It has just about been one year since the tragedy at Sandy Hook Elementary School, with the topic of gun control peaking early in 2013 and simmering down by the summer. But that did not stop gun control advocates and opponents from pushing legislation throughout the year. Obama, took the standard liberal approach, calling for federal gun control measures that were simply dropped the second they left his mouth. Some of the more liberal states, like New York, passed sweeping bills that pissed off the gun-owning crowd to no end. I can say from first hand experience that you cannot drive a square mile in New York State without seeing a “Repeal Safe Act” sign on someones front lawn (NYC metro area excluded, of course).
Regardless of your position on the matter, what happened at Sandy Hook was tragic. If you do not want to blame guns, that’s fine – you can easily blame those with mental disorders and their ability to get guns. Either way, you would certainly expect a positive legislative change regarding either one of the two following the tragedy, yes? Well you would be wrong. In the year since, the 50 states have passed a total of 109 laws regarding guns, only 39 of which are actually restrictions or make if more difficult for people with mental disorders to acquire guns. The remaining 70 laws actually *loosen* gun control laws. What does this tell us? It tells us that those behind the gun manufacturing industry and gun toting citizens have far more influence over lawmakers than 20 dead kindergartners. So much more influence in fact that states were so afraid of gun control measures, they went in the opposite direction to make gun access easier for citizens.
This, to me, says a lot about the current state of government.
The New York Times clearly has it out for the mega-network ESPN. Perhaps it is because the political/sports statistician/wizard Nate Silver recently left the New York Times to join ESPN, and included his fivethirtyeight blog as part of the deal (which the New York Times never owned, just contracted it for three years). Or perhaps because even the New York Times hates Keith Olbermann, they must bash the network for allowing him to come back. Or maybe the New York Times hates Mickey Mouse, and must destroy everything in Mickey’s domain (most likely, in my opinion).
Regardless of the reason, The New York Times has been throwing punches at ESPN for the past week. It all started last Friday, August 23rd, when the New York Times reported that ESPN bailed on a documentary about head injuries because of pressure from the NFL. This kind of punch takes a clear shot at ESPN’s journalistic integrity, which lets be honest, its fans don’t really care too much about. I would bet most of the Monday Night Football fan base could give a shit less about concussions. However, that article was nothing in comparison to today’s exposé of the giant ESPN truly is. The New York Times starts off with the standard anti-competitiveness of the network, by mentioning it owns more rights to sports than it does capacity to air said sports. The article goes deeper into Disney’s lobbying efforts to keep bundled television, as opposed to a la cart television – where subscribers would only pay for channels they actually want to watch. ESPN gains A LOT by having TV providers bundle channels, because ALL subscribers pay $5.44 for ESPN programming, which is 4 times more than any other cable network. Of 100 million subscribers paying this fee, only about 25% of them actually tune to an ESPN network. This means Basement Rob is subsidizing Sunday Night Baseball and Monday Night Football for me (thanks Rob!). I’m sure given the choice, Basement Rob would not be paying for this subsidy.
The article goes on about how Disney let the FCC chairperson use Superbowl ad time on ABC to announce the analog to digital TV change years ago, likely because the FCC chairperson was in favor of keeping bundled television. The article tells tales of lobbying events in Washington where politicians were giddy to take pictures with Mohammad Ali, Carl Lewis, and Johnny Unitas. And there is even mention where a congressman with ties to the cable bundling bill was given a free trip to Disney for himself and his family. All classic Washington stuff really.
This week, the United States Senate has released a report detailing the types of international tax shelters Apple has used to avoid paying US federal taxes, as well as taxes in Europe. The amount of tax savings may be surprising to the uninformed; up to $74 billion over 5 years. It was not shocking to me when the panel also determined that the single largest US corporation did not break any tax laws to accomplish this. Yet, even though no laws were broken, Apple CEO Tim Cook is speaking before the congressional committee to explain the company’s actions.
The whole thing is a sideshow though. Independent journalists have been pointing out these loopholes for decades among all the largest United States corporations. The irony is these loopholes would not even exist if it weren’t for the very same people carrying out this investigation. And these very same people are not very likely to change anything, because lets face it, those who fund their campaigns earn the most from these loopholes in the first place (I’m not suggesting here that Apple is behind these loopholes either, although I wouldn’t be surprised if they had tax lobbyists like every other public company).
It’s always good when the media sheds some light on stories like this. However, without any serious changes to campaign finance laws, we are not likely to see any big changes. And on top of that anyway, multinational company taxes are complicated by the simple fact that they operate in multiple countries, and no country’s tax codes look alike. A real solution to this “problem” would need to be met with international support, and we all know how easy that is.
We’ve spent a good amount of time on our podcast debating Bitcoin, the virtual currency – from the feasibility of it as a currency to the sustainability of it. Dick Sharpe believed the bubble popped when the US dollar value of a Bitcoin fluctuated from $240 down to $99 in just a week. I disagreed, thinking this fluctuation is more to do with a market that does not know how to value this strange new commodity. While some people believe in the long term sustainability of Bitcoin as a currency, I do not. Bitcoin has a maximum number of currency that can be generated in its lifetime, which creates its scarcity – so it’s more of a commodity than a modern currency. Unfortunately for our modern economy, a commodity makes a lousy currency for one simple reason – no central bank. Central bank’s are needed to help smooth the roller coaster ride that is capitalism. Without them, the world would be faced with times of runaway inflation and high unemployment – neither of which help sustain a great society.
Then if Bitcoin is destined to fail, who will get hurt the most? Like I said previously, I don’t believe the price fluctuations alone are enough to call the bubble burst. After all, who gets hurt the most during this volatility? Those looking to sell their Bitcoins – which at the moment would mostly be hobbyists and weirdo fringe investors. Also, even though the price did jump up momentarily, the value of Bitcoin has actually been trending up for a long period of time, regardless of the jagged edges. Hobbyists are mostly not interested in selling, because for them Bitcoins are all about the technical mining process.So in general, I don’t think too many people were hurt by the large swings in market values.
The real bubble is being inflated now, as Bitcoin popularity continues to trend upwards – the development of third party company’s hoping to bank on the sustainability of Bitcoin. For the past year, small start-up companies have been receiving venture capital and angel investor funds and are developing tools designed for efficient storage and transactions of Bitcoin. I say this is the bubble, because when these companies fail (and they will), real people will lose their investments in these start-up companies; but more importantly, real people will lose their jobs. The engineers, designers, accountants, IT people going to work for these companies don’t stand a chance. Most of the people that go to work for a start-up know this, but collectively, it could be a big problem when the rest of the market deems Bitcoin useless.
Bitcoins, an online based currency developed four years ago by a nerd in his mother’s basement, has lost 75% of its value in 2 days. In the last month the exchange rate for the digital currency skyrocketed, trade at 47 USD per Bitcoin in March to 266 USD last Wednesday. But that was as high as it may ever likely trade at again. The Bitcoin bubble is an excellent example of what a trading bubble is like on crack. The boom and bust of this all happened in less than a month, suggesting that the volatility of this currency is will spell then end of investors intrest in it.
This doesn’t mean that Bitcoins are out of the market completely, or that anyone who traded with them is an idiot. In fact I am sure some people made a good chunk of change on this bubble. There are those who traded early last month and road the bubble to the peak or maybe a little below then sold which then caused the value to plummet from under his fellow investors. There are some very cunning individuals who might have used their coins to buy assets or stable commodities that can be traded back after the market stabilized or turned into another investment. Like this guy who bought a Porche.
The good news here is that there is not a Bit nation where peasants will be suffering from this disaster. Usually when there is a currency crisis a whole nation of people is left to suffer in the devastation caused by the hubris of the few. So luckily no children will be starving because mom dosen’t have enough Bitcoins to buy a loaf of digital bread. In this case the only losers are those invested large amounts in Bitcoin and now can’t find a buyer, like the guy that sold his Porche.
However there are those who still believe that there is utility and value in the Bitcoins, albiet not in the way investors hoped. As an investment Bitcoins turned out to be the 21 century answer to the tulip bubble. As for the actual legacy of Bitcoins, the jury is out.
I’m seriously asking, because I have no idea. Economists all have very differing opinions here as well; some think it’s a huge deal, others think it is a small deal. Personally, I think it is not a small deal, in fact, I think it is of no impact on the overall economy. Here is why.
When was the last time you looked to borrow money? Think back to that moment, whether it was a house, a car, a business loan, student loan, whatever – was there any thought in your head along the lines of “well the country’s deficit right now is growing, so maybe it is not a good time for me to borrow.” I don’t know you, but I am inclined to think this thought was never processed by your brain. And I would venture to guess all the smart business types who are looking for capital to start and grow businesses don’t care about the government debt, because if they have demand for said business, then what does the national debt even matter? Sure, you can say government employees worry because if the fed doesn’t get control of its spending, they may start to cut back on government jobs. But does this matter in the private industry? I suppose it does actually, because if government workers lose their jobs, they’re spending less in the private industry, lessening the demand for private capital. On the contrary, the government can just print more money to keep paying for workers they’d otherwise have to let go, but then of course they are growing the debt and lessening confidence in the private sector. Ahh, but you’re now thinking that printing money will create inflation, however, this is not true as long as the demand for goods and services remains equal. Or if demand actually increases as money is printed, then you could see a situation where we get deflation, while printing currency. In the case of high demand, more people will work and pay taxes and the government debt won’t be such a big deal after all.
Did you follow any of that? No, because modern economics is stupid. It’s a confidence game more than real supply and demand. Go read Atlas Shrugged, drink a bottle of scotch, and set your doomsday clock accordingly.
My one-year subscription to the Wall Street Journal is coming to an end, which has put me in a bit of a funk. Despite what some of you may think, I really enjoy the paper. Its news article are short, concise, and quite accurate. Unlike other third rate news outlets (CNN, Fox News) they actually wait for facts before posting something on its site. And while I’ve enjoyed the newspaper as a source of information, I’ve had a field day berating the op-ed section and its writers. Well since this may be my last for a while, I better make it count.
Former media executive Steve Cohen is an ignorant asshole. Yes, he may have been a successful executive at one point in his life, however on the subject of unpaid internships, yeah – an ignorant asshole. You see, Mr. Cohen writes in this WSJ op-ed that the value of an internship is in the experience gained. Because of this experience, it does not matter that one will not be paid for services completely irrelevant to ones field of study. He is apparently an expert on the subject because he recently graduated New York Law School and in the process “worked” multiple internships, unpaid of course (as did his son at a national magazine – a nice irrelevant fact pointed out in the article). And he has no complaints, because while he spent the majority of his time making copies, the experience was well worth it.
Here’s the problem Steve (can I call you Steve?), you have a lot of money and live a privileged life. You can easily afford to work somewhere for free because apparently you are at a point in your life where you can go back to school, work multiple full-time unpaid internships, and support your son who is also working for free. I’m not trying to take a stab at your successes in life, I’m sure you worked hard and earned every penny, but this does not make you an expert on the inequality of unpaid internships. Sorry, it just doesn’t, not even close as a matter of fact.
First, lets put aside the argument that the experience is the salary – because I agree with this. Proper internships can be invaluable in experience. This is not the problem with unpaid internships, the real problem is the lack of equality. There are students in this world that cannot afford the luxury of accepting an unpaid internship, believe it or not. Some students have to work full time jobs just to get through school, so they cannot possibly afford the time needed to work a full-time, unpaid internship. Now, you may think equality is not that important, I disagree. Equality is important for two reasons 1) if the pool of potential interns opens from those who can work for free to those who can and cannot, then employers can be sure they are getting the best available talent for a given role and 2) those potential interns that could not have worked for free now have an opportunity they could not have obtained otherwise. We live in a country of opportunity, yet if we don’t pay people to perform a job, then we are essentially limiting that opportunity to a certain class of people.
Now, you may make the argument from the employers perspective that they don’t care about the talent of an intern necessarily, because frankly they are only being brought on to perform mundane tasks, like making copies. So why should they care about the talent quality of students? Well, I would compare this to slave labor. Sure, it’s not a perfect comparison; after all the students wouldn’t be performing tasks against their will. However, from the employers perspective, they are gaining a service they would normally have to pay for simply by calling a mundane job an internship. In this case, the employer doesn’t have the interest of the intern at heart, they are merely looking for a way to get a job done at the lowest possible cost.
Ultimately, we can break down the argument into two very simple goals for our country: do we want to be the country of opportunity or a country of maximizing the cost of work?
If the fiscal cliff debates have taught me anything, it’s that John Boehner is fucked. Republicans and Democrats mostly want the same things:
Kick the defense budget debate into 2013 and end automatic cuts
Kick other government spending cuts into 2013 as well, avoid cuts to government workers
Permanently adjust the Alternative Minimum Tax rules so inflation is always accounted
Raise government revenue
It is item number 4 that is the big problem. Both sides are OK with reducing tax reductions (like charities) for all Americans, which is speculated to raise between $400-800 billion over 10 years. The difference is Democrats want to raise additional revenue on those who make more than $250,000 a year, and Republicans don’t want to raise any additional revenue from taxpayers. Here is where things get really funny.
John Boehner created a fallback plan, “Plan B” where he will allow tax increases for those who make more than $1 million a year. Obama and almost all Democrats denounced this plan and said they would not pass it. Boehner, insistent on this compromise went ahead and tried to pass it in the House, as kind of a political theater to show there was interest in this bill. The only problem, Republicans didn’t want this either! Tax increases on those who make more than $1 million won’t fly past Republicans.
Additional to this clusterfuck, Obama has compromised and agreed to increase the income from $250,000 to $400,000, which the Republicans obviously denounced because it is an increase on taxes for citizens. However, Democrats are complaining that Obama pledged that taxes should go up on incomes greater than $250,000 – not $400,000. So Obama’s party is pissed that he’s breaking a campaign pledge. Now Obama has to fear that his own party will not be willing to pass this legislation, since it is not what he promised.
Ultimately, there will have to be compromise. Obama has the least to lose really – he’s already been elected to the last 4 years of his political career. Boehner is fucked though. His willingness to compromise on taxes is going to kill him in his party. To get a bill passed, he and a few other Republicans will have to give in on tax revenue to while getting the Democrat minority in the House to pass the bill. Democrats will ultimately compromise on Obama’s compromise, because backing the President is the best thing for their party. Democrats have the most to gain if we go over the cliff, because if there is not compromise, then taxes are increased for ALL incomes – which means Republicans have a lot to lose if there is no compromise. The big question is if a few key Republicans are willing to swallow their pride and raise rates for the minority of citizens, so the majority can keep their current tax rates.
In the wake of the Newtown tragedy, pundits, politicians, bloggers, and Facebook friends are talking about gun control. Some are saying that it is too soon to have a discussion on gun control – that is a highly hypocritical position to take though. The people that say it is “too soon” are the same people that demanded answers from Obama hours following the Benghazi crisis. Tragedies are tragedies, and there is no time limit before the factors of such events should be discussed, no matter how badly your personal beliefs may be impacted.
No, this is exactly the time gun control should be discussed. If it is not discussed now, it will continue to fall to the wayside as it has for the past decade. It’s incredibly obvious to most Americans that *something* should be done to try and avoid future mass killings – however the limits of what that something is needs some serious focus. This should not be a discussion what we think might work, or how we can continue to preserve the “liberties” of our country’s citizens by protecting the 2nd Amendment. Instead, our leaders should be looking at countries around the world, and improving on systems of gun control that work far better than ours. The United States ranks 12th in terms of gun-related deaths per population, the only Western society in the top 15. Our allies in England still have the freedom to own firearms, and are far less likely to die in a gun related homicide (The US has about a factor 7500% more gun related homicides than England – that is not a typo).
The biggest problem facing meaningful legislation in the United States is the National Rifle Association. The NRA is by far the most powerful and influential lobby in Washington DC, as determined by a survey of lawmakers in Washington. If you’re wondering where the organization gets its money, well that’s a question nobody can answer. You see, the NRA is setup as a 501(c)(4) organization, the same as the Super PACs that spent billions of dollars in our last election. This means that the organization can collect unlimited amounts of money from anonymous sources and spend it freely. It’s widely speculated that even though the NRA collects small amounts of money from it’s 4.4 million members, the majority of its income is raised from gun industry corporate partners.
If you think the NRA is capable of rational debate and conversations, think again. Since the shooting last Friday, the NRA has declined comment of any kind. They have even shut down the social media arm by blacking out its Facebook page and stopped tweeting. In 2008 when President Obama reached out to NRA president Wayne LaPierre, LaPierre responded with “Why should I or the N.R.A. go sit down with a group of people that have spent a lifetime trying to destroy the Second Amendment in the United States?” The NRA is not in the business of rational discussion – it’s in the business of keeping its constituents happy. LaPierre earns close to $1 million dollars a year from the organization, and since it’s his job to force the legislation that keeps the gun industry moving, you can bet that’s what he’ll do – regardless of how many innocent first graders die.
And if you happen to think the Newtown tragedy was enough to overpower the grasp of the NRA on politicians, you guessed it, think again. Both the Wall Street Journal and New York Times have reported that Senator Joe Manchin, a gun advocate Democrat from West Virginia has come out and said that reform must be looked into, but must be done with the NRA at the table. Manchin says “I’ll go over and sit down with them and say, ‘How can we take the dialogue to a different level?” It is the epitome of “democracy for sale” when our leaders cannot make a decision for themselves without first consulting a lobby. There is a certain irony when our leaders are “fighting for our freedoms” while they are not free themselves when it comes to making a decision to better our society.
Apple has recently announced that it will move manufacturing production of one of its PC lines exclusively to the United States in 2013. The speculation is the iMac line, as some of the newer units have already been labeled with “Assembled in USA”. The cost of this move is going to cost the electronic behemoth $100 million. Even though it is a wonderful PR move for Apple, it reeks of financial disaster. Investors already know this, which is why the stock dropped 5% the day before the announcement. It’s a terrible idea for two reasons: 1) this will undoubtedly lower the margin of profit per PC or it will 2) raise the price of PCs. Apple already charges a premium on its PCs relative to the rest of the commercial computer industry, so raising its prices could be harmful. Not raising the prices of the PC line will lead to smaller margins, which will hurt Apple’s bottom line. Throw in the $100 million capital to jump start this effort, and you are creating some real pain for investors.
On the contrary, Apple has so much cash that it uses 100-million-dollar-bills as toilet paper. Apple also makes the majority of its money from iPods, iPhones, and iPads – so sacrificing one of its desktop production lines for good PR might actually make it a pretty reasonable marketing move. All in all, the move will probably end up being a wash for the company and have very little or no impact on the company. So… sorry for wasting your time reading this post. Email your rage at email@example.com