I cannot imagine a God who rewards and punishes the objects of his creation and is but a reflection of human frailty.
Albert Einstein
The Florida Straw Poll and Political Reality
Saturday's straw poll, promoted by Governor Scott and where a string of certain past winners (Reagan, GHW Bush, and Dole) went on to win the nomination, was won by Cain with 37%, followed by the national front runners Rick Perry at 15%, Romney at 14%, Santorum at 11%, and Paul at 10%.
I haven't been following the straw polls so much. For one thing, straw polls are much like website polls: there's a lot of self-selection, meaning that it is a poor substitute for a random poll. Self-selected polls can be manipulated simply by motivating a higher turnout of targeted motivated voters. We earlier saw Bachmann grab the neighboring Iowa straw poll, and a week earlier Ron Paul won the California straw poll with 45% of the vote, with Rick Perry getting 29%, and all other candidates in single digit percentages. Until this past February, Herman Cain had a popular talk show on an Atlanta radio station and is a past US Senate GOP candidate for Georgia, which borders Florida from the north.
It would seem like Cain is surging; today comedian/talk show host Dennis Miller endorsed Cain for President. That and $5 will get you a cup of coffee at Starbuck's. Herman Cain has no government executive experience nor policy expertise (e.g., defense, etc.); he has had embarrassing gaffes, e.g., being stumped by the Palestinian right to return question. I heard him on a recent media interview dodging questions over which economists are behind his 9-9-9 tax plan. I am not a politician, and I remember the Palestinian right of return being covered in Weekly Reader when I was in elementary school; I cannot begin to understand a foreign policy that doesn't start with a thorough understanding of our special allies, Israel and Great Britain. There's no way Herman Cain matches up against a sophistic progressive like Barack Obama: I cringed at McCain's and Palin's debate performances in 2008; I thought they were competitive, but there were things that were awful--Palin letting key questions go unanswered, even ignoring what a moderator had to say. McCain came in with the most predictable assertion in the world--he is constantly bragging about never having asked for an earmark. Obama came back with essentially, look, I called for an end to earmarks months ago, plus, they only account for a couple of pennies on the federal dollar. McCain's handlers had to know Obama would say that. Plus, when you come in with innovative policy ideas like the 9-9-9 plan, Cain has a higher burden because he's attacking the status quo. Obama has an easy job; all he has to do is exploit people's fear of change.
According to the RealClearPolitics polls averages this month, Perry has 28% to Romney's 21.5%, while Paul is at 7.7%, Bachmann has 7.5%, Gingrich 6.8% and Cain 5.5%. Perry has swept all recent polls, but he has not done well at the debates.
Let's face the fact: Romney will win the nomination. There are several reasons, but let's point out even the Democrats recognize this, running a well-publicized web ad mocking Romney's recent visit with Trump. Intrade odds show Romney with just under a 20 point lead. More importantly, Romney has shown surprising spunk when being heckled by progressives, and he has had strong debate performances. GOP voters this spring are not going to gamble on a candidate they feel won't match up well against Obama during the Presidential debate. They also want a candidate whom has appeal in swing states. Romney has even suggested that Sarah Palin join the race; this is a rather transparent move given the fact that over 70% GOP primary voters know she is unelectable and don't want to see her in the race, but the real motivation is a divide-and-conquer strategy over Rick Perry, since the two of them appeal to a similar base. But let's face the facts: Rick Perry had to know last week he was going to get questions on Gardasil and immigration. He should have had focus group-approved talking point responses. Can you imagine if Perry didn't have good responses to predictable questions or statements, he can handle what I know is going to happen during the debates, which Obama will try to swerve or blindside his opponents and the only candidate in this field that I see as least predictable and with intellectual bandwidth to hold his own and return the ball harder than Obama hits it to him is Romney.
I realize that there are people whom will disagree with my assessment (e.g., Kyle-Anne Shiver). I will simply respond to some of the typical points made:
- "Look at what Romney did in Massachusetts vs. what Perry did in Texas--and the fact of RomneyCare." (not a quote but restatement) First of all, the question of RomneyCare: there was a far worse ballot initiative likely to carry, and the state had been threatened with a huge Medicaid contribution cutoff. Romney did not run on RomneyCare; it arose AFTER his election. When he went about his grand bargain with the Democratic legislature, he didn't want a reworked HillaryCare model, he did not want to implement (as did the Massachusetts House) a payroll tax. He wanted people to buy through a private-sector, not public-sector provider. Romney vetoed several points in RomneyCare and was overridden by a legislature overwhelmingly controlled by liberal Democrats. Second, a governor is not the legislature; he's got the power of the veto, but the idea that Romney is going to ram medical malpractice tort reform in a state like Massachusetts is just an unrealistic expectation. The idea that Romney was inspiration for legislation written by a liberal Democratic legislature is patently absurd. Perry has been governor of a state that only became reliably Republican after George W. Bush became governor in 1995. Perry also started his career as a Democrat and backed Gore's 1988 Presidential bid.
- "Romney flip-flopped on major issues during his last 2 years as governor as he prepared to run for President." First of all, Romney has been focusing on economic issues, not cultural issues, and those positions have been consistent. Second, the cultural issues being discussed--not really pertinent to the President, whom has very little control over cultural issues--are NUANCED changes, not SUBSTANTIVE changes. For example, let's take the issue of abortion: Kennedy during his reelection campaign against Romney in the 1990's argued that Romney had flip-flopped from the other direction to a pro-abortion choice. Romney argued, just like a number of prominent Catholic politicians, e.g., Mario Cuomo, that he was personally opposed abortion but not willing to impose his position on others. Romney decided around midway through his term that this position was morally incoherent and hence unsustainable.
Taxes, Taxes, Taxes
I was annoyed by a Fox News business show Saturday morning; some African-American economist from the liberal Economic Policy Institute was arguing that American businesses had one of the lowest tax burdens in the world. This was deliberately misleading. A PWC study released last April showed that US companies pay the sixth highest effective tax burden (Japan, Morocco, Italy, Indonesia and Germany had higher): 27.7% vs. 19.5% (non-US). Part of what's going on is the companies that are taxed differently on operations outside the US (quite often today, LOWER than uncompetitive US tax rates) are allowed to defer paying taxes on income earned overseas AT THE TOP US TAX RATE until the income comes home. So say country XXX has a tax rate of 20%; presumably the company will get a tax credit for the foreign income tax paid if and when they in-source their profits. The companies have very little incentive to bring those profits back, say to invest in American plant expansions and workers, since the company would immediately owe the US 15% on any money they bring home. Critics will argue that the US has enhanced credits and deductions which mean less income is subject to the higher rate. Others suggest that the tax burden by business is lower elsewhere because most economies have a VAT tax.
Another study released by KPMG last year showed that among 10 countries surveyed (including NAFTA, British Commonwealth, European countries and Japan), the US effective business tax rate worsened from #5 to #6.
Finally, a few comments about tax policies in the context of the Buffett tax/rule. Keep in mind we have tax policies that tax the same stream of income twice. Let's assume for simplicity it's 27.7% (dividends or capital gains at the corporate rate). When Buffett reports his income, he pays another rate on that income. Even if it's 15%, it's really double-taxing the same income. The real tax rate is more like 42.7% (plus whatever state and/or local taxes on the same income).
Furthermore, I recently referenced an ASI study showing only a small portion of capital gains are realized within the first couple of years. Our current system has been taxing income and capital gains on a nominal not real (i.e., inflation-adjusted basis). For example, suppose inflation rose 3% last year on your savings and you earned 5% on your savings. The government is not taxing your 2% net gain--it's taxing your nominal 5%, something that is grossly unfair and confiscatory.
Musical Interlude: My Favorite Groups
Fleetwood Mac, "Sara". This is the most hauntingly beautifully arranged Fleetwood Mac song (I also particularly like the musical craftsmanship behind "Gypsy", upcoming). I have been extensively commenting on prior Nicks' compositions, and I will give my take (which no doubt would amuse Nicks greatly, if she ever read what I write about her songs) on this one. I should note that Nicks claims that the original song was at least 2 or 3 times longer with several unreleased verses. Obviously my interpretation is based on the actual lyrics I've heard, and I have to trust that the final verses are representative of the original song.
Please note: I do not know whether any of the below allegations of Nicks' personal life are accurate. Don Henley, a principal singer/songwriter for the Eagles, and Stevie Nicks had a 2-year relationship starting in 1976. There are rumors that Stevie Nicks had an affair with Mick Fleetwood, at the time married to Jenny Boyd, in early 1978. At some later point, Stevie's best friend Sara Recor, a model married to a music manager, started dating Fleetwood, believing that the Nicks-Fleetwood affair had run its course. Fleetwood and Recor divorced their spouses and married each other.
Stevie Nicks was earlier commissioned, around the time of the Henley relationship, by Waylon Jennings, then married to Jessi Colter, to write the song "Leather and Lace". The Jennings marriage soon broke down. Nicks and Henley had sung an early demo of the song together, and they would eventually release their huge hit duet in late 1981. Other hints from Nicks' interviews: the house being built was Henley's, and the "great dark wing" was Mick Fleetwood.
I think all of these come together to explain the song: I think Nicks is moving on from her relationship with Fleetwood. I find the song title 'Sara' enigmatic, because the song is obviously directed mostly at Henley. Only two lines of one verse reference Sara; the only reason to reassure Sara involves the love triangle (particularly a best friend whom may not have double-checked before starting to date the other's former boyfriend). The very first line of the song ("Wait a minute, baby") "Baby" is a term of endearment for one's significant other. There are two men referenced in the song, one of whom no longer has a relationship with Nicks ("now it's gone"). Nicks, in fact, uses "my match" (i.e., a well-suited couple, eligible for marriage) and says he is a singer (definitely not Fleetwood). Notice the unusual crafting of the verses: she starts with Fleetwood, ends with Henley; she starts with Sara, ends with Henley; she starts by saying the affair is over, ends with Henley. 'Call me', 'ask me': I'll meet you anytime, any place. (I'm not sure about some of the verses: maybe during their past relationship, Nicks liked to go out partying more than Henley.)
Why name the song 'Sara'? I think Nicks is unsure of Henley's feelings and needs the support of her best friend as she moves on with her life. Why does Nicks sing of Henley in the third person at one point, but second person elsewhere? I think she's saying "I know the guy I really wanted to be with was not Fleetwood but this musician I worked with on this project..."
"I had met my match/he was singing" clearly references Henley's professional collaboration (Fleetwood is not a vocalist); "Undoing the laces" is an unmistakable reference to the song Nicks wrote and Henley collaborated with her on and also suggests the intimate nature of their relationship.
"Sara, you're the poet in my heart, never change, never stop": Sara, I love you; you are my rock, my best friend forever; whatever feelings I had for Fleetwood are over; I don't blame you for what happened with Fleetwood.
'light', 'fire' (sun), 'drowning', 'wing': maybe I'm reading too much into the verbiage here, but what immediately comes to mind is the story of Daedalus and Icarus from Greek mythology. (Remember the Kansas classic hit, "Carry On Wayward Son"?) Daedalus designs wings for him and his son Icarus to escape from the island of Crete; Daedalus warns his son against flying too close to the sun for fear it would melt the wax binding the feathers to the wings. The son forgot or ignored his father's warning, the wing structures were compromised, with Icarus falling to the sea and drowning. Nicks is Icarus.
"said you'd give me light": Henley gave Nicks advice or a warning about mixing personal/professional relationships (e.g., Fleetwood?) "But you never told me about the fire" Perhaps Nicks was convinced that her relationship with Fleetwood could be discreet and contained, that it wouldn't affect her other relationships, especially her connection with Sara. But the Nicks-Fleetwood relationship tested her bonds with others in unexpected ways.
"Drowning in the sea of love": I think Nicks sees herself as Icarus: the reality of the Fleetwood relationship, the "fire", has affected her relationships with others. She finds herself in uncharted waters, no longer sure how others feel about her, although she is sure of how she feels about Sara and Henley. I think I've seen locus of control crop up in other Nicks' songs (e.g., "Landslide") as well.
"Now it's gone": the relationship with Fleetwood is over; never mind the details; I don't want to talk about it; it doesn't matter.
"All I ever wanted was to know you were still dreaming": Henley, I hope that I'm still in your thoughts, that you still have feelings for me.
"It's a heartbeat, and it never really died": Henley, I never really stopped loving you; it's been there all the time. I'm ready to move on with my life; let me know when you're ready for the renewal of our relationship, and I'll be there.
I suspect if Stevie Nicks ever read this analysis, she would be rolling on the ground laughing at poor pitiful clueless me. Indeed, given my never having found my own true love, who am I to write about the topic? I think, though, those of us love-challenged people tend to be a little idealistic.
