Wednesday, December 6, 2017


President Trump has issued an Executive Order vastly reducing the size of Bear's Ears (designated by President Obama) and Grand Staircase-Escalante  National Monuments

On December 4, 2017, Trump reduced the size of the [Bear's Ears] monument by about 1.3 million acres (85%). Trump shrank another national monument, Grand Staircase-Escalante [about 46%], on the same day*.  See the figure below:**

He said that U.S. territory should be governed by local people and not by a few people  in Washington (e.g. the national government).  A problem with that argument is that the land is owned by the U.S. Government or, in other words, the American people.  While the local inhabitants are a part of the American people, they are only a small part of the entire American people.  Therefore it seems to me that the people's land should be administered by the people's representative which is the Federal government..

Existing rights are not effected.  If you already had grazing rights on the land, it will continue.  I urge you to read the entire fact sheet.***

The national monument designation does not alter or affect valid existing rights of any party and will not impact the operation, maintenance, replacements or modification of existing utilities, pipelines or telecommunications, as long as they are consistent with the care and management of the objects identified in the national monument proclamation. A mineral resource assessment is made prior to designation of Federal land as a wilderness or monument status.  See below for mineral resource information on Bear's Ears National Monument.***
Yes. Currently, livestock grazing occurs throughout most of the monument area including nine active Forest Service allotments. Existing laws, regulations and policies followed by the Forest Service and BLM in issuing and administering grazing permits or leases shall continue to apply to ensure ongoing consistency with the monument. Likewise, timber management, including for purposes of restoration and forest health, will continue pursuant to existing laws, regulations and policies, consistent with the proper care and management of the national monument. ***

Specifically, 11 “wilderness study areas” in the Bears Ears region prohibit most motorized travel, construction of new roads and development of oil, gas or coal. These wilderness study areas include many of the region’s iconic locations: Cedar Mesa, Mancos Mesa and Cheese Box Canyon, to name a few. The region is also home to the Dark Canyon Wilderness, designated by Congress in 1984 and completely protected from motorized travel or natural resource extraction. Farther south lies the famed Valley of the Gods, federally preserved as an “area of critical environmental concern” to ensure the integrity of beautiful scenic vistas.****
Fact: Mineral resources beneath Bears Ears are scarce. There is no developable oil and gas. The region’s nonrenewable resources, including uranium near the Daneros Mine, were actually outside the expansive monument boundaries declared by Obama. The integrity of the Bears Ears landscape, long kept intact before the creation of the monument, will almost certainly remain intact after Trump’s announcement. And to ensure this going forward, the state of Utah is asking for congressional legislation that will exclude the region from mineral extraction.****

In contrast, there do appear to be mineral resources in the Grand Staircase-Escalante  National Monument was designated by Bill Clinton, including coal on school lands.  It was promised that other lands for school benefit will be found elsewhere.***

As I don't know the details of how many of the Indian artifacts will be in the removed area, I cannot make an assessment and will leave it to others.  I don't know how destruction or looting of Indian artifacts will be enhanced by removal of the area from the monument.  In both cases it is against the law.


Monday, December 4, 2017


Since taxes are a big topic of the day in the U.S., it may come as a surprise that the happiest countries in the world have rather high taxes, much higher then the U.S.

According to the United Nations' latest World Happiness Report, as covered by CBS News, the top 10 happiest countries are:*
1. Norway
2. Denmark
3. Iceland
4. Switzerland
5. Finland
6. Netherlands
7. Canada
8. New Zealand
9. Australia
10. Sweden
As of 2014, in terms of total tax revenue as a percentage of GDP and measured per capita, Norway came in at No. 2 out of 35 countries ($37,682 USD), Denmark at No. 3 ($30,630 USD), and Iceland came in at No. 9 ($20,418 USD), according to the OECD.*
Unlike Americans, however, residents of New Zealand 
enjoy the protection of a robust welfare state including 
a public health system, 18 weeks of subsidized parental
 leave and benefits for middle- and low-income families 
with young children.
The U.S. ranks No. 14 for happiness, significantly lower 
than its neighbor to the north, Canada.*

Ow is the ranking of happiness done?
All of the top four countries rank highly on all the main factors found to support happiness: caring, freedom, generosity, honesty, health, income and good governance.
All of the other countries in the top ten also have high values in all six of the key variables used to explain happiness differences among countries and through time – income, healthy life expectancy, having someone to count on in times of trouble, generosity, freedom and trust, with the latter measured by the absence of corruption in business and government.**

Perhaps if happiness is a goal, we in the U.S. should think of how we can afford these things that other countries have rather than try to get rid of what we have.   But then, maybe happiness is not our goal.  Maybe it is just a constant pursuit of happiness a la the constitution and not achieving it.


Friday, December 1, 2017


Haven't we heard this before that "We Need To Pass The Bill To Find Out What's In It?"  Nancy Pelosi famously said this about the lumbering ACA Healthcare bill.  That bill was broadly discussed repeatedly, amended, etc. in regular order.  In contrast, the current tax cut bill has been rapidly thrown together and it seems it will be passed without discussion.

It is a matter of faith among Republicans that tax cuts pay for themselves in spite of all the contrary evidence.  In a recent report of the JCT that the tax cuts will only pay about a third of themselves (a figure I think is optimistic), Republican Larry Lindsay (former adviser to George W. Bush) has said that the JCT claim is a fraud.*

Republicans point to the tax cuts of Jack Kennedy, Ronald Reagan, and George W. Bush as examples, but (1) these presidents never came close to balancing the budget, and (2) these tax cuts were done during recessions (on top of Federal deficits) when the cuts might have some significant positive effects.  In contrast, now we have a roaring economy. the stock market indices are setting new highs weekly, and we are near full employment.  But Republicans will fall into line.

Thus this tax cut bill and repatriation of off shore profits by companies is throwing gasoline on the fire.**

Still, CFOs are confident that the bill's reforms will have a positive impact on U.S. economic conditions. In addition, 70.9 percent agree (29.2 percent strongly) that corporate tax reforms will create more U.S. jobs, while 83.3 percent agree (20.8 percent strongly) that corporate tax reforms will stimulate U.S. economic growth.***
I find it hard to believe these CFOs are being honest because their companies are rolling in money and could be doing all these things now.  They do, however, have a different view on what will be done with repatriated funds.

At any rate, it has been pointed out that raising the corporate maximum tax rate to 25% instead of 20% would solve the JCT problem.   I have written that I think lowering the rate from 35% to 25% is worth a try to see what happens.****

With regard to the repatriation of overseas profits, only 12.5% of the CFOs canvassed indicated they will bring all overseas profits back home.***
(Click on figure to enlarge)

Asked what they would do with the repatriated funds, 29.2 percent say they would buy back stock, the most popular response. The percentage of those who use overseas cash to invest in new plants, equipment or technology: 20.8 percent, compared to 12.5 percent who would raise dividends. Only 8.3 percent plan to use repatriated cash to increase headcount.***

Note: As others have said, if we allow companies to bring back profits at especially reduced rates every 10-15 yrs, isn't that an incentive to merge with  overseas companies?
The tax breaks for bringing home such offshore profits “confirm the central tenet of tax planning that a tax deferred is a tax avoided,” said David Miller, a tax lawyer at Proskauer Rose. “For decades, U.S. multinationals have shifted profits abroad and deferred their taxes on them. If either of the tax bills pass, they will be rewarded for doing so."(


Thursday, November 30, 2017


There seems to be optimism that the tax plan considered by the Senate will be approved.  I don't know about you, but I am one of those that will come out thousands of dollars behind in the Senate version.  Perhaps my problem (healthcare deduction) will be removed in Conference Committee.  I can hope, can't I?

Well on this news, the stock market is going crazy today (so far).  The attempt in this tax plan is to give corporations even more money when they are rolling in money as it is.  They have been told that about a third of the corporations will actually improve their plants and hire workers (and give raises?).  Most corporations have said that they will mainly buy back stock, do some mergers and acquisitions (M&A), boost dividends, and maybe reduce debt.

Major companies including Cisco Systems Inc.Pfizer Inc. and Coca-Cola Co. say they’ll turn over most gains from proposed corporate tax cuts to their shareholders, *
Robert Bradway, chief executive of Amgen Inc., said in an Oct. 25 earnings call that the company has been “actively returning capital in the form of growing dividend and buyback and I’d expect us to continue that.” Executives including Coca-Cola CEO James Quincey, Pfizer Chief Financial Officer Frank D’Amelio and Cisco CFO Kelly Kramer have recently made similar statements.
“We’ll be able to get much more aggressive on the share buyback” after a tax cut, Kramer said in a Nov. 16 interview.
Yet congress proceeds as if they feel what these companies are telling them is false and that companies actually will increase plant and employees and maybe increase wages.
Meanwhile, the stock market rises like a roaring fire (also called a bubble).  I have started to put floors on some of my stocks like 3M that are up 50% this year.  Remember the saying, "Buy on the rumor and sell on the news."  When the bill is actually passed, watch out.

Incidentally, a lot of bills die in Conference Committee, though I doubt this one will.  It may look quite a bit different from what either the House or the Senate approved, however.

Repatriated Overseas Profits A part of the bill regards a tax holiday for repatriated profits from overseas.  when this was done before in 2004, over 90 of the money went to stock buybacks.**   Repatriation of profits might even slow the economy"
Kleinbard  [Edward Kleinbard, professor at the University of Southern California's Gould School of Law.] notes that the Republican bill leaves one thing conspicuously unchanged: "A U.S. multinational looking to build a factory to serve foreign customers and choosing between a U.S. and low-taxed foreign location will still have a big incentive to locate that business abroad."***
 [Clausing at Reed College suggests that] Unemployment is at a 16-year low of 4.2 percent. Economic growth has come in at a healthy annual rate of 3 percent or better in each of the past two quarters. If the tax bill managed to heat the economy much more, the Federal Reserve might have to accelerate its pace of interest rate increases to cool things off.
That would make loans costlier for individuals and businesses and might slow the economy.***


Wednesday, November 29, 2017


"Pure As The Driven Snow" is a phrase that has been around since the 1500s, but not used much anymore.   It means very pure, i.e., sinless It probably will be coming back, however.  Nancy Pellosi says there should be zero tolerance for sexual improprieties.  In other words people, principally men, should be pure as the driven snow.  To apply this retroactively will be Armageddon for men.  I doubt you will find many men as pure as the driven snow.

For what it's worth, I don't recall my mother ever having conversations with me about the ways to treat women.  She definitely worried that some woman would get her clutches on me and marry me ending my educational career prematurely.  That I heard many times.  I also took a course in manners at the age of 12 where quite a bit of time was spent on the proper way to shake hands with a woman.

I thought that the big subject right now is Judge Roy Moore who is running for interim Senator from Alabama for two years who is accused of improper advances to teenage girls when he was in his early 30s.  I had thought that if he had shown contrition rather than saying all the stories were false, and said something like, "I saw the evil in my ways and reformed many years ago," that he would have disposed of the problem. Now I am not so sure.

I'm sure we are just seeing the tip of the iceberg, but for the current record on notables accused of sexual harassment , NBC has published a list.**  Note that not all those on the list involve men and women, but a couple are men and men.

Al Franken repeatedly has shown  contrition for seemingly putting his hand on women's bottom in taken a picture  together.  But it is turning out that he can't show contrition enough as he repeatedly apologizes for past actions and says he will be more careful.  Also I wonder how many women told him to get his hand off my butt (or equivalent) or just walked away?  It seems some women equate a man putting his hand on her butt is the equivalent to rape.  Apparently former President H.W. bush is also accused of putting his hands on women's bottoms.

I don't know that I ever put my hand on a woman's posterior, but I may have, perhaps as a joke to get a rise out of her.  I do recall slapping the behind of a girl I knew well  when I was in high school.  I did it for no particular reason except that she was bending over to look at something.  I remember doing this particular thing, because is was so not like me.

It seemed to me that things really started to heat up with the accusations against men in Venture Capital firms inducing women to "visit the casting couch" in order to get aid for their company 's start**  Of course things really exploded with Harvey Weinstein use of the "casting couch" tor women to get acting jobs.  Though Weinstein was a prominent Democrat, Republicans got into the act as well  e.g. Roger Ailes and Bill O'Reilly of Fox News.  Trials of Bill Cosby have been going on for years over shockingly drugging women to have sex.

I have to admit that I dearly miss both Charley Rose and Mark Halpeirn.  Charley Rose seems to be known among women for exposing his, um, equipment upon getting out of the shower.  I guess he was very proud of it, but it is a seerious charge (I once was on a jury of a man accused of "indecent exposure with lascivious intent.").  I watched his midnight show on TV almost every weekday.  It is not replaced although I believe NBR is trying to. (Oprah was apparently invited, for example).  Halperin, my favorite political reporter, is accused of making unwanted sexual advances to women when he was with ABC News.  Both these men have apologized for their very serious actions, but no matter.

Note: As this item was going to press, I heard that a principal at  NBC News Matt Lauer  (Co-host of the TV Today show)has been dismissed on charges of sexual harassment.  Quite a few people have said they are heart broken over this announcement, including a number of women like NBC Savannah Guthrie, who says she is very surprised and heartbroken.  Hoda Kolb also of NBC Today show also expressed her surprise and said she has known Lauer for 15 yrs.  As of this moment Lauer has not made a comment.  Before the day is over, Garrison Keillor is also added to the list of predators.

So maybe Roy Moore and Donald Trump are right that it is better to deny accusations than to be contrite.  Up to now, there is little to support that sexual improprieties effect political  campaigns.  We will see if things are changing in two weeks and see if Moore survives his widely accepted inappropriate harassment accusations with teenagers.


Sunday, November 26, 2017


A recent CNBC post contains a figure showing the GDP vs the year.  I found it instructive and reproduce it below and reproduce a similar figure from Tableau using information from BEA (Bureau of Economic Analysis) updated to include the 3rd quarter of 2017.*  To remind us, GDP is a spending metric composed of personal consumption, business spending, Government spending, and net exports.**

Net exports have been negative since, I believe, 1977 so that it  always is a drag on the GDP.

But first, GDP can be complicated as not all spending is counted.  A LOT of spending can go on that isn't counted.  For example on business spending:
Business investment includes purchases that companies make to produce consumer goods. But, not every purchase is counted. If a purchase only replaces an existing item, then it doesn't add to GDP and isn't counted. Purchases must go toward creating new consumer goods to be counted.**
So a lot of equipment replacement spending could be going on, and it would not be reflected in the GDP.
Fixed investment also includes residential construction, which includes new single-family homes, condos and townhouses. Just like commercial real estate  the BEA  doesn't count housing resales as fixed investments.**
So a lot of existing home sales could be going on, and they would not be reflected in the GDP.  In fact, there is a shortage of new homes now.
The example of government spending includes state and local governments as well as the Federal government:
Government spending [has decreased also putting a drag on the GDP] was $3.27 trillion in 2016. That's 18 percent of total GDP.  It's less than the 19 percent it contributed in 2006. In other words, the government was spending more when the economy was booming before the recession. That's exactly when it should have been spending less to cool things off**.
I think state and local government spending has not fully recovered since the Great Recession.  Federal spending has been hampered by the sequester.

For more details, see the reference.  The figure on GDP by quarter is given below:

(Click on figure to enlarge)

Here is the table from the reference.**  I had to piece the table together in two pieces and apologize that they don't fit in perfect vertical alignment.

(Click on table to enlarge)


Saturday, November 25, 2017


For awhile I thought that my average page views on items in this blog had risen into the 30-40 range, but this may not be true.  I've been writing this blog for 8 yrs now and haven't the slightest idea why some of my posts will get hundreds of page views and others less than 20.

For example, I think my post Corporate Tax Cuts; Unintended Consequences was one of the most important I have written (  It has gotten 61 page views which is nice, but why isn't this one of my posts that has gotten in the hundreds of page views?

For example I point out in Corporate Tax Cuts that, if we lower our corporate tax cuts, there is nothing to prevent other countries from lowering theirs.  So far as I know, no one else has mentioned this possibility.  There was a time when I attended a lot of congressional hearings, and I was quite impressed by the general intelligence of Senators (but not so much Representative).  I can't believe that they haven't thought of this possibility.  Are we being lied to?

There is something weird with our Republican political leaders.  It appears that Gary Cohn, the top economic adviser, feels there is some direct relationship between corporate  tax cuts and increasing investments:
President Donald Trump's top economic adviser, Gary Cohn, looked out from the stage at a sea of CEOs and top executives in the audience Tuesday for The Wall Street Journal's CEO Council meeting. As Cohn sat comfortably on stage, a Journal editor asked the crowd to raise their hands if their company plans to invest more if the tax reform bill passes.
Very few hands went up.
Cohn looked surprised. "Why aren't the other hands up?" he said.*
Was Cohn faking his surprise at the lack of corporate interest in more investing by corporations with a decrease in corporate tax rates?  Do they really not realize that we are in a very good economy, that companies are supplying our needs with current plant and equipment, with current employment, and at current wages?  Do they not realize that corporations are rolling in money and could well expand if they thought the expansion would bring more business?

I am not alone in saying that corporations are likely in this economic environment to buy back stock and increase executive rewards as they did in the 2004 tax holiday for repatriating foreign profits. and maybe give a special dividend or raise their dividend.  Surely congress and the administration know this.

There are those who say the stock market will crash if we don't have a big tax reduction for business and the wealthy.  Companies are making excellent profits in recent years and the wealthy have done extremely well.

I'm cynical enough to think the whole reason for doing these tax cuts is to take money away from Medicare, Medicaid, food stamps and the like:
The G.O.P. budget would cut $5 trillion in spending over the next 10 years, with a trillion of those dollars coming from the Medicaid program and half a trillion from Medicare. (“Entitlements” like housing assistance and food stamps wouldn’t fare much better.) Meanwhile, the Pentagon’s budget would increase to $620 billion.**

That GDP has been under 3% for most of the post Great Recession years, is pointed to, to say we are in a slow economy.  But GDP is a spending metric.  One reason that GDP isn't higher is that corporations are not spending, but hoarding their profits and buying back stock.  Certainly the consumer is doing their part and household debt is at record highs.***

I certainly will be very, very surprised if the tax cut and tax holiday on repatriated profits result in much increase in the economy.  Also as I pointed out long ago, tax cuts for individuals is an inefficient way of stimulating the economy.****