The Code

October 7th, 2009 No comments

The Code
When I write of The Code, I am talking about the Department of the Treasury’s, Internal Revenue Service Tax Code. It’s the Bible/Quoran/Mahabarata of all tax accountants, the lodestone of our existence, the tome we grab and consult for “truth”.
Remember in the Pirates of the Caribbean, where Keith Richards ( as Cap’n Jack’s dad) is “The Keeper of the Code” ? He hauls out a dusty tome the size of the Greater New York Yellow Pages, labeled “The Codex”? Aye, matey, that’s The Code.
It would be funny if this musty accretion of laws going back to 1917 were indeed a lovely leather volume with impressed golden letters. It’s not. We pay yearly for access on a CD (or an online database) for The Code.
It’s cumbersome, antiquated, and unjust.
How many of you know lawyers? They study words. Not numbers, words. Logic, precedent, jurisdiction-wordy concepts like that. They generally cannot count. If you put a doc in front of a lawyer with any numbers (other than or and page numbers) they push it away faster than a pro bono case. Lawyers can compute fees from ten feet in dim light: otherwise not so much.
But do you realize that lawyers, i.e., the Ways & Means Committee of the United States Senate, write the Code? Yes, they write, and write, and write. They do not have to clarify or minimize before they pass new legislation. They add more words upon words, which Accountants have to interpret after it is passed and becomes law.
Why does this happen? Legislators write laws with the express purpose of raising revenue, affecting social policies and implementing programs and services they feel serve the public interest. We elect them based upon what we think they will do: what comes out is something else. The ‘something else’ is crafted by lobbyists to serve the interests of large corporations, and wealthy individuals to sneak complicated stuff into the legislation. Do you think I’m kidding? Read the actual legislation some times: I do.
The solution? Simplicity, not complexity. As a financial analyst I can tell you when something is complicated it is a.) because it was written by Committee/Idiot; or b.) someone is trying to make it complicated so you will either stop reading it, ask a lawyer what it means; and/ or c.) they are doing something sneaky. Like incredibly low capital gains rates, like no disclosure or taxes for Hedge Funds, like a corporate tax code that ships jobs abroad and allows/encourages corporations to repatriate heinous profits and offset them with fictional losses; like the Earned Income Credit for poor people, like Pollution Credits.
My Solution: Restructure the Code. Disallow multinational corporations shipping labor abroad: Estates and Trusts having no allowance for Net Operating Losses or Exemptions with the top rate at 40% from 35%, make all income subject to Social Security, apply means testing to Social Security payments ( no one having over 100,000 in Adjusted Gross Income gets anything from Social Security ),increase the Basic Standard deduction (for single people) from 5,450 to 9,000.,the Exemption from 3,500 to 5,000., allow long term capital losses against long term capital gains in the amount of 25,000 for the next 3 years, audit Schedule A Mortgage interest deductions and exclude interest attributable to things other than home improvements, and do not index Alternative Minimum Tax with inflation. That’s to start with.
Want to talk?

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No Blog Tonite, Kiddies

October 6th, 2009 No comments

I am taking 20 units of Tax Continuing Professional Education today: which warps/saps both personality & energy. I will annoy and enlighten you tomorrow.
In light of recently passed legislation:
I have no sponsors to disavow, and am not yet a sold-out media prostitute. I can always hope, however.
Peace Out.

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Rantus Interruptus

October 5th, 2009 No comments

Rantus Interruptus
To you style mavens today I am attempting to modulate my usual rant-rant-solve format with a new format. My wonderful web geek told me that my paragraphs are too long and I need more headers. I suppose that is because you all have the attention span of a kitten on speed. Because you can’t concentrate.
Header One: Why can’t You Concentrate?
Mostly because Content is drivel. I used to think that between the New York Times, and the Wall Street Journal, Louis Rukeyser’s ‘Wall Street Week’, and National Public Radio I could be sure of fair, balanced, thoughtful content. Scratch Rukeyser in 2002 when the programming whizzes ( why does that make me think of a men’s room?) @ NPR (Maryland Public Radio)screwed with him and he got pissed-off and quit.
That was when NPR started losing their grip on anything having to do with Money. Finance, the Securities Market, the Federal Reserve, Taxes, GNP: anything to do with Money. When NPR’s marketing idiots decided THEY knew more about what their audience wanted/needed to know about Finance, when they got involved with Content THAT’S when it started to go downhill.
Header Two: Why NPR can’t Count
When the marketers started messing with content @ NPR, and they became afraid of Bush II and watered down critical thinking and any third party pundits who did not buy them off as Sponsors, their Economic reporting became boring and low-grade. When their idea of hard-hitting reportage is Tess Vigeland hooting it up with a Fund Manager the same day the Dow fell over 3%, I started looking on my dial for KALX.
When Bush II came in the Wall Street Journal rolled over: their content went into the realm of Glen Beck and FOX. Worthless. They stopped covering the Economy in anything other than soft-core porn adoration of Greenspan and started sucking up to the B School graduates. Flattery becomes doggerel when they are more interested in getting the latest Harvard Grads for interviewees than in calling their Daddies on corruption.
Header Three: Why the New York Times is a Sad Fishwrap
For years my sign that life was acceptable ( I married two overachieving, lying, maniac depressive men, so my standards of “acceptable” included Arruba not Sanity) was my daily dose of the New York Times. San Francisco, Chicago, Walnut Creek, Pacifica, penury in El Cerrito, and now Clayton, Ca – anywhere I was the Gods Who Deliver would have my daily fix on the doorstep by 6:15AM.
Alas, that romance is over. Even with a full black & white dose of fiber (yes, that does mean p-r-i-n-t) in my hands it’s not the same. It’s like talking to your Bubby when she’s starting to go: the rich old relatives and their lifestyles, the scandals of landsmen who betrayed us, adverts for watches for the Shiksa Mistresses of her friend’s husbands, and puff pieces on an Economy down sour.
I Think This Is Header Four: Content, Content: where is the content?
My premise: you are bored because the media IS boring. It has been so dumbed-down that it is not challenging, or thoughtful or even surprising. It’s not that you are the MTV generation and Jump Cutting makes you want something new and fast every tree seconds. You are bored because it’s an insult to your intelligence.
Is there A Solution? (Oops! Header Five )
NPR has their media Pundits ( I do love On the Media & Studio 360 ) bemoaning the death of newspapers. The grey hairs at the Print Publications are bemoaning the loss of their expense accounts, and the fact there is much less fat in the budget. You could say it’s Craig Neumark’s fault. I don’t think so.
I do not believe that the Wikipedia Collaborative Journalism Model will work. People must be paid for their reporting. Geeky stay at home wonkers who read the RSS and rant ( of course NOT ME), holding up their iPhones™ for pictures are never going to be a substitute for Real Content from real reporters (Gretchen Morgenstern rocks!).
Solution: people are going to have to pay for Quality Content. There is an old saying “If you get something for free you got what you paid for”. What we are getting online and from the Newspapers, Magazines (New Yorker , Wired, the Economist excepted) is the pap they think we want. Her e it comes: we need to find good, challenging, critical media and support it. With money.
Peace Out. Write back with what YOU think is/are good reporting. Please.

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Dogbert and Evil Bosses

October 4th, 2009 No comments

Corporate Culture, HR & Dogbert the Evil HR Director: Culture of Meanness
Do many of you read Dilbert™? We cubicle drones know that it reflects Big Corporate Culture: stupid Boss, lazy co-workers, thankless tasks and the Evil Human Resources Director: Dogbert™. The Sadistic paper pusher who thwarts your efforts and career advancement, and enjoys your pain in a myriad of ways you never envisioned.
This is another story of corporate brutality and injustice. Mean people treating their Employees badly with impunity.
The Facts:
Mary (not her real name because she needs the job), my friend got sick at work. A legitimate Workers’ Compensation claim. She got an infection because of poor ventilation in the workplace. Could not wear her contact lenses, and her eyes were ‘icky and painful’. Not good. The Evil HR Director told her to put it under her health insurance. Mary therefore has to pay a co-pay and gets no Doctor’s time off. Not correct and not legal at all. After asking her rights in a sidebar conversation, I told her to confirm with her Doctor that it WAS a legitimate Workers’ Compensation claim. The Doctor gave her the correct claim form. She pursued it and two weeks after she should have filed the claim under Workers’ Compensation, she finally got the form from Dogbert. She filed the Claim.
However, because she is an hourly EE she did not get paid for the time at the Doctor’s, even though it is a legitimate BUSINESS LIABILITY INSURED UNDER MANDATED WORKERS’ COMPENSATION. She now cannot make her rent because she was docked for doctors hours. The Evil HR Director says “it will take 6-8 weeks for the Insurer to pay you.” and demurs on the unpaid hours. Question: is this fair? Is it just? Why is she doing this?
Response: No, no, because she can!
The Employee is powerless. She has no advocate (this is an Ex-Client where I used to be able to intercede in the behest of aggrieved Employees).Some HR directors are evil Be-atc-hes: some just old ladies who file paper.
The Real Question is that one of Corporate Culture. Why are some people mean, when they should be protecting the unprotected? ‘Cause They can.
My older sister is a Retired HR professional and is one of the most controlling, solipsistic, nasty people on the face of the Earth. Calls my Dear Old Mother and makes her cry, had my aged father trim her trees, and my Mother Dog Sit her Labs because she was too f’n cheap to pay for a kennel. BTW; the possibility of My Sister either reading this or leaving me any of her jewelry (she told everyone she is leaving it to the SPCA) is small. Would anyone in my family deny any of this? Nope.
Are all of the Human Resource Directors that way:? No but it helps if you like to fire people and demean them as a full-time job.

Small hearted People (insert HR Director in case above) may have been beaten down, and think the world is unfair. They use what advantages when they can and WHEN they are in power abuse the Power, IF the corporate Culture Fosters it. In short, if the Bosses are mean, they are mean. Some are just mean, period.
Before I started my own consulting business in 1991 I worked in Finance, Real Estate & Insurance. I, like all of us, had mean HR Directors and Bosses. I had horror experiences in Real Estate Due Diligence, the Entertainment Industry (Bosses like Harvey Weinstein- remember Tom Cruise in Stiller’s “Tropic Thunder”? ), and a Israeli-funded high-tech banking start-up ( I learned to read Financials upside down in Hebrew for a reason). What did I learn? Deal with Nice People, not B.P. (Bad People).
So, if you are reading this you know the rubric: rant, rant, humor, solution. Right?
As a Buddhist: (on good days I am a good Buddhist: Bad Days a Bitch) let it go: it is their Karma. When they are in the right turn of the Wheel they will either ascend or descend and be re-born as their actions deem appropriate. As a Muslim: they may a.) be possessed by a jin or evil spirit, and it is not your place to fight Demons; or b.)they are inherently bad, and are to be avoided (i.e, don’t work in Real Estate or the Entertainment Industry). As a Christian :( I spent wayyyy too much time in Church not to address this ) pray for them, Jesus will forgive them; turn the other cheek. So, don’t you feel better? I thought not.
For those of you who have your own businesses, maybe this will make you treat your EE better. If you are an EE: God help you. In this tight economy with > 12% unemployment (not even counting those who are self-employed ( contractors) and have no business & those who have stopped looking for work because there IS NONE) your Bosses are probably treating you as badly as they can.
Maybe it IS time to start your own business. You did know that I help people start their own businesses and keep out of trouble, didn’t you?
Yeah, I thought so. Peace Out.

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Polanski & Letterman: Perverts or Artistes?

October 3rd, 2009 No comments

Waxscratcher 100309

Roman Polanski and David Letterman: Pervert or Artiste?
So, I had this nice snarky column/rant written: all ready to post (thank you WordPress) and then David Letterman had his Big Reveal.
Then I got mad. Why? Because there was another white, aged, rich entertainment celebrity ( high and low culture in this case) somehow exposed as a Perv? No, it’s not that. It’s the Abuse of Power. One of the things I do for a living is handle Human Resources for small to medium sized Companies. I also teach Payroll accounting, which is part of HR. I try to act as an advocate for powerless Employees (EE) in the workplace. One of the biggest hurdles is ignorance of their rights in the workplace: that and fraternization ( under thirties call it “hooking up”) with co-workers and bosses (ER).
That is where Letterman comes in: was he a predator with unequal power OR was he such a “catch” that his female EEs couldn’t resist him? Yes, I know that some men will say, “But don’t the hotties in the workplace act as Predators to “catch” a rich, high status mate/sugar daddy? “ Well, yeah they do: but THAT IS NOT THE TOPIC OF THIS BLOG. The dynamics in the workplace is skewed in a pernicious direction by Predators: be they the Bosses or the (let’s be truthful here, OK?) GoldDiggers. It ain’t fair to hardworking EEs who just want to come to work: get meritorious advancements, be paid correctly and on time, have their measly 401Ks matched with a pitiful 3% (Heinous Safe Harbor provisions of ERISA to be dealt with at a later date), and go home unmolested to sexual partners of their choice. Does that sound like too much to ask?
Back to geezers trolling at the Workplace: maybe the girls wanted it, maybe the girls involved who worked/slept with David Letterman were treated fairly ( I will not say anything about covering ones teeth…) BUT there is matter other than fairness in the workplace. He is a satirist; he makes fun of corrupt, powerful men on his show. He gets paid handsomely (another inequity?) because he is Talent ( do you know that is what they call the performers in Adult Entertainment ?- which to my mind is neither Adult nor Entertaining?). Does the word ‘Hypocrite’ come to mind? When he is getting multi-millions for lambasting the foibles of Bill Clinton (workplace abuse or consensual sex?) while he has been running his own Harem? Makes him a bit less funny. I believe he used the word “creepy”.
In fact, when you see the show, he used the Monologue Spot to address the Injustice ( poor Dave being extorted- Just who is the victim here?) done to him and his family ( Regina had worked for him on the show before she left) and the Audience did not know how to react. They were laughing & clapping up until the point where he talked about the FBI Sting, and then they realized this was not funny. It became another ashamed powerful man defending his poor judgment ( or improper acts under EEOC, or DOL codes). A dictum of Public Relations confirms that the first person to speak is assumed to be the aggrieved party. It was spin or damage control, not Comedy and was not funny at all.
What do I think the Remedy should be? You know by now that I am a Do-Gooder Squishy-Thinking Big L Liberal, don’t you? Well, workplace sexual assault ( which is what it is if it is non-consensual) IS a major Issue. My remedies:
• Education in the High School level (prior to kids getting their first job) about their rights as EE
• Education about Sexual Harassment at the High School level: and
• A larger budget for Workplace Enforcement when there are aggrieved parties who have no recourse to Prime Time Monologues.
Rant Over: have a nice Weekend.

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Why should you bother to read this…

October 1st, 2009 No comments

Dear Readers: this was a speech given to the
Womens’ Business Connection of Lamorinda last year and is my thoughts on the Credit Crunch…
What happened?
The Players:
Mortgage Brokers/ Underwriters
Securities Firms
Bond Rating Agencies
Insurance Companies
Investors: Hedge Funds, Banks, Foreign Investors, Pension Funds

The Milieu:

Real Estate market in a boom- properties overvalued, all parties assuming the market would continue to increase and I will be able to sell anything at a higher price than I
bought it for.

Interest Rates at historic lows. The assumption that Real Estate would continue to increase in value made Real Estate in any form, of any type attractive since interest
paid on bonds were historically low, and therefore unattractive.

Sequence of Events:
Mortgage Brokers/ Underwriters arranged loans to people who could not afford them, with terms ( ↑ interest rates / adjustable rates) that could not be met. Sold increasingly complex financial instruments to uneducated buyers without the financial means to meet the terms of the contract. Compensation of mortgage brokers structured to incentivize sales people to sell loans to anyone, regardless of creditworthiness.

Lack of financial sophistication of buyer
Ignoring credit guidelines in mortgage industry
Pernicious, predatory loans not disclosed
Securities Firms
Packaged loans that would not have performed (paid to term by buyers) if adequate due diligence had been performed – ignored riskiness of loans. Packaged these in large dollar denominations ( Collateralized Mortgage Obligations) and sold to buyers, while not telling buyers of the high risk.

Violation of Securities Act of 1933 to disclose risks to investors
Bond Rating Agencies
Gave good to excellent ratings on poor quality loans in order to sell to buyers. Conflict of interest in that the fees for rating the packaged loans were paid by the Securities Firms
the sellers), as part of a package deal. Did not exert due diligence in addressing the inherit risks of the loans ( poor quality credit of home buyers, expectation that RE values were unsupportable, liquidity of packages poor due to over abundance of Collateralized Mortgage Obligations). Buyers of CMOs duped as to low risk of investment.

Breech of fiduciary duty to exert due diligence in insuring integrity
of financial ratings
Failure to disclose conflicts of interest in compensation
Insurance Companies

AIG, the largest insurance company in the United States, sold Credit Default Swap insurance to insure to the buyers of Collateralized Mortgage Obligations that if the loans (CMO) were not paid, AIG would pay them. AIG’s mistakes were:
a. to not charge adequately for the inherent risk in the poor quality loans
b. to sell many more on the “short” ( there would be a default, versus there would not be a default) side than the “long” side. Ration 1.4 Trillion vs. 435 Million.
AIG did not charge enough to cover the possibility that the CMO they wrote would “go bad.” This is poor underwriting, and is typical of a soft insurance market. The fact they did not balance the risk in their own financial portfolio by either transferring this risk elsewhere ( sell it to someone else), or take a position in the Markets to make money if the Real Estate market collapsed and/or the loans did not perform was poor Risk Management. Not underwriting the risk of default by charging adequate $ to cover the possibility of failure
Portfolio unbalanced on macroeconomic assumptions and in extent of dollar risks.

Investors: Hedge Funds, Banks, Foreign Investors, Pension Funds

Purchased products CMO assuming they were risk-free, and that the Real Estate Market would continue to escalate. When mortgages went bad (failed to perform) the CMO which were large aggregations of loans that were packaged, they could not renegotiate the terms easily to “workout” a mortgage that would continue to perform AND PAY THEM. Buyers of homes could not meet the escalating interest rates, ands when the people who owned the loans (in many cases impossible to locate) could not be found to make the loan work at a more supportable rate THE BORROWER WALKED away from the Properties. This put pressure on prices (↓) causing Real Estate prices to fall further.
The Investors watching their computer screens across the World and all feeling that the sky was falling, sold their CMOs driving the prices down further. The Investors & Financial Institutions who purchased CDS to address the risk that the Real Estate Market might go down called AIG and tried to collect on their Policies. AIG had not collected enough money, nor balanced the risk. When everyone came to get paid AIG’s cash drawer ( Current Assets) was empty, bankruptcy was next. They (AIG) received $213,000,000,000.($213 Billion) from the Federal Reserve.

Lack of underwriting standards in investments
Result:

No one trusts anyone. Banks and financial institutions are not allowing individuals to use home equity/ credit cards, are increasing interest rates or cutting credit limits, not writing new loans or allowing anything to threaten THEIR financial security. The downturn in the Real Estate market has made consumers ( contractors, developers, suppliers, mortgage brokers) unable to buy the things they were buying when they felt secure and happy (cars & consumer goods). There is a lack of trust in the Financial Institutions, and a level of risk aversion on those who DO HAVE MONEY not to trust or lend to strangers.The Troubled Asset Relief Program (10/3) was passed to distribute $700,000,000,000.($700 Billion) to address the credit crisis.

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My First Blog Post & Why You Should Read It

September 30th, 2009 No comments

Wax Scratcher . com
Initial posting
“Waxscratcher”, def. a journalist, writer ( Babylonian: war correspondent) from “ The Afghan Campaign “, p.384,Steven Pressfield, Doubleday/Broadway Books, New York; 2006,ISBN 978-0-76792238-8.
Who am I? I am a middle-aged accountant and business manager, living in Northern California, who has been in the Finance Industry since 1972. I am an avowed Democrat (small D),who considers herself a Compassionate Capitalist. Now, I know what you are thinking, “ Compassionate” … Isn’t that what George The Second called himself? A “Compassionate Conservative”? Well, Yes, He did. That among other Republican Untruths are a legacy that is still with us: spiteful, hateful, mean; and anything but compassionate.
A Compassionate Capitalist is a businessperson who treats his/her EE ( Employees) with compassion. A Boss who pay his/her EE correctly, and on time. A Boss who, subject to profitability, grants his/her EE health care, vacation time, sick time with reasonable co-pays. A Boss who does not seek to enrich him/herself by sending jobs abroad: but by keeping them close to his/her own home. Unlike most prestigious MBA Graduates, a person who creates a business legacy that, if not guaranteeing employment, at least ensures stability that allows EEs to buy homes, have progeny, go to school themselves, help their children attend college, and retire with adequate retirement.

What is not a Compassionate Capitalist? One who outsources jobs: one who acts like a Liberal by giving to charities who help only the poor in Third World Countries and not at home: people who send their children to private schools, hold fundraisers for the Democratic Party and fail to pay Employment Taxes, health insurance, mileage and vacation time for their Nannies, Personal Assistants, Maids, Cooks, Gardeners or Domestic help. Who have a Jag ,a Mercedes, a Hummer, A Volvo in the driveway while trusted workers drive a beater they can barely afford. One who drives 10 miles to do a Pilates Class, while their EE cannot afford healthy food or any health club at all. One who took the TARP Bailouts with big fat salaries and bonuses while driving companies into penury. The managers of the Credit card companies who raised everyone’s interest rates, escalated Minimum Payments, cut their Limits and took TARP money.
So why am I writing this? It’s not because I don’t have anything to do. It’s not because I want to run for office, or sell Banner ads.
It’s because I’m mad as Hell and I’m not gonna take it anymore. Because I worked for and voted for Brother Barack who is starting to disappoint me by trusting The Bad People (heretofore known as B.P.).Because the government is still listening to B.P., and not helping the Good People. Because The Democratic party has sold out to the Greedy B.P. and although they have the majority in Congress they don’t have the Cojones to get jobs and healthcare going. That’s why. Oh, and did I mention that Dems understand nothing of Finance, Economics and taxation and trust the B.P. who have always said “it’s too complicated, Trust me”. And it’s not too complicated, and they are not trustworthy. Its’ like what your Mother says in the Mall, “Keep a hand on your Purse, Dear.”.

End of rant 1.0
Other Topics:
Why Liberals Can’t Count…
Why Economists should be Fired…
Why Political correctness is Annoying and Stoopid…
Are Lesbians Liberal?
How Education should be Changed
Where did the Jobs Go & What the IRS Tax Code has to do with it.
What Caused the Credit Crunch & Why We Bailed out the Wrong People
Why can’t I afford a Green car & Solar Power?
Why NRP is useless…
Corporate Culture & Cannabis Culture
Why Isn’t Bill Maher President?

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