Thursday, January 26, 2012

The trouble with money

I'm not one for pithy phrases, but sometimes they stick. This one for instance:

When you do something for the money, all you have is the money.

Last month, Warren Olney did a show focusing on today's wealthy class and how different it is from the wealthy class of just a few decades ago, when you made a good widget and built a small empire around it. I know two men who did just that. One started manufacturing paper tubes, the other packaging products. They worked hard producing superior items. They employed good-sized staffs. They succeeded and reaped the financial reward. Everything about these men was solid, including their money.

Today's wealthy class are anything but solid. Most make nothing other than money. They have ten- or one-hundred fold more than what was considered old school wealth. And if you listen to Olney's show, you'll learn that they lose it very easily and that taxing them is hardly a reliable income source.

I don't deny anyone a career in the financial industry, but at some point money becomes obscene. Venture capitalists make one thing: money. And judging by Romney's squirming over tax returns, I'll bet he's made an awful lot of it.



I have no idea what will become of Romney, but avarice is a deadly sin for a reason.

Writing does not pay much, but it is my craft. I strive to make it the best it can be. Sometimes my writing shines and sometimes it doesn't. When I write on this blog I don't get paid a dime, but when I get it right and produce something that lifts or energizes or enlightens you, it does the same for me.

And something of value is born

*  *  *

37 comments:

Bill said...

Gee, Erin. Do you think Romney has reached the point of obscene? He gave $7M bucks, 16.4% of his income, to charity in the last two years.

Venture capitalists try to make money by investing in start up companies. Sometimes they win. Sometimes they lose. When they win, the company they invested in makes money, grows, hires people. "Something of value is born." When they lose, THEY lose.

Erin O'Brien said...

Charity is not voluntary for Romney. It's called tithing and in his case, it goes to fund Mormon causes such as massive anti-homosexual campaigns.

As for Bain, the horror stories will be trickling out for months.

Bill said...

The President gave 1% of his income to charity. Obscenity is in the eyes of the beholder.

Tony Rugare said...

Erin, excellent post. The best account about money in today's debates that I have read.

Anonymous said...

Obscenity is in the the eye of the beholder. Horseshit is a matter of fact.
Horseshit:
"Venture capitalists try to make money by investing in start up companies. Sometimes they win. Sometimes they lose. When they win, the company they invested in makes money, grows, hires people. "Something of value is born." When they lose, THEY lose."

RJ

Anonymous said...

Moral Hazard:"Any situation in which one person makes the decision about how much risk to take, while someone else bears the cost if things go badly."

Hey Bill,
In your best salsa rhythm sing us a little dirge about the poor folks at Countrywide(BOA)Mortgage.

RJ

Bill said...

It's OK, RJ, if the "someone" bearing the cost, is NOT the taxpayer. Solyndra, for example.

Bill said...

By the way; would anyone here vote to raise long term capital gains tax to 30%?

Anonymous said...

Unresponsive. Does not address your assertion that a Venture Capitalist providing seed money to a start up is the ONE AND ONLY winner or loser in the transaction.

But since you mentioned Solyndra are you suggesting that the government should not be engaged in providing economic stimulus in an effort to create jobs?

RJ

Anonymous said...

"By the way; would anyone here vote to raise long term capital gains tax to 30%?"- Bill

1/26/12 10:32 AM

Me!

RJ

Erin O'Brien said...

Solyndra.

Solyndra.

Solyndra.

Solyndra.

That is going to get so by Novem--oh wait--it already is.

Bill said...

Solyndra created jobs for a few lawyers, ultimately, and cost the taxpayers $500M. Venture capitalists use their own and other investor's money. Sort of like betting a few hundred dollars in a slot machine. Do I detect a little envy here?

Regarding the proposed increase in cap gains tax; I suppose you'd want to exempt the sale of a home you've owned for 30 years. Right?

Anonymous said...

Still unresponsive. Just a snarky smackdown that provides no value(!) to the discussion.

Just to cut to the chase on taxes. I think the code needs to be simplified. Income is income. Set your parameters and collect the required percentage.

Envy? Yep. I cry myself to sleep at night longing for an estate on Long Island with a big ole gravy trough in which I can consort with the other swine. (Sorry swine, it's just a literary device.)

RJ

Bill said...

How can you tell, RJ, when you are in a "swine" neighborhood vs a righteous one?

Is "snarky" defined as a comment you don't agree with? Sort of like "obscene" is something that's distasteful to you.

Anonymous said...

How can you tell, RJ, when you are in a "swine" neighborhood vs a righteous one?

Karma.

Is "snarky" defined as a comment you don't agree with? Sort of like "obscene" is something that's distasteful to you.

snark·y/ˈsnärkē/
Adjective:
(of a person, words, or a mood) Critical; cutting; testy.


RJ

VideoDude said...

It seems the Solyndra saga started under the Bush/Cheney Co-Presidency: http://thinkprogress.org/romm/2011/09/13/317594/timeline-bush-administration-solyndra-loan-guarantee/

Anonymous said...

@Erin-Solyndra is driving righties crazy because that and the ATF fuck-up are all they've got-this has been one of the most scandal-free administrations since...ever.

@RJ-I wonder how much of Mr Romneys income stream comes from real 'venture capital' and how much from 'private equity'. There's a difference, and it's pretty important.
MR

Anonymous said...

@MR. I wouldn't even "venture" a guess at that question. I am a rank amateur on tax law. I'm sure the differences are important. But based on that 500 page document Mitt submitted it seems even a novice can see that if one can't find a favorable niche in which to shield assets one is not getting his moneys worth from his tax accountant/attorney.

RJ

Bill said...

Solyndra should drive every taxpayer crazy. The Obama campaign has already aired an ad defending Solyndra and the misuse of taxpayer money. Solyndra is not the only example, either. An application, for a loan, was made during the Bush administration and they were smart enough to say, "it's not a viable business plan". Obama pushed it hard because the investors contributed to him and it fit his green agenda. The original private investors, of another $500m, realized, quickly, that the invesment would never pay off. They figured out how to get Obama to cover their losses. There's no way to sugar coat the corruption here. Taxpayers who look the other way and who are not concerned about this, are tools.

Erin O'Brien said...

Hm.

A whole half a billion, huh? Jeepers, creepers. That would cover Afghan war costs for a whole two weeks!

Anonymous said...

"There's no way to sugar coat the corruption here. Taxpayers who look the other way and who are not concerned about this, are tools."-Bill
1/26/12 3:21 PM

Couldn't agree more. However there's more than one problem in my field of vision. Solyndra is a partisan circle jerk compared to:

Military-Industrial Complex.

Eric Prince sends greetings from Abu Dhabi.

RJ

Bill said...

Yes. I agree that it's not a huge amount of money in the overall scheme of things but defense and military spending is authorized by congress. The money for Solyndra was a gift/payoff from our President. Totally corrupt, anyway you cut it.

Anonymous said...

Don't recall you focusing your X-Ray vision on this little gem Citizen Bill:

"Last summer, with his former top managers facing criminal charges , and saying he was weary of "proctology exams" from Congress, Blackwater founder and erstwhile CEO Erik Prince put the company up for sale and moved to Abu Dhabi."

RJ

Anonymous said...

One last mnemonic and I'm done. Anyone that can say in good conscience that executive discretionary spending has never been used illegally to advance U.S. Imperialism is mentally ill. (Or, at least, A TOOL)

"During the Reagan administration, senior Reagan administration officials secretly facilitated the sale of arms to Iran, the subject of an arms embargo.[1] Some U.S. officials also hoped that the arms sales would secure the release of hostages and allow U.S. intelligence agencies to fund the Nicaraguan Contras. Under the Boland Amendment, further funding of the Contras by the government had been prohibited by Congress."

RJ

Bill said...

Whew! Glad I've never made that claim.

Anonymous said...

Solyndra:
By law and the constitution the President cannot appropriate money. This loan went through the vetting process, and money for a program appropriated byCongress was used in a program established under a previous administration. It wnet bad. Free-market conservatives should rejoice in the glorious working of the invisible hand of the marketplace.
If there's corruption where's the investigation so far? Mr Issa of California seems mum on the subject so far.

The fact that you're spending so much time on this, Bill, pretty much reinforces my point that this is about all the right has to bark about.

MR

Anonymous said...

Actually I hear that the solar panels are stored in a warehouse and the US is going to put them on the moon to intercept the sunlight before the Chinese can get it.
Those righties will fix everything.

RJ

P.S. Cue: Solyndra. Fast and Furious. The GOP campaign. I'm sure we haven't heard the last of the secret Kenyan Muslim either.

Bill said...

I think the list of govt funded green energy companies, that have gone bankrupt, is up to around 8. Not to mention the Money we'll never get back from GM. Unless, of course, the Volt catches fire. Government waste is real. trashing green energy

Anonymous said...

Bill,

Your willingness to participate in useless pissing contests is limitless. But, just to be a good sport: STAR WARS.

When the GOP gets curb stomped in November how will you explain it?

RJ

Anonymous said...

From Bill's Link:
"Solyndra, based in Fremont, Calf., received a $535 million loan guarantee from the Obama administration in 2009 as part of the Energy Department’s push to promote alternative energy. The company filed for bankruptcy last year."

From DOD website:
Missile Defense Agency (Renamed and retooled remnant of Strategic Defense Initiative under Raygun)
MDA is requesting $8.626 billion (B) in FY 2012


Gov't Waste is real.

RJ

Al the Retired Army Guy said...

I like money. And I'd like to have more of it.

Al
TRAG

Bill said...

Yes, RJ. My willingness to participate in useless pissing contests is only limited by the amount of knowledge I'm able to drink in and the number of other pissers willing to go the distance. And, I'm quite sure November will provide all of us something to get pissed about.

Anonymous said...

I was actually nervous about the coming election for a little while, primarily because dependable progressives like myself feel abandoned by BHO et al and might go all rogue or shit. However I woke up this morning and, after hearing a recap of last nights GOP debate, thought "The only way Obama can lose the White House is if it's discovered Michele is actually RuPaul."

RJ

Bill said...

Or, if something else surfaces about Larry Sinclaire. That a could be a problem. Or, not.

Anonymous said...

Larry Sinclair!? Wow...bringing that up is the equivalent of the guy who's in trouble with someone who says "HEY-Look...over there-it's Batman", pointing in one direction while dashing in another direction...
MR

Anonymous said...

@Bill on 1/26, 10:58-
-The current exemption on capital gains from sale of a primary residence is $250K for a single taxpayer or $500K for a couple filing together. One can also convert a rental property to a private residence for the purpose of this tax break fairly easily by demonstrated occupancy in the property for two of the previous five years.
-This exemption can be used an unlimited amount of times. There is no lifetime cap.
-Nobody has discussed changing these provisions.
-There is a huge difference between capital gains per se and the carried interest loophole which is the instrument that has transferred Mr Romney from the ranks of the rich to the ranks of the super-rich. The carried interest loophole allows fund managers to treat their fees from their management services as if it were profits from the fund they were managing, a fund they don't own, instead of a fee for management services, which would become earned income.
-I mentioned above a difference between 'venture capital' and 'private equity'. Venture capital implies investment in start-ups such as Bain did with Staples.
Private equity is more closely associated with Sopranos-style bust outs, which Bain was also involved in. When Mr Romney tries to present himself as a 'job creator', he tends to take credit for the Stapes-type successes and ignore the Sopranos style bust-outs like at American Paper Pad.
MR

Bill said...

Hey! Look over there! It's Batman!