Wednesday, February 25, 2009

California Dreamin"

As the economy goes to pot

In the post below, I advocate taxing television to save Oregon's public schools during the recession. But Oregon is sitting in high clover compared to California, which faces a $40 billion budget shortfall. Forty billion bucks--that's a lot of money. Why, it's almost as much as we are still spending in Iraq every three months.

The chronically clever Mark Morford, columnist for the San Francisco Chronicle, has a different solution.

Sunday, February 22, 2009

A school funding solution

Tax your television

TV D-Day was supposed to go down on Tuesday, but the digital revolution won’t be televised for a few more months. Those of you who use frail metal rods to conjure television programming out of the ether have a reprieve. I used to be a member in good standing of the Analog and Aerial Society, but about a year ago I figured I was spending way more money in taverns watching the Blazers and Mariners than it costs for the necessary Comcast package.

Being a cheapskate, I finally subscribed to cable. That’s as far as I’m going, though. The 20-year-old set I inherited from my parents still works fine in my opinion. My eyes don’t have crystal clear vision, so there’s no need for my television to be any better.

The digital switchover, however, has gotten me to thinking about another issue that never goes away and only seems to get worse from time to time: education funding. With the state budget shriveling, it appears school children are once again headed for any early vacation this spring. Yesterday, Gov. Kulongoski asked teachers to work several days this year without pay. (Being the big man he is, Kulo announced he also would cut his own pay by five percent--from $93,600 per year.)

Public schools in Oregon are funded through an equalization formula based on local property taxes and to a greater extent general fund revenue from Salem. Portland, being the wealthiest part of the state, sends roughly half a billion dollars to poorer districts in more rural areas. On top of this, so much Portland property is tied up in “blighted” urban renewal districts (like the Pearl) that the tax base is inadequate.

A new source of revenue is needed and the coming digitizing of television offers an obvious solution: tax television.

We tax cigarettes and give the money to health programs. Although an increase in the tobacco tax was defeated last year, each pack of cigarettes carries a $1.18 tax that is sent to the Oregon Health Plan, other state health care agencies and smoking prevention programs. Cigarette smokers can squeal all they want about the tax being unfair, but sooner or later most of them get cancer, emphysema, heart disease, a stroke or an ulcer and the financial burden of these consequences far exceeds the puny amount of revenue collected by the coffin nail tax.

So if we tax cigarettes because they make people sick, we should tax television because it makes people stupid. This is particularly true for children. The more kids watch television, typically the lower their academic achievement. There also is evidence that children who watch television for several hours a day run a higher risk of suffering from attention deficit disorders. Dealing with these kinds of problems costs schools a lot of money.

By the way, no exemptions allowed for “educational television.” You can watch OPB only and still not involve the higher brain area as much as you would by reading Danielle Steele, a graphic novel or the ingredient list on a box of cereal.

Surely by now you are thinking taxing television is a downright commie pinko un-American idea, just like providing universal health care to U.S. citizens. Exactly. And just like universal health care, every other developed nation in the world has a television tax. Most follow the British model that requires citizens to pay for an annual license for each television they own—139 (approximately $200) for a color set and 47 for a black and white one. The money raised from this fee supports the BBC. In many other countries, the tax also funds public broadcasting, though in some it goes into the general fund.

The British employ a fleet of vans equipped with sensors capable of detecting a working television and these vans cruise the streets scanning homes and apartments for unlicensed TVs. With the coming digital switch, such old-fashioned Orwellian tactics won't be necessary. Your television ownership and usage can easily be monitored from the headquarters of your cable or satellite service. Okay, that's even more Orwellian, and it's probably happening to you right now (just as it is with your broadband Internet connection). Might as well put it to good use.

Let's do some paper napkin type of calculations: there are 1.6 million households in Oregon and just to make things simple, assume there is one TV per household. Sure, many homes have no TV, but many others have more than one. If Oregon levied a tax comparable to the British fee--$200--that would generate $320 million per year for education. Add on at least $10 million more from the sets in sports bars and hotel lobbies. That's not quite enough to fill the projected $850 million budget hole the state is in for this fiscal year, but it would certainly hold harmless the education part of it.

Taxing the TV, however, seems shortsighted. What really should be taxed is the amount of time it is on. In the average American household, the TV is on eight hours a day—or 2,920 hours a year. Surely, there exists the technology for cable and satellite television companies to track the amount of time each household has its television on. And if that is feasible, it should also be possible to track the viewing of television programming on one's computer via high speed connections.

If a dime tax were levied on each hour of television viewing—or, as in many cases, of sleeping in the La-Z-Boy with the TV on—that would generate almost half a billion in revenue for education. Maybe allow for a full school year and still pay our teachers.

Bump it up to a quarter, you've got over a billion dollars coming in. Sure, that would be $730 a year for every Oregon household, or $320 per person. But each of us has other options, such as turning off the tube off and maybe reading a book.

Wednesday, February 11, 2009

Fallen Angels

Two cupids idled by the St. Valentine's Inc. mass layoff ponder better times.

Cupid Downsizing Derails Valentine's Day

Love became the latest victim of the economic recession Thursday when it was learned that several thousand cupids have been laid off in a cost-cutting measure.

“We regret any inconvenience that the public might suffer from these necessary budget measures,” said St. Valentine Corp. CEO Sodding Malarkey. “But we can no longer afford employees who work only one day a year, if you can call it work.”

When asked how people will now fall in love with all cupids quivering their arrows just two days prior to the annual Valentine's celebration, Malarkey responded, “What's love got to do with it?”

Flocks of despondent cupids have been sighted clustered on the tops of tall buildings, while others have taken to drink or drugs. “Yeah, it sucks,” lamented Rudy Putti, one unemployed cupid. “You practice all year for this one day, honing your archery skills, and then you get canned.

“Oh, people will still fall in love,” he went on, “it just won't be the true love that only we can bring. I mean, you'll still see idiots stampeding into places I wouldn't set foot in.”

St. Valentine's Corp., a successful operation for centuries, was acquired in a hostile takeover in 2001 by Haliburton Advanced Defense and Entertainment Systems. HADES sought to train the winged cherubs for military purposes, such as surveillance and a flying special forces team. The experiments failed as it appeared the cupids were only capable of shooting small arrows that could do no harm. Shortly after HADES gave up on the project, St. Valentine's stock plummeted.

“We need some of the stimulus money,” Putti said. “Sure, people say we need bridges and highways and new schools and all that other stuff. But really, all you need is love."

Thursday, February 5, 2009

A political soccer ball

If you build it. . .

I have a great old car, nearly a classic. At one time, it was a shabby rustbucket, but a few years ago I spent some money on it—new paint job, transmission, audio system—and made it into a real head turner. The problem is, these days, I really want a boat. So I’m thinking of converting this vintage automobile into a motorboat. Yeah, a project like this will take some money, and I’m still paying off the credit cards on the paint job, but I really want a boat.

Naturally, once I change my car into a boat, I will need a new car.

And you are thinking, “This guy’s elevator is stuck between floors.”

You’re pointing out it would be cheaper and better to leave the car alone and buy a boat. But that’s not the Portland way.

For example, here’s Randy Leonard, the City Commissioner who boasts that he represents the little guys on the east side of town. He wants to bring major league soccer to Portland. He wants to make sure his friend Merritt Paulson (son of Hank) gets a stadium that will pack in the crowds of soccer fans. Paulson owns the Portland Beavers minor league baseball team and is vowing to put up $40 million to secure a major league soccer franchise.

Both Paulson and Leonard (and most of the rest of the city council) propose to convert PGE Park (formerly Civic Stadium) into a soccer stadium and then build another venue for minor league baseball somewhere else. This will cost at least $75 million ($45 million for the renovations and $30 million for the new park). These projects will be financed by bonds to be repaid by taxes on the ticket sales.

Never mind the merits of the financing scheme (such as whether the ticket tax revenue will pencil out in the next millennium.) Never mind that major league soccer hasn’t been a big draw in most other cities.

Doesn’t transmuting a baseball park into a soccer field seem like changing a car into a boat? Why not leave PGE Park alone (we still owe $28 million on the last facelift) and build a soccer stadium somewhere else?

Here’s the irony. Leonard wants to build the baseball park in Lents—right at Southeast 92nd and Holgate. Go over there on a weekend, or a nice spring evening, and you’ll see all sorts of people playing guess what? Yup, soccer.

Lents is the crossroads of immigrant life in Portland. There are Latinos to the east and south, Russians and other Slavs to the west along Foster, and Asians to the north along 82nd. These immigrant and second-generation folks are into soccer big time. If a major league soccer stadium is to be built using public money, it should be situated where the biggest soccer public lives.

Getting Washington's ear

Any economists out there?

I have no idea who Gerald Scoones is or what else he believes in, but his letter to The Oregonian a couple of days ago is worth republishing:

Cure economic death spiral
Foreclosures are at the root of falling property values that underpin the financial future of every American and the economy as a whole. Banks must race to sell homes from under their owners as long as their collateral's value keeps plummeting. As more foreclosures speed the decline, banks desperately need intervention to end their death spiral. Here's a solution I support:

Require that banks hold foreclosed homes for two years. Banks will then work to keep owners in their homes. Homes not able to be rescued will become two-year rentals, exempt from capital ratios. These can be lease-optioned to worthy prior owners or turned over to property managers.

The downward cycle is broken and home values stabilize. Banks resume lending for construction as well as other industries. Stimulus programs now have a defined framework to work within. A powerful turnaround begins across the entire economy

Better than any stimulus plan, it attacks the source, not the symptoms, of our growing economic crisis. Moreover, it is "shovel-ready," has no pork, and won't pass a big bill on to future generations. Sadly, I can't get Washington's ear. (Any economists listening?)


There are probably a lot of devils in the details, but it certainly is an idea that nobody else has floated. What the federal government is doing now is like spackling over seismic cracks.

The idea of letting the “owners” rent their former homes is appealing. One thing that has been galling during this issue is about all those poor folks losing their homes and/or investments when they put down less than what it takes to get into a house as a renter. Consider that a three-bedroom house in decent shape will rent for $1,500 a month. First and last month’s rent plus a security deposit, pet deposit, cleaning fee, etc., can run at least $5,000. So anyone who got a house with a no-money down loan, or a very small down payment, isn’t losing anything if they have to give it up.

Monday, February 2, 2009

A mere $128,000

It’s not just that former Sen. Tom Daschle failed to pay $128,000 in income taxes, it’s that he made enough money to owe at least $128,000 in income taxes.

After all, Daschle has been appointed to head the Department of Health and Human Services, which is the government agency most concerned with the needs of poor and working class people.

Wouldn’t it be refreshing if Obama appointed somebody who thought $128,000 was a lot of money?

“If you want to see what God thinks of money, just look at all the people He gave it to.”—Dorothy Parker

Sunday, February 1, 2009

Missouri Senator Suggests

Let's Pass a Maximum Wage

Sen. Claire McCaskill (D-Mo.) Friday called Wall Street executives “idiots” for using taxpayer money to pay out $18 billion in bonuses, then proposed that compensation for the employees of all bailout recipients be capped at $400,000 per year.

A columnist for The Washington Independent, Daphne Eviatar, thinks McCaskill didn’t go far enough. Eviatar proposes that $400,000 be the maximum salary for all executives. After all, it’s still more than our president makes a year. You can read her logic here.

Most people think it’s greed that has driven salaries and compensation packages of corporate honchos into the billions. It’s not greed so much as ego. They are reaping more money than they can ever spend, but money can’t buy them love.

They figure, however, if they make more than the next CEO, it can get them respect.

Their behavior is about as mature as spoiled sports personalities like Manny Ramirez or Terrell Owens. Performance statistics are no longer the measurements by which athletes compare themselves. It’s now all about salary. Every year, some baseball team owner is dumb enough to pay a journeyman pitcher with a 14-12 won-lost record and a 4.25 ERA upwards of $12 million a year over four years. And then every pitcher who has a better record will demand a bigger salary. It keeps escalating. Superstars aren’t super unless they are signing super-sized contracts.

The same applies to corporate superstars. Even when they have an off year, they still get bonuses. They need top dollar not to stick around with the company that hired them, but to make them feel as if they are leaders of the pack of the alpha dogs that have been ripping apart the flesh of Western capitalism.

People that insecure really shouldn’t be running big companies. There are some large companies in the U.S that limit executive compensation to a reasonable amount, such as Whole Foods, whose top execs cannot make more than fourteen times the wages of the lowest paid workers. (According to the AFL-CIO, the average CEO earns 360 times the wages of the average employee in the same company. European CEOs make roughly half of their American counterparts, and Japanese CEOs just ten percent. Somehow the companies based in Japan, Germany, Sweden and other enlightened nations compete very well with U.S.)

And it turns out, the more an executive gets paid, the worse his or her performance.

Like power, money corrupts. Or as the Bard of Hibbing sang, “Money doesn’t talk, it swears.”