James Clark Blog

Americans concerned with waste in our Congress & Senate should note how fortunate we are not to have a system like the one in Great Britain.  Members of Parliament routinely charge English taxpayers with a myriad of expenses that go beyond the pale. Michael Martin, the M.P. Speaker, just resigned over his expense submissions, which he fought in vain to keep from the public. (First time in 300 years a Speaker of the House of Parliament has been forced out of office, the last being John Trevor, having been convicted of a bribe in 1695). The cheating was uncovered by Heather Brooke, an American freelance writer living in London. The Daily Telegraph broke the story.

Check out the expenses the Honorable Michael Martin charged to the taxpayers:  Massage chair, pornographic movies, a moat cleaning service, a plasma TV, horse manure for his gardens, and tennis court repairs.  In resigning, the disgraced Speaker said “……I have always felt that the House is at its best when it is united. In order that unity can be maintained, I have decided that I will relinquish the office of speaker.”

M.P.’s have been abusing the lax British expense tax laws for years. “Second-home” allowances are the norm, with $40,000 a year in taxpayers’ money to renovate and even sell the properties for profit.  Some have even claimed monthly payments for mortgages long since paid off. How about putting one “Kit-Kat bar” on your expense claim and swearing under oath it’s legit?

For shame!

Went to Grapevine Mills in Texas last weekend.  In the mall were several new GM Saturns.  I took some time to look at one, which was open with a young attendant standing by. The car was stunning. White SUV with an impressive interior and all the options one would possibly want. I was taken with the vehicle until…..

Sticker on windshield. Remember, Saturn is the company that will not negotiate prices. What’s on the sticker is what you pay. This one was just under $40,000. With delivery costs and taxes, north of 40k.  That, in my view, is what’s wrong. New vehicles made by GM, Ford & Chrysler are simply overpriced. I would have loved to have owned that slick vehicle, but not at the quoted figure.  The young lady standing by the car seemed a little depressed, since I assume she knew that Saturn was being sold off by GM and would be no more.  So….I left the Saturn and went to one of my favorite stores in the mall, Steve & Barry’s. Upon arrival at the location, I found it had gone out of business.  Somehow that seemed fitting.

Another big reason the government should have stayed out of the auto manufacturing business & let the marketplace and the law handle the Big Three’s economic woes is the so-called “government backed warranty.”  If I had bought that new Saturn, I would be buying a vehicle with a company that goes out of business. What if I have a warranty claim? I would likely be required to trek through piles of online govenment paperwork, then be directed to a shop no telling where, to get the warranty work done. A government approved warranty shop for that Saturn might be 100, 200, or 500 miles away. Once you get that warranty service, be prepared to spend several hours filling out the paperwork. A nightmare. The US Bankruptcy Code is designed to handle individuals who spend more than they earn.  It will happen to GM, Chrysler, and possibly Ford. The only question is when.

Update: As of 21 May Chrysler is in Chapter 11. Dealers who get axed will be left with up to $500k in Chrysler parts plus another 300k or so in required-purchased Chrysler tools, will take a big hit.  (Chrysler won’t take them back, nor will the company pay warranty claims.)  So when you buy that new Chrysler, expect to pay for all that service. It’s a given. Same with GM, which has likewise invoked Chapter 11 bankruptcy protection. What irritates me is that bankruptcy was always a foregone conclusion for these automakers, but they wisely chose to ask Uncle Sam for billions of dollars in a vain hope of staying solvent. It was never going to happen.

Every reader who has a teenage daughter or sister should require her to watch Liam Neeson’s new film TAKEN.  Neeson is dynamic as retired CIA agent Bryan Mills, who goes to Paris to rescue his 17-year old daughter from Albanian kidnappers. The film vividly reflects the dangers faced by a naive teenage girl in foreign lands. The movie is exciting and electrifying.  Using his CIA contacts at Langley, Neeson’s character is able to use a garbled tape of a cellphone conversation to determine the name of the girl’s kidnapper and that he is an Albanian National. The ring kidnaps young tourists, drugs them and uses them as prostitutes. Virgins (like Mills’ daughter) are auctioned off to Arab sheiks. Mills has a window of 96 hours to effect the rescue.  His anger and the film’s velocity is breathtaking.  Neeson is terrific in the role. A must see.  (The film’s a little over the top, in that Neeson kills off at least 10 men, including a corrupt former French police inspector but somehow gets to leave Chas. De Gaulle Airport with his daughter in hand, no problemo. Yeah, right). Also, why did he have a 96 hour window to get the girl? That wasn’t explained.  Still, fantasy as it was, the movie is interesting and keeps your attention.

NCAA storm clouds are hovering over the University of Southern California sports programs. The probe centers on lack of institutional control and failure to monitor the football and basketball programs at the school.  Here, in a nutshell, is what it’s all about:

1. O. J. Mayo. The Huntington, W. Va star, according to Louis Johnson, a one-time confidant, signed with USC and received approximately $30,000 from one Rodney Guillory, a “runner” for Bill Duffy Associates sport agency.  Food, clothing and a 42-inch flat screen TV went to Mayo, according to Johnson.  Johnson has told the NCAA, FBI, and IRS that Trojan basketball coach Tim Floyd gave Guillory $1,000 cash for his (Guillory) and Mayo’s weekend at a 2007 Las Vegas NBA All-Star program, and that Guillory received between $200,000 and $250,000 from BDA Sports for his efforts to successfully lure Mayo from the West Virginia high school to USC. Mayo denies the allegations. Late news from Los Angeles quotes sources as saying Coach Floyd will tender his resignation soon.

2. Reggie Bush. According to Lloyd Lake, co-founder of a failed sports marketing company, Bush and his family received nearly $300,000 in benefits when Bush was playing football at USC.  One widely circulated photo of Bush on the cover of a hot rod magazine showed him standing next to a customized 1964 Chevrolet that supposedly was worth over $60,000. Plus Bush’s family allegedly received housing benefits approaching $800,000 while Bush was a Trojan. Like Mayo, Bush denies the claims.

My prediction? The NCAA will dish out a two year probation period to USC that will be founded on Failure to Monitor, a step down from the dreaded Lack of Institutional Control.  (If USC escapes the institutional control strike, it will be very lucky.) Punishment: Banned from television and post-season games for two years, reduction in scholarship offers, forfeiture of victories during the violation periods, and a requirement that certain people in the sports programs be canned. (There likely will be a finding that USC also failed to self-report the violations to the NCAA which will be an enhancer).  Tim Floyd, Pete Carroll and AD Mike Garrett should be very, very concerned.

Interesting question: If the NCAA hammer falls, and USC has to forfeit its football victories, will that mean that their 55-19 2005 win over the University of Oklahoma Sooners will be reversed, giving OU a national championship?  Possibly.  Will Reggie Bush have to deliver his Heisman Trophy to the runner-up, Vince Young?  (Doubtful that the NCAA has that jurisdiction.)

Which brings us to a critical point:  When will reality come to Div. I sports, particularly football? Some fans are not aware that the expenditures for these schools come from revenues, and there’s nothing the state legislatures or concerned taxpayers can do about it.  Look for the day when coaches like Bob Stoops, Mack Brown, Pete Carroll, et al., are paid $5 to 10mm a year, all from revenues. Univ of Texas football alone brings in over 55mm to the program. So….I humbly ask When Are We Going To Start Paying The Athletes?  Seems only fair and that will take this NCAA hammer stuff out of the equation.

Regardless, sports fans should expect something explosive to come from all the SC stuff.  It looks gloomy in Trojan Nation.

I have a simple idea:  The Congress & Senate pass emergency legislation that would allow U.S. citizens to purchase treasury securities that would not only be exempt from state and federal income tax but more importantly, be exempt from state and federal estate tax.

Cap:  Three trillion dollars.

Purpose: Rebuild America’s infrastructure, bridges, roads, toll ways, federal buildings, national parks, dams, hydroelectric plants, borders, airports, ports, nuclear power stations, i.e., the works. Rebuild America from scratch and put millions to work, similar to a modern-day W.P.A.  Also create a universal health care system once and for all covering all U.S. citizens.

We would need a czar watchdog, like U.S. Senator Tom Coburn, to try to prevent waste and corruption, but all in all this would get America going again.

There would be an almost immediate 3 trillion dollars go into the treasury. This would work. Personal note: So far readers of this blog have endorsed this concept 100%. That means it stands no chance of being considered by our Congressmen and Senators.

Some impoverished Nigerians filed suit against Chevron in U.S. District Court in San Francisco alleging violations of human rights. Villagers from the Niger Delta region took Chevron to trial in an attempt to hold the company responsible for the 1998 shooting and mistreatment of protesters by Nigerian soldiers at Chevron’s Parabe offshore oil rig.  The villagers were protesting extensive environmental damage they said the oil company’s operations inflicted on the region, including destruction of farmland and  fisheries that provided their livelihoods.  A jury returned a verdict for Chevron.

Chevron then asked the trial judge to impose trial costs of more than $500,000 against the villagers, who live on less than $100 per month. The judge refused, citing Chevron’s earnings in 2008 of nearly $24 billion. Lawyers for the villagers have appealed to the U.S. 9th Circuit Court of Appeals.  The trial costs were leveled against the Nigerians and their lawyers. Taken from the Los Angeles Times – Reporter:  Carol Williams       carol.williams@latimes.com

Outlined against a blue-gray October sky the Four Horsemen rode again. In dramatic lore they are known as famine, pestilence, destruction and death. These are only aliases. Their real names are: Stuhldreher, Miller, Crowley and Layden. They formed the crest of the South Bend cyclone before which another fighting Army team was swept over the precipice at the Polo Grounds this afternoon as 55,000 spectators peered down upon the bewildering panorama spread out upon the green plain below.

Grantland Rice – October 18, 1924: The New York Herald Tribune

Notre Dame Fighting Irish 13 – Army’s Black Knights of the Hudson 7

AM Talk Radio is filled with hateful, virulent content.  It commands a huge audience of people who want to hear right-wingers rant about the government and trash President Obama, Nancy Pelosi and Harry Reid.  To their listeners, the mouths with microphones blame everything on the Democrats and pay continuing tribute to W and Ronald Reagan.

To counteract that undeniable force, the Congress is offering up a so-called “Fairness doctrine” which would require equal time to liberal interests.  The FCC would monitor, and govern, the AM airwaves, presumably with a huge new staff, and possibly another bloated government agency. The AM radio market would be ignored.  I’m a liberal Democrat, but submit that this government requirement has huge flaws.  It basically tampers with, and overrules the marketplace.  It should never be enacted. If the owners of AM radio stations want to promote hatred as their core market offering, and the market wants it and pays for the product, so be it.

Speaking of AM radio, has anyone but me noticed the new subliminal advertising schemes? It goes like this: A so-called “caller” calls in, compliments El Fatso Rush and/or Sean as the new saviors of America, and then asks a final question, like “…..Rush, I understand you have a Serta mattress. I’m thinking of buying one. How do you like it?”  Rush fakes surprise at the question, then quickly recovers.  “Oh, I love it. The folks at Serta, who can be reached at 1-800…..that’s 1-800……..are great! If you’ll leave your name and address with my staff, I’m going to send you out a free queen’s size! You’ll love it.”  Caller:  “Oh Rush, thanks so much! What’s that 800 number again?”  Talk about dupes. We’re all in the same barrel. We just bought in to a Serta commercial in the form of “news”.

For taxpayers tired of ponying up to Uncle Sam, here’s a good one. Under current U.S.  tax law, a U.S. firm can “defer indefinitely” paying taxes on its overseas profits, while at the same time deduct immediately all expenses incurred in achieving that non-tax paid income.  Pres. Obama is trying to close that loophole, which would infuse the Treasury with $210 billion a year.  He’s adding 800 new IRS agents to get this done. Don’t hold your breath, however,  on seeing this enacted. It’s been advanced since John F. Kennedy tried it in 1961.  The business community contends that the “deferral” system helps U.S. companies compete against foreign companies that pay taxes only in the countries where they generate profits.  So….. I submit that if the “deferral” system is going to stay in place, the companies who don’t pay taxes on overseas income shouldn’t get to deduct the expenses incurred immediately.

How does this work? A U.S. company doing business in Ireland earns $1.00. It must pay Dublin 12.5 cents tax like every other Irish company.  The U.S. firm then immediately deducts all expenses on its U.S. corporate tax return incurred in making that buck. So long as it keeps the money in Ireland, it can avoid paying the U.S. Treasury 22.5 cents (difference between Ireland’s tax rate and the 35% U.S. tax rate).  A huge windfall and monster loophole.

As everyone knows by  now, Congress, inherently incompetent individually & as a body, has now taken over the job of designing and creating America’s automobiles. Given that the Big Three automakers are lacking, I humbly ask if Congressmen and Senators are more qualified to meet our motoring needs? I dare say nada. Here’s my reasoning and what I anticipate will confront car buyers in the future in our country.

The Chevrolet Volt is the poster-car for what we’ll be buying. It will cost north of $40,000 and be equipped with a 400-lb battery that is “T” shaped, running from the firewall to the back of the rear seat, then outwards. It will supposedly operate for 100,000 miles and be charged with ordinary household current. It will run 35-40 miles on battery power alone, with a total range of about 250-300 miles. The Volt appears to be the size of a 4-door Volkswagen Jetta.  Here are some of my questions:  [a]. what will be the replacement cost of a battery? (industry estimates range to about $10,000 up). [b]. what will be the depreciation factor for a trade-in or sale of an electric car with say, 70,000 miles on the odometer? Who will buy it knowing that the battery’s life is very short? What will the dealer offer you on a trade? The answers to these questions are rather obvious.  [ c]. Landfill/disposal costs. Don’t think for a minute you can dispose of that 400-lb defective battery that no longer takes a charge, get another one for your Volt for ten grand, then walk away. Nope.  Like tires, there’ll likely be a “disposal” fee based on landfill impact.  (Don’t think the states and federal government will pass up that beautiful taxing opportunity.)  Another thing, if you believe that big battery will last 100,000 miles I have a bridge to sell you.

Another thought: When you go in to see the Volt or any other electric/hybrid car, consider the depreciation on a 3-4 year old Lexus, Toyota,  Cadillac or Lincoln with 65,000 or so miles, well maintained, that gets 17-23 mpg, for 15-18 grand,  then figure out how long it’ll take you to recapture that 22 thou (assuming the Volt costs only 40k, don’t bet on it) in gas mileage/savings? 12 years? Or longer?

I guess the thing I dread most is the day fast approaching when all of our American cars will look like the roller skates the Europeans have driven for years.  Their cars are funky, and ugly as hell.  Get used to it, since ours will look the same as theirs in a few years.