Mike Kueber's Blog

September 30, 2011

Buffett’s perspective

Filed under: Economics,Issues,Politics — Mike Kueber @ 11:04 pm
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This morning, while watching Imus in the Morning on the FOX Business channel, I learned that Warren Buffett was going to be interviewed on the floor of the stock exchange by a FOX correspondent in a few minutes.  What a pleasant way to start the day!

The ten-minute interview reminded me why I like Buffett so much.  Most of the interview focused on the Buffett Rule, which has been proposed by President Obama.  The rule is really nothing more than a minimum income-tax rate (probably 25%) for people who make more than $1 million a year.  As Buffett pointed out, hundreds of these people currently pay less than 25% because the bulk of their earnings are taxed at the 15% rate for long-term capital gains.  This new minimum rate seems perfectly fair, and it does not raise the specter of a rate so high that it discourages entrepreneurs.

The other major issue discussed by Buffett was the lagging economy.  Buffett said that that things were improving, with most of Berkshire’s operational companies on schedule for record profits, except for his homebuilding companies.  When the FOX correspondent wondered what could be done to revive homebuilding, Buffett sagely told her that nothing needed to be done – i.e., he didn’t want to see more houses being built now.  He went on to explain that the bubble caused America to build more houses than it had households, and that resulted in an excess inventory of houses.  Today, America was creating more households than houses and this was slowly reducing the excess inventory.  It’s just a matter of time before homebuilding picks up.

When asked what American government should do from a macro-economic perspective, Buffett said that fiscal or monetary policy cannot supply the answer.  When pressed for an answer, Buffett said that we have already done as much as we can with fiscal and monetary policy, and that we need to give the economy some time.  Ultimately, the “natural regenerative juices of capitalism” will prevail.

What did Buffet think about stock market prices?  Berkshire was buying stocks every day, and in the 2nd quarter they had a net increase of $4 billion in the market.  Talk is cheap, but that’s his money talking.  I wish I had $4 billion to put in today’s market.

Regarding the recent retirement planning going on at Bershire, Buffett claimed that he was merely making sound precautions “should he drop dead tonight.”  But he had no plans to retire or slow down.

Long live Buffett.

 

 

 

 

 

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Chris Christie’s weight problem

Filed under: Issues,Media,People,Politics — Mike Kueber @ 1:51 pm
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As I mentioned in my blog a few days ago, my conservative drinking friend believes that Chris Christie is too fat to win the Republican nomination.  That kind of thinking has been around ever since Kennedy was perceived as winning his debates with Nixon because of his physical attractiveness.  Radio listeners thought Nixon had won the debates, which led to the joke still in play today – John Doe has a great face for radio.  It is also the conventional wisdom that Lincoln would never have been elected in 1860 if his facial ugliness was more prominent in the campaign.

Chris Christie looks fine from the neck up, but he is undeniably obese.  Most news reports put his weight north of 300 pounds on a 5’11” body.  The only one other president who was similarly afflicted was William Howard Taft, who was president from 1909 to 1913.  Like Christie, Taft’s weight vacillated greatly as he struggled with his weight.

Washington Post columnist Eugen Robinson recently wrote about Christie’s weight problem, but he surprisingly chose to focus on issues other than how the electorate reacts to attractiveness.  Instead he argued that Christie needs to lose weight because he won’t be able to perform the obligations of the presidency at his highest level if he is carrying too much weight.

That’s an interesting argument.  Leading America is a critical role, and we should have a right to expect all candidates to be at the top of their game.  But how important is physical health?  Franklin Roosevelt is generally considered to be one of our top-ten presidents even though he was afflicted with severe ailments.

I think being an overweight president is different than being an overweight athlete.  Presidents operate from the neck up, and Christie is fine there.

In-state tuition for illegal immigrants

Filed under: Issues,Politics — Mike Kueber @ 2:25 am
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A few days ago, I blogged about a caller to Mark Levin’s talk show who said there was a federal law that prohibited states from granting in-state tuition to illegal immigrants, regardless of where they lived.  By doing some research, I found the following federal law (8 U.S.C. § 1623):

  • Notwithstanding any other provision of law, an alien who is not lawfully present in the United States shall not be eligible on the basis of residence within a State (or a political subdivision) for any postsecondary education benefit unless a citizen or national of the United States is eligible for such a benefit (in no less an amount, duration, and scope) without regard to whether the citizen or national is such a resident.”

Although the language in this statute seems exceptionally clear, the caller to Levin’s show said that a California state court had decided to allow in-state tuition for illegal aliens.  He suggested, however, that the courts in some other state might interpret the statute differently.

Because it was hard to imagine how a court could read the federal law as anything but a ban on in-state tuition, I went looking for the California decision and found it earlier today (Martinez v. Regents, 11/15/2010).  Actually, I found an analysis of the decision conducted by the Connecticut OLR.  The analysis was ostensibly done for the help of legislators in Connecticut who were considering associated legislation.

According to the OLR:

  • Holding.  The California Supreme Court held that California’s law did not award in-state tuition on the basis of residence and thus did not violate 8 U.S.C. § 1623.
  • Analysis.  The bulk of the court’s analysis focused on the California law’s relationship to 8 U.S.C. § 1623. The court stated that if Congress had wanted to ban illegal immigrants from receiving in-state tuition, it could have easily done so. Instead, noted the court, while the federal law prohibits in-state tuition from being awarded to illegal immigrants on the basis of residence, it is not a complete ban; it allows states to award in-state tuition based on other factors.  The court found that the state law awarded in-state tuition on factors besides residence, such as attending a California high school for three years and earning a diploma or its equivalent. It overruled the Court of Appeal’s holding that the attendance and graduation requirements were surrogates for residence.

Although the decision by the California Supreme Court was unanimous, I would be surprised if any nonpartisan jurists would agree.  I don’t know how the federal statute could be any clearer that it intended to ban illegal immigrants from receiving in-state tuition.  The lower court had correctly characterized the language in the CA statute as a patent attempt to evade the intent of the federal law.

Not surprisingly, the Texas law is patterned after the California law, or vica versa.  But Texas judges are less partisan that those in California and a different result could be expected if a case were brought here.

September 29, 2011

Selling caskets in Louisiana

Filed under: Business,Law/justice — Mike Kueber @ 8:59 pm
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While doing some research on ObamaCare, I stumbled across an interesting decision in a Louisiana federal court regarding the sale of caskets.  A new Louisiana law required that funeral merchandise, including caskets, could only be sold by licensed funeral directors, and this served to put out of business a group of monks who had a thriving business building and selling caskets.

Fortunately, the Institute for Justice challenged the law, and the court saw through the false argument the law was intended to protect the public:

  • The only protection afforded by the Act is the economic protection of the funeral directors which this Court has held not to be in and of itself a rational basis for the Act under the Constitution of the United States.”

Judges sometimes get it right.

Illegal immigration in the news

Filed under: Culture,Issues,Media,Politics — Mike Kueber @ 4:51 pm
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There were two important developments in the news yesterday relating to illegal immigration:

  1. ICE conducted a nationwide dragnet that resulted in the arrest of 2900 convicted criminals/illegal immigrants.
  2. A federal judge in Alabama upheld most parts of that state’s illegal-immigration law, supposedly the toughest in the nation.

Although both developments had many interesting components, the one that most interested me was that, according to news reports, the Alabama federal judge held that the state of Alabama could not exclude illegal immigrants from its public colleges.  That is sure to be a hot topic because it relates to Rick Perry’s defense of in-state tuition for illegal immigrants.  Furthermore, it runs counter to the conventional wisdom that, although the Supreme Court (in Plyler v. Doe, 1982) had required that states provide K-12 public education to illegal immigrants, there is no such requirement that applies to a college education.  (Only three Deep South states currently have laws that prohibit the attendance of illegal immigrants – South Carolina, Georgia, and Alabama.)

One of most amazing things about the modern internet, in addition to Google and Wikipedia, is that a news article can provide you a link to the underlying information on which the article is based.  In the case involving Alabama’s illegal-immigration law, the NY Times article provided a link to the federal judge’s decision, which would explain why Alabama can’t exclude illegal immigrants from Alabama public colleges.

Of course, most people would not be interested in wading through a 115-page opinion, but I used to enjoy doing that for a living.    Unfortunately, I skimmed the opinion twice and couldn’t find anything related to a ban on illegal immigrants attending Alabama colleges.  This caused me to wonder if the article in the NY Times made an error, so I read related articles from other news sources, and they consistently included a mention of the college ban:

  • Chicago Tribune – “But the judge temporarily prevented the state from making it a crime to knowingly transport or harbor an illegal immigrant. Pending a final decision by the court, Alabama also cannot prohibit illegal immigrants from attending its public colleges.”
  • Business Week – “She blocked a state law provision barring those who are in the U.S. illegally from enrolling in public colleges or being eligible for scholarships and financial aid and requiring any aliens enrolled to have lawful permanent resident status or an appropriate
    visa.”

That confirmed that the mistake was with me, unless all of the other media sources were plagiarizing each other.

I decided to take a break from my research and went to work out.  When I came back, I skimmed the federal judge’s opinion again.  I even did some word-searches of the pdf document.  Still nothing.

So, I encourage any reader to review the opinion, and if you find where it grants an injunction of the part of the law that bans college attendance by illegal immigrants, please let me know.

Job discrimination against the unemployed

Filed under: Economics,Issues,Politics — Mike Kueber @ 12:56 pm
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President Obama is taking a lot of flak from conservatives for generating too many regulations and for protecting plaintiffs’ lawyers who file frivolous lawsuits.  Both of these things, according to the conservatives, are a serious drag on the economy.

Unfortunately, President Obama appears to have concluded that he will not be able to work with conservatives until the 2012 election adjusts their attitude.  So instead of trying to find common ground, he is making proposals that have no chance of success, but will help rally his base.  An example of this is his recent proposal to make it illegal for employers to discriminate against the unemployed.

According to an article in the NY Times, Obama’s proposal would make it an unlawful employment practice for a business to consider an applicant’s current employment status when deciding who to hire.  The proposed law would authorize unsuccessful job applicants to sue “just like when an employer discriminates on the basis of a person’s race, color, religion, sex or national origin.”

This dispute reminds me of my days as an auto-insurance lawyer, when we had to fight regulators who didn’t want us to make underwriting decisions based on an applicant’s credit score.  The regulators initially argued that there was no statistical connection between a low credit score and the likelihood of getting into an car accident, but eventually we were able to decisively win that argument.  Facts are stubborn things.  Then the regulators shifted to a fairness argument – i.e., people with bad credit scores were already punished enough; extending the punishment to their insurance rates was not fair.

Proponents of Obama’s proposal argue that that people who are unemployed through no fault of their own are just as likely to be a good employee as someone continually employed.  Furthermore, the unemployed have already been punished enough; making it harder to get a job just isn’t fair.

Conservatives respond that the proposal would establish the unemployed as a new “protected class” and would encourage frivolous lawsuits from unemployed people whose job application is rejected.

President Obama is correct in worrying about the growing number of long-term unemployed people, who are reaching record levels.  According to the Times article, “Skills often atrophy when a person is out of work, and White House officials said that discrimination could worsen the problem, creating a class of people who could be left behind as the economy recovers.”

But the problem can’t be solved by requiring businesses to hire less qualified persons just because they are unemployed.  The problem needs to be
solved by an economy that has more jobs for everyone.

Chris Christie

Filed under: People,Politics — Mike Kueber @ 3:59 am
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There has been a lot of buzz about New Jersey governor Chris Christie entering the race for the Republican presidential nomination.  Consistent with that buzz, the latest Intrade.com betting odds reveal that Chris Christie has passed Sarah Palin and all other candidates in the Republican field not named Romney or Perry as the most likely nominee.

The famous NY Times political blog titled FiveThirtyEight recently considered the effect of Christie’s entry into the race.   The author of the blog, Nate Silver, suggested that Christie’s record as a moderate on gun control, global warming, immigration, and same-sex marriage would cause him to take more votes from Romney than from Perry.  That suggestion makes perfect sense.

But Silver does not make sense when he suggests that Christie and Romney may slug it out as the only viable, electable candidates, “with Mr. Perry and the other conservatives reduced to competing for a minority of delegates in especially conservative states like Iowa and parts of the Deep South.”  There are plenty of conservative states outside the Deep South, and there are plenty of conservative Republican-primary voters in every state.

If Rick Perry proves to be nonviable, the conservatives might look for someone else to challenge Romney, but they won’t be looking for another moderate.

P.S., my ultra-conservative friend Kevin says that Christie’s weight is as much a problem as his several RINO positions.  He can’t imagine America choosing as president someone as obese as Christie.

September 28, 2011

Military pensions

Filed under: Military — Mike Kueber @ 4:28 pm
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There is a lot of talk about reforming military pensions as one way to reduce America’s defense costs.  The argument is that, like other government pensions, they are too generous.

A well-written op-ed piece in the NY Times describes the key issues, and I especially like its recommendations that (a) partial pensions should be made available to those serving less than 20 years, and (b) payments should begin at the normal retirement age.  Both recommendations are imminently reasonable, but I wonder why I have never heard the Times extend this same reasoning to its sacred cows – pensions for police and fire personnel.

Although most of the Times analysis is solid, I disagree with two points:

  1. The Times argues that “a 401(k)-type plan for future retirees, is the wrong way to go. Military pensions should not be held hostage to stock market gyrations.”  I believe that, just because the stock market goes up and down, it remains the best place to grow your money.
    Furthermore, 401(k) plans always give investors the opportunity to avoid risk by putting their money into cash or bonds.  Fixed-benefit pensions are rapidly going the way of the dinosaur, and there is no need to maintain an exception for military personnel.
  2. The Times argues that military pensions are too generous.  I believe that is clearly true of civilian government-employee pensions, especially police and fire, but not true of the military pensions.  When pensions (and other benefits) are too generous, the free market dictates that you will have an abundance of people seeking and holding on to the positions.  That is why there are long lines of people
    wanting civilian government jobs, especially police and fire, and very few people leaving those jobs before attaining the retirement benefits.  By contrast, there are not enough people wanting a job in the military and a lot of the military personnel leave before their so-called “generous” pension is vested.

The military pension needs to be reformed, perhaps with some money being shifted from pension to compensation, but the problem isn’t that America is spending too much on its military personnel.  Once the economy recovers, we will find that patriotism isn’t enough to keep our ranks filled, and we will have to spend more or re-institute a draft.

Animals have feelings, too.

Filed under: Culture — Mike Kueber @ 5:38 am
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Many years ago, the Kueber boys earned spending money during the long winter months in North Dakota by trapping muskrats.  We would set traps in the muskrat huts, and then check the traps daily.  When we were lucky enough to catch a muskrat in our trap, we would use a hammer to hit the muskrat in the head to kill it, and then put it in a pile to await its eventual sale.

In hindsight, the killing of the muskrats seems almost barbaric, but at that time, we had no empathy for the animal.  Man was at the top of the food chain, and that was all that mattered.

Earlier this week, however, I read a Room-For-Debate article in the NY Times that touched on the subject of animal rights – i.e., the difference between banning the sale of fur and allowing the sale of leather.   The article focused on the killing of animals and provided six different viewpoints:

  1. If we accept animals as sentient beings, how can we personally justify their exploitation, including their killing, for food, clothing, entertainment, science or any other reason?
  2. Most of us accept that imposing “unnecessary” pain, suffering and death on animals is wrong. Whatever “necessity” means in this context, it implies that it is wrong to impose suffering or death for reasons of pleasure, amusement, or convenience. But those are the only justifications we have for imposing suffering and death on over 56 billion animals (not counting fish) we kill annually worldwide for food. No one maintains we need to eat animal products for optimal health, and there is a growing consensus that animal agriculture is an ecological disaster.  We eat animals because they taste good. And if that’s O.K., what’s wrong with wearing fur? We need as a society to think seriously about our institutionalized animal use.  Efforts like the West Hollywood fur ‘ban’ will not get us any closer to that goal.
  3. Using animals, including their fur or organs, to improve, even entertain, people is justified given the relatively greater importance of people versus other animals. There is a hierarchy in nature, and denying it is not warranted.
  4. In truth, there is little distinction between wearing fur and wearing leather.  Both involve animals being treated inhumanely, dying in a not particularly pleasant way, and then being turned into a product. But that doesn’t mean the vote in West Hollywood to ban the sale of fur products is an empty gesture. It highlights the fact that cruelty is taking place, and for those who are passionate about animal rights, it is a small step in the right direction.
  5. It is unlikely that the West Hollywood law will suffer a similar fate. If the law is challenged, judges will probably conclude that there is at least some “rational basis” for it, such as the need to protect fur-bearing animals from overhunting. Nor will it matter that the law bans the sale of fur clothing, but permits the sale of leather items. Such distinctions are also subject only to minimal scrutiny. Nonetheless, the debate over this case and others like it could help increase public awareness of the need to enforce constitutional protections for economic liberty.
  6. West Hollywood’s ban on sales of fur is a move in the right direction. However, we must work to ban the sales of leather and hides, too. So yes, there is some hypocrisy in the ban, but it’s better than no ban at all.

Only two of the arguments (#3 and #5) suggest that animals can be killed to service the desires of human beings.  The others posit than such killing is unethical.

Call me barbaric, but I think there is a food chain and that animals are destined to eat and be eaten.  If cattle were not destined to be food, they
would have no reason to live.

September 27, 2011

Rick Perry – who has no heart?

Filed under: Issues,People,Politics — Mike Kueber @ 4:25 pm
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Rick Perry has caught a lot of flak for his most recent debate performance.  Although he had numerous low points, his lowest was his defense of in-state tuition for illegal immigrants:

  • If you say that we should not educate children who come into our state for no other reason than that they’ve been brought there through no fault of their own, I don’t think you have a heart. We need to be educating these children, because they will become a drag on our society.”

There are at least three problems with this response – one was unavoidable, one was easily avoidable, and one was inexcusable:

  1. Unavoidable.  The unavoidable problem was that in 2001 Perry had signed-off on a bipartisan law, but now he is faced with partisan primary voters.  At the Christian Science Monitor cogently described – “For Perry, his state’s version of the Obama administration’s ‘Dream Act’ proposal for helping students without legal immigrant status has become like ‘RomneyCare’ – a state-specific position that’s hard to justify in the context of today’s national debate on such issues.”
  2. Avoidable.  The avoidable problem was that Perry was unable to speak clearly.  Perry knew that this question was coming, so he should have been able to rehearse an articulate response.  Instead he gave a response with jumbled syntax.
  3. Inexcusable.  Perry knew that many Republican voters disagreed with his position, but instead of trying to persuade them that his position was reasonable, he criticized them for not having a heart.  I don’t think he read Carnegie’s How to Win Friends and Influence People.

Perry should have known thta most conservatives are already ultra-sensitive to the charge of being uncaring because liberals have been accusing them of that for years.  That’s why you would think that a conservative would never sink to that level in defending a policy position.  What was Perry thinking?

Mitt Romney wasted no time in providing an effective rejoinder.  The next day during a CPAC speech he said, “I think if you are opposed to illegal immigration, it doesn’t mean you don’t have a heart. It means you have a heart and a brain.”

What is the right answer?  Perry’s position is consistent with the 1982 Supreme Court decision – Plyler v. Doe – that required Texas to provide K-12 schooling to illegal immigrants.  The rationale for the decision was that to deny such schooling would result in “the creation and perpetuation of a subclass of illiterates within our boundaries, surely adding to the problems and costs of unemployment, welfare, and crime.”  Although liberal Justice Brennan writes better than Perry speaks, they are saying the same thing.

The vast majority of Republican voters, however, disagree with Brennan and Perry.  Much of the immigration talk in the debates has gravitated toward the elimination of magnets that are attracting illegal immigrants.  A job is the biggest magnet, but others include education, medical care, and birthright citizenship.

Furthermore, Brennan’s decision in Plyler v. Doe was limited to K-12 education, while Perry and the Texas legislature have extended it to a college education.  As noted in Wikipedia:

  • Other court cases and legislation … have allowed some states to pass statues that deny undocumented students eligibility for in-state tuition, scholarships, or even bar them from enrollment at public colleges and universities.”

Recently, while listening to the Mark Levin talk show on radio, a caller suggested to Mark that federal legislation not only allows states to deny in-state tuition to illegal immigrants, it requires them to deny it.

By doing some basic legal research, I was able to find the law – Public Law 104–208 – Division C – Illegal Immigration Reform and Immigrant Responsibility Act of 1996.  Section 505 is titled, “Limitation on eligibility for preferential treatment of aliens not lawfully present on basis of residence for higher education benefits.”  The section reads as follows:

  • Notwithstanding any other provision of law, an alien who is not lawfully present in the United States shall not be eligible on the basis of residence within a State (or a political subdivision) for any postsecondary education benefit unless a citizen or national of the United States is eligible for such a benefit (in no less an amount, duration, and scope) without regard to whether the citizen or national is such a resident.”

The law appears clear, but the Mark Levin caller, who was a lawyer, said that several years ago a California state court had thrown out his case brought to enforce the law, but he was optimistic that a case brought today in another state would have good prospects for success.

Regardless of whether the federal law could pre-empt Texas’s version of the DREAM Act, Perry will need to do a better job in explaining his position.  I suggest that, instead of calling those who disagree as heartless, he should say that the issue is a close call.  He understands that the magnets and sanctuaries have to be eliminated, but that he also has to deal humanely with the young people in his state who were brought here as children.  As with his inoculation decision, Perry’s concern for the kids carried the day.

That’s what I’d say.

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