The Chris Wallace Bill Clinton Interview

The Chris Wallace Bill Clinton Interview

9/27/06

I had heard about the famous Clinton temper but until the Chris Wallace interview on Fox, I had never seen it. Quite a force. President Clinton seemed a little over the line, but I’m really happy he did it. He was right. The question regarding the Clinton administration’s anti-terrorist activities was designed to embarrass Clinton and to take the spot light off the Bush administration’s mistakes. I had read Richard Clark’s book before President Clinton talked about it as a reliable source of what really went on during his administration to fight terror. Those who are now blaming Clinton conveniently forget that because of their activities the president was under investigation and was being impeached. To take more vigorous steps to eliminate Al-Qaeda would have brought about loud accusations of “diversion”. It is those same people who are now saying not enough was done. Clinton cannot escape blame though. If only he could have kept his pants zipped until he was the Ex.

A NEW STRATEGY ON THE WAR AGAINST TERRORISM

A NEW STRATEGY ON THE WAR AGAINST TERRORISM

The long term strategy is to stop being dependent on oil. We should spend the money NOW to convert to the Hydrogen Economy (read Jeremy Rifkin’s The Hydrogen Economy). In addition to neutralizing our focus on the Mid-east we would move forward on eliminating Global warming.

My short term thinking is based on some history and thinking about the Sunni versus Shiite dynamic. Prior to our invasion of Iraq there was somewhat of a détente between Iraq and Iran. After the war, Iran and the Shiite majority of Iraq have joined forces. Iran has been imbolded and thus we feel even more insecure then we were when Sadaam was in charge of Iraq. I think we should leave Iraq as soon as possible and let the Shiites and the Sunnis slug it out. It is their fight not ours. Additionally, this would probably make Israel less vulnerable since the Shiites and the Sunnis would be focusing on each other instead of Israel.

We should take our Iraqi troops and put all of them in Afghanistan and finish the job we started there. We seem to have the Afghans behind us, but the Taliban is reemerging. We need to stop that movement in its tracks.

Political-Tom Friedman & General Motors

Once again, Tom Friedman is right on the money. In today’s article, he excoriates General Motors and rightly so! Recently GM, in an effort to sell gas guzzlers, guaranteed gasoline at a cap price of $1.99 for one year with no limit on mileage if you live in Florida or California. The eligible vehicles are half-ton models such as the 2006 and 2007 Chevrolet Tahoe and Suburban, as well as the Hummer H2 and H3 and many of their SUVs. Hummers get approximately nine miles to the gallon. So GM is subsidizing the purchase of gas guzzling cars when the opposite is needed. No wonder Toyota is cleaning GM’s clock.

We are in Iraq because of oil. So not only are we paying for the war, we are paying to continue the underlying cause of the war. GM should be subsidizing the purchase of fuel efficient cars. Talk about corporate blinders!

Business & Politics-The latest tax bill

If signed into law, the latest tax bill passed by Congress is a mixed bag. While fundamentally I think extending the tax breaks, given our deficit, is a bad thing for the country, I’m particularly incensed by the portion of the bill that opens up the window for converting traditional IRAs to Roth IRAs for people who earn over $100,000. Most of my clients earn over that amount and where the numbers work out, I will have them make the conversion. It makes sense to do it because for most of them, they will still be in a high tax bracket when they start drawing their money out—and Roth IRAs accumulate tax free. So that is the good part—I can help my clients. The bad part, creating my “mixed bag” feelings, is that once again our generation is sticking it to future generations. This tax break starts in 2010 and is over in 2011. It is estimated that about $6.4 billion will be raised. Leonard Burman, coordinator of the Tax Policy Institute in Washington D.C., estimates that the cost by 2049 will be $100 billion. The reason this break is being offered is that it will generate immediate tax revenue (because when conversions are made, taxes are paid), thus ameliorating the impact of the other tax breaks being perpetuated. So later generations will end up paying more because no tax revenue will be coming in as people use up their Roth accounts. This means my grandkids are going to suffer and that really ticks me off!

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Books-Andrew Jackson

BOOKS: I’m reading “Andrew Jackson” by SeanWilentz (part of the American Presidents series). I was particularly struck by Wilentz’ prologue in which he attempts to categorize Jackson in terms of Liberal versus Conservative—only to find that it cannot be done with today’s redefinition of Liberal versus Conservative. Wilentz says “The idea, for example, that there has always been a pro-big government party and a laissez-faire party, and that presidents can be judged by which they adhere to, is as useless in interpreting the politics of the 1830’s as it is for interpreting our own time. American political parties have always blended “small government” and “big government” policies. Today, the Republican Party rejects federal regulation of business, but shows a robust willingness to regulate individuals over certain social, cultural, and political issues. Without embarrassment, Republican leaders look to the federal courts sometimes at the direct expense of state rights to secure what they consider a favorable outcome. The Democratic Party, meanwhile, is much more attentive to regulating business, but comparatively laissez faire on cultural and social matters –and, when it suits them, Democrats kick and scream about violations of state rights.” The same dynamic was going on in Jackson’s days. This writing especially resonated with me as I read about the political machinations of the FDA. We have not had a head of the FDA for the last three years because of the ideological tug and pull between Conservative Republicans who want to eliminate birth control pills and Liberal Democrats who don’t. Talk about dynamic role reversal—Republicans trying to regulate the market and Democrats advocating letting the market work. This certainly seems to be a role reversal.

I’m really enjoying learning about Jackson and would recommend the book. He is definitely somebody who would not appeal to me. But that was a different time!

Congress attempts to mitigate the gas price problem

POLITICAL—Congress, in an attempt to mitigate the gas price problem, is trying to push through a $100 Rebate tax rebate!!!! It is unclear exactly how this rebate would be handled, however according to CNN and other news sources “$100 rebate checks would be written to millions of Americans who earn under $125,000 or for couples whose combined earning is under $150,000.” This amendment is tied to the current Energy bill working its way through Congress. That same bill seeks opening Anwat for drilling. It is doubtful the rebate will pass. Thank goodness! What is the matter with the Republicans? Republicans used to stand for separation of church and state, fiscal responsibility, and taking personal responsibility. This blatant political pandering is totally bazaar. It’s bad enough that we now have a deficit approaching $500 billion—but to add to it with a rebate that will do nothing to solve the problem, is just abhorrent to me. Do they think this step will help them get reelected? The American public, though often ignorant, is certainly not stupid. I guess the Republicans no longer believe in market dynamics. I’m with Friedman who says having the price of gas go to $4.00 per gallon gas is probably what is needed to convince Americans to stop driving gas guzzlers. The $100 rebate is a manifestation of a mind set which says “don’t worry, the government will take care of you.” Damn this is upsetting!

I-Bonds Update

BUSINESS
It turns out I-Bonds are not the educational funding panacea I had originally thought they were. What attracted me to them was my understanding the interest would accrue federal tax free if used for secondary education. While that is true, phase out rules apply. If a married couple filing jointly has a modified adjusted gross income of $94,700, the federal interest free portion starts to phase out and is completely eliminated when the modified AGI is $124,700. I-Bonds still have the advantage of being state and local tax free and the federal tax is deferred until used. As an addition to a portfolio that is trying to lower its volatility on a tax deferred basis, I-Bonds still make sense. However for funding educational needs, 529 plans work better because of their tax advantages and because of broader investment choices.