Economics & Finance

California Confiscates Tax Refunds

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I would wager that those who withheld more than they owed on their State of California taxes didn’t think that they would be making a zero interest loan to the state.   I would be absolutely furious.   I am thinking that many will never see their refund, as California  appears to be  on the precipice.  

California has had no money in its general fund for the past 17 months, and has been paying its bills by borrowing from Wall Street and special internal funds.

If the state’s legislators and governor do not reach a budget agreement that brings immediate funds into the state’s coffers, the state’s borrowed funds will be entirely exhausted at the end of February, according to the controller’s office.

I would also wager that workers will be making a lot of changes to their withholding so as not to be owed any refund at the end of next year.   Fool me once, shame on you, fool me twice…

Then again, the feds could come to the rescue and print some money for Cali.   Good luck with your bond rating, California municipalities and (insert project here) districts.

Some muni bonds are actually paying very good rates right now.   As I was sitting across the table from a financial advisor we discussed the rates that some municipalities and state agencies in California were paying and then we both laughed out loud and moved on to looking at munis from more stable cities and states.   I am thinking that this conversation has been played out millions of times at brokerage desks across the nation.

Who Creates the Value of Labor?

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Mickey  Kaus, writing on the  intransigence  of UAW president Ron  Gettlefinger [h/t Instapundit], observes:

It doesn’t mean Gettlefinger’s workers have a right to $28/hour  if at that wage their employers can’t stay in business without an ongoing multi-billion dollar subsidy. I’m sorry if this seems obvious. It’s apparently not obvious enough.

It’s not obvious to most on the Left. One of the basic tenets of Marxism is that labor has intrinsic value that  precedes  and is  separate  from the value of  management  and investing. Most leftists, even those who are not Marxist, have absorbed this concept of the value of labor.  

In reality, the circumstances are the exact opposite. It is the skill and judgment  of managers and investors that creates the value of labor. If you don’t own your own company or freelance, you rely on someone else to choose what work you do and how you do it. Their  decisions  create the value of the products and services you make.    When they make mistakes, the value of your labor decreases and you should charge less for it.  

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Change We Can Believe In (More of the Same)

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This is brutal:

As Weiss wrote, “The chances of Schapiro shaking things up in the securities industry — instituting real, meaningful, desperately desired change — are about the same as the chances you can make a black bear curtsy and serve tea. This is a terribly disappointing selection.”
 
This is not a pick that most people really care about and the media didn’t raise hell over it. 90% of voters still probably have no idea who she is, or what FINRA is. But the fact that the Senate rubber stamped such a dubious pick so quickly and without dissent could be a sign of much worse things to come.
 
Convicted felon Sam Antar, who was the CFO of the Crazy Eddie fraud and now speaks out against white collar crime told me that “If I was still the criminal CFO of Crazy Eddie, Mary Schapiro is not someone I would be afraid of.”

It is going to be a long four years (or 8) indeed.  

Wisconsin Economic Forecast Luncheon

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Yesterday I attended the Wisconsin Economic Forecast Luncheon. I was invited by a financial institution that I work with, who had a table reserved. The purpose of the meeting was to network, and to hear speakers talk about the forecast for the future as far as business goes. I would guess that there were about 500 people there representing all types of business across Wisconsin. There were lawyers, bankers, construction company owners, and many other business represented. Also attending were mayors of some cities, and many state representatives and senators.

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Job Creation

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Politicians, from Barack Obama on down, are spending a lot of time talking about “job creation.” Businesses, labor groups, and “experts” of various kinds are getting into the fun, each emphasizing that their proposed project W will create X jobs within Y time frame at a cost to the government of only Z.

I know a way to create at least a million jobs, almost immediately, at no government expense whatsoever.

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