Tuesday, October 7, 2008

BAILING OUT WOODEN ARROWS WITH WOODEN NICKELS


Woodennickel According to the gurus over at Wikipedia, “A wooden nickel, in the United States, is wood token coin, which are usually issued by a merchant or bank as a promotion, sometimes redeemable for a specific item such as a drink. Wooden nickels were most commonly issued in the US in the 1930s, after the Great Depression.



Which is fine (as far as it goes), although in the sense of the current bailout of fraudulent and specious investment vehicles, it seems the wooden nickel is upon us almost before the fact. We have been snookered out of our underwear before the game began.


Paulsonshadingeyes Investment ‘vehicles’ are well named, invented as they are to drive off with your money. In case you missed the point of the failure in the House of Representatives to pass Hank Paulson’s giveaway to his former partners in crime over at Goldman Sachs, it was to provide political cover for the coming election, while allowing the Senate to unashamedly lard the legislation.

Seldom does the Senate step in ahead of the House, but paid-off Senators were well paid and only a third of them are standing for reelection. Thus are leaders made. Such is the power of a corrupt two-party system that badly needs a viable third party to disrupt partisanship where stalemate and power-plays have all but replaced representative government.

Hope for a future lies in meaningful coalition governance. What we have allowed in Washington simply will not suffice. Consider what Nancy Pelosi (rhymes with Bela Lugosi) has given us for this month’s monster under the bed;

(Rescue Sweetened With Tax Incentives, by Cecilia Kang, Washington Post)

The House of Representatives yesterday approved $107 billion in tax breaks for businesses and consumers as part of a sweeping financial rescue package designed to stave the credit crisis.

Saddled onto the 450-page bill is a provision to shield as many as 25 million Americans from the alternative minimum tax and $18 billion in tax credit extensions for wind and solar energy production.

Yet to appease lawmakers and make the bill more attractive, several more prosaic tax provisions are included, according to a government budgetary watchdog group.

Saddled. Well chosen metaphor. Indeed, the nation’s economic horse very nearly sank to its knees under the load. Any vague hope that “the best Congress money can buy” would seek anything other than its own unending grip on Democratic dominance (under an Obama administration) sank as well.

Pelosibailoutsigning Pelosi, who has an absolute majority in the House, said, “We were dealt a bad hand; we made the most of it.” This witless Speaker of the House has made nothing but excuses for the deplorable job she has done since the 2006 mid-term election gave her what she wanted and cannot find a way to use—control.

In the week that was, last week’s $700 billion refusal became this week’s acceptance--larded with an additional $150 billion in earmarks and other buried treasures. Republicans have been watching all year, like cats at a mouse hole, for a bill that could not be refused to which they could attach pet legislation.

They got it this week on a platter, thanks to the Pelosi-Reid dumbo combo. Less able 'leadership' has seldom haunted the halls of Congress. Republicans are not always civic-minded, by by god they are able and showed it by their expansive mood.

(Time Magazine) Paulson's original request was barely three pages long, whereas the bill passed today runs well over 400 pages.

Pork, of course, is not exactly speech-writing, but it does take language and language takes pages. Fortunately, that language was at the ready, loaded, primed and parsed, eager to be fired so everyone could go home and leave the mess to Obama or McCain. With change like this, who really cares who occupies the White House?

(Washington Post again) NASCAR will be able to write off racetrack costs over 7 years and manufacturers of wooden arrows for children will be shielded from an excise tax applied to other shafts. The NASCAR provision was introduced by Rep. Mike Thompson (D-Calif.), who voted in favor of the bill.

Money Nice job, Mike. That certainly bails out the auto-racing industry, which grosses more than any other organized sport and is awash in profits. A friend of mine, just today, sent me a pretty good idea--that those in Congress be required to wear NASCAR-like uniforms, so we could readily see their sponsorship. I don't know the attribution, it's not original with him, but it's pretty accurate and (would be) funny if it didn't cleave so close to the bone.

The bailout package also provides tax rebates on rum imported from Puerto Rico and the Virgin Islands and tax credits for economic development on the island of American Samoa.

"In the midst of a debate over a historic bailout package, Senate pulled out an old bag of tricks: piling billions of dollars of unrelated legislative provisions into the package and daring the House to reject the bailout again," said Ryan Alexander, president of Taxpayers for Common Sense. "Many of these provisions are tax extenders that have been waiting in the wings for months, hoping for a legislative train to leave the station."

The bill passed the House yesterday 263 to 171. It was a last-ditch effort of sorts for proponents of renewable energy to get tax provisions extended before they were set to expire by the end of the year. Those extensions, estimated at $18 billion, had repeatedly failed to pass legislative muster in both the Senate and House over the past year.

The tax breaks in the legislation total $149 billion over 10 years, and are offset by $42 billion in tax increases. The hikes include a new levy on hedge-fund managers who avoid taxes by transferring income offshore, a provision that would raise $25 billion over 10 years.

It was an absolutely bi-partisan effort. Everyone got their hand in the till, regardless of race, creed, gender or political affiliation. No cause was too large ($150 billion in tax breaks) or too small (39 cents on wooden arrows).

(Bloomberg) Senators attached a provision repealing a 39-cent excise tax on wooden arrows designed for children to an historic $700 billion financial-markets rescue that passed tonight by a vote of 74-25. The provision, originally proposed by Oregon senators Ron Wyden [D] and Gordon Smith [R], will save manufacturers such as Rose City Archery in Myrtle Point, Oregon, about $200,000 a year.

Senators Widen and Smith can’t get any more bi-partisan than that.

(Wikipedia) It was during this (depression era) decade that some banks and chambers of commerce in the United States issued wooden nickels with expiration dates to mitigate difficulties faced by merchants in making change at times of instability.

Wooden arrows—wooden nickels—guess we’ve now seen the closing of the circle. We can hope, but not be assured, that the circle is not a noose in disguise.

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