Category Archives: Politics

Stock Photo Isn’t of First Family

g73840Mediaite reported yesterday that a photo in Herbalife’s 2004 Form S-1 bears a striking resemblance to the First Family. The find was first reported on the Bronte Capital blog and it sparked a conspiracy in some parts of the web about whether the President was a shill for had ties to Herbalife.

The photograph, while it indeed depicts a father who looks quite similar to President Obama, is a stock photo available on Getty Images. And, according to Steve Mason, the photographer who took the photo, it is not a photo of the First Family:

“This was taken long before we ever conceived of African American president (1991). Any depiction of the first family was purely coincidence.”

Put down the pitchforks, conspiracy theorists — the conspiracy that the President is part of some secret group that started Herbalife for the purpose of world domination just isn’t true.bsig

‘Jackass’ Approved for Ohio Motion Picture Tax Credit

bgThe upcoming film Bad Grandpa, part of the Jackass series, was filmed in Northeast Ohio.

I noticed a frame of the Veteran’s Memorial Bridge, a bridge I crossed frequently during my high school years on Cleveland’s West Side.

In an effort to win filming locations, Ohio offers the “Ohio Motion Picture Tax Credit” as an incentive, though many films use Cleveland as a backdrop for other cities like New York, Chicago, or Washington, rather than a feature. In other words, Ohioans are subsidizing Hollywood firms to turn Cleveland into New York.

So far as these incentives go, Ohio isn’t alone — over 75% of states offer some form of incentive.

According to the website of the Ohio Development Services Agency:

“The Ohio Motion Picture Tax Credit provides a refundable tax credit that equals 25 percent off in-state spend and non-resident wages and 35 percent in Ohio resident wages on eligible productions.”

It also specifies that “[e]ligible productions must spend a minimum of $300,000 in the State of Ohio”.

The Ohio Development Services Agency confirmed to me that, while “the production company has not yet sent in their final audit … the project was approved for a $1.5 million Motion Picture Tax Credit.” The production company projected that “47 percent was to be shot in Ohio.”

Motion Picture Tax Credits and other incentives for filming are popular among state legislators. The Tax Foundation observes:

“Forty-four states [in 2010] offer significant movie production incentives (MPIs), up from five states in 2002, and twenty-eight states offer film tax credits.”

While they are popular, they are not without controversy. The Economist called such incentives a “stupid trend.”

Since 2010, three states have dropped their motion picture incentives. Many others, including New Jersey — the epitome of states with silly policies, have suspended such programs.

The non-partisan Tax Foundation is skeptical of the value of incentives and credits for motion pictures:

“While broad-based tax competition often benefits consumers and spurs economic growth and development, industry-specific tax competition transfers wealth from the many to the few … Movie production incentives are costly and fail to live up to their promises.”

The report continues:

“Based on fanciful estimates of economic activity and tax revenue, states are investing in movie production projects with small returns and taking unnecessary risks with taxpayer dollars. In return, they attract mostly temporary jobs that are often transplanted from other states.”

and:

“Furthermore, the competition among states transfers a large portion of potential gains to the movie industry, not to local businesses or state coffers. It is unlikely that movie production incentives generate wealth in the long run. Most fail even in the short run. Yet they remain popular.”

I’m in agreement. Scrap them.

But if you’re going to keep them, at least require that they say they’re in Cleveland in the film, so that you can pick movies that cast Cleveland in a positive light.bsig

Here’s a screen grab from Google street view of the bridge seen in the movie.

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The next frame cuts immediately to Charlotte, North Carolina. From the trailer, it appears most of the film is depicted in North Carolina. (Also, Cleveland’s tallest building one of Charlotte’s tallest were both designed by Cesar Pelli and look similar.) Other scenes were filmed in North Carolina.

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You can watch the trailer here:

Eliot Spitzer Photoshops NYT Sub-Headline in New Ad

In Eliot Spitzer’s new mea-culpa advertisement, which opens with “Look, I Failed. Big Time” — I noticed something curious. Let’s just say having seen a lot of shops in my day, I could tell by the pixels.

His campaign staff purposely omitted part of the subhed of a New York Times article.

Here’s what his ad showed:

spitzer edit

Here’s the original:

nyt original

It is obvious why Mr. Spitzer’s campaign team would edit the Times article. Since he’s embracing the whole “Sheriff of Wall Street / Working man” image, it would be pretty silly to leave up a subhed that suggests unions and politicians are pushing back against his candidacy also. That doesn’t comport with the man of the people image.

The unions are indeed out for Mr. Spitzer:

The unhappy unions may prove to be a more significant obstacle to Spitzer. Spitzer crossed swords with them in his previous incarnations over charter schools and Medicare reform. And remember, the unions are deeply involved in the management of pension funds. Spitzer turning over rocks could embarrass them.

Creatively editing a headline or a quote from an article in a positive ad, or even an attack ad is nothing new. But, in most cases, they’re direct quotes leading or ending with an ellipsis…

What Spitzer’s team did — actually photoshopping out the words “Unions and Politicans” is quite another. Eliot Spitzer’s back. And if this ad is any indication, he’s more brazen than ever. bsig

 

Cap South — What It’s Really Like to Work in Congress

There are tons of funny shows out there that touch on what it is like to work in the federal government. House of Cards is excellent, and the scene work is phenomenal. Veep — a show I just started watching — is entertaining, but not on the same level for me as House of Cards.

But, one new show might change all that. It’s a forthcoming web series starring my good friend / mortal prank enemy and former room mate, Andrew Heaton as the lead character. His girlfriend in real life, Naomi Brockwell, also stars in it.

It’s called Cap South. (You can learn more about it here eventually, but you can learn more now by following it on facebook.)

Since Andrew’s involved, and the show is run by a fellow Congressional Expat, I expected the dialogue to be highly realistic and very funny. I was correct. Below is what it is really like to answer un-screened phone calls.

Here’s the Trailer:

Answering the phone on the hill in real life (left) versus in Cap South (right). Spot on.
phone

bsig

Could Pop-Up Hotels Solve Disaster Housing Shortages?

I read with interest a recent piece in Businessweek about an innovate company that has managed to make something akin to a hotel food truck:

This year, Snoozebox Holdings is shipping 40 to 400 stackable containers to house guests at events including Le Mans, the Edinburgh Festivals of plays and concerts, and the G8 Summit. The prebooked rooms are equipped with flat-screen TVs, Wi-Fi, and running hot water.

Who would want to stay in one of those, you might ask? The company, Snoozebox, has already found some markets for its product.

snooze

The answer is, mostly, rich people. However, like with most innovations, what starts as a toy or luxury for the rich (telephones, VCRs, televisions, internet) usually becomes pretty affordable and widespread.

Take the devastating tornado that recently ravaged Oklahoma. Or the one in Joplin, Missouri. Housing is one of the most needed commodities in the wake of natural disasters. Could Snoozebox, or its competitors save the day and provide a market-based solution to help people in need?

While the obvious answer is yes, the reality is probably not. Or at least not anytime soon.

Whenever an innovation disrupts the current natural order, vested interests often use the law and politicians in an attempt to stifle competition. Economists call the former “creative destruction” (good) and the latter “rent seeking” (bad).

Creative destruction, in the form of the Uber car service or food trucks, is really great for consumers. Their competition — well established taxi cabals and brick-and-mortar restaurants — don’t see it that way. They get politicians to enforce laws that would inhibit any competitor from setting up shop, and if the laws doesn’t exist for that purpose, those interests usually push politicians to pass them.

Let’s rewind the clock to a day after the tornado hit Oklahoma. You work at Bomblebox, a fictional competitor of Snoozebox. Oklahoma would be an ideal place to offer your services to a populace coping with disaster. Hotels are overbooked, people are cramped in the houses of friends — often far away from the site of their former home. There’s a natural market for the Bomblebox.

Could Bomblebox drive a couple of trucks over and set up shop somewhere? In this hypothetical, it’s unlikely.

Each of the fifty states has their own laws and regulations governing hotels and lodging. And it’s unlikely that a company not already licensed to do business there could get all the t’s crossed and i’s dotted before the window of opportunity closes.snoozebox-exterior-sunshine

Second, local hoteliers, their trade groups, and other interest groups would probably object. There are a ton of ways they could do this:

Would Bomblebox’s products be up to snuff with Chapter 285 — the part of Oklahoma law that regulates lodging establishments?  Is the plumbing consistent with the Oklahoma Plumbing License Act? Is the electricity system consistent with the Oklahoma Electrical Licensing Act? Does each unit “maintain at least one lighting fixture suitable for reading”? Do all the bathroom floors have “impervious floor surfaces?” Is the sewage disposal system consistent with “regulations adopted by the Oklahoma State Board of Health?” I don’t know.

Remember, these laws are for your safety. Created, supposedly, to protect you — but they also often serve to protect the current natural order from competition.

You get the point.

The time and money it would take to ensure compliance would probably guarantee that such a plan wouldn’t get past the research phase. There are a lot of questions to answer just to drive a box that people would pay $400 a night to stay in while watching a race or stay at a festival like Bonnaroo. Put another way, if people are willing to pay that much to stay in a box at a race or a festival, my guess it’s probably good enough for  to stay in after the wake of a disaster.

But that’s not how regulation and the natural order operate. Mutually agreed upon and beneficial transactions, even under extenuating circumstances, are often illegal outright. You’re not necessarily free to transact with others as you see fit. While FEMA does provide disaster assistance — think FEMA trailers —  some people probably would be willing to pay more, and could afford to get something a little nicer than a crappy camper because for their well being they want the comforts of home.

Let’s pretend for a second that Bomblebox is a Missouri company, and has plans to do business all over the southland to help people recover from disasters, and provide housing during political conventions and festivals.

Could Bomblebox then, had it complied with all the varying laws regulating hotels and motels, go into business? Again, the answer is probably not.

Ill-advised price gouging laws in each of the states would likely prohibit Bomblebox from charging the market rates necessary to make it profitable. And thus, local hoteliers and the government — which also hates competition — would likely object and prohibit the “evil” Bomblebox corporation from helping people at a time when they need it most.

What about renting (or selling) house-like version of the Bomblebox? At first glance, that might appear to be a better option.

But, again, the complex web of laws and regulations would make that difficult, and in addition to hoteliers, the competitors of the natural order (RV makers, prefabricated home makers) would likely throw in a monkey wrench to complicate things.

In my lifetime, we’ve seen creative destruction move at an amazingly fast pace. The days of radio-dispatched cabs that come because of a call from your home phone or payphone are over. We’re in the Uber era now, where my smartphone will get me a black sedan in mere minutes. Instead of having to go and wait in a long line to get a Georgetown cupcake, food fad fetishists can be satisfied by a 3 minute walk to Farragut Square where multiple food trucks offer similar (and often better) products with shorter lines and often at lower prices. Or, if you really have your heart set on Georgetown cupcake, Seamless can deliver it for you.

Generally speaking, our regulatory system and laws are outdated. Uber is discovering that first hand across the country, most recently in Los Angeles. The byzantine shackles of a outdated laws and regulations that keep cities (like my hometown of Cleveland) from returning to their former status of greatness exist all across the country in various degrees.

What keeps them there is politicians who cater to the special interests, and who see themselves as wizened sherpas of the regulatory Mt. Kilimanjaro rather than people whose job it is to make their constituents’ lives easier through good policy, not political dependency.

Going forward, the cities and states that recognize the burdensome constraints of outdated regulations and laws are the ones that will prosper. They’ll have the Ubers, the food trucks, and — when times are tough — people willing to provide innovative solutions to help them in their time of need.  Their citizens will lead happier, better lives, and bounce back from adversity faster than their friends in the cities and states whose leaders who let archaic policy and outdated thinking rule the day.

Few people argue for no regulations at all, but the people who think that deregulatory advocates believe this are often the very politicians who say “everything is fine.” Odds are, it’s not. And the joke’s on you if you believe them.

 

 

 

Could Voter ID help implement Obamacare?

According to a new report by Jackson Hewitt, full implementation of the Affordable Care Act could exclude “more than one in four uninsured Americans eligible for the new premium assistance tax credits.”

Why? Because they don’t have a checking account.

The report continues: “Among the uninsured, non-elderly population with household incomes in the tax credit eligible range, 27 percent are effectively ‘unbanked.’”

Under federal banking law, it is quite difficult to open a checking account without government-issued photo identification. To open a bank account without photo identification, an individual must be on file with a credit reporting agency or have had a bank account in the past.

According to the report: “[t]he impact will be especially large among African Americans and Hispanic Americans, who are over 40 percent more likely to be unbanked relative to white residents in the same income category.”

Like a proper education, a photo ID and a checking account are near-requirements to move up the income ladder and improve economic outcomes.

Which is why it is curious that Democrats are eager to ensure people can vote without possessing a photo ID, but drafted a law that pretty much excludes a large number of those same people from being able to claim the benefits of Obamacare.

Could voter ID laws be a win-win for Democrats?

Unintended Consequences of Price Gouging Laws

gouge

From The OK Disaster Scam Prevention Packet, as prepared by OK Attorney General E. Scott Pruitt’s “Public Protection Unit”

Most states have laws that purportedly protect people from evil “price gougers” in the wake of man-made or natural disasters. Some are toothless and silly, affording publicity seeking politicians to give themselves some good press, while others are draconian or invasive.

One point to consider is that price gouging laws do nothing to address or fix the shortage of a certain commodity due to either high demand or diminished supply. They’re not a solution.

These laws impose a “finder’s keepers” marketplace, where those conveniently situated to suppliers can hoard much needed goods at what are effectively below-market rates, rather than a market-based economy where buyers and sellers can decide what prices they’d like to charge or the price they’re willing to pay.

Oklahoma’s law seems especially pernicious because it restricts the ability of prices to rise by 10% not just for the immediate time after the disaster, but for 30 days after – and for “dwelling units, storage space and goods related to home repair and restoration”, 180 days after.

While big-box stores like Home Depot and Lowe’s have the size and scale to absorb potential losses from such a prohibition, it’s doubtful that your local mom-and-pop hardware store will escape as unharmed.

Of course, there are individuals who would try and skirt the law, and that’s not hard to understand because it is a bad law. Jim’s Hardware could mark up all items by 55% immediately before the disaster, and presumably be able to better absorb the price shocks they’d experience afterwards. However, you can bet that your local “consumer reporter” would be all over that in about a New York minute.

Lastly, even if price gouging laws do result in savings before the shortages occur, it’s worth asking whether, on net, the prosecution of violators if price gouging laws ends up costing taxpayers more than the money the few who were lucky enough to stock up on D-Batteries and bottled water saved?

Put another way, can you put a price on feeling good that you weren’t “ripped off” — even if you are living in the dark and thirsty? Will that round out the balance?

Could it be that these laws harm more than they help?

Here’s a good video on the topic:

I can picture the signs already…

md

When you cross the bridge into Virginia from Maryland or Washington, D.C. you are greeted by an ominous sign that warns “RADAR DETECTORS ILLEGAL.”

Maryland’s state senate OK’d a bill today that would “ban smoking in cars when there is a passenger younger than age 8.”

Should this bill become law in Maryland, I expect they will put up similar signs to avoid non-residents challenging a ticket. That will give me a chuckle when crossing the Wilson bridge. At this rate, they might as well put up electronic boards informing motorists of all the do’s and don’ts.bsig

Bomblecast #20 — The Minimum Wage

ep20

In this podcast, we talk about the minimum wage and President Obama’s proposal to raise it $9 an hour.

Here’s Episode #20:

That Time I Almost Got into a Fight in N.J.

I’ll admit, there are times I can be a curmudgeon. There are other times, and I blame my genes for this, that I can go from being perfectly calm to going straight through the roof in short order. Driving contributes to this frustration, setting the floor a bit above normal — driving with Swift men can be an annoying experience.

Earlier today, I was talking with my friend Brian about stupid state and local laws we don’t like. Yes, this is seriously what I do for fun. New Jersey’s gas pumping law came up, and a vivid memory came back to me.

Rewind a few years to when I was a recently minted college graduate. My cousin’s employer, Johnson & Johnson, was having a sort of employer fair at their headquarters in New Jersey. (When I got there, it turned out to be a rehashing of “how not to shoot yourself in the foot during a job interview” — not actual people looking to hire.)

I drove from Cleveland to New Jersey and checked into my hotel. I went to the event, made a few friends, and left not having really learned anything new. I was low on gas.

I pulled off the highway — New Jersey’s highways are great by the way — and pulled into the gas station. I got out, put my card in, and started pumping gas.

It’s been a few years, but here’s how I remember that confrontation:

A guy come out from the side of the building, where the stinky bathrooms that reek of rancid piss are, and looked at me with a glare you’d think would be reserved for somebody who actually was, you know, doing something wrong.

Demanding in one of those comical Jersey accents (he may have been Snooki’s father) he asked “Now what do you think you are doing?”

“Just pumping my gas.” I said.

“You can’t do that,” he said, “I have to do that.”

I replied “I am not paying you to pump my gas. But thanks, though.”

“New Jersey law requires me to pump your gas.”

“That’s stupid, I was raised perfectly capable of pumping gas, and I don’t have any cash to pay you to pump my gas.”

“You don’t have to pay me, I just have to pump your gas.”

“So, I have to pay a higher price to pay for employees to come and pump my gas? That’s stupid.”

I relinquished control of the pump to him. The glare persisted. We both stood there awkwardly until the pump went click. He removed it, looked over at me, and said “Have a nice day.”

I fumed all the way back to Missouri. What a dumb law.

There’s a special place in hell for politicians who continue to keep these absurd laws on the books.

It’s called New Jersey.