Friday, November 9, 2012 - Thank a Veteran

Thank a Veteran

by Sinclair Noe

DOW + 4 = 12,815

SPX + 2 = 1379

NAS + 9 = 2904

10 YR YLD -.02 = 1.61%

OIL + 1.06 = 86.15

GOLD – 1.10 = 1731.80

SILV + .32 = 32.73

Speaker of the House John Boehner held a press conference this morning. Boehner repeated that House Republicans won't agree to higher income-tax rates but said they would be open to limiting tax breaks as part of an agreement with Democrats. A couple of hours later, President Obama said any deal would have to result in wealthy Americans paying more in taxes.

Following up, Obama's spokesman said later that the president would veto any legislation extending tax cuts for families making $250,000 or more.  Obama said he had invited congressional leaders of both parties to the White House next week for their first post-election negotiations. Their assignment: don't go over the fiscal cliff; avert the tax increases and automatic spending cuts due to hit in January.  Both sides agree that failure to address the automatic tax increases and spending cuts could cripple the economy.

The congressional budget analysis said the automatic tax increases and spending cuts would cut the deficit by $503 billion through next September but the fiscal austerity would cause the economy to shrink by 0.5 percent next year and would cost millions of jobs.

The new study estimates that the nation's gross domestic product would grow by 2.2 percent next year if all Bush-era tax rates were extended and would expand by almost 3 percent if Obama's 2 percentage point payroll tax cut and current jobless benefits for the long-term unemployed were extended as well.

All sides say that they want a deal and that now that the election is over everyone can show more flexibility than in the heat of the campaign.

That's a joke, right?

Even though preliminary estimates suggest that Democrats received somewhat more votes than Republicans in Congressional elections, the GOP retains solid control of the House.  Representative John Boehner, the speaker of the House, wasted no time in declaring that his party remains utterly opposed to any rise in tax rates even as they decry the size of the deficit. The Republicans have signed a pledge for no tax increases. We know the starting point. The looming combination of tax increases and spending cuts looks easily large enough to push America back into recession. Nobody wants to see that happen. Yet it may happen all the same, and Mr. Obama may allow it, especially if he can avoid the blame.

I think that there is a possibility both sides will dig in their heels and try to blame the other side. Whichever side is stuck with the blame would receive a brutal political broadside.

It’s worth pointing out that the fiscal cliff isn’t really a cliff; nothing very bad will happen to the economy if agreement isn’t reached until a few weeks or even a few months into 2013. So there’s time to bargain.

And what happens to the economy if they can't reach a deal in time? Will the economy grind to a halt? Will government close down? The Republicans might be willing to take that chance, and if they do, the President might not have to accept it. Well, yesterday I told you how the Federal Reserve can step in to provide cash for non-banks in the event of an emergency. Breaking through the debt ceiling and facing a government shutdown would qualify as an emergency, and they don't need Congressional approval to put Section 13.3 into effect.

If the Treasury needs cash to keep the government going, they can get the money from the Federal Reserve. Need money for Social Security checks? The Fed can print those. In other words, there are ways to deal with an intransigent Congress.

More important, however, is the point that a stalemate would hurt Republican backers, corporate donors in particular, every bit as much as it hurt the rest of the country. As the risk of severe economic damage grew, Republicans would face intense pressure to cut a deal after all.

Forget about talk of a mandate; that only goes so far. The vote was pretty much split down the middle. Democrats control the Senate but Republicans control the House. The Congress may control the budget but the Fed controls the printing press.

Maybe involving Section 13.3 is a little extreme, but there should be no fear of going over the cliff. That the looming debt and deficit crisis is fake is something that, by now, even the most dim member of Congress must know.  The combination of hysterical rhetoric, small armies of lobbyists and pundits, and the proliferation of billionaire-backed front groups with names like the Committee for a Responsible Budget is not a novelty in Washington. It happens whenever Big Money wants something badly enough. Big Money has been gunning for Social Security, Medicare and Medicaid for decades – since the beginning of Social Security in 1935. The motives are largely financial: the payroll tax is the “Mississippi of cash flows.” Anything that diverts part of it into private funds and insurance premiums is a meal ticket.

The fact is, Social Security, Medicare and Medicaid are the main way ordinary Americans connect to their federal government, except in wars and disasters.  They have made a vast change in family life, unburdening the young of their parents and ensuring that every working person contributes whether they have parents, dependents, survivors or disabled of their own to look after. These programs do this work seamlessly, for next to nothing; their managers earn civil service salaries and the checks arrive on time.

Can a federal insurance program go bankrupt? Of course it can’t. Bankruptcy is a legal process for private citizens seeking relief from unpayable debts. How can the obligations of Social Security or Medicare ever be unpayable? These are public programs, not private companies. All the federal government has to do is to write the checks, pursuant to law. As for the size of the checks, it will be whatever Congress prescribes at any given time. Or, whatever the Fed decides, in the event of “unusual and exigent circumstances”.

Three days after the election, Florida still waited for a final tally in the presidential race as Palm Beach County worked to finish counting its absentee ballots. State election officials said they expected Palm Beach to wrap up their work on Friday. All counties must report their voting results to the state by noon Saturday so Floridians, and the nation, will definitely know then who won Florida and if a recount is necessary. As of this afternoon, President Obama led Mitt Romney by about 60,000 votes out of 8.4 million cast in Florida. That's outside the one-half of one percent margin that would trigger a recount so it looks as though Florida will avoid a recount and President Obama will win Florida. Election supervisors say they won't call the race, they'll wait until November 20 to certify the race. Many Floridians waited in line for 6 hours or more to cast votes. And you may recall this is not the first time Florida has had a problem counting votes.

In a huge victory for the pro-pot movement, Washington and Colorado legalized marijuana use on Tuesday. The unprecedented win could bring even more welcome news for marijuana users, as some say that legal pot could also mean cheaper pot for consumers.

That’s right -- many speculate that the price of marijuana will go down significantly as the industry enters a new legal environment. Legal marijuana in an open market could cost as little as $3 an ounce, or  100 times less than its current price of about $300.  A decrease in prices would be partly due to the fact that it would cost less to grow marijuana in a legal environment. Without fear of getting punished criminally, pot producers could eliminate the costs of growing marijuana in secret.

The real cost of marijuana will of course be impacted by how the states decide to tax pot on the open market. In Washington, marijuana will be at a 25% rate, three times over, with the tax being charged when the grower sells it to the processor, when the processor sells it to the retailer and when the retailer sells it to the users. Estimates indicate that Washington State could pull in over $500 million in tax revenue.  

In Colorado, the taxes will be limited to 15% of the wholesale price, which is still expected to bring in about $60 million  a year in tax revenue. I think it could generate even more revenue. There are going to be people traveling to Colorado and Washington for a little pot vacation; so you have to add in taxes on hotel rooms, and extra cookie sales; and in Washington the coffee houses are going to be selling a lot more coffee. Further, you can cut the expenses associated with enforcing marijuana laws, no time in court, no time in jail. Cutting expenses while raising revenue. It's not enough to balance the entire budget but it a few hundred million here, a few hundred million there, and it starts to add up to real money, dude.

It's been an exciting couple of weeks, full of hurricanes, Nor'easters, and an  election. And the banksters have been flying under the radar, but in the UK, there was no election. And so today, the British tax authorities said that they were looking into a list of HSBC clients with bank accounts in the tax haven of Jersey. Jersey is the largest island in the English Channel and it's a British dependency with its own tax system.  Her Majesty's Revenue and Customs, Britain's tax authority, is investigating more than 4,000 accounts in Jersey that belong to British clients after receiving details from a whistle-blower. The list includes a drug dealer and a man convicted of possessing more than 300 weapons at his home in the south of England.

HSBC, Britain's largest bank, is already part of an investigation into money laundering. The bank said earlier this month that it set aside an additional $800 million to cover potential fines from the money-laundering case, bringing the total to $1.5 billion. The bank, which is negotiating a settlement with the American authorities, added that the actual fine could be even bigger.

HSBC has also had to set aside cash to reimburse British customers who were sold inappropriate insurance products. The money laundering scandal began when the Senate Permanent Subcommittee on Investigations accused HSBC of allowing some of its executives to let illegal behavior go unchecked for nine years, until 2010. In one example, the bank provided financing to Al Rajhi Bank of Saudi Arabia, even though some of the bank's owners were linked to the financing of terrorism.

HSBC clients are also on another list that was in the spotlight this month. Kostas Vaxevanis, editor of the investigative magazine Hot Doc, was acquitted last week on charges of breaching privacy laws when he published a list of more than 2,000 Greeks believed to hold accounts at a Geneva branch of HSBC. The list was given to the Greek authorities two years ago by Christine Lagarde, then the French finance minister and  the current director of the IMF, to help the government in Athens investigate evasion.

On the 11th hour of the 11th day of the 11th month of 1918, the war to end all wars ended. On that day, 94 years ago, the Germans signed the armistice. America's veterans, along with Allied forces from around the world, had secured the peace. There was a profound belief and hope that they had secured an lasting peace, but as we have learned over time, eternal vigilance is the price of peace.

In 1919, President Woodrow Wilson proclaimed the holiday, saying: "To us in America, the reflections of Armistice Day will be filled with solemn pride in the heroism of those who died in the country's service and with gratitude for the victory, both because of the thing from which it has freed us and because of the opportunity it has given America to show her sympathy with peace and justice in the councils of the nations."

In 1938, Congress made it an official holiday, saying it would be: "a day to be dedicated to the cause of world peace and to be thereafter celebrated and known as 'Armistice Day'."

Of course, we know the Great War did not end all wars. Eventually, Armistice Day was recognized as Veterans Day to reflect the contributions of all veterans. In February of this year, Florence Green, a British citizen and the last known surviving veteran of World War 1, died. In February of last year, we lost the last surviving veteran of World War 1 from the United States. There are no more veterans of the Great War.

Frank Buckles drove an Army ambulance in France in 1918 and came to symbolize a generation of embattled young Americans as the last of the World War I doughboys.  He was only a corporal and he never got closer than 30 or so miles to the Western Front trenches, and he was just one of some 2 million men who served in the Expeditionary Forces in France, he was just one of nearly 4-and-a -half million who were deployed. Frank Buckles was 110 years old, when he died last year. He was buried at Arlington National Cemetary with full military honors. All gave some, some gave all.

There are still almost 23.5 million veterans in this country; not all served in war, but for those who stood the wall to guard the peace, thank you. For those who took to battle to secure the peace, thank you. That's what veterans day is about, remembering those veterans that have passed and honoring the living veterans.

There was a lot of talk in the recent election about America's "1 percent", the wealthiest residents; but another segment of the population often was overlooked in these discussions, the fewer than 1 percent of Americans who currently serve on active duty in the military.

This is the smallest share of Americans serving in the armed forces since the era of peace between World War I and World War II. The number of active duty troops in harms way is decreasing but even when the fighting eventually stops, many soldiers will face their toughest battles when they return home. Unemployment among veterans is above the national average, and may battle PTSD and homelessness. Suicide now outpace combat deaths.

I think the best way to honor the service of our best and bravest is peace, and I pray that some day the world will know a lasting peace; but we must never forget that we have a commitment to those who served. We have a price to pay, a sacred promise to protect those who protect us. This should be the first line in any national budget and it should be written in indelible ink. I believe a job and housing for a veteran should be an inalienable right. And I say with certainty that the GI Bill is not an entitlement program, it is part and parcel of an ironclad contract, and it is the best bargain there is. This is the small price we have agreed to for all who gave some, and some who gave all.

This Veterans Day, I encourage all to do more to honor those heroes who have served our country. While recognizing Veterans Day can be as simple as placing the American flag on your porch or reminding youngsters of a relative who served in the military, as a community we can do more.

If you know a veteran, thank him for his service. A simple gesture of kindness can make a difference for someone struggling to make the transition from military to civilian life.

If you know a veteran who’s not taking advantage of VA health care benefits or who is struggling to find a job, reassure him or her that help is available. An astonishing number of veterans — including women who often do not self-identify as veterans — do not know about VA health care services available to them. A phone call to enroll for VA health care may be the most important call they ever make to maintain their health and well-being. The website, www.VA.gov, can give you more info.

If you voted Tuesday, thank a veteran. After millions of Americans went to the voting booth last Tuesday to exercise one of their most cherished rights, we should pause and remember those who help make it possible. Simply having rights isn’t enough. They must be defended, often at great personal cost. And it’s the members of our armed forces, past and present, who put their lives on the line every day to do just that. How fitting, then, that Election Day occurs so close to Veterans Day.

If you enjoy your freedom, thank a veteran. If you love your country, thank a veteran. There is one simple fact: no veterans, no America.

On the 11th hour of the 11th day of the 11th month, the President or his representative will place a wreath at the Tomb of the Unknowns, and a bugler will sound Taps.