Thursday, February 23, 2012

Now Speechless?

Despite parts of New Jersey objectively resembling the armpit of the world, others, defying popular belief, are gorgeous, charming and even bucolic. I speak with some authority on this having grown up and studied in this often-maligned state. My (late) mother, who was a veteran employee of a most liberal mind, working within the State's most liberal bureau, would undoubtedly have HATED Chris Christie almost as much as she uncharacteristically spewed venom at the other Christie - Christie Todd Whitman who trampled upon and  slimmed her bureau before ironically taking over the same at the national level for Bush-the-Lesser. I admired her (and still do) and we shared many sentiments, though she was not fond of my political pragmatism that often resulted in me traversing party lines and hacking away at some of her most cherished ideals. While memories have a notorious habit of softening their edgier bits over time, such conflicts, unlike the poisonous political debate of the present era, never resulted in hatred, obstructed conversation, or prevented the pouring of another  after-dinner glass of wine.

Despite my mothers opinion, I liked Christie Todd-Whitman both as Governor of NJ (irrespective of  her unpopular decisions including those that infuriated my mother) for her balanced leadership and the moral position she took against the Bush admin (and Dick Cheney in particular) by voting with her feet rather than towing the lame-ass GOP party line that "The Best Public Interest is NO Public Interest...". And as a pragmatist, I cannot help but admire hers, especially in respect of trying to bridge the divide between wing-nuts of both parties.

Yet, there are times when shibboleths NEED to be outed and contrary opinions voiced boldly...when bureaucratic processes take on a life of their own in stark contrast to prevailing realities, and perhaps even their original mission, or that foreseen by original lawmakers and beneficiaries alike. At such junctures, larger-than-life provocateurs speaking the increasingly obvious (but too-often unsaid) - however painful - is not only entertaining to behold, but also both useful and necessary, for The People (even if they don't know it....yet). I have, to date, viewed Chris Christie in this way, and will admit to admiring his willingness to jump in the pool and make a large splash by saying things that need to be said, and doing things that more diminutive men (or women) just cannot do. He is unashamedly unashamed of his [frequent] insensitivity, political incorrectness, his gaffes, and for that matter his girth, all which is as it should be (except speaking with mal-intent about his waistline). It has been enojyable and refreshing.

But such men come with baggage. Speaking your mind, and shooting from one's proverbial hip, runs risks - for those far-from-perfect, for better or for worse. Sometimes such honest and unscripted quips are more apt than anything Safire or Frum could conjure working late into the night with a well-worn thesaurus. But others - those that go awry - perchance give insight into the real person. At one extreme, recall Jimmy Carter's infamous Playboy interview. At the other end are Governor Christie's, and this should be concerning to all concerned - even those who otherwise *like* him, such as myself. And what such a peek-under-the-hood reveals is the presence of some of the least-desirable traits in a leader: an ignorant intolerant bully.

Whether you-the-reader or Mr Christie agrees or disagrees with WB regarding the present level of marginal tax rates, or whether higher rates should be *optional*, is wholly irrelevant. As a citizen, WB has every to right the the soapbox. In fact, in issues of wealth that effect the uber-rich and business, he perhaps deserves even a larger pulpit with a more ornate lecturn. The political process with all its warts is precisely about airing contrary views, and letting them be kicked around, and judged by the polity. Some have direct access by position or money. Some have more direct access than they should. Others have indirect access, but all are entitled, and should be encouraged to express their views without being told to "Shut-Up" by a large, loud-mouthed, bully, just because its contrary to his (or his party's) position. By extension, if you, as a citizen in a democracy think the public interest would be improved by a road expansion, rather than bring it to the attention of other citizens, in "Mr Christie's world you should just "Shut The Fuck Up And Build It Yourself". If believe that an existing law insufficiently and unsustainably protects fish-stocks, I suppose in Mr Christie's world you should just "Shut The Fuck Up and east Spam" or alternatively going down the action-path, Mr Christie might encourage you to take matters in your own hands and become a Vigilante-Of-The-Sea.  If capital-expenditure on sewage treatment is insufficient to purify drinking water or prevent noxious gases from permeating the neighborhood, by extension, I presume Mr Christie would suggest you "Shut The Fuck Up, buy bottled water and shut your friggin' windows". Politics as it should be?, one might ask?

Perhaps one cannot know what Mr Christie really meant. Perhaps he was just misunderstood. But I have the suspicion that this super-sized New Jersey Djinn, now out of the bottle, is displaying his true persona. And it is NOT a pretty sight...unless of course you're a brown-shirt.


Highgamma said...

I can't agree with you on this one. Anyone who knows Warren Buffet's finances knows that he advocates higher taxes on everyone, except people like him. He's donating nearly all of his wealth to a foundation, none of which will ever be taxed at any tax rate. Given that, higher tax rates will have little effect on his finances. He has no intention of writing a check for tens of billions of dollars to the US government.

So, Buffett's so-called moral high ground is just another chimera. He himself would actually pay little of his wealth for the tax named after him. I can completely understand, given such hypocrisy, that someone would tell him to "put up or shut up".

"Cassandra" said...

I do not hold Buffet on a pedestal. I have written of a few of his more sordid things. Yet, since America doesn't tax assets or wealth (excepting real estates at the local level or when they spin income or one incurs a capital gain), I fail to see why the size of total assets matters or should effect his political opinion as a high-earner with 8-digit taxable income. Of course I can see a day when assets ARE taxed, but that is for another day.

IF Christie's attack was ad-hominem - i.e. Buffet is a Hypocrite - then he should have said so, which he didn't. A reading of interview leaves no doubt that his attack on Buffet was squarely about his disagreement with Buffet on The Policy of higher taxes on the wealthy.... period. Therefore, I stand by my view that we should be intolerant with only one thing: intolerance. Therefore, whatever Buffets Net Net Net, he is entitled to his political opinion (shared by a sufficient number of other of his Uber-earning peers) without being told to Shut Up and a write a check. Indeed, if one descends the slippery philosophical slope, why not make ALL taxes optional or voluntary??!? We can establish a big fat US Govt Tip Jar. Why not? Because it is as an intelligent idea as Wall Street self-regulation for a start.

Anonymous said...

How about that yen? As I type, it is on the upper trendline. Will you be shorting it? (I'm newly long, the BOJ and their efforts are, as always, the same as they ever were.)

"Cassandra" said...

While a Yen contrarian in 2007 at USD120,and EUR160 witnessing the crowded carry trades, the building pressures and the relatively cheap OTM vol when I wrote this, the opposite was true in
Oct 2011 view given much Yen carry had puked, trade surpluses are evaporating, and the weakness with "Yen as a safe-haven" meme.

So I cannot be bullish on the Yen (which is no statement on the BOJs cunning or ineptitude) when carry trades are returning. The reflation trade is and will continue to be long nikkei and short yen. While there may hiccups and you can trade the counter-trend move, I see no reason to fight global CB balance sheet expansion, and continued monetization, and think you'll see USD/Yen at 90 before 75 again. For the truly serendipitous, try buying 2yr 100 USD/YEN calls with your erstwhile Starbucks Mochaccino Latte money.

This comes with the usual disclaimer: "What the heck do I know....??!?!!!"

J Reev said...

I like Christie for the same reasons you stated earlier in your piece. I watch a 1 minute Youtube video of Christie's comments about WB, and simply thought he was fed up with being asked about higher taxes on the rich, instigated by WB, a democrat and seemingly strong supporter of Obama, who up to now has shown little inclination to cut spending and take on fatted calves, such that Christie himself is doing. So he blew back.

"Cassandra" said...

JReev -

SO we should give him a free pass because he had a flustered bad hair day? Makes you wonder what he would say and do in an actual crisis. It was the antithesis of articulate (anti-articulate??!?) when he coulda woulda infact shoulda said something like "...Mr Buffet is entitled to his opinion, but I disagree BECAUSE it's easy for him to say BLAH BLAH BLAH, but I'm the guy takin on the bloat...."

The thing is, as Rogoff has reiterated so many times, it will take BOTH spending cuts AND revenue rises (and given the current %take from the top marginal brackets as a percentage of historical take, its quite obvious WB is spot-on where this portion should come from. From this point of departure, Christie's remarks were even more subarticuate.

Highgamma said...

I didn't advocate taxing assets. Pretty much all the value of Warren Buffett's assets is unrealized income -- income he made while paying little to the US government. The fact that he has a way to realize his dreams and not pay taxes to the government on that income makes him a super-hypocrite. He's been saying "Tax me more!" when he knows that his unrealized income will never be taxed.
Buffett is entitled to his hypocritically presented opinion. That's for sure and Christie is entitled to his opinion that he "should just write a check and shut up". He didn't order him to write a check. He stated his opinion, bluntly, and forcefully. I admire him for that.
If it were me, I'd have made myself more clear. "Warren Buffett has structured his financial situation so that even if tax rates were raised, he'd pay little tax, either estate tax or income tax, on nearly all of the income that he accumulated in his lifetime. Perhaps, instead of insisting that others should pay more taxes, he should just shut up and write the check for the tens of billions of dollars of his accumulated income that would how that he's actually willing to contribute to this nation's finances. Otherwise, he's just another hypocrite who wants to raise your taxes while not paying any himself." But that would not be as good of a sound bite.

J Reev said...

In no way, shape or form am I trying to defend the current ridiculous tax code we have here. I agree that WB, Hedge Fund, Private Equity, et al people who get many huge breaks on income taxes because of the corrupt insider way we do things here, should be taxed more. Perhaps much more. I just sensed Christie was fed up talking about something he couldn't anything about as governor of NJ, but if he threw his hat in the presidential ring, and responded the same way that would have been very disappointing, and made me wonder if he was the same as the other politicians. As much as I don't trust politicians to spend additional tax revenues wisely, the current system needs to be more fair and we need to start dealing with the deficit and the debt.

Jack Parsons said...

About taxing wealth: I can't remember where, but I recently saw an income tax form from (I think) the civil war, or afterwards.

It asked "how many houses do you own?" "How many carriages?" In other words, conspicuous consumption as a proxy for income. Luxury taxes as the only income tax.

Anonymous said...

Thanks for your thoughts on the yen. I must concede, it is either experiencing a stop-popping extravaganza or it is breaking out. I'm betting on the former for no other reason than a firm belief that the outstanding yen debt will squelch any trend line breaks. 50 is not a goal as much as it is a necessity...for Japan.

I'll skip the calls, thanks. And serendipity favors the absurd. Or contrarian, take your pick.

Anonymous said...

I don't understand how donating money to charity instead of giving it to the government is forsaking Buffet's "moral high ground" in that anybody else can also do the same.

The only argument you can make about "hypocrisy" is that Buffet earned his wealth in a low tax environment and it would be more difficult for someone else to do the same if/when taxes are higher.

But this ignores the fact that if Buffet were truly focused on maximizing his wealth, he chose one of the least efficient structures possible. He would be A LOT wealthier if he charged investors 2 and 20 or 3 and 50 to invest with him.

Highgamma said...


You don't see the hypocrisy in someone crying out, "Tax me more" when the policy that they are actually espouses would tax them little more than they are now but tax others a great deal more? I'm sorry. I can't help you with that one.

Not everyone wants to give their money to charity. Buffett has very publicly attempted to get people to do so. Now he'll have a tax policy in place that we push even more people to do what he wants done. It's not a moral high ground. It's using government to impose his view of the world on other people. If he said that, he wouldn't be a hypocrite. He hasn't said that.

Anonymous said...

You have both of these statements in there but you can't put one and one together. Im pretty sure Buffet believes rich people should pay more taxes OR give their money away. Nobody's ever advocated against doing the latter, because it's always been an option - and will continue to be an option.