HorsesAss.Org

Over at EffU, I broke down the dumbest post to appear at the orange clown car this year, Jim Miller’s bizarre follow-up attack on Rick Steves for things that only seem to exist in Miller’s imagination.

[youtube]http://www.youtube.com/watch?v=jETv3NURwLc[/youtube]

The Seattle Times editorial board argues that “Congress should enact consistent sales-tax laws to even playing field for Main Street businesses,” and I suppose that seems like a fair and reasonable enough objective. But do they understand that there’s no practical way of achieving this goal without putting tens of thousands of small entrepreneurs out of business, including many here in Washington state?

I know this because I started and ran a small software development and publishing company myself for about a half decade during the nineties, which at its peak consisted of me, my (not yet ex) wife, and a single employee. And had we had the burden of collecting and remitting sales taxes to forty-some states, we never could have afforded to stay in business.

The bulk of our sales during those years, maybe 70% of our unit volume, went through a handful of major mail order catalogs, and thus the bulk of our wholesale product shipped tax-free to the Airborne facility in Wilmington, OH. No problem for us there, and I don’t have much sympathy for big catalogs and online retailers who oppose efforts to collect taxes on interstate sales.

But the bulk of our profits came from direct sales, an outlet that would have been all but impossible to administer had we been required to collect taxes for every state and municipality in which we did business.

The mail order catalogs “purchased” our main product, a rhyming dictionary for Mac and Windows, at half the $49.95 MSRP, and generally resold it at the discounted price of $32.00. ($3.00 overnight shipping was pretty much standard at the time.) But I put “purchased” in quotes because that’s not really how the scam worked. Rather, we swapped product for co-op advertising, the price of a fraction of a page costing us thousands of dollars a month, per catalog, by the time we gave up.

If they sold enough product to pay for the ad, as they did every Christmas season, the catalog would purchase more, and we would make money. If they didn’t sell enough product to pay for the ad, as happened most Summer months, we would owe them money. The catch: they wouldn’t sell us Christmas if we didn’t advertise during the Summer.

We sold a lot of product over the years this way. But we really didn’t make much money.

Direct sales, on the other hand, that was mostly profit. At a $39.95 “discounted” direct price, plus about $4.50 shipping and handling for Priority Mail, we could realize 85% gross margins, and the credit card transactions went directly into the bank (as opposed to say, Multiple Zones, whose refusal to pay one Christmas season ultimately drove us out of business). It was a lot of busy work handling the direct sales, and they rarely amounted to more than a few a day, but I enjoyed dealing directly with customers, and the steady trickle of cash flow they created.

In our best sales year we grossed maybe a few hundred thousand dollars, but the cost of advertising was so high that we barely broke even on the 90% of units that went through retail. But the $20,000 to $30,000 a year in direct sales… that, plus a little contract work on the side, was often the difference between paying our bills and going deeper into debt.

And here’s where the Times’ sales tax proposal really strikes home, for had we been required to collect and remit sales tax for every sales tax state—and on any given year we shipped at least a few units each to every one of them—we never could have afforded to sell direct at all.

For example, for several years we displayed at the August MacWorld Expo in Boston, and sold product on the floor as a means of defraying some of the expense, and as such were responsible for paying Massachusetts sales tax on that few days of business. A hassle, but fair enough.

When we stopped exhibiting at MacWorld, and thus stopped filing taxes annually in Massachusetts, their Department of Revenue noticed, sent us a bill for a big late filing fee, and suddenly insisted that we file quarterly. For over two years I had to sporadically deal with Massachusetts’ demands, as late fees and interest accumulated, and threats escalated. I’m not really sure why they eventually dropped their collection efforts, but it probably would have just made sense to pay them the money I didn’t owe, rather than expending so much time and energy fighting it.

Now multiply that by forty-some, and you get an idea of what small businesses might face if sales tax could be charged on interstate sales.

Even the so-called Streamlined Sales Tax Project isn’t nearly streamlined enough for truly small businesses—and I’m not talking about the 100-person companies the Times thinks of as small, but rather mom & pop businesses like my own—if it requires multiple rates and remitting to multiple states. We never had the luxury of affording an accountant, and we certainly couldn’t have afforded one if the Times’ favored proposal had been law. In fact, with the accounting nightmare it would have created, we couldn’t have afforded to stay in business at all.

And thanks to the Internet and services like Ebay, the number of small time entrepreneurs making all or part of their living via direct, interstate sales has exploded over the past decade, taking advantage of an extraordinary online marketplace that would simply be impossible if every vendor had to take the time and/or expense to file taxes in every state that levies a sales tax. I have no gripe with the goal of protecting brick and mortar businesses from the unfair advantage enjoyed by the major online and mail order retailers, but not if tens of thousands of small entrepreneurs are flattened in the process, many of whom are just supplementing their income with a few hundred dollars worth of sales a month.

I’ve had this conversation with state legislators eager to stem the loss of tax revenue to interstate sales, and they’ve mostly brushed aside my concerns, telling me that third-party service providers will magically arise to fill the gap and process the sales tax for me… but at what cost?  5%…? 15%…? 20%…? And at what minimum transaction fee? At some point, and particularly on low cost items, selling direct ceases to be worth the effort.

Indeed, the whole Streamlined Sales Tax Project shows an utter lack of imagination on the part of legislators, and a total lack of appreciation for the role of really small businesses in our economy. For the bigger problem, at least here in Washington state, isn’t the loophole that allows interstate sales to go tax free, but rather our over-reliance on the sales tax itself. That the Times and our legislators would prefer to crush a vibrant economy of small, online retailers rather than address the real revenue problem, shows just how unready they are to lead our state into the 21st Century.

Last week’s contest was won by N in Seattle. The correct location was Lariat Loop Rd. just outside of Golden, CO.

Here’s this week’s, good luck!

– I’m planning to follow the City Attorney’s race pretty closely this year. Tom Carr has always struck me as a disingenuous hack, but Josh has some concerns about the Holmes campaign. Even with those concerns, I feel compelled to support Holmes in this race, especially when he runs against someone who claims to be against prison overcrowding yet tries to send bar employees to jail for not properly checking id’s.

– A number of California TV stations are refusing to air ads in support of marijuana legalization despite the fact that 56% of the state supports legalizing marijuana and the Governator has asked to have an open debate on the subject.

– Mother Jones has devoted its latest issue to the drug war. This story about a Mexican reporter trying to seek asylum in the United States after he reported on corruption in the Mexican Army is chilling. Contrast that with the work of legendary moron Ruben Navarrette Jr, who safely cheers on the entire corrupt mess from the comfort of his San Diego home.

– The story of Eric Frimpong is not that well-known yet, and I’m struggling to understand why. It’s the story of a young man from Ghana who was destined to play professional soccer, but who is now serving a six-year prison term in California for a rape that he almost certainly did not commit.

– The overly aggressive police raid on San Diego Congressional candidate Francine Busby’s fundraiser was sparked by a neighbor who appears to have called in a bogus 911 complaint.

– One of the reasons why alcohol prohibition lasted for only a short amount of time was because people remembered the time before it and could easily see the progression towards more crime that it brought. In Copenhagen, the same thing is happening. Up until 2003, a small section of the city called Christiania tolerated cannabis and hashish sales. Since 2003, when the city cracked down, the drug trade has spread across the city, creating more crime. Now, 59% of Copenhagen residents want Amsterdam-style coffeeshops.

Reporter Stephanie Rice at The Columbian tells the story of a former police officer who spent nearly 20 years in prison for allegedly raping his own children, and the now the adult children have told a court it never happened and that they made the accusations as children after intense pressure by a former detective. Please click through and read the whole story if you wish.

But the Clark County prosecutor’s office is “not waving the white flag,” as reporter Rice writes, even though the former police officer received a commutation from Gary Locke in 2004. Amazingly, it sounds like prosecutors are actually considering appealing to the Supreme Court if the charges are wiped out.

This story is why we need good reporters, and more of them. The Columbian deserves credit on this story.

There is, of course, a public watchdog function that newspapers perform, as something seems to be seriously amiss at the office of Clark County Prosecutor Art Curtis. Readers may recall that Oregonian columnist Steve Duin had a column on July 2 about a Clark County man wrongly charge with luring of a child, despite having ironclad proof that he was elsewhere. The public has a right to know why Art Curtis’s office is conducting itself in this fashion.

We all want the bad guys to be caught, and have put them away. But our Founding Fathers came up with some pretty amazingly sound rules to follow, like the right to face one’s accuser. While that’s admittedly problematic when it involves children, it places an extra burden on police and prosecutors to make sure they have the right guy. That’s not always easy, and the good cops and the good prosecutors deserve our eternal thanks, but when serious screw-ups occur there needs to be some accountability.

Talk radio hosts nationwide breathed a sigh of relief yesterday when Judge Jeffrey Ramsdell threw the book at Scott Brian White, handing him a 20-year sentence for the brutal axe murder of former KIRO talker Mike Webb.

King County Prosecutor Dan Satterberg had only sought a 12-year sentence in exchange for White pleading guilty to 2nd-degree murder, and courtroom observers had speculated that he could have received as little as 8-years, a precedent that some disgruntled listeners might have found awfully tempting. (Only 8 years for taking an axe to Dori? Hmm.)

Fortunately for me and the rest of my radio colleagues, White’s more appropriate sentence sends a clear message that we’re still considered legally human, at least here in King County.

Andrea James, the P-I’s aerospace reporter, has a post concerning the views of Richard Aboulafia, an industry analyst with the Teal Group. I guess it’s not just foul tempered bloggers like me who are amazed at what has become of Boeing and the 787. From James’ post (emphasis mine:)

Boeing’s latest delay — its fifth — and purchase of supplier Vought combine to prove that the company’s strategy of saving money from outsourcing work to suppliers “has been dwarfed by the cost of remedying the damage wrought by that strategy.”

“This is all seriously bad,” Aboulafia said. “As we digested the news, I paused to reflect on just what a tremendous drug-like rush the 787 program once was, and just what a ghastly let down it has become.”

What was supposed to be a category killer has turned out to be even worse than the “commercially irrelevant” Airbus A380, Aboulafia said. Because, at least the A380 flies.

James goes on to quote Aboulafia, there’s some interesting history there about the McDonnell Douglas-Boeing marriage in the late ’90’s. It’s a familiar story for those familiar with late 20th-Century and early 21st Century American “capitalism.”

So what say before our entire state’s political class goes on bended knee to Chicago, promising the sun, moon, stars and no unions, they take a good, hard look at Boeing? Yes, the company is an historic and important part of this state. I can’t even imagine how hard this is for long-time Boeing folks. The company that helped win World War II and build the Pacific Northwest’s industrial base is now a basket case.

Boeing is apparently in seriously deep shit, folks.

But a lot of entities, including households, local governments and educational institutions are also in deep shit, and the people simply can’t afford any ill-considered and hasty offers to a company whose management has so clearly dug its own hole. It would be one thing if Boeing management had a good attitude, but in trying to blame unions for their woes they have revealed just how craven they really are.

The first and non-negotiable starting point should be that Boeing stop demanding no strike clauses and other union-busting tactics, and the second non-negotiable starting point is that Boeing commit to keeping assembly jobs in Washington state.

Absent those two things, there’s really not much to say. Playing the destructive game of pitting locality versus locality is ultimately self-defeating, both for workers here and in South Carolina. This isn’t a basketball team, folks, although the basic technique is the same. Threaten, threaten, threaten, and then threaten some more.

We all know how good Democrats are at giving away the store before negotiations even start, so for once in the history of the universe it would be nice to see some Dems start out strong and maybe even shove management’s face in their failures a little bit. Sure, it would be political grandstanding, but not any worse than say, calling the cops. Just sayin’.

The taxpayers of this state are already subsidizing the faltering newspaper industry with a massive tax break, for no good reason that I can think of, and likely to no useful effect either, as the newspapers still don’t understand the new landscape.

But the titans of industry and their boosters inevitably demand our money when they screw the pooch with bad business decisions. What we’ve seen happen at the national level is that people wake up to a new round of layoffs followed by a new round of executive bonuses. The least our political class here could do is make sure we don’t throw any good money after bad in the aerospace sector, and make sure that any efforts to assist Boeing are done with the interests of all the citizenry in mind, not just executives and stockholders.

Here is a quick introduction to Republican-inspired neologisms:
[youtube]http://www.youtube.com/watch?v=kRdzRF97NlE[/youtube]

(And there are nearly 70 more media clips from the past week in politics posted at Hominid Views.)

So I was at MacPherson’s Produce up on Beacon Hill, and I said “Washington bing cherries for only $1.99/lb? Oh my God,” and God said, “Eh. You think that’s good? Look to your left.” And there I found nice looking organic cherries for the same price.

“Go ahead, taste one,” God said. So I did.  And it was good.

“You like mangos?” God asked, but then my phone rang, so I had to cut Him off.

… And apparently, He talks back:

[audio:http://horsesass.org/wp-content/uploads/susietalkstogod.mp3]

Susie talks about her time as the weekend newscaster in Hawaii, and how demoralizing it was when she didn’t get the weeknight slot when it opened up. And so of course, she turned to God.

… And about that time I was so discouraged, I found myself on my knees to the Lord one day saying, “Lord, I am ready; I am professionally ready to move on. Why aren’t you doing it for me?”

And He told me something then that I have never forgotten, and I think it’s of tremendous significance to all of us no matter where we are, and He said: “It’s fine, I want you to be professionally ready for your job, but it’s also essential that you be spiritually ready for the next step.”

And I realized that I was going to be in the public eye, and as such I was going to be an ambassador in a sense for Him. And so, I realize that there are other things more important or as important as being professionally ready for anything. And that is to be spiritually ready.

I’ve got to admit that I’ve never really gotten the whole God thing, but a couple of things stand out to me, besides the fact that when Suzie talks to God, He matter of factly talks back. (I mean, if I started quoting God in my blog posts, folks would accuse me of being a liar or a lunatic… but maybe she just meant this metaphorically?)

First, what is this thing with Christians praying for touchdowns and lottery tickets and news anchor jobs, and thinking that God doesn’t have more important things to do than answer their petty, materialistic prayers? Children are starving, people are dying of horrible diseases, we’re on the verge of catastrophic climate change, and somehow I’m to believe that the Almighty Lord is taking sides in NFL games (regular season, no less), or advancing one news anchor’s career over another?

“Why aren’t you doing this for me?” Susie asks God, to which the appropriate response might have been “Leave me alone, I’m busy preventing a giant asteroid from wiping your species off the face of the earth.”

The other thing that strikes me about this snippet is the intended message… that there are more important things than being “professionally ready” for your job. And that is to be “spiritually ready.”

So I guess, in that sense, despite her utter lack of adequate professional experience, Susie believes herself to be perfectly qualified to serve as King County Executive.

UPDATE:
It occurs to me that I might still have a radio show today, if only I had prayed.

If anyone is helping advance the distinctly remote possibility that the United States will ever see any true form of “socialism,” it’s the fine folks at AIG.

Apocryphal or not, Marie Antoinette’s supposed rejoinder “let them eat cake” certainly comes to mind.

Put that in your teabag and smoke it, Rick Santelli!

Robert Reich doesn’t buy that there will be a quick recovery. In fact, in his view, there is a radically re-shaped economy and talking about a “V” shaped recession or a “U” shaped recession probably isn’t accurate.

Personally, I don’t buy into either camp. In a recession this deep, recovery doesn’t depend on investors. It depends on consumers who, after all, are 70 percent of the U.S. economy. And this time consumers got really whacked. Until consumers start spending again, you can forget any recovery, V or U shaped.

Problem is, consumers won’t start spending until they have money in their pockets and feel reasonably secure. But they don’t have the money, and it’s hard to see where it will come from. They can’t borrow. Their homes are worth a fraction of what they were before, so say goodbye to home equity loans and refinancings. One out of ten home owners is under water — owing more on their homes than their homes are worth. Unemployment continues to rise, and number of hours at work continues to drop. Those who can are saving. Those who can’t are hunkering down, as they must.

Eventually consumers will replace cars and appliances and other stuff that wears out, but a recovery can’t be built on replacements. Don’t expect businesses to invest much more without lots of consumers hankering after lots of new stuff. And don’t rely on exports. The global economy is contracting.

Then one comes across stuff like this from Firedog Lake:

Workers returned Tuesday to the job at Stella D’Oro Biscuit Co. in the Bronx after a judge ordered the company reinstate the 136 employees who had remained strong throughout a brutal 11-month strike. But before they could even walk through the doors, they were greeted with the anti-union response by the company’s private equity firm owners, the 21st century’s mutation of the robber barons: Brynwood Partners announced it would shut down operations in October. (“Private equity firms” is the euphemism those leveraged buyout corporations adopted after leveraged buyout got a bad name in the 1980s.)

Too often in our “national discourse,” such that it is, income inequality is discussed in solely moral terms. There’s also a utilitarian side, in that consumers who are under economic pressure are not going to spend freely. All those traders who cheered Rick Santelli in the spring might want to stick that in their cigar and smoke it.

If a rising tide lifts all boats, as the old aphorism goes, then maybe we really do need a major reform of labor laws, as the author at Firedog Lake suggests, so that the playing field is less slanted towards corporations and ultra-wealthy investors. For some reason trying to destroy unions is considered a good business practice in this country, and it creates an irrational distortion in the labor marketplace.

The right to form unions and bargain collectively is not only the law, it is a birthright to all Americans that was paid for in blood. Somehow many other industrial democracies manage to have large unions and still make great stuff. You kind of wonder if some of the Wall Street types ever stop to consider whether unionized workers built their fancy sports car. Probably not is my guess.

As long as right-to-starve states and anti-union ideologues at major corporations are allowed to relentlessly attack wages and benefits, the nation faces a zero-sum game where producing quality products and services takes a back seat to screwing over regular folks, usually to the sound of cheers from Wall Street. While this system benefits a relative few in the financial sector, it’s been a disaster for wide swaths of the economy.

If Reich is correct that there will be a “new economy,” the shape that it takes is a legitimate topic for debate for all Americans.

Former KIRO TV news anchor Susan Hutchison has been surprisingly media-shy since announcing her candidacy for King Executive, but according to a report on BlatherWatch, she wasn’t nearly so reserved—or calculatingly non-partisan—last Fall when she joined in the Obama-bashing fun with the right-wing talkers over on KTTH:

Her can’t-we-all-get-along is now, but last year she was trashing Obama, and loving up Sarah Palin in a conversation we caught on the fly last Fall in election crunch as she guested on the very conservative David Boze Show (KTTH m-f, 3-6p) with the host’s wife, Peggy Oban Boze.

The conversation didn’t mean much at the time. We knew it was Peggy Boze, but we didn’t know it was Hutchison. We remember snorting when she said something like, (we’re paraphrasing) “Why don’t Obama’s supporters just write in Bill Cosby’s name?” The ladies had a good laugh over that and at the idea, we guess, that, if these silly people must vote for a black guy, Dr. Huxtable would be safer.

Obama’s “terrorist connections,” Bill Ayers, and Jeremiah Wright were mentioned, naturellement.

Why not just write in Bill Cosby’s name? Ouch. I don’t know if I’d go so far as to describe the comment as racist (after all, she’s still encouraging folks to vote for a black guy), but it certainly strikes me as a tad racially insensitive.

But more importantly, despite her careful efforts to present herself as a moderate non-partisan (you know, mostly by refusing to talk about where she stands on any issues), Hutchison’s radio performance places her smack dab in the mainstream of the KTTH crowd… which of course, isn’t mainstream King County at all. And it certainly ain’t non-partisan:

The Boze Show isn’t some lifestyle talker, it’s hard right. Peggy Boze is not just Dave’s ever-lovin’, she’s a conservative activist and was the McCain-Palin Chairwoman For King County. She was a member of the laughable Palin Truth Squad, a sock puppet front to “set the record straight” after “false attacks, rumors and smears ” against Sarah Palin. It amounted to no more than a list of national Republican women they wanted to hitch to Palin to help gain independent women whose votes were going for Obama.

Don’t get me wrong, Hutchison has the right to her own opinions, extremist as they may be. But voters also have a right to know what these opinions are. And if Hutchison refuses to talk openly and honestly about her political allegiances, philosophy and ideology, then the media will just have to piece it together for ourselves as best we can.

NOTE:
And if Hutchison disputes the similar accounts on BlatherWatch and in The Examiner, she should demand that KTTH make the audio public.

UPDATE:
BlatherWatch has since posted a correction, but I’m not sure that it’s warranted. No, Hutchison did not trash Obama on the September 28th broadcast, but most of the other broadcasts from last Fall are not available online, so that doesn’t mean that it was the broadcast in question. (And yes, I searched for the show, and listened to the 9/28 broadcast before writing my post.)

Regardless, the point is that Hutchison is a conservative Republican, something she paraded openly even on the September 28th show (in which Peggy Boze kvells “You’re our Sarah Palin!”), but refuses to admit it now, and she should simply not be allowed to hide behind this nonpartisan bullshit.