Stock Market, Last 24 Years, Dems vs GOP

My most popular post to date has been Businessmen Presidents, in which I debunk the idea that successful businessmen make good presidents by looking at our actual history.   So, along those same lines I offer this infographic comparing stock market performance under Democratic and Republican presidents over the last 24 years.

I picked 24 years because it seems fair.  The period covers four presidents, two Republicans and two Democrats.   The parties have been in power 12 years each -- well, almost 12 for the Democrats, as President Obama's first term has a few months left.

I used the Russell 3000.  This is a broad index, covering the 3000 largest publicly-traded stocks, collectively worth 98% of all publicly-traded companies in the United States.   It's a pretty good proxy for investor prosperity.   It includes lots more companies than the S&P 500 or the Dow 30. It's cap-weighted, which means the larger companies count more, in proportion to their market capitalization.   This is the right way to go to find out what happens to the average dollar invested in the stock market.   For the returns shown as percentages I used the monthly RUA (Russell 3000) series, so I started each president at the end of the January in which they took office.    

When you do this sort of thing with jobs, there's a fight about when to start counting each new president, because it takes a while for the new administrations policies to have an effect.   With the stock market there's no inherent lag, so I just used as close to the start of the term as I could get.   I suppose you could argue that you should start from election day, or even before, when the winner is first apparent.   However that would credit bad news to a president-elect who had nothing to do with it and who is powerless to do anything about it, so I didn't think it was right to take that route.

I used Yahoo finance for the graph because it had the series going back far enough, and it was able to do a logarithmic scale for the Y axis, which your math friends will tell you is necessary to make the "stacking up" metaphor work properly.   The percentages are combined by compounding [(1+p1)*(1+p2) - 1] which makes more sense than simple addition.

It's not like I counted billionaires.   It's just that the way people become billionaires is mostly by owning lots of stock that goes up in price.   As the graphic shows, this happened mostly under Democrats in the last 24 years.

I'll admit I even surprised myself when I worked out the numbers and the difference was this stark. Over the last 24 years,  the U.S. stock market lost 4.8% under 12 years of Republican presidents, while it gained 430.4% under almost 12 years of Democratic presidents.

Why aren't the Democrats telling everyone?

I was inspired to make this after my brother-in-law sent me a story about Bernie Marcus, the billionaire founder of Home Depot, telling everyone the world is going to end if Obama gets reelected.    There's a youtube ad that's getting some attention.   It's related to the rather despicable trend of Republican CEOs threatening their workers with dire consequences if Democrats are elected in November.   

So, I first worked this up for Home Depot before I did the picture above.

It turns out Home Depot wasn't an exception.  The market as a whole really has done much much better under Democrats than Republicans.   Another thing to note is how similar this graph is to the market as a whole -- mostly Home Depot and other firms rise and fall together.  

A commenter on the Patch alerted me to a Bloomberg article from February that make a similar point to my stock market chart.  The Bloomberg article uses the more narrow S&P 500 index and goes all the way back to JFK.  It says:

The annualized return for 23 years of Democratic administrations is 11 percent, or four times the 2.7 percent annualized return during 28 years of Republican presidencies.

Federal Fast Track Rape Court - Picture of the Day 2012 10 26

I feel I should get back to chronicling Rep. Guinta's many missteps, but I find I can't stop worrying about how a Romney presidency will affect women's reproductive rights.   Here I make a rather dystopian forecast based on statements made by Mitt Romney and Paul Ryan.

It's difficult to know how any economic policy will play out.   I suspect Romney's economic plans will work out poorly for most of us.   I am much more certain that Romney's plans for women's rights will be a disaster.

When the candidates make their legislative desires known on social issues, it's fair to assume that once they take power, they will work to enact their stated agenda.   President Romney has stated he wants to appoint justices to returns back to the pre-Roe v. Wade days.    It's worse, actually, because a GOP congress would then move to ban all abortions nationally.

Mitt has tried to take the "moderate" position, actually to the left of many leaders in his party, of having an exception that allows aborting pregnancies from rape.    Since this would be one of the few exceptions, it's easy to imagine some women wishing an abortion would make false claims of rape.   In this exercise of imagination, I tried to imagine what the due process of granting the exception would look like.

References:

http://en.wikipedia.org/wiki/Filibuster   It seems only a simple majority is needed in the senate to change to rules at the start of a session.

Fixing the Filibuster - Senator Tom Harkin

Paul Ryan: Rape Is Just Another 'Method Of Conception'

Mitt Romney says he'd be delighted to sign a federal ban on abortion

Romney: I support overturning Roe

Romney will nominate judges in the mold of Chief Justice Roberts and Justices Scalia, Thomas, and Alito.

Businessmen Presidents: Picture of the Day 2012 10 22

Does prior success in business generally result in a successful presidency?   Historically, how well has the successful business guy done once he's elected president?  This opinion piece in Entrepreneur Magazine picked the four men below as the most successful businessman who became president.   I try to capture their history, as well as a non-partisan rank, on this single page. The ranking and parts of the biographies are from Wikipedia.   For the rank I use the aggregated scholar survey rank, which combines the rankings from 17 different surveys.

Rep. Guinta is OK with violence against some women

Frank Guinta is very proud of voting to renew the Violence Against Women Act.   He sent around an email entitled "Frankly Speaking: Keeping Protection in Place -- Renewing the Violence Against Women Act."    You might think from that title that, with Frank Guinta's support, Congress has renewed the Violence Against Women Act (VAWA), extending into the future the protections it affords, for which we are all better off.    Nothing in the rest of the rather long email would dissuade you of this.

It turns out to be totally wrong.

Joe Biden wrote VAWA, which first passed in 1994.  VAWA is a bipartisan sucess story, breezing through renewals with bipartisan support over its two decades.   The current authorization expired in September, 2011.

On April 26, 2012 the Senate passed S. 1925, the Violence Against Women Reauthorization Act of 2011.   All the Democrats and a third of the Republicans, including all the women, voted for it.  The House had the opportunity to simply pass the Senate version, which the president would sign and things would go on in their bipartisan way, pretty much the same as always. 

But the Tea Party dominated House had a problem with the Senate's version.   It protected too many women.   It protected the wrong kinds of women.  It protects immigrants.  It protects lesbians.  It protects bisexuals.  It protects the transgendered.  It protects Native Americans.  We can't have that!

So the House passed its own version of VAWA, without all those protections that might help the wrong kinds of women.    The president has threatened to veto the house bill, should it reach his desk.   At this point the renewal has not been passed by congress.    The two chambers' bills await reconciliation, which appears to be stalled.

This is an example of Frank Guinta claiming he's doing something, when all he's doing is passing bills that will not become law.   He could have chosen to support the senate bill, which was truly bipartisan, authored by the liberal Patrick Leahy and the conservative Mike Crapo.   But instead, he went along with the effort to scuttle the bill.   Hey, the house bill got 6 of 190 Democrats to vote for it.   In Frank's book, that's an incredible show of bipartisanship.

The Christian Science Monitor has a balanced explanation of the difference between the two bills:

• The Senate adds language that explicitly mentions gay and transgender Americans for protection, while the House version is gender neutral. Republicans contend that their measure allows all Americans to receive protection because it does not specify who qualifies for various programs. Democrats, however, say that local law enforcement could use the lack of specificity to discriminate against gay or transgender people.

•  The House bill does not include a Senate provision that would allow Native American women to take American citizens who abuse them to court within the tribal legal system. Republicans say that the Senate measure is unconstitutional and replace it with a proposal that allows Native American women to apply for protection orders from local US courts. Democrats contend that without the Senate’s proposals, Native American women abused on an Indian reservation are often left without legal recourse. 

• The House bill does not allow for a path to citizenship for illegal women who have been abused and agree to cooperate with the police investigation of the crime. Moreover, it holds the cap on temporary visas offered to women cooperating in legal investigations to 10,000, below the Senate’s increased 15,000 level. Republicans say the citizenship provision is akin to amnesty for illegal immigrants. Democrats, on the other hand, say that women fearing deportation may never come forward to take abusers off the street under the House bill.

I call the last one the "Husbands, Beat Your Mail-Order Brides With Impunity" law.  Right now there's a special program that shelters abused women whose immigration status depends on staying with their abuser.   Think of all the money the feds will save because abused brides will no longer seek protection, because if their marriage ends they'll be deported.   Thanks for fighting for my freedom to beat my mail-order bride, Rep. Guinta.   And thanks for the free shipping to send her back.

Much as the Republican Party wants to deem only women raped in a particular way ("forcible rape" or "legitimate rape") to be worthy of an abortion, they want to choose only certain women to be worthy of the protection of the law.   Rep. Guinta, if you actually want to be bipartisan, instead of just claiming bipartisanship without working with the other party, get your colleagues in the House to pass the Senate version of VAWA.



References:

http://www.govtrack.us/congress/bills/112/s1925

http://www.govtrack.us/congress/bills/112/hr4970

http://guinta.house.gov/frankly-speaking/frankly-speaking-keeping-protection-place-renewing-violence-against-women-act

http://www.csmonitor.com/USA/DC-Decoder/2012/0516/House-passes-Violence-Against-Women-Act-grudgingly

http://maddowblog.msnbc.com/_news/2012/05/16/11731004-house-vawa-bill-draws-obama-veto-threat?lite

http://www.cbsnews.com/8301-503544_162-57435857-503544/violence-against-women-act-passes-in-house-but-partisan-battle-looms/

http://democrats.senate.gov/2012/08/01/republicans-object-to-sending-vawa-to-house/

http://www.thedailybeast.com/articles/2012/05/17/the-house-s-immigrant-betrayal-with-new-violence-against-women-act.html

http://immigrationimpact.com/2012/05/03/house-vawa-bill-threatens-protections-for-immigrant-women-and-children/

http://articles.cnn.com/2012-05-18/politics/politics_violence-against-women-act_1_senate-democrats-republican-leaders-bipartisan-support?_s=PM:POLITICS

http://gcadv.org/harmful-hr-4970-passes-u-s-house/

http://en.wikipedia.org/wiki/Violence_Against_Women_Act

http://www.americanprogress.org/issues/women/news/2012/05/03/11524/the-fight-to-reauthorize-the-violence-against-women-act/

Veep Debate Fauxto Essay

I'm going to load a bunch of Photoshop efforts I think may come up in the vice presidential debate tonight.    You may click on any picture to enlarge.

My guess on some things that Joe Biden might bring up:

• Medicare / Ryan Budget
• 47%
• Tax Plan (posted here)
• Abortion / War on Women / Supreme Court

Here's the first Ryan budget, passed by the GOP house 4/15/2011.

First on the idea that Ryan Budget cures the deficit.  I already posted this one.   I'll just reproduce the picture that uses the debt figures from the bill itself.

 I think the main thing Biden should focus on in the Ryan budget is the Medicare "premium support."   I find the argument over the word "voucher" unproductive.   Call it "discounts on private insurance" maybe. 

It's the folks 55 and under that will be directly effect by the Ryan Medicare plan.   The analogy with Groupon might help them to understand.

One might object that the picture below again refers to the first Ryan budget, passed by the House 4/15/11.  The GOP plan is closer to the second Ryan budget -- it gives you a choice yada yada yada.   In reply, I note that the first Ryan budget is still a live resolution.  It was passed by the current House of Representatives.  If the Senate felt like it they could pick it up and pass it today, at which time it would become a Concurrent Resolution of the United States Congress.   It is not ancient history.  

I believe the first Ryan budget to be a purer statement of Republican desires.   These got watered down in the second budget as adjustments were made to address the backlash from the first budget.   In my view the adjustments are largely veneer, and the first budget remains an important statement of GOP principles and goals.

One thing I don't think has been emphasized enough is the difference in the way Medicare costs are controlled under Obamacare and Ryan 1.   Obamacare genuinely controls overpayments to insurance companies and hospitals (the infamous $716 Billion) which extends 8 years the life of Medicare as it exists.   Ryan 1 throws up its hands at controlling escalating medical costs, instead changing to a system where medical cost increases that outpace inflation are borne by senior citizens.   In their mind it's off the government's books now, so problem solved!

I'd try to get the 47% into the debate.

I think the Democrats see women's issues as a winner for them this time because the Republicans have gone so far extreme.   Paul Ryan has been pretty far right pro-lifer his whole career and I think may properly be tied to Todd Akin and other extreme Republicans.    Since, 2010 there have been so many states whose legislature and executive are Republican controlled, that promised to focus on economic issues but have enacted just a tremendous amount of anti-abortion legislation.   I have no reason to believe the same thing wouldn't happen on a national level.

Here I try to focus on the age of the Supreme Court members and the very good chance the next president will appoint at least two Supreme Court Justices.   If Mitt can replace Ruth Bader Ginsburg with a Scalia as promised, Roe v Wade would soon be overturned 6-3.

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Frank Guinta's Plan for America

Breaking News 10/7/2012:  Rumors are circulating that someone who attended one of Representative Frank Guinta's job fairs has actually found a job through the fair.    We here at NotIntaGuinta.org are focusing all our reporting resources on tracking down this person if he or she exists.   Please check back for updates.

Update 11/3/2012:  Incredibly, AP just ran a story about how there's no evidence anyone's gotten a job at a Guinta job fair, and some evidence Frank Guinta is lying about that.   NotIntaGuinta.com readers knew this a month ago when they read this post.


Fresh off the success of his “Getting Granite Staters Back to Work” initiative, in which the US congressman himself hosted six job fairs, single-handedly ending the state's unemployment problem, Congressman Frank Guinta announces his "Congressmen Fix America Themselves" initiative.   In the freshman representative's bold plan, members of the United States House of Representatives will do the jobs needed to solve America's problems themselves.

Congressmen running employment agencies.   Unemployment: Solved

Rep. Guinta hosts a job fair for veterans.  

We are investigating rumors someone got a job at this event.

The cost of healthcare for all of us is spiraling out of control.    Congressmen are already being paid by the federal government, and it will cost nothing additional to the taxpayer to have them see patients.

Congressmen working as physicians.   Healthcare: Solved

Our nation's roads and bridges are crumbling.   There's no money in the budget to fix them.  But each congressmen regularly travels back to his own district.   He could easily do some roadwork while he's there.

Congressmen fixing roads and bridges.   Infrastructure:  Solved

Educating our children is vital to our country's future.   All congressmen have attended school, and some even have first-hand experience with our public education system. 

Congressmen teaching public school.   Education: Solved

Foreign policy, especially in the Middle East, presents grave challenges to our nation.   In Frank Guinta's bold new plan, congressmen arm themselves and fight for US interests across the globe.

Congressmen as soldiers.   Foreign Policy: Solved

Republicans are struggling to reconcile their belief that government should be small and nonintrusive with their desire to regulate women's reproductive systems.  But Frank Guinta has put forth a bold solution to this seemingly intractable dilemma.   When congressmen themselves act as gynecologists they can keep women's healthcare decisions private between doctor and patient while simultaneously intervening to prohibit abortion and contraception.


Congressmen as OB/GYNs.  Women's reproductive health care:  Solved

This post is satire.  I obviously have no authority to speak for Rep Guinta or his campaign.

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Ryan Raises Debt: Picture of the Day 2012 10 06

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You may be surprised to learn that the Ryan Budget, passed 4/15/2011, does not end deficits or reduce debt in the next 10 years.   That's not according to me reporting on a study I read about on Michael Moore's blog.   The projections about what the Ryan Budget does to the debt apparently have to, by law, be included as part of the Ryan Budget bill itself.   Here I cut the bill up and paste it onto a lightened picture of Mitt Romney and Paul Ryan.   The source of the debt figures is the bill itself, which makes them tough to challenge.

Our own Frank Guinta played a special role in the birth of the Ryan budget.   He provided the crucial swing vote making it 19-18 to get the bill out of committee.

The Ryan budget will (if enacted) kill 4 million jobs in the next two years, according to Fox News.  Thanks, Frank!  Forbes reports the Ryan budget wont be in balance until after 2040.    

It's never been about reducing debt with Republicans.   It's about giving tax breaks to rich folks.

Guinta job fairs are just glorified photo ops

Breaking News 11/3/2012:   The Associated Press reports there's no evidence that anyone got a job at a Guinta job fair.   NotIntaGuinta.org readers knew this a month ago because they read the following post.     Be sure to notice the lame dodge from Guinta - he won't tell us names because he's respecting the privacy of the newly hired.   Maybe we need a school to make congressmen better liars. 

Please check out the related post Frank Guinta's Plan For America, which takes his job fair idea into other areas. 

I have three problems with the job fairs Rep. Guinta endlessly touts:

• Mr. Guinta's fairs are sham events that focus on generating campaign photos rather than finding constituents jobs.

• Mr. Guinta then mails us all photos of the fairs at taxpayer expense.

• The fairs provide cover that allows Mr. Guinta to claim he's doing something about jobs, when in fact he is not doing the hard work of creating bipartisan legislation that will help create jobs.

Representative Guinta exploits veterans with his phony job fairs

The rate of unemployment among vets is several points higher than the rate for the country as a whole.   It's a national disgrace.  But there's terrible gridlock in congress.   Nothing can get done.

Frank Guinta is on the case.  He's going to get those vets jobs if he has to find each one a job himself.  So he hosts job fair for vets.  

It's a good story.   NPR reported it.  Let's see how it went.

 There was this letter in the Concord Monitor on November 13, 2011 from a man who attended Rep. Guinta's event.  It's entitled "Useless job fair from Guinta."

I had the displeasure recently of attending U.S. Rep. Frank Guinta's job fair at the New Hampshire Community College in Manchester. My son, who is a U.S. Marine, and I traveled from the Monadnock Region to attend this job fair. We arrived just before 10 a.m. 

Companies with applications were nowhere to be found, not a good thing for veteran job-seekers. They had a table with some snacks on it. There was a table set up for recruiting, a table set up for homeless veterans, a table with a Walmart representative who said Walmart would be sending holiday packages for the troops. A nice gesture in my opinion, but there weren't any job applications at this table. Another table was set up representing the American Legion and maybe one or two more tables geared toward military benefits. 

It was a sorry excuse for wasting my gas money. I didn't see one representative from a company that had job applications. I suppose if you wanted to enlist or reenlist, then Guinta wouldn't have to worry so much about the state of the economy. My advice: Don't waste your gas.

Lee Richardson, Bradford

Then there's this video on YouTube.    The description states:

Jack Cochrane did everything he could to get a job, before finally pleading to his Congressman for help. Frank Guinta promised 4 times to "personally help" Cochrane, then blew him off while Cochrane lost his home and his daughter.

I've been looking for a report that someone actually got a job at one of these fairs.   I couldn't find one.   No letter to the editor, no comment on a blog thanking Mr. Guinta for getting him a job.    If you find one, please leave a comment and I'll update this paragraph.

Well, you'd never know the Guinta job fairs were shams from the picture of the event:

He got some log rolling the other day when veterans defending his record said: 

He especially impressed us when he hosted a job fair specifically for military veterans to help put those who served back to work — something former Congresswoman Shea-Porter never did.

Of course, Carol Shea-Porter spent her time in her office passing actual laws to get veterans jobs and health care.

Rep. Guinta responds to accusations that his job fairs don't actually get people jobs here in the new (11/3/2012) Associated Press piece:

Guinta said the feedback he’s received from businesses has been largely positive, but ‘‘there are rules in terms of what I'm allowed to publicize once these people get a job,’’ he said. ‘‘There are privacy issues there.’’

In other words, Rep. Guinta failed to name a single person who got a job at one of his fairs.   You'd think at least one person would be grateful enough to give the congressman permission to use his name.

 Mr. Guinta abuses taxpayer-funded mailing privileges

What did Mr. Guinta do with the pictures from this and similar events?   Here's a clue from the Concord Monitor story from 4/29/2012 entitled "Guinta spent most on mailings."    "Franking" is the word used to refer to taxpayer-funded mass mailings from congressman.   

Guinta, who in 2010 criticized his Democratic opponent, then-Rep. Carol Shea-Porter, for her use of franked mailings, spent $164,649 on franked mail last year. 

A 5/15/2012 USA Today story "House freshmen spent millions of tax dollars on mailings" had a higher estimate for the price tag.

When he ran for Congress two years ago, New Hampshire Republican Frank Guinta blasted Democratic incumbent Carol Shea-Porter's frankings as "propaganda," and described them as "campaigning with our tax dollars."

As a freshman, Guinta sent 469,013 mass mailings last year at a cost to taxpayers of $206,276, ranking him 21st among House members for money spent on franked mail. In one piece distributed in October, he told constituents that he "is working to improve the economy for your family."

469,013 mass mailings!   Impressive.    Note that Mr. Guinta is now attacking Shea-Porter for a typical $30,000 salary expense, which is dwarfed by his use of $200,000 in taxpayer funds to send what were essentially campaign materials.    By the way, Mr. Guinta attacked Shea-Porter for abusing her franking privilege for spending that turns out to be less that half of Mr. Guinta's total.

Mr. Guinta isn't doing the job the taxpayers hired him for

What bothers me the most is that we are paying Mr. Guinta to be our representative in the US congress.   He's supposed to be a legislator - a lawmaker.    But the supposed "jobs" bills that Mr. Guinta votes for seldom become laws.  

Mr. Guinta provides us a list of his supposed jobs bills.    They're supposedly bipartisan as well.    Of the twenty eight bills he lists (oddly his literature says there are 30 or 40) four have been signed into law by the president:

Small Business Paperwork Mandate Elimination Act

H.R. 4 - Signed into law by the President on April 14, 2011 

Summary from Thomas:

Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 - Amends the Internal Revenue Code to: (1) repeal requirements for the reporting to the Internal Revenue Service (IRS) of payments of $600 or more to corporations that are not tax-exempt and of gross proceeds paid in consideration for any type of property; (2) repeal requirements for reporting payments made with respect to rental property which is not part of a trade or business; and (3) increase the limitation on recapture of excess advance payments of the tax credit for health insurance premiums.

3% Withholding Rule Repeal

H.R. 674 - Signed into law by the President on November 21, 2011

This is actually a job-creation bill that should get some veterans back to work (summary).   It offers employers up to $5,600  to use as 40% of a newly hired vet's wages.   The amount goes up to $9,600 to vets with service-related disabilities.

Middle Class Tax Relief and Job Creation Act of 2012

H.R. 3630 - Signed into law by the President on February 22, 2012

summary  Extends unemployment benefits, payroll tax cut, food stamps.   Seems a little light on direct job creation.

US-Colombia Trade Promotion Agreement Implementation Act

H.R. 3078 - Signed by the President on October 21, 2011

summary

So, of the 28 bills Mr. Guinta calls "jobs bills" that Mr. Guinta lists, only four passed, and only one of these is a bona-fide attempt to create jobs.   H.R. 647 looks like a nice bipartisan compromise: use federal dollars to boost private sector hiring of vets.

Frank, why aren't you working on more things like this?   It's truly bipartisan -- it passed a GOP dominated house and a Democratic senate and was signed by a Democratic president.    Don't you see how it's different than what you call "bipartisan" ?  You get one or two Democratic votes on a largely party line house bill, and call that bipartisan.   Of course the senate is not going to vote on any of your "bipartisan" bills.   You make no effort to work with the senate on a bill that could be passed in both chambers and signed by the president.

Politifact calls Frank Guinta's claim that the jobs bills he's passed are bipartisan "mostly false."

Frank, you're a legislator.   You're not job fair planner-in-chief.   Your job is to make laws.   To implement policy to solve our nation's problems.   If there's some shortage of job fairs that's keeping our people from working, your job is to pass laws to fix this.   Staging a few job fairs instead of passing laws is an abdication of your responsibility to your constituents.   

Voting for "Disapproval of FCC's Net Neutrality Regulations" is not helping anyone get a job.  Even if it did get through congress, which it has no chance of.   Yet it's on your list of jobs bills.

Passing bills that will never be adopted by the senate is not making laws.   It's not really doing anything.

Frank, I saw somewhere in your literature that you were doing something about healthcare for veterans.   Promise me you haven't donned a stethoscope and started making house calls.

Misleading Anti Shea-Porter Mailer

I got this mailer in the mail a couple of days ago.   Here's the meat:

It's not directly from Rep. Guinta.  It's from his pals at the New Hampshire Republican State Committee.   Please correct me if I'm wrong, but I think that unlike with Super PACs or other outside organizations, there's no rule preventing Congressman Guinta from working with the Republican state committee on the content of their ads.   I think it's likely he approved this ad.

Actually, I just noticed the same attack on Rep. Guinta's website.

The mailer mentions 42 months of unemployment over 8%.   Of course it doesn't mention that the unemployment was caused during George Bush's term by the biggest financial crisis since the Great Depression.    And somehow it neglects to mention that Frank Guinta has been our representative for over half of those 42 months.    Actually, it doesn't mention Frank Guinta at all.   In fact it goes through some contortions to avoid mentioning Rep. Guinta, oddly asking people to "vote no on Carol Shea-Porter."

The mailer claims Carol Shea-Porter sent her staff home with "massive bonuses" at taxpayer expense.   It references Legistorm.  I thought I'd verify the claim.

The concern seems to be the period from 1/1/2011 to 3/31/2011, the first quarter of 2011, 1Q11.    Outgoing representatives and their staff only work a few days in that period, as the new congress starts in early January.

Here's the data from Legistorm.   I compared Carol Shea-Porter to Paul Hodes, the district 2 NH rep who also lost in 2010.   Then I looked a list of all the house reps who lost in 2010, and looked up the first few (sorted by state) in Legistorm.   Here's the result.

1Q11 staff salaries of defeated house members from the 111th Congress.

Dist Representative      Staff Salary, 1Q11

NH1  Shea-Porter          $29,876
NH2  Hodes                  $42,027
AL2  Bright                     $6,634
AZ1  Kirkpatrick          $178,428
AZ5  Mitchell               $120,791
CO3  Salazar                   $9,487
CO4  Markey              $148,559
FL2  Boyd                    $25,554
FL8  Grayson               $59,164


I got "You have reached the limit of your free access allowed in a one-month period" from Legistorm.  I'm not going to pay $30 to add more lines to this table, so let's stop here.  

It's very clear that Shea-Porter did not do anything unusual or outrageous with her staff pay after she was voted out of office.   She looks positively thrifty compared to some of these outgoing representatives.   Three of the eight others on this list spent more than four times as much on outgoing staff.   The mailer is misleadingly trying to make an issue of what appears to be perfectly reasonable behavior by outgoing Representative Shea-Porter.

Is this the really the best you can do, Frank?

I'll bet that Frank Guinta's final staff salary tab in 1Q13 exceeds Carol Shea-Porter's final tab.   But I'm not going to complain about it.  It will be worth the money to get Rep. Guinta out of that seat and Rep. Shea-Porter back in.

Back of the Envelope Debate Math

I'm going to focus on the presidential race in this post.   Back to NH District 1 soon.

Mitt Romney's tax plan is going to be a big subject in the presidential debate coming tomorrow night.   What deductions will he have to cut if he cuts rates by 20% ?    Here's my back of the envelope debate math.  

I'll try to keep it simple. I'm going to express everything in fraction of GDP because it's easier to get your head around that than trillions of dollars.

Mitt Romney's plan is a 20% across the board cut in tax rates. Mitt says it will be revenue neutral. This means tax deductions must be reduced if total tax revenue is to stay the same under the lower rates. If you raise taxable income by reducing deductions you can collect the same total amount of tax with lower rates. That's the plan. With me so far?


Up to here, I don't think Mitt would disagree with how I've described his plan.   Why it's supposed to work I'm less sure.  Somehow the magic of lower rates is supposed to create jobs even though the total tax burden is the same. It's just paid by different people. For now, let's skip the question as to whether that would actually create jobs and focus on how to make the numbers add up.


Federal income tax is about 9% of GDP (this excludes payroll taxes, and includes 7.5% personal income tax and 1.5% corporate income tax).  20% of that is 1.8% of GDP. So if Mitt's plan is going to be revenue neutral, it needs to reduce deductions by 1.8% of GDP.

Actually, Mitt's plan also eliminates the estate tax and the AMT and lowers corporate tax.    The number being tossed around is $5T over 10 years, about 3% of GDP.   Let's go with 2.5% on the back of the envelope.

Here's how much each deduction costs the treasury, biggest on down, as a percentage of GDP.  I'm using the word deduction loosely here to refer to all tax expenditures.

Cost(%GDP) Deduction

1.8% Employer Healthcare Deduction
1.1% Retirement contributions not taxable
0.8% Mortgage Interest
0.5% Reduced rate on dividends & capital gains
0.3% Capital Gain Exclusion at Death
0.3% State and Local Tax
0.3% Charity
0.3% Earned Income Tax Credit
0.2% Untaxed Retirement Benefits (incl Social Security)

0.1% Child Tax Credit

1.0% Other

That's about it for the substantial ones. The plan requires you cut 2.5 points out of the these deductions listed.  They add up to about 6.7  points, 6.7% of GDP. So Mitt's plan is to cut about one third of deductions, each of which some people have grown pretty attached to. There's no other way. Mr. Romney wants all the votes he can get, so he does not want to piss off any of those people. That's why he can't possibly give details of his plan in the debate. If he does start to list things he wont touch ("the mortgage deduction is sacred", say) you can use this handy table to figure out what's left -- that's what he actually plans to cut.

The rest of this was written in the middle of the night and may ramble.   Feel free to stop here.

[Sanity check.   GDP is around $15.5 trillion.   15.5*.09 = $1.4T income tax.  20% is $0.3T, the revenue lost from reducing rates.   Over 10 years that's $3T.   The number you hear for the amount of deductions to be cut to make Romney's plan revenue neutral is $5T.   I think there's more in Mitt's plan than the 20% rate cut that goes into that number.  Maybe the AMT, Estate Tax and corporate tax cuts.    The real amount may be higher, up to 3.0% of GDP]

Actually, I've heard it proposed that Mitt would eliminate all dividend & capital gains taxes.  This doesn't seem to be part of his current proposal, but let's see what that would do to the other deductions.  Those taxes collect around 2% of GDP. So we could cross the cap gain stuff off my list, leaving 6% of GDP available to cut. We'd then have to cut 4.5% of GDP (2.5+2) to stay revenue neutral. In other words, a 20% across the board income tax rate cut coupled with eliminated tax of dividends and capital gains would require 75% of every other tax deduction to be cut in order to be revenue neutral.

Here's news that Mitt is proposing reducing the mortgage deduction.

News just out that Mitt has floated capping total itemized deductions at $17,000.   That seems a pretty progressive proposal for a guy like Mitt.  It's definitely the higher incomes that have deductions greater than $17,000.  

I understand that Mitt current plan does not touch the rate on investment income beyond repealing Obamacare.   His taxes, and all those that make money from dividends and capital gains, will remain largely unchanged.

But it's different if you make a wage.  Your rate goes down by 20% but you lose deductions.  In New York City I think you pay around 12% state and city income tax.   So just the state and city tax on $140,000 would eat up your entire deduction.   That's not really that high an income for a New York couple.   You save .20*$27K= $5,400 from the rate cut.   That's about what your mortgage deduction was probably worth.  You don't get to deduct any additional state and city tax. No charitable deductions.

So, Mitt's plan a hurts the people in the high tax places more.   This is a good choice for Mitt -- he's probably not going to win in New York, New Jersey, Connecticut, Massachusetts or Maryland anyway.

For very high wages with state tax.  If your wage is w, your state tax rate s and the top marginal federal bracket is f, your state tax deduction is worth d=s*w*f.   Under the Romney plan, you save t=.20*f*w.   The benefit to the taxpayer of Mitt's plan = t-s = (.2-s)*f*w.   f*w is the (approximate) tax you owe.  (.2-s)*f*w is the amount you save under Mitt's plan.  Since all state taxes are less than 20%, .2-s will be positive, and the high wage earner saves money under Mitt's plan  (not counting other deductions they'd lose).   The less state tax you paid before, the more you save.

OK, I've really gone off the deep end here.  See you after the debate.


Thursday, October 4.   Debate Postscript.

I'll admit I'm a bit depressed after the debate. Democrats are just going to have to buck up, get tough and work harder now. Rather than wallowing I thought I'd come up with what I would have said to Mitt about his tax plan. Maybe that is wallowing. But it's constructive too because there's still time to say it.

It was a very wonky debate, so here's my rather wonky take on what I think the president should have said about Mitt's plan. 

Let's focus on the top 5% of personal federal income tax returns. That's about 6 million families with the highest income. For over a decade, they've all always earned above 250,000 a year every year. Sometimes much more. Their average income is over half a million dollars a year. They pay about 16% in personal income tax. This works out to about 500 billion dollars a year in personal income taxes from these folks. On behalf of the United States of America, I want to thank them for that. That is a real contribution to building our country.

Mitt, your 20% rate cut by itself reduces their tax bill by 100 billion dollars a year. Currently these folks use tax expenditures, meaning they take deductions and exemptions, that in total reduce their taxable income by 17%. So you're going to have to eliminate all their deductions. You have to take away their home mortgage deductions, take away their state and local tax exemptions, take away their charitable contribution deductions, and all the rest. And you'll still collect 3% less of their income, about 15 billion dollars less. And when you back out expenditures for investment income and gains, which you've said you wouldn't touch, it's more like 30 billion dollars a year less your plan collects from these folks. You're going to have to get that 30 billion from lower income folks if you want to make your plan revenue neutral. It's just math.

References

http://www.cbo.gov/publication/43373
http://www.urban.org/UploadedPDF/412495-Distribution-of-Tax-Expenditures.pdf
http://www.taxpolicycenter.org/UploadedPDF/1001234_tax_expenditures.pdf

Frank Guinta's Lying Robocalls

Imagine you're the challenger trying to get elected to the US house in 2010.   You might spend some of your campaign dollars to rent a computerized autodialer to deliver a pre-recorded telephone message to the voters - a robocall.   Here's your message:

“Hi. This is Frank Guinta, candidate for Congress, running against Congresswoman Carol Shea-Porter.  I’m running to end the broken culture of Washington.”

Simple.   Effective.   Everybody hates Washington.   Congratulations Frank, you're elected.

The problem is, this is not a transcript of a robocall that Mayor Guinta ran in 2010.  It is a robocall that Representative Guinta ran in the summer of 2012.   That's right.  These are his re-election calls.  Frank Guinta is pretending to be the challenger.  It's shameless.

Rep. Guinta must be thinking that it worked so well being the challenger the first time, why not do it again?   Everybody hates congress, especially this congress.  That he's not actually the challenger this time -- that's just one of those pesky facts that can be glossed over.   Like Mitt, apparently Frank isn't going to let his campaign be dictated by fact checkers.   He obviously thinks his constituents are idiots.   At least the ones that he assumes will be fooled by this call into voting for him.

I suppose the irony is that an incumbent pretending to be the challenger "running to end to broken culture of Washington" is a prime example of the broken culture of Washington.  

I've looked at a fair number of articles about this.  The only defense from the Guinta campaign is that they were "showing respect" for Carol Shea-Porter by using her old title.  Well, you have to admire the audacity of his campaign for calling their deceitful tactic "showing respect."  Where I come from that's called chutzpah.  Apparently they do not feel the need to apply the same standard of respect to their own candidate, Congressman Guinta, whose title is never mentioned in the call.   

At least the Guinta campaign admits they made the calls.  I've read through the comments in the articles, and not even Frank Guinta's supporters have gone with "showing respect."  The most they can muster is to call Carol Shea-Porter names. 

The Concord Monitor notes a similar tactic used by the National Republican Congressional Committee this cycle.   The Committee said it's time to "replace" Shea-Porter and other Democrats who supported President Obama's health care law.   Some of the articles cited below talk about how our Mr. Guinta is not the only Republican congressman to run for reelection by pretending he's not a congressman.

I would simply love to get a recording of this call.  Somebody still has this message on their answering machine or in their voice mail.   I never delete -- I may still have it.   But I probably wasn't on the list of numbers to be called.   If anyone can point me at a recording of this call, they'll get a special place of honor at NotIntaGuinta.org.

Let's give Frank the benefit of the doubt.   Maybe he's just forgotten that he won in 2010.    After all, he forget about his $355,000 bank account.   He should get his memory checked while he still has his congressional health care.

- Dean

Here are some references:

August 3, 2012  Concord Monitor  Guinta camp: Shea-Porter is incumbent.  Campaign calls frame rep as the challenger

August 13, 2012  Union Leader editorial.  Good grief: Guinta disowns Congress

July 19, 2012  Miscellany: Blue.  Incumbent Frank Guinta catches anti-incumbent fever

August 7, 2012   The Wire   Frank Guinta’s breathtaking hypocrisy

August 5, 2012  Politico  GOP freshmen run away from incumbency

August 6, 2012  Green Mountain Daily   Republican Mendacity, special cross-border edition
August 6, 2012   Real Clear Politics   Incumbents Deceive Voters About Their Jobs

August 6, 2012  maddowblog   The challenges of incumbency

August 27, 2012   seacoastonline opinion.  The two faces of Rep. Frank Guinta