It’s Friday, December 7th, 2012….and 71 years later, the infamy lives on.

But before we begin, apologies for our extended period of radio silence.  We went in Monday, November 26th for lithotripsy to break up one of four kidney stones discovered as a result of a contrasting CAT scan for an unrelated issue.  The stone in question was located above the entrance to the ureter in our right kidney, and our urologist thought it best to eliminate the stone before it could cause more significant problems.

As everything the urologist told us, as well as what could we could learn about lithotripsy online indicated the procedure would cure what ailed us, we were nonplussed at our total lack of discomfort in the two days immediately following.  All that changed at about 0930 Thursday morning….and continued with brief periods of respite through late Sunday.

Imagine our surprise the morning of Monday the 3rd when the urologist informed us the almost indescribable pain we’d experienced wasn’t, as we imagined, the remaining stone in our right kidney passing, but the remnants of the stone which had been broken up the week before.

We score it this way: Stones 1 – Magoo 0.  Anybody want odds the Stones end up sweeping the series 4-0?!?

Anyway, we’re sorry for the extended absence.  Now, here’s The Gouge!

First up, could Egypt, like Greece, be offering America a glimpse of her own future?

Morsi Refuses To Give Up Powers

 

Since we’re on the subject of the Great Prevaricator, the WSJ‘s Kimberly Strassel offers her thoughts on….

Obama’s Famous Tax ‘Victory’

Top marginal income tax rates may go up. But the president’s second-term spending wish list will be history.

 

To read the current fiscal-cliff coverage, President Obama holds the upper hand and is poised for the “victory” of winning an increase in the top two tax rates.

So successful has the White House been in defining this fight, few have stopped to consider how paltry that victory is likely to be. For a short-term win on this ideological issue, President Obama may well cede most everything else.

Let us assume that Mr. Obama is correct in his bet that the GOP will prove more responsible than he is and won’t cliff-dive. The president’s recent baiting of Republicans—his unreasonable offers, his public campaign to belittle them, his refusal to negotiate—has not put them in a generous mood. If Republicans have to fold on the top tax rates, it’s a decent bet they will do only that—and nothing more.

Mr. Obama has invited them to do just that. He’s called on Republicans to quickly pass an extension of middle-class tax rates, to get that out of the way. “I’ve got a pen, I’m ready to sign it,” he quipped. He can hardly complain if the GOP House sends him a bill that extends current tax rates for 98% of Americans—and that’s it. The president will have his “victory.” And?

Republicans will make clear they sent that bill under duress—that they wanted to extend tax rates for everyone—and that Mr. Obama is responsible for the consequences. The president claims that raising taxes on job creators won’t hurt the economy. Fine, but if he’s wrong, he alone owns it. There will be no GOP fingerprints on this.

Speaking of ownership, Mr. Obama will also take possession of the sequester. The Republicans, after all, offered to fix this as part of a deal, but he wouldn’t budge on taxes. The GOP would have to swallow hard on the defense cuts, though Mr. Obama will be under huge pressure to take actions to mitigate the damage to the military. That will be harder to do on the domestic discretionary side of the sequester, which will next year cut $50 billion from programs Mr. Obama and his partisans cherish.

The president will also finally have to show his math. He has argued his entire presidency that America’s debt hole could be filled by soaking the rich. He’ll now get his way, in a bill that likely provides $800 billion in revenue over 10 years, or $80 billion a year. To repeat: $80 billion a year. That is 7% of the $1.1 trillion deficit Mr. Obama ran in fiscal year 2012 alone. His tax hikes in hand, he can now explain why the hole keeps getting bigger.

Especially as no further tax revenue will be forthcoming. The president’s grand plan was to pocket the top tax rates and commit the GOP to later tax “reform” worth an additional $800 billion in closed tax deductions. His leverage has been holding hostage the middle-class rates. That hostage will now be dead. The GOP will have no reason to give him more.

Nor will Mr. Obama get any of the spending wish list he sent to House Speaker John Boehner last week, since a deal was his only real shot at slipping in some of that money. No $50 billion in stimulus. No extension of unemployment insurance or payroll tax holiday. No money for his mortgage program.

Finally, he’ll have lost his chance to solve his debt-ceiling problem. The press’s judgment is that last year’s debt-ceiling fight was politically bad for both sides. The Republican recollection, by contrast, is that they forced Democrats to give them $2 trillion in cuts—and that was with the threat of a tax increase hanging over their heads. Mr. Obama won’t have even that leverage next time around.

Come February, Mr. Boehner will remind the president of his formula of $1 in spending cuts for $1 in a debt-ceiling hike. He will likely present Mr. Obama with the choice of doing serious entitlement reform that will get the debt-ceiling monkey off his back for a notable period of his presidency, or of monthly debt-ceiling fights. The latter has the potential to derail a second term.

No question, the Republicans would suffer a bitter defeat if top marginal income-tax rates rise. Then again, if those rates are going up anyway—either because we go off the cliff or because Mr. Obama maneuvers them into a panicked, last-minute deal—the rational GOP response is to instead choose a deliberate course that mitigates its own political damage, and lands some blows. This is the corner our intransigent president has backed Republicans into.

So, that Obama “victory”: On Jan. 1, the president gets to give a news conference gloating over his tax win. He then faces four years and 20 days of a presidency marked by his ownership of a faltering economy, a spiraling debt problem, automatic sequester cuts, no prospect of further spending or tax revenue, and a debt-ceiling time bomb. If that’s this president’s idea of “victory,” maybe it’s what he deserves.

We’re inclined to agree with Strassel’s analysis, though we must state for the record no matter the GOP’s ultimate course of action, Team Tick-Tock and their MSM shills will blame them for the inevitable catastrophe to follow.

Two things are certain: first, as Howard Dean, in a rare fit of low-volume honesty reveals….

….eventually, everybody’s gonna have to chip in to pay THIS piper:

Second, as this graph of Smith & Wesson’s revenues forwarded by Balls Cotton indicates, if politics makes strange bedfellows, it also creates truly unintended consequences:

That is, of course, unless The Dear Misleader owns S&W stock.

And in International News of Note, Peter Wehner, writing at CommentaryMagazine.com, details….

What Kirsten Powers Gets Wrong About Israel and the Palestinians

 

Kirsten Powers is a thoughtful liberal who’s willing to challenge the party line. At times, though, her arguments strike me as misguided. Such is the case with her column in The Daily Beast titled, “What Evangelicals Get Wrong About Israel and the Palestinians.”

Ms. Powers quotes Todd Deatherage, co-founder of the Telos Group, an organization that “works with American evangelicals to help positively transform the Israeli-Palestinian conflict.” According to Mr. Deatherage, “What a lot of Christians don’t understand is the importance of realizing both people [the Israelis and the Palestinians] have legitimate connections to the land.” American evangelicals, we’re told, need to “understand the Palestinian perspective.”

“Palestinians have a need for dignity and respect, and a deep attachment to the land,” according to Deatherage. As for Powers, she criticizes American evangelicals for their “blind loyalty to Israel, with little to no regard for the plight of the Palestinian people.” She then asks, in the context of the Palestinians, “Since when is dehumanizing people—God’s creation—an acceptable Christian view?”

The answer, of course, is never. But it seems to me that both Powers and Deatherage are missing some important points.

Let’s start with some historical ones.

From 1948 through 1967 Jordan and Egypt controlled the West Bank and Gaza—and during that time neither nation lifted a finger to establish a Palestinian state. The Arab world seemed strangely indifferent to the Palestinians’ “deep attachment” and “legitimate connections” to the land. In fact, in 1970 King Hussein of Jordan slaughtered tens of thousands of Palestinians and eradicated the PLO from Jordan. And for those who maintain that the animosity against Israel is because of the occupied territories and settlements, there is this inconvenient fact: the PLO, whose declared purpose was the elimination of Israel, was founded in 1964—three years before the West Bank and Gaza fell under Israeli control. And what explains the 1948 and 1967 wars against Israel, before the occupied territories and settlements ever became an issue?

The land Israel did win in 1967—including the West Bank, the Gaza Strip, the Sinai desert and the Golan Heights—was the result of a war of aggression by Arab states against Israel. After its victory in the Six-Day War, Israel signaled to the Arab states its willingness to relinquish virtually all the territories it acquired in exchange for peace—but that hope was crushed in 1967 when Arab leaders met in Khartoum and adopted a formula that became known as the “three noes”: no peace with Israel, no negotiations with Israel, and no recognition of Israel.

The wave of anti-Israeli rage never subsided. Thirty-three years later, in 2000, then-Prime Minister Ehud Barak offered up an astonishing set of concessions to Yasir Arafat, including having Israel withdraw to virtually all of the 1949-1967 boundaries, so that a Palestinian state could be proclaimed with its capital in Jerusalem. Yet Arafat not only turned down the offer but responded with an intifada against Israel. And in 2005 then-Prime Minister Ariel Sharon and Israel did what no other nation—not the Jordanians, not the Egyptians, not the British, not anyone—has ever done before: provide the Palestinians with the opportunity for self-rule. In response, Israel was shelled by thousands of rockets and mortar attacks.

The record also shows that when Israel has an Arab interlocutor that is interested in authentic peace—such as Jordan and Egypt under Anwar Sadat and Hosni Mubarak—it is quite willing to make peace and return land for peace (see the Sinai Desert, which Israel returned to Egypt and which is three times the size of Israel and accounted for more than 90 percent of the land Israel won in the 1967 war).

I detail this history because it’s highly relevant to what is happening in the here and now. For while some “rejectionists” do exist among evangelical Christians in America and among some Jews in Israel, the reality is this: A two-state solution is the official policy of Israel. The obstacle to a Palestinian homeland doesn’t have to do with evangelical or Israeli rejectionists; it has to do with the inability of Hamas and the Palestinian leadership to make their own inner peace with the Jewish state of Israel. As long as that’s the case, it’s perfectly appropriate to distinguish between what Churchill called the fire brigade and the fire. And as the most recent conflict in Gaza has once again demonstrated, Hamas not only targets innocent Israeli civilians; it does everything it can to cause the deaths of innocent Palestinians (by using them as human shields) in order to score propaganda victories. Israel, on the other hand, takes extraordinary steps to try to prevent civilian deaths. Denying these realities—constructing a false narrative that fits a false hope—makes peace less, not more, likely.

This doesn’t mean that every Israeli action and every Israeli government has acted wisely. Israel itself is constantly engaged in a lively discussion about its approach to everything from settlements to roadblocks. My point is simply that in the totality of its actions, facing organizations and nations dedicated to its destruction, Israel has acted in estimable ways. People demand of Israel what they demand of no other nation, and the moral double standard that is applied to it is repulsive.

I want to turn, finally, to what it means to be genuinely pro-Palestinian. The old paradigm argues that to help the Palestinian people means applying pressure on Israel to hand over new land. But in Gaza we have just tested the proposition that the Palestinians, if given self-rule, would govern responsibly. The result wasn’t just escalated violence against Israel; it was destitution and suffering for Palestinians who lived under the leadership of Fatah and then (after a brief and bloody intra-Palestinian civil war) Hamas. Which brings us to a larger truth: the Palestinian people, many of whom are bone weary of war, have suffered horribly at the hands of other Arab nations, who have used them as pawns; and at the hands of a corrupt and malevolent Palestinian leadership. The few responsible Palestinian leaders who have emerged in recent years have proven to be much too weak to shape the course of events.

Those who profess solidarity with the Palestinian people and want them to live lives of dignity and peace—which is an admirable and humane impulse—should focus their energy and efforts less on Israel and more on replacing the political elite and reforming the political culture of Palestinians who will not let their burning hatred for the Jewish state dim, even for a moment. Unless and until that happens, no amount of Israeli good will and no amount of territorial concessions will lead to peace. It will, in fact, only inflame the passions of Israel’s enemies and draw the Jewish and Palestinian people closer to days of violence, days of mourning, days of war. Surely that is something that those who long to be peacemakers and agents of reconciliation should understand.

No….since it requires common sense, a very rare commodity indeed, even among the sanest of Liberals.

Next up, courtesy of BlogSpot.com and Greg Mankiw, it’s our Eye on Hypocrisy, brought to us by….

A Master of Tax Avoidance

 

Warren Buffett has an op-ed in today’s NY Times on one of his most popular themes: The rich should pay more in taxes.  At first blush, his position seems noble: A rich guy says that people like him should pay more to support the commonweal.  But on closer examination, one realizes that Mr Buffett never mentions doing anything to eliminate the tax-avoidance strategies that he uses most aggressively.  In particular:

1. His company Berkshire Hathaway never pays a dividend but instead retains all earnings.  So the return on this investment is entirely in the form of capital gains.  By not paying dividends, he saves his investors (including himself) from having to immediately pay income tax on this income.

2. Mr Buffett is a long-term investor, so he rarely sells and realizes a capital gain.  His unrealized capital gains are untaxed.

3. He is giving away much of his wealth to charity.  He gets a deduction at the full market value of the stock he donates, most of which is unrealized (and therefore untaxed) capital gains.

4. When he dies, his heirs will get a stepped-up basis.  The income tax will never collect any revenue from the substantial unrealized capital gains he has been accumulating.

To be sure, there are pros and cons of changing the provisions of the tax code of which Mr Buffett takes advantage. Tax policy always involves difficult tradeoffs.  But it seems odd to me that whenever Mr Buffett talks about taxing the rich more, the “loopholes” that he uses never seem to enter into the conversation.

Speaking of loopholes, they’re the subject of this related item from the WSJ, which describes….

Costco’s Dividend Tax Epiphany

Obama’s fans in the 1% vote to beat Obama’s tax increase.

 

When President Obama needed a business executive to come to his campaign defense, Jim Sinegal was there. The Costco co-founder, director and former CEO even made a prime-time speech at the Democratic Party convention in Charlotte. So what a surprise this week to see that Mr. Sinegal and the rest of the Costco board voted to give themselves a special dividend to avoid Mr. Obama’s looming tax increase. Is this what the President means by “tax fairness“?

Specifically, the giant retailer announced Wednesday that the company will pay a special dividend of $7 a share this month. That’s a $3 billion Christmas gift for shareholders that will let them be taxed at the current dividend rate of 15%, rather than next year’s rate of up to 43.4%—an increase to 39.6% as the Bush-era rates expire plus another 3.8% from the new ObamaCare surcharge.

More striking is that Costco also announced that it will borrow $3.5 billion to finance the special payout. Dividends are typically paid out of earnings, either current or accumulated. But so eager are the Costco executives to get out ahead of the tax man that they’re taking on debt to do so.

Shareholders were happy as they bid up shares by more than 5% in two days. But the rating agencies were less thrilled, as Fitch downgraded Costco’s credit to A+ from AA-. Standard & Poor’s had been watching the company for a potential upgrade but pulled the watch on the borrowing news.

We think companies can do what they want with their cash, but it’s certainly rare to see a public corporation weaken its balance sheet not for investment in the future but to make a one-time equity payout. It’s a good illustration of the way that Federal Reserve Chairman Ben Bernanke’s near-zero interest rates are combining with federal tax policy to distort business decisions.

One of the biggest dividend winners will be none other than Mr. Sinegal, who owns about two million shares, while his wife owns another 84,669. At $7 a share, the former CEO will take home roughly $14 million. At a 15% tax rate he’ll get to keep nearly $12 million of that windfall, while at next year’s rate of 43.4% he’d take home only about $8 million. That’s a lot of extra cannoli.

This isn’t exactly the tone of, er, shared sacrifice that Mr. Sinegal struck on stage in Charlotte. He described Mr. Obama as “a President making an economy built to last,” adding that “for companies like Costco to invest, grow, hire and flourish, the conditions have to be right. That requires something from all of us.” But apparently $4 million less from Mr. Sinegal.

By the way, the Costco board also includes at least two other prominent tub-thumpers for higher taxes— William Gates Sr. and Charles Munger. Mr. Gates, the father of Microsoft’s Bill Gates, has campaigned against repealing the death tax and led the fight to impose an income tax via referendum in Washington state in 2010. It lost. Mr. Munger is Warren Buffett’s longtime Sancho Panza at Berkshire Hathaway and has spoken approvingly of a value-added tax that would stick it to the middle class.

Costco’s chief financial officer, Richard Galanti, confirms that every member of the board is also a shareholder. Based on the most recent publicly available data, they own more than 4.1 million shares and more than 1.3 million options to purchase additional shares. At $7 a share, the dividend will distribute roughly $29 million to the board, including Mr. Sinegal’s $14 million—at a collective tax saving of about $8 million. Even more cannoli.

We emailed Mr. Sinegal for comment but didn’t hear back. Mr. Galanti explained that while looming tax hikes are a factor in the December borrowing and payout, so are current low interest rates. Mr. Galanti adds that the company will still have a strong balance sheet and is increasing its capital expenditures and store openings this year.

As it happens, one of those new stores opened Thursday in Washington, D.C., and no less a political star than Joe Biden stopped by to join Mr. Sinegal and pose for photos as he did some Christmas shopping. It’s nice to have friends in high places. We don’t know if Mr. Biden is a Costco shareholder, but if he wants to get in on the special dividend there’s still time before his confiscatory tax policy hits. The dividend is payable on December 18 to holders of record on December 10.

To sum up: Here we have people at the very top of the top 1% who preach about tax fairness voting to write themselves a huge dividend check to avoid the Obama tax increase they claim it is a public service to impose on middle-class Americans who work for 30 years and finally make $250,000 for a brief window in time.

If they had any shame, they’d send their entire windfall to the Treasury.

If they had any shame, they wouldn’t be Liberals; but they don’t, so they are!

Then there’s yet Another Sign The Apocalypse Is Upon Us, courtesy of James Taranto and Best of the Web:

The Quinquagenarian College Athlete

 

The Contra Costa Times of Walnut Creek, Calif., has what sounds like a feel-good story–a 50-year-old athlete who competes on a college basketball team, and with considerable success:

Most of the 50 or so onlookers in the dingy, yellow-tinted gym briefly look up from their chili-cheese nachos and smartphones, and then back down. A few whisper and point at No. 42, marveling at her size.

It was the debut of Gabrielle Ludwig, and at 6 feet 8, 220 pounds, with tattoos on her arms and legs, she stands out in the Contra Costa College gym. At 50, the Fremont resident is about three decades older than her Santa Clara community college teammates and opponents–and much taller.

But there’s a catch:

What many at the 19th annual Comet Classic did not know was Ludwig had only been a woman since July, when she had a sex change operation.

Turns out that “as a young man, Ludwig briefly played at an East Coast community college,” presumably on the men’s squad. Even then he “displayed a natural shooting touch.” We’ll be more impressed when a 50-year-old female-to-male transsexual competes successfully on a men’s basketball team.

“6’8”, 220 lbs.?!?  If this dude’s an ounce under 300 we’ll vote Obama a third term.

On the Lighter Side….

And in the Sports Section….

Fan sentenced to prison for BCS video

 

NEW ORLEANS (AP) An Alabama football fan got a dressing-down and two years in prison for obscenity in a viral video with an unconscious LSU fan after last year’s championship game. State District Judge Karen Herman told Brian Downing of Smiths Station, Ala., that he’s a bully who has permanently damaged someone else’s life.

Downing declined to say anything before the judge sentenced him as part of a plea deal. He pleaded guilty in October to two counts of obscenity for rubbing his genitals on the LSU fan. (Who was passed out) Prosecutors dropped a charge of sexual battery, which is punishable by up to 10 years in prison.

The incident took place last January after Alabama defeated LSU at the Superdome to claim the BCS title.

Our advice to Mr. Downing: teabagging may be in vogue, even encouraged in certain parts of the country; Key West, West Hollywood and San Francisco come.  But New Orleans ain’t one of ’em.

Then there’s today’s installment of the Automotive Section, where we learn….

Couple convicted of stealing GM trade secrets

 

Since when do the plans for low-quality, over-priced hybrid automobiles constitute “trade secrets”?!?

Finally, we’ll call it a day with the “Do As I Say, Not As I Do” segment, and yet another example of Progressive hypocrisy, courtesy of Carl Polizzi and InfoWars.com:

Anti-Second Amendment Democrat Arrested With Gun at Chicago’s O’Hare

 

The arrest yesterday of Illinois Democrat Donne Trotter by TSA agents for attempting to bring a .25-caliber Beretta pistol on an airplane at Chicago’s O’Hare International Airport demonstrates the hypocrisy of the anti-Second Amendment crowd. Trotter is charged with one count of attempting to board an airplane with a weapon, a Class 4 felony.

Donne Trotter is a long-time gun-grabber. He opposed concealed carry legislation in the state and worked to outlaw so-called assault weapons….Trotter argued that passing the law would turn citizens into vigilantes.

“Trotter is a South Side Democrat and he was a leader in the move to ban so-called ‘assault weapons’ during his first term as a state representative,” said Alan Gottlieb, chairman of Citizens Committee for the Right to Keep and Bear Arms, in a press release. “A man who favored banning firearms for thousands of his fellow Illinois residents shouldn’t even have a gun, much less be packing one illegally into an airport.” “Senator Trotter, by his own action, has demonstrated the monumental hypocrisy of gun control advocates who try to disarm average citizens while reserving the right to bear arms for themselves alone,” Gottlieb continued.

So, Senator Trotter, our sincere….

And a hypocritical one at that!

Go Navy, BEAT ARMY!

Magoo