Gates Foundation to Get Bulk of Buffett’s Fortune

Gates Foundation to Get Bulk of Buffett’s Fortune:

“We agreed with Andrew Carnegie, who said that huge fortunes that flow in large part from society should in large part be returned to society,” Buffett, 75, told Fortune in an interview laying out his charitable-giving plans. He said the philanthropy was encouraged by his wife, Susan, who died in 2004.

Bravo, Messrs. Buffett and Gates! Combining their massive fortunes will make huge changes in the world possible. Following on the estate tax postings (here’s the first and the second) of a couple weeks back, Warren Buffett’s explanation, above, about why he is giving most of his money to Gates’ foundation, only confirms the reason that the estate tax is good public policy.

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19th Gastrointestinal Breakdown


My wife gave me the stomach flu for our 19th Anniversary. I didn’t know that this was the gastrointestinal anniversary. I got her flowers.

Anyone waiting for something from me, please be patient.

Currently, I feel like a road grader has been at work in my gut. I feels like a strip mall neighborhood has sprung up in my small intestine. There’s a Wal-Mart in my stomach and, I think, a Hooters has opened in my colon.

What’s really nice about this—the golden lining, if you will—is that we are still happy when we are stuck in bed and trading trips to the bathroom. It may seem prosaic to say this about a marriage, especially to younger folks who think of love solely in terms of romance or unbridled lust, but there is magic in all the quiet and uncomfortable times Kiera and I have shared, too. I love my wife, even when she brings the flu home for our anniversary.

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Coulter: Self-congratulating bombastic witch

Coulter calls 9/11 widows “witches” – Yahoo! News:

“I am tired of victims being used as billboards for untenable liberal political beliefs.”

I read a bit of Ann Coulter’s published extract of her new book today, just to see if she’d learned anything in the intervening months since her last screed appeared. Except for the fact that she’s descended to attacking widows who disagree with neoconservative policy, she’s the same wretched logician and feckless demagogue as before. There’s nothing new here. No thoughtfulness, only invective that, amazingly, she has turned on the very people whom she and her ideological colleagues have hung their untenable political policies for the past five years.

No pointage to Coulter, who doesn’t deserve any.

Want to read a neocon who is thinking? Try Francis Fukayama’s new book, America at the Crossroads: Democracy, Power, and the Neoconservative Legacy, which holds to some of the same insanely hegemonic thinking he advocated before while actually taking into account the military and diplomatic record of the Bush Administration. I urge you to read any American commentator who is struggling to explain reality. If there’s no struggle for the author, they are clearly ignoring something. Coulter, who sees the world through monochrome glasses that paint all that is liberal as black and bad while all that is conservative is white and good, is simply trying to spread hateful nonsense.

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Where’s that growth coming from? Tomorrow’s pockets

FRB: G.19 Release– Consumer Credit — June 7, 2006:

It’s not just the federal deficit that is rising. Consumer credit increased at a six-percent annual rate in April, according to the Federal Reserve. The only time we’ve borrowed more heavily is in 2001, when borrowing was all there was to do.

We’re spending far in excess of current income. Not good on several levels, the least of which is the growing threat of inflation, which, if checked by higher rates, could suddenly contract consumer spending, business spending and any other forces keeping the economy from turning on itself and going into a tailspin.

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The inevitable estate tax troll

Minutes after posting my piece about the estate tax, I was accused of “just ranting” by an advocate of repeal. He challenges, and I respond:

Do you know how many estates qualified for the tax last year? Do you know what income bracket the majority of the families fell in to? Do you know that family-owned farms and businesses are the hardest hit by the estate tax?

According to Less than one percent of estates are taxed. Less than 3 in 10,000 family farms are subject to the estate tax.

According to the Tax Policy Center: There were only 53,819 taxable estates out of 2,336,840 adult deaths in 1999—2.3 percent, but this was at the peak of the Internet bubble when there was a lot of paper wealth. In 2003, of 63,024 returns that qualified for the estate tax, only 30,627 were actually taxed after adjustments. Fewer than half the estates of between $1 million and $5 million were affected by the estate tax.

Finally, how many dang times do you want to tax the same dollar?? You tax it when I earn it. You tax it at a higher percentage if I follow the American work ethic and work a little harder to get a bonus. You tax it when I save it in the bank. You tax it when I invest it. You tax it when I take it out of my 401k. If I choose to give a gift of more than 10k to a relative you tax it. Then you tax whatever is left when I die.

This is the big myth. We’re not taxing the same dollar, we’re taxing new wealth for the recipient created from the same dollars. If you follow this “same dollar” line of argument, theoretically all the money in the economy is merely the inflated product of the original amount of money in the system, therefore nothing should be taxed, but it isn’t so. There is lots of new wealth being created all the time and that is what is taxed. The progressive tax system treats higher incomes as greater recipients of society’s investments, so, yes, the rich pay a bit more. We don’t tax investments, we tax profits from investments and give deductions for losses.

We don’t tax “whatever is left” of a person’s wealth, we tax less than one percent of the estates passed on to the next generation. Before modern times, when America led the way toward greater equality, these estates were the basis of hereditary nobility. If you want dukes and duchesses, by all means support the repeal of the estate tax. But it is not a “rant” to point out that it is unAmerican to want hereditary wealth to define our society.

Maybe if we spent less time (and money) trying to equalize the income distribution in this country and more time coming up with ways to allow us to reinvest wealth you might find this is an even better place to live.

We aren’t spending any time or money on equalizing income distribution. Income disparity has increased by 50 percent in the last 16 years and by much more since 1980. Twenty-six years of trying to make the United States a “better place to live” by making it more like a third-world economy with drastic income disparity, hasn’t worked.

Income equality is not what I advocate or what anyone concerned about the estate tax is advocating. Instead, the tax system in the United States has focused on increasing opportunity across all segments of society. We each still make of the resources we have and are given what we will.

These facts are widely known. The question is what is right for the United States. If you believe rising deficits and increased income disparity are good for you and your family, urge your Senator to vote to repeal the estate tax. If you want the estate tax to continue, and more generally that we restore fiscal sanity in the United States, I urge you to demand your Senator to vote to block the repeal of the estate tax.

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Stop the repeal of the estate tax

After all we’ve done to encourage their investment during their lifetimes, the rich want more? The Senate is considering legislation to repeal the estate tax.

I’ll amend that first sentence: Some of the rich, the least patriotic, don’t want to pay estate taxes. They want to revert to a socio-economic model that pre-dates the American Revolution, making a blunt statement to society that they are entirely in this life and the next for themselves.

Patriotic and thoughtful wealthy people are not trying to find a way out of the estate tax. They recognize everything this society has done for them and support the tax. Bill Gates Sr. and Jr. are on the correct side of this debate, siding with supporters of the estate tax. Wrote Sr. in his book, Wealth and Our Commonwealth:

“How can we justify this tax? At the core of our advocacy for a highly progressive estate tax is our belief that society has a just claim on the accumulated wealth of its most prosperous citizens. This is not rooted in a belief in enforced charity or redistribution, but in an assessment of the undervalued role of society’s investment in each of us. This is substantial and often invisible.”

Indeed, most of the wealth created in this country has evolved directly out of the massive investment across society in the capabilities and competence of everyone, so that companies and entrepreneurs have vast resources to tap into, so that it isn’t necessary to invent an education for oneself if you are rich but to choose among many educational opportunities. The infrastructure that facilitates rising productivity and innovative logistics and distribution systems, the list goes on and on.

If the estate tax is repealed, it will be another blow to the fiscal and social stability of the nation, placing everything at risk, it is not just a matter of lost revenue from the estate tax.

Sebastian Mallaby writes in the Washington Post today, Reward for the Hereditary Elite . . .:

The abolitionists don’t respond to this question because there is no convincing answer. Paul Volcker, the former Federal Reserve chairman, has written that “we would be hard-pressed to find evidence that, compared with the alternatives, a reasonable estate tax significantly discourages work or innovation or savings.” In other words, killing the estate tax and raising some other tax instead would damage the economy. And that’s before you take into account the positive distortions introduced by the estate tax, such as more social mobility and higher charitable giving. Charitable bequests will fall by at least a fifth if the estate tax is repealed permanently.

It is time to stop this mad disassembly of the great country we were born in. Start by calling your Senator today to demand they vote against the repeal of the estate tax. And if you are a Democrat, send a note to Democratic Senators Blanche Lincoln of Arkansas, Bill Nelson of Florida, Ben Nelson of Nebraska and Max Baucus of Montana, who are siding with repeal of the estate tax. Tell them you are disappointed.

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Backing Congressman Adam Smith


I joined a large crowd at the Washington History Museum to help launch Rep. Adam Smith’s re-election campaign this past Thursday evening. I’ve been fortunate to get to know Adam through his staff and have spoken at a couple of the technology events he sponsors in the South Sound each year. For instance, he has been great about getting junior high and high school kids to career fairs at companies like Intel in Dupont. He’s been a big backer of the South Sound Technology Conference each year, as well.

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Adam’s one of the most grounded Congressmen I’ve had the fortune to know. Everything he does is informed by his own experience as a working-class kid growing up in the Seattle area, seeing the vast opportunities created by companies like Boeing and Microsoft emerging around him. Like him, I managed to work my way through college and been fortunate enough to join in the prosperity, but Adam’s aware of how easy it is for kids and adults alike to slip through the cracks. He supports the kinds of investment in people—education investments, small business initiatives and continuing education programs for adults—that preserve and expand opportunities for Puget Sound-area citizens

He has a reasonable and balanced approach to questions of security, domestic and international, and hasn’t sacrificed the environment in the name of energy but voted consistently for market-driven incentives for cleaner industry. As a co-chair of the House New Democratic Network Campaign, he represents the centered politics of consensus that showed what a powerful force for positive change throughout the 20th century and can help reinvigorate the people’s relationship with their representative government during the 21st century.


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Senator Maria Cantwell, whom I also support, was the speaker who introduced Adam. She’s going into what will be a touch re-election campaign against Mike McGavick, an insurance company executive-turned-candidate who, I believe, would deepen the worst faults of the Bush era, driving health costs higher and preventing government from setting standards of safety and health. We should be through with crony-capitalism.

Maria, by contrast, is a pro-growth Democrat with strong environmental credentials who recognizes the people have a powerful voice in government that can help restrain greed and create opportunity for all.

If you agree with me that we need a balanced government that represents everyone, not just a small segment of the wealthy, I hope you’ll contribute to Adam Smith’s campaign and contribute to Maria Cantwell‘s, too.

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Just noticing the bad economic news?

Jobs Report Signals Cooling Economy – New York Times:

The American economy added a surprisingly weak number of jobs in May, a sign that nervousness over a cooling economy may be spreading among the nation’s employers.

The net increase in nonfarm payrolls in May — 75,000 — is a significant falloff from April, when the Labor Department estimates that 126,000 jobs were added, a figure it revised downward today from the 138,000 it initially reported.

it’s frustrating that the previous months’ job gains, which were consistently tens of thousands of jobs less than needed to keep up with population growth are now being referred to as good times. This is a miserable jobs figure, not just weak, but miserable. April’s 126,000 new jobs was only about 50 percent of the number of new workers in the economy that month. The average number of non-farm jobs created since the beginning of the year is only 164,000 a month, less than half during the 1990s.

I’d hate to be Henry Paulson, the incoming Secretary of Treasury, today. Read Paul Krugman’s warning to Paulson and ponder what his day was like after the Bureau of Labor Statistics announcement:

Americans are very unhappy with the state of the economy. According to Gallup, only 4 percent of the public considers the economy “excellent,” and only 25 percent considers it “good.” And there’s good reason for this unhappiness. Although profits and C.E.O. compensation have soared, most workers are significantly worse off than they were a year ago.

The official line, however, is that it’s a great economy, but that Americans for some reason aren’t hearing the good news (just like they aren’t hearing the good news from Iraq). Mr. Bush — who, by the way, isn’t the affable guy you may have thought you met — doesn’t seem as if he realizes that the economy isn’t all that good; in his public appearances he seems peeved that he isn’t getting credit for a great economy. And he expects you to explain to working Americans that the trouble they’re having paying their bills is just a figment of their imagination.

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Worth the sub price…. The Wild Side – Olivia Judson – Genie, I Dream of Planets – Times Select – The New York Times

The Wild Side – Olivia Judson – Genie, I Dream of Planets – Times Select – The New York Times :

Call me a geek, but if a genie appeared before me and offered me a wish, here’s what I’d wish for: detailed descriptions of at least 127 other randomly chosen planets in the galaxy, of which 63 would be home to life.

This may sound greedy (wishes usually do). After all, life on earth holds uncountable mysteries. Here’s one that puzzles me: Why is it that no birds have evolved pregnancy? Representatives of all the other major groups of backboned animals, from guppies to skinks, have evolved to give birth — why not birds? It would surely be better for an emperor penguin to give birth than to play ice hockey with its egg. Another: Can you alter the odds of conceiving a son or a daughter by altering how often and when you have sex?….

I’ve subscribed to Times Select, despite the heresy that seems to entail for some, since it was introduced. Recently, they’ve started introducing new columnists and Olivia Judson’s piece, extracted above, is wonderful. I’d pay for Krugman and Friedman and Kristof happily, and now I’m receiving a growing bonus in new voices. The Times‘ redesign still sucks, but you get good writing when you pay for it. I may, of course, be prejudiced in saying so.

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