"There is more stupidity than hydrogen in the universe, and it has a longer shelf life." -- Frank Zappa

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5-22-2003
Money talks

High school basketball phenom LeBron James just signed a $90 million shoe contract with Nike. Assuming he plays 10 years in the NBA, that works out to $24,657 per day. The national median salary for a year is roughly $27,000. Now considering his team contract will be a similar amount, this high schooler will make more money per day than 90 percent of the country makes per year.

Now imagine making $20,000 a year in your career of choice. Now imagine that your bosses decide you don't deserve any more money. Now imagine getting fired for trying to do something about it. A union-bashing tale from a newspaper chain in Vermont.

I start with these two examples because sometimes in politics the need for one last vote can lead to one person having a tremendous amount of power. And so it goes with Ohio Sen. George Voinovich, who has managed to stick to his principles and trim back the latest money grab by Republicans fed by contributions from the investor class.

Yes, Dubya got his $350 billion tax cut, but the tax on dividends was cut to 15 percent instead of eliminated entirely. This will surely be revisited in the future, but for now, the damage to the working class has been contained, at least slightly.

And here's why I probably should have stayed in journalism, my knack for asking questions that most reporters don't ask. Can anyone tell me what the elimination of the tax on dividends would do to the tax-free municipal bond market? Not being an MBA, I have to think it would wipe it out. Why invest in a four percent tax free bond when Altria is paying a seven percent tax-free dividend?

I bring this up because while Congress is hell-bent on rewarding its rich benefactors with tax cuts, states and localities all across the country are in a tremendous fiscal crunch. And I can't help but think that the cost of states and localities to borrow money will go way up whenever the tax on dividends is eliminated. Considering Virginia's state budget cuts lead to layoffs, I cannot see how this tax-cut frenzy is going to create jobs, as Dubya claims, but lead to more job losses.

Someday I'll do a piece explaining deflation, as opposed to inflation, because it is on our national horizon. It doesn't matter how low interest rates drop because if you don't have a job, you're not buying a house. I can have a tax rate of zero but it would mean nothing if I have no income to tax.

I've said it before, and I'll say it again. The American political system is money versus votes, and money is winning. Attack ads aren't designed to rally people to vote; they are designed to turn people off to the entire process. It's really no surprise that when half the people making $27,000 or less a year don't bother to vote, that the rich elites will have their way with things.

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If Mr. Marshall ever won a McArthur genius grant, he'd study Earth-friendly building techniques. If he won a Niemann Fellowship, he'd study the myth-making aspects of American capitalism. If he ever won the lotto, he would, over his lifetime, give away more money than he actually won.