Across the Great Divide

Defining Franken: First His Jokes, Now His Business.

For months, Minnesota Democrats Exposed has dribbled out scores of out-of-context clips and quotes from a man whose business it was to say funny things. The humorless Michael Brodkorb labored mightily but unsuccessfully to define Senate candidate Al Franken as a mean man — never quite getting that many voters  understand the difference between cutting remarks about people and cutting programs that help people. 

So Brodkorb kept digging, and at last he got his mainstream media stories, if not his cherished attribution. While many people get the difference between a comedian and a bigot, fewer understand running a small but complex business. Thus, Franken's failures to make proper business filings in New York and California can more credibly be blown up into gargantuan character flaws and ethical lapses.

I'd wager at least half the U.S. Senate could not walk you through their tax returns, and if I found one senator's return without a signature from a professional tax preparer, I'd be shocked. On that basis alone, Franken would fit in. And when you add the fact that a senator's main job is to pontificate in committee and read speeches with conviction while staffers do the work, why, he's eminently qualified. Franken, at least, writes most of his own material.

Does bad paperwork disqualify him? As a former business owner who has not yet picked a candidate, I say no. But then, I have some empathy that has nothing to do with politics.

Most entrepreneurs, entertainers and other innovative types succeed by focusing intensely on creative output. Soon they are horrified to discover the are running a small business. This is the last thing they want to do. It is also the last thing most of them are cut out to do. While some will have succeeded by focusing on the details and others by focusing on the big picture, none get very far in business by focusing on the minutia.

Except for those stalwarts who do it for a living, filing tax forms and keeping up with regulations is minutia — especially in a business like Franken's that involved many different income streams from multiple states. Speaking fees, publishing and broadcast royalties, paychecks for TV appearances and associated expenses must only be part of his accounting. Then there's keeping up with tax and business law wherever he may land and pick up a payment.

Trust me, anyone in his situation will rely on others to stay on top of this stuff.

For example, I sold my company in 2005 but still own a very small stake in it. Among the 70 or so pages of tax forms I file each April, eight pages go the state of Georgia, where the company has an office. This year, I sent a check to Georgia for $6, the amount due on the taxable business income from Georgia attributed to me for 2007, which is still sitting on the company books, not in my pocket.

Meeting this obligation no doubt cost me more than I paid in tax. Was I aware I owed this tax? Only because my accountants told me so. Did I pay the correct amount? I have no idea and even less interest in reworking my accountant's computations, which were based on reports from my former company's accounting firm. If a problem turns up, I'll address it.

Franken's affairs were certainly much more complicated than mine, and his supposed transgressions may involve larger amounts, but I haven't seen any evidence he did anything to exploit the rules, intentionally evade his responsibilities or conceal his income. In my book, he's guilty of antipathy toward paperwork and a failure to hire the right people to watch over his areas of disinterest.

Minnesota had a U.S. Senator in the early '90s who also relied on the advice of lawyers and accountants for how he structured his speaking fees, publishing expenses and Minnesota condo ownership. By most accounts Dave Durenberger was once a pretty good senator and became an even better ex-senator. I had some empathy for him at the time, too, and was willing to accept that his conduct was in good faith. If you couldn't find a lawyer, accountant or investment advisor who'd tell you a shady deal was okay back then, it only meant you didn't have enough income to warrant sheltering it. But after reading this analysis and this retrospective from a former Republican staffer, I'm not so sure.

The difference between the two cases illuminates a couple relevant points, though. Franken's errors were passive, Durenberger's, active. Franken's failure to file may have temporarily put additional money in his pocket, but if you're a public figure and that's your goal, you structure a deal that looks legitimate, as Durenberger and his advisers did. Franken's business lapses occurred when he was flying around the country as an entertainer, not when he was a U.S. Senator collecting honoraria from groups that had legislation before his committees. Franken's oversight sullied only his future campaign; Durenberger's cast a shadow over all politicians and the institution he served.

Sure, I wish Franken had been given more attentive counsel, found the errors on his own and corrected them before the stink factory got a hold of them. I wish he had explained himself more completely and clearly. But does this say anything about his ability to carry out the work of the Senate?

I think the real lesson is about why more lawyers than business people run for public office.

None Dare Call It Conservation.

Oil consumption in the United States dropped nearly 2 percent in the first quarter of 2008. If that trend holds, it would be the biggest percentage decline since the 1991-92 recession.
[...]
The statistics have some folks wondering whether the country has hit a consumption tipping point, amid $3.50-per-gallon gasoline and historically high crude oil prices.
— "Oil consumption at the tipping point in U.S.?" Star Tribune

The column quotes an academic who sees this dip as a sign conservation behavior is starting to take hold, but Jim Thill suggests it may just be more people can't afford the price, have no alternative to driving and are not happy about it.

With rapidly increasing demand in India and China, consumption in the U.S. isn't really the tipping point we should be concerned about, is it?  When consumption really tips, price per gallon of gas and high crude prices will only be the part we could see coming.

In another post, Jim sees something else going on, citing a news release from Consumer Watchdog that says:

The White House clings to a pallid strategy of blaming OPEC even as it continues buying oil off the market at a rate of 1.5 million barrels a month for a Strategic Petroleum Reserve that is already filled to near-record levels.

In 2006 when gas prices made their surge toward $3 a gallon, Bush announced the government would stop buying for the strategic reserve to help bring down domestic prices. Now, in a much worse economy, with a weaker dollar, unprecedented prices and a costly oil supply protectorate (aka Operation Iraqi Freedom) dragging on, Bush continues to top off the reserve tank. Jim says,

I've come to the conclusion that no major media outlet is ever going to announce in a headline "We've reached Peak Oil!" But articles like this one suggest that hoarding behavior at the highest levels is well underway.

And why not? Among the 12 nations with most of the world's proven oil reserves Canada (mostly), Mexico and the U.S. were in 2007 estimated to control 212 billion barrels. Middle-eastern "allies" like Saudi Arabia, Kuwait, the United Arab Emirates and Iraq control 571 billion. The rest (about 322 billion) is under Iran, Russia, Libya, Nigeria and Venezuela. And most of those countries have state-owned or -controlled oil companies sitting on the reserves. The market will sort this all out, right?

Hoarding won't cover our oil habit. Expanding U.S. proven reserves beyond the current 21 billion barrels won't do it. Conservation in the U.S. — whether it's price-driven or principled — won't make much of a dent, and workable energy alternatives are a long way off.

We have to do all these things, of course. But I've come to the conclusion that no president is ever going to announce "We're bringing all our troops home from the Middle East!" Of the major presidential candidates, John McCain has come closest, but everyone in the running must by now know the truth of what they will be handed in 2009.

We can blame George Bush, but we also better look in the mirror.

Bad Ads Mocked: Swift Kids.

As a reminder of the upcoming Worst Political Advertising in America Awards May 21st, I'll occasionally post some of my favorite parodies of political advertising.

Announcing the Appointment of What's His Name.

TPT reporter Mary Lahammer blogs about the rather detached performance by Governor Pawlenty at the press conference announcing his new 21st Century Tax Reform Commission.

The governor usually gives a really good press conference with some solid quotes and witty interactions. Today he announced a tax reform commission and the event wasn't exactly riveting. I know it's taxes — not the most exciting topic, but it should be for Capitol nerds like us.

The tax portion of the press conference lasted just 15 minutes. That's short for our grilling of our chief executive, which tends to run closer to half an hour. We generally really appreciate the fact he spends time with us, often pushing back other events to take our questions. He did humor us with taking other non-related questions. But our efforts to humor him didn't really work.

She describes a couple of the questions Pawlenty answered only superficially, but doesn't mention a gaffe that I found particularly telling.

When introducing five of the 15 members of the commission who were present at the press conference, the governor clearly did not know two of them and fumbled as he looked for their bios in his notes.

Certainly, the governor has a lot things on his mind between the state budget and the McCain campaign, and the screening of his commission was done by staff. But if tax reform to aid business and promote economic growth is a priority, wouldn't he at least have met his appointees?

Taxes and Averages.

Nan Madden writes about why Tax Freedom Day protesters like to use "average" as a way to describe the tax share paid by Americans.

But 80% of American households pay a smaller share of their incomes in federal taxes than the average found by the Tax Foundation. According to the Congressional Budget Office, “typical” Americans - the 20% of households in the middle of the income distribution - paid 14.2% of their income in total federal taxes in 2005. In contrast, the Tax Foundation’s average share of income paid in taxes for that year is 20.2%.

This is typical of the ways tax data are selectively reported to heighten grievances. Minnesota's anti-taxites also choose:

• Per capita dollars over percentage of income. Minnesota ranks 12th versus 23rd on the two measures. Per capita doesn't reflect differences between low- and high-income states. Plus, people respond more negatively to thousands of dollars than to percentages.
• Income tax over all state and local taxes. This obscures differences in how states fund government services at different levels. Minnesota's greater reliance on the income tax places makes it look worse compared to states that raise more revenues through other taxes and fees. Minnesota ranks 12th versus 23rd.
• State rankings over percentage differences between states. A one percent difference can mean an 18-place difference between Minnesota and Mississippi.

So Froma Harrop Knows How to Google Spring Flowers.

The pasque flower, which heralds spring in the prairie, is just now showing its sweet face in this cold clime. But the politics here are already jungle-hot. Minnesota is ground zero for what may be the most expensive Senate race in the country. And even bar hours have become political.
— "Long Hot Summer in Minnesota," Froma Harrop

Okay, I'm sitting in Colorado writing about Minnesota right now. But dude, I've been there, and I'm willing to believe Froma Harrop has never seen a pasque flower (the South Dakota state flower) or a St. Paul bar in her entire New York born and bred life.

Spare us the fake local color and overwrought metaphors to stitch your research together, dearie. Next time buy a plane ticket before you pretends to write from flyover land.

Blue Ribbons and Yellow Slips.

“We often hear in this room, and not just on this proposal but any proposal, that it should get a subsidy because they will pay taxes," [House Tax Committee Chair Ann] Lenczewski said before twirling her index finger in the air, "Well whoop-dee-do! Every business in Minnesota pays taxes; we don't give out blue ribbons for paying taxes."
— KARE 11

Rep. Lenczewski was commenting on proposed tax breaks for a Mall of America expansion that would be in her district. She has a point. All businesses pay taxes, so why should the public subsidize some private projects versus others?

A union electrical worker who's been out of work for months has a different view. His livelihood depends on new construction projects. If no one's building, he's out of  job. He's not paying taxes, and he may be collecting unemployment.

I don't care which side you're on, this stuff isn't as simple as cut taxes or no subsidies for billionaires.

Short and Sour.

Here's why I read this blog:

“Three Girl Scouts fainted in [Pope Benedict's] presence.” 

Isn’t this the kind of thing that had the hard right frothing about what a fraud Obama was/is?

Kid McCain and Diamond Donald.

Coming out of Pennsylvania, I've seen a poll that said 26% of Clinton supporters said they'd vote for McCain if Obama were the Democratic nominee and 19% of Obama supporters would do the same if the nomination went to Clinton. If that isn't face-spiting-stupid enough for you, there's always Ralph Nader.

But who knows?  In Pennsylvania's Republican primary yesterday, John McCain managed to lose 27% of the vote to Paulabee — one guy whose campaign seems to consist mostly of anger expressed through roadside pieces of painted plywood and another one who isn't even running. I wonder what would happen if anyone ever got around to attacking McCain?

Or, in the spirit of the new politics, even talking about his ethical inconsistencies and questionable associations.

The New York Times kind of whiffed with its story about McCain's cozy ties with a female lobbyist. Now, it's reporting his relationship with a rich developer, Donald Diamond, who co-chairs the finance committee for McCain's presidential campaign.

Mr. Diamond is close to most of Arizona’s Congressional delegation and is candid about his expectations as a fund-raiser. “I want my money back, for Christ’s sake. Do you know how many cocktail parties I have to go to?”

Campaign finance being what it is, it's difficult not to have a relationship with a rich somebody who wants something or other that will add to their wealth through government intercession or acquiescence. Developers in particular must have friendly relations with government, but Diamond hasn't just benefited from the usual favorable tax deals and planning concessions. He's enlisted McCain's endorsement of lucrative deals involving the purchase and swapping of federal property.

In particular, Diamond profited hugely from land swaps in which private lands next to parks, wilderness or conservation areas are exchanged for public parcels. While the trades can serve a public purpose, they almost always end up favoring the developer. Diamond was particularly skilled at spotting these opportunities and getting them approved.

The story details several deals that netted him tens of millions in profits. One sale and trade involved a 4,400-acre ranch he'd purchased in 1979 for less than $10 million. Starting in 1991, he arranged to sell 2,000 acres to the feds for $23 million, and also received about 50 acres of land in high-rent Scottsdale, Arizona. The remaining ranch land adjacent to the Saguaro National park outside Tucson became  considerably more valuable, and Diamond still has plans to build 3,000 houses along with resorts and golf courses there.

Mr. Diamond, for his part, said Mr. McCain had only done his job. “I think that is what Congress people are supposed to do for constituents,” he said. “When you have a big, significant businessman like myself, why wouldn’t you want to help move things along? What else would they do? They waste so much time with legislation.”

He said he often complained to Mr. McCain that he was “too straight” about refusing to provide federal help for Arizona businessmen. “I tell him, ‘You are an Arizona senator besides being the world senator. Loosen up, kid!’ ”

Do You Know Boxes?

Test your knowledge of rectangular rural structures.

This concrete box rises about 20 feet above a concrete pad northwest of Fruita, Colorado. My former neighbor, Jean Urrity, built a fancier one west of Grand Junction, but the essentials are all here in this example.

Another mysterious structure can be seen in multiples as we ride around the countryside. The eight-foot blue boxes stand along the fringes of irrigated fields.

The example here has a bit less finish than others I've seen. Here, the vertical bars are aluminum. A different design uses rebar that runs into a shelf about one-third up from the floor.

So, amaze your friends and ID these things — or give up.