Dennis the Peasant

From October 20, 2005...

Here's what I had to say back then:

As those brave few who read this blog closely already know, I’ve made reference more than once to the fact that I was, at one time, 25% of what is now Pajamas Media. In fact, I was a part of that business before Charles Johnson was. The brave few will also note that I’ve made reference more than once to the fact that I’m not a part of Pajamas Media because Roger L. Simon (and his poodle, Charles J.) decided it to be worth their while to cut myself and another Central Ohio businessman out of the company and dole out our percentages to folks they deemed more likely to aid in the noble cause of lining their own pockets.

As Roger told me after I called him on it, “That’s business.”

Well, OK then, let’s talk business...

The last time I wrote about the whole sleazy affair (here), Roger actually had the gall to call me on the telephone and claim he was “deeply hurt” that my anger over Pajamas Media had “destroyed our friendship” and that he didn’t understand why “we couldn’t still be friends”. It was quite a performance, in a repulsively transparent sort of way. Overlooking the fact that we had never been ‘friends’ in the first place, I simply told him to fuck off – on the rather obvious principle that one who cheats you, humiliates you with your business associates (I had several of them working on Tulip-related projects on my word they’d be compensated at a later date by the company) and then sticks you with thousands of dollars of unpaid expenses is not really your friend, even if they want to be.

Anyway, after Roger’s attempt to bullshit his way out of trouble I basically swore off the idea of writing anything else about Pajamas Media simply because I really didn’t want any further contact with that loser. Not that I really thought he was going to make another effort at salvaging our deep and long-standing friendship, mind you. No, not that. What I’d written had terrified him because he knew just how badly I could hurt Pajamas Media, and his reputation, with what I could disclose. For him, this was about minding the store (which for him was far more important, anyway), so there was always the possibility he’d call me again. And while I must admit I really liked (and continue to like) the idea of him squirming over what I might do, the idea of further intimacies with my old pal Roger ain’t cutting it. If by some chance Pajamas makes serious money, we’ll renew acquaintances via my lawyers over the pound of flesh that is mine by right. It’s the least I can do to an old friend. But until then...

What has made me go back on my No Ragging on Roger Resolution was the realization that last weekend was the first anniversary of my business trip to L.A. to meet Roger and Charles. It was the weekend when, using a spark supplied by Roger’s wife on Saturday morning, Roger and I formed the basic idea of how to execute internet advertising on blogs in a manner more sophisticated and profitable than the BlogAds approach. That idea started as Tulip Advertising and has now morphed into the advertising component of Pajamas Media. In fact, if Roger hasn’t deleted the post, you can find a photo of Charles Johnson and I at Roger’s dining room table from later that very Saturday afternoon (Charles wasn’t present at the birth of Tulip... he was out riding his bike around L.A.). I didn’t really even remember that it had been one year until yesterday, but when I did, I guess it would be fair to say that it brought up some unresolved feelings on my part.

But you’ve probably already noticed that.

I’m sure you’re finding all of this fascinating in a National Enquirer sort of way, but it’s not really the focus of this post. The focus of this post is to give those of you wanting to make money via Pajamas Media some reasons why you probably won’t. Understand that my take on Pajamas Media is completely biased, so if you want to, mix it with however many grains of salt as are required. But also remember that I was the one who spent months researching the feasibility of the idea, talking to advertising professionals, talking to Roger L. Simon himself, and drafting the business plan we were to use (and not the piece of shit Pajamas Media used during the blogger recruitment phase). I know what they’re trying to accomplish, and how they are trying to accomplish it.

Here is a selection of the reasons why I think Pajamas Media’s advertising venture will crash and burn:

Reason the First: Lack of Focus

The primary reason you’re probably not going to make any money with Pajamas Media advertising is because Pajamas Media is trying to do several things at once, and only one of them is advertising. I suppose all the Junior Journalistic Cadets are slavering over the idea of getting published through the New Media that is going to destroy the Old Media, but those of you motivated by advertising revenues aren’t going to reap any benefits from Pajamas taking over for the New York Times and the Washington Post, right?. So what you have to ask yourself is which of these two business efforts are going to be the top priority with management and ownership? Is it going to be journalism or advertising?

Well, I can’t say I’ve examined everything in great detail, but most of what I’ve been hearing has centered on the journalistic end of the business. According to the Pajamas Media web site, phase one testing of the advertising component was to begin in September and broadened to all of the signed bloggers sometime in October. Now I haven’t checked every site out there, but I’ll be damned if I’ve been able to find any advertising, testing or otherwise, at any Pajamas-affiliated site as of this date. There have been press releases about the editorial staff Pajamas Media has put together, though.

Draw your own conclusion.

Reason the Second: Lack of Assets, Therefore Effort

Understand that Pajamas Media is a part-time effort for all of ownership and management. I was to be the person who was going to work full-time on Tulip Advertising during the start-up phase. Roger and Charles were not then, and are not now, willing to give up their existing careers to devote their talents or energies wholly to Pajamas Media. Pajamas Media is what comes at the end of the day... After writing scripts and novels and articles (or in Charles’ case, code) and blogging, then comes Pajamas Media. And understand something I think neither Roger nor Charles has ever grasped; making the advertising portion of Pajamas Media work – really work, that is – will require an enormous amount of both time and energy doing the sort of spade work necessary to attract the attention of media buyers, advertising agencies and corporations themselves.

One of the things that became very apparent to me very early in the life of Tulip Advertising was that there was going to be no shortcut to attracting advertisers. The two of us who actually had business experience (myself and our other Central Ohio partner) knew it was going to be months of telephone calls, meetings and presentations – one ‘dog and pony’ show after another – to nail down a handful of high-quality advertising clients. We also knew that we could only grow that client base using a methodical and continuous sales process. My impression from Day One was that Roger truly believed that the sheer brilliance of our idea would have advertisers knocking at our door sans much effort. You tell me which vision sounds realistic, and which one doesn’t.

So, at this point, my guess as to why we’re not seeing much advertising testing on Pajamas Media sites has more to do with lack of advertisers than ‘technical’ issues or what not. Given how much time Roger and Charles have spent fucking around with the journalism side of things, as well as the whole (abortive) portal project with Marc Danzinger, I can’t see that they’ve had the time to expend on acquiring much of a client list.

Reason the Third: Lack of Expertise

Roger Simon and Charles Johnson don’t know shit about advertising or the advertising industry. And I sincerely doubt that they’ve made a systematic and concerted effort to remedy that situation since elbowing me out of the picture. Not that I knew anything about either item myself. But the difference was that I launched myself into learning as much as I could about both. I had started to develop a series of contacts, both in the industry and in academia, which we could have used to educate ourselves about what we needed to do to convince the professionals that we had a good idea that we were capable of executing. In other words, we needed to learn enough about how advertising professionals approached their profession so as not to appear to be the Beverly Hillbillies when we walked in the door. I wonder if anyone with Pajamas Media has really done the sort of work necessary to avoid getting tagged as a Clampett by those who control the almighty advertising dollar.

Beyond that, there’s the matter of simple, basic expertise (if you want to call it that) in business itself. The documents Pajamas Media sent to those wishing to sign up were beyond dreadful. Their business plan, such that it was, would have been laughed at by any venture capitalist or businessman worth his salt. It was amateur hour. And that would be what you’d expect from two guys with absolutely no business experience who ditched two guys with professional training in business who had each started and developed their own (successful) businesses.

Lets put it this way: Lots of you have read The Westerville Chronicles, right? Well, if Roger runs Pajamas Media as well as I write fiction, do you think they’re going to make money? Is there any reason a professional writer with no meaningful business training or experience is going to do better at running a business than a professional businessman with no meaningful training or experience in writing fiction will do at attempting the next War and Peace?

Now reread a few Chronicles and tell me what I’ve just said doesn’t send a shiver up your spine.

All this means, at least to me, is that Pajamas Media doesn’t really have any sort of working document that actually lays out the strategy of the company in any sort of meaningful way. That means no time lines, no task lists, no structure and no accountability. I think it safe to say this assumption is bolstered by such things as the steady stream of missed deadlines, lack of meaningful communication, and the general sloppiness of the contracts tendered. Let’s face it; they announced Pajamas Media back on April 29th. Check your calendar for today’s date. Think about that for a second. It’s been half a year and nothing’s really happened. Could it be these guys are winging it? If there ain’t a strategy or a plan, how can there be any sort of truly organized, systematic effort to attract advertisers?

Based on what you’ve seen to date in terms of results (not hype), does it look like Pajamas Media is being run well?

Reason the Fourth: Lack of Interest

Bottom line? Roger L. Simon and Charles Johnson want to be media stars. And (pay attention, this is the important part), they want to use the profits from the advertising business to do it. The first time Roger mentioned the media idea I tried to get him to drop it. I wanted Tulip Advertising to make money. I wanted to grow it into something big. And I wanted to run it for a long time. As our efforts progressed, Roger became more and more focused on the idea of getting the company running and using it to either finance his journalistic activities or to make a quick buck via selling it. That was the problem I saw looming on the horizon (not realizing the real problem was looming behind my back). I see no reason to believe Roger’s focus has changed one iota since then. Given that, I don’t see the advertising business succeeding – primarily because I don’t see the level of real interest necessary to make it succeed. Oh sure, there are people out there who are so damn good that they can make businesses work without much effort, but that isn’t the issue. The issue is this: Are Roger and Charles two of those people?

There are other reasons to doubt, but I think I’ve supplied enough of them for one sitting, so we’ll leave it at that.

To those of you who are now under contract with Pajamas Media, all I can say is that if you have expectations, lower them, because I don’t think it is going to work. The idea was fine, and with some expertise (which isn’t there) and some dedication (which isn’t there), there was a good chance it could have made money for everyone. But as it stands, the people who are running this business are doing it for all of the wrong reasons and, I’ll warrant, in all the wrong ways. And it shows in Pajamas Media’s dearth of achievement to date.

So You Think I'm Classy, Eh?

Evidently a certain cross-section of the blogosphere has found my reaction to the demise of Pajamas Media's blogging network to be less than completely classy.

Well, tough shit. What the fuck were you expecting?

Anyway, I swore I wasn't going to say anything else about Pajamas Media, but then I actually read Da Raj's post on the matter (and, no, I ain't linking to that asshole):

I wrote a letter to the Pajamas Media network bloggers yesterday, some of whom took it a bit more personally than intended. We disbanded the ad network part of our business for a simple reason: it was losing money and we couldn’t see how in the reasonable future that would change.

Actually that part of our business has been losing money from the beginning, so the people getting their quarterly checks from PJM were getting a form of stipend from us in the hopes that advertisers would start to cotton to blogs and we could possibly make a profit. Didn’t happen. No wonder those people are kicking and screaming now that they are off the dole. I might too. [What's their beef? I thought most of them were free marketeer libertarians or something.-ed. Go figure.]

The Pajamas Media portal and the XpressBlogs will remain exactly as they are, but as many of you have noticed we are putting considerable effort into Pajamas TV. The theory behind this is that television is on the cusp of change and the Internet and the TV set will soon fuse. Apple TV already exists and several of the electronic companies have flat screen TVs in the pipeline with the Internet accessible at the click of a remote. Pajamas TV is trying to position itself for this in the long run. Will it work? Beats me. But if it doesn’t, we can always ask for a bailout. [I hope you're kidding.-ed. My lips are sealed.]

Did you catch that?

No wonder those people are kicking and screaming now that they are off the dole.

Off the "dole"?

Off the fucking "dole"?

That's Roger L. Simon's (public!) view of those who were, in effect, his employees? 

Question: If Pajamas Media "has been losing money from the beginning", who the fuck would be more on "the dole" than Roger L. Simon, C.E.O.?

Now you tell me about my lack of class. OK?

Yeah, I've Heard...

Well, there's Really Big News out of da House o' Raj today, and the emails, links and traffic be pourin' in to Peasant Manor to see if I've gone Postal yet.

Shame on all of you.

But since you're here, let me just ask a couple of questions of those of you who thought I was full of shit back in '05...

Who called it from DAY fucking ONE?

Who?

I did.

And who got it 100% fucking RIGHT?

Who?

I did.

Right?

Fuckin' A, Baby!

 

So, all you Fools, Wannabes and Groupies... what spent the second half of 2005 and the first half of 2006 slurpin' Roger L. Simon's dumb ass because you thought he was gonna take you to the Promised Land...

How'd that work out?

Eh?

 

Now... for those of you who thought I was full of shit back in '05:

How 'bout kissin' my fat white ass?

 

For those of you looking for thoughtful analysis:

Blah, blah, blah, blogging, yak, yak, yak, money...

Hope that suffices.

I did that shit years ago and am really, really, really not interested in doing it again. If you have to have it, click on "Mockery: Ragging on Raj" and "Money and the Blogosphere" and start reading. There is some wheat amongst the chaff; sorting through it is your problem, not mine.

Over and fucking out.

Clarification: I am not suggesting Ann Althouse slurped Roger L. Simon. Far from it. The fact of the matter is this: Ann publicly called Da Raj on his shit before I did. In double fact, she was the first blogger to call him on his shit, period. For that alone I hold her in very high esteem. Indeed, in my book only Ann, Moxie, Steve H. Graham, Tim Blair and Laurence Simon figured it out at the appropriate time. If memory serves, it was Andrew Breitbart, John Cole and some bimbo called The Anchoress that did most of the slurping. Hope they're having a nice day.

Over and fucking out.

This Week's Femnist "Feel The Love" Post...

What can you say to something like this bit of femnist love and respect?

I'll reproduce the post here so you can avoid the possibility that Feministing has installed some sort of diabolical internet castrating device: 

Fact: calling yourself a "liberal" or "democrat" doesn't make the shit coming out of your mouth any less sexist

So, calling people out on their prejudices (and other stupid shit they say) can be pretty awkward.  Uncomfortable to the point that, a lot of the time, I bite my tongue and conduct an angry debate in the confines of my own mind – so as not to be the nagging, “PC-obsessed” feminazi of the group (/my family).  I’ve been noticing a pattern, though, in the reactions I get when I do venture to call peeps out on the anti-feminist or just plain sexist shit spewing from their faces.

You see, the level of hostile defensiveness in said peeps’ reactions is directly proportional to the amount of pride they take in “being über liberal” (commonly measured in units of just how muchthey like Obama, or, similarly, just how manyblack friends they have).  Somehow, in their bluer-than-Massachusetts minds, the comment she just made about Hillary Clinton being “too ambitious,” or the fact that he just called some girl a “dirty skank, ” CANNOT and SHOULD NOT be misconstrued as “sexist” (air quotes!) because s/he…doesn’t…vote…Republican..?

It’s like, k, congratulations on discerning the fact that John Palin would have gotten us all killed (read: driven half the country to mass suicide).  But, I don’t see how you self-identifying as a “liberal” factors into, or altogether excuses, your 1950s-esque outlook on women politicians or girls who...have sex / enjoy sex / are fat / don’t subscribe to patriarchal norms / aren’t sexually interested in you / don’t want children / fuck other girls / used to be “boys” / dedicate themselves to their jobs / don’t get married / et fucking cetera.

Yeah, not seeing the connection…YOU AN ANTI-FEMINIST FOOL!

Now why would anyone adopt an attitude of hostile defensiveness with this particular femnist?

Has The Patriarchy no shame?

Note: Be sure to read the first two comments to the post. It was all in fun! Fun? Maggie must be a riot at parties.

Organic Aerosol Waffle Batter, Something's Wrong With The Beav, And The End Of The World As We Know It...

Here's a classic post from our second favorite dim-bulb femnist.

You know, after reading something like that, it's clear to me that femnist types are going to end the world as we know it... Kind of a Hope and Change thing that will crush The Patriarchy™ for all time. Either that, or the abuse of organic aerosol waffle batter will accelerate global warming and we men will all die before having the chance to be properly emasculated. 

It's enough to put me off my morning bowl of organic, free-range, non-aerosol, carbon-neutral and completely vegan Tofu Surprise.

Anyway, we've done some sleuthing and found evidence of additional aerosol abuse of Gaia by this particular femnist...

This time involving Silly String.

Somebody needs to call Al Gore's fat ass about this. Pronto.

Note: What's wrong with sitting on a shag rug watching pro rasslin', eh? You would rather we sit on a comfy chair (bought at IKEA) watching The Vagina Monologues? Double icky!!

This Week's Amanda Sentence: The "Feel The Love" Edition...

Leonard Pinth-Garnell here with another episode of Bad Femnist Blogging...

... Thus bringing you the finest of Amanda Marcotte's post-Bush Amanda-isms. Enjoy.

This Week's Grand Jury Prize For The Most Obvious Example That Obama's Attempts To Get All Of Us To Love And Respect Each Other Is Succeeding In Tapping That Vein Of True Progressive Love And Respect We've All Come To Love And Respect:

Even controversial moves like asking Rick Warren to pray at the inauguration were done in the sincere spirit of defanging the culture wars---a recognition that validation is what your average rabid wingnut wants more than anything, and that the anti-gay hysteria is an attempt on their parts to be self-reassuring.   (My inclination is to think it won’t work, because resentful right wingers are emotional vampires and no matter how many nods you give them, they will always feel insecure and want more. But hey, maybe I’m wrong.)

This Week's Grand Jury Prize For The Second Most Obvious Example That Obama's Attempts To Get All Of Us To Love And Respect Each Other Is Succeeding In Tapping That Vein Of True Progressive Love And Respect We've All Come To Love And Respect:

He tries his hardest to be open-minded and generous with the people he meets in Hagee’s church, especially since fundamentalism is practically designed to prey on the lost and the weak.  But of course, it’s hard because they’ll all buy any kind of hateful B.S. aimed at gays and liberals, and he gets plenty of occasions to encounter the line of cruelty that threads throughout the fundie subculture, no matter how much Christian love the profess.

Sentence #1:

I tend to think fundies are coming from a place of more personal frustration and fear, and conspiracy theorists are just people with major ego problems.

26 words. What about fundie conspiracy theorists?

This Week's Grand Jury Prize For The Third Most Obvious Example That Obama's Attempts To Get All Of Us To Love And Respect Each Other Is Succeeding In Tapping That Vein Of True Progressive Love And Respect We've All Come To Love And Respect:

Certainly it seems that a lot of 9/11 Truthers are people that have been slowly driven crazy by the political insanity that was the Bush administration, and instead of focusing on the realities that they don’t seem to be able to affect---torture, human rights abuses, the war itself---they get involved in concocting crazier and crazier theories about how the Bush administration actually caused 9/11.  Focusing on fantasies is just psychologically easier, I guess.  Same story with fundie Christians.  They live in communities strained by the ongoing economic problems, and they have problems doing things like holding marriages together or making friends, and the real causes of their problems are complex and hard to tackle, so instead they get sucked into a fantasy of the end of days and hope to just pray all their problems away. 

This Week's Grand Jury Prize For The Fourth Most Obvious Example That Obama's Attempts To Get All Of Us To Love And Respect Each Other Is Succeeding In Tapping That Vein Of True Progressive Love And Respect We've All Come To Love And Respect:

I think it’s absolutely true that culture war issues are meat thrown to wingnuts to get them into a frenzy of envy and hatred for the liberals with all the sex we’re having in between interesting parties with good food and conversation.  And of course it’s small and petty for right wingers to be willing to throw their votes away worrying about what kind of sex some strangers are having.

This Week's Grand Jury Prize For The Most Muddled Analysis Of The Week:

Reproductive rights don’t cause any damage, except to the feelings of sexists who need to get a life.  But not having them can be utterly life-ruining in the same way that losing your job can be---thus, in my mind, they are both important issues, and as long as jobs and reproductive rights are threatened, it’s an issue.

This Week's Grand Jury Prize For The Fifth Most Obvious Example That Obama's Attempts To Get All Of Us To Love And Respect Each Other Is Succeeding In Tapping That Vein Of True Progressive Love And Respect We've All Come To Love And Respect:

Plus, I can’t think of a bigger culture war issue than global warming.  And Taibbi gets a taste of this when he’s subjected to a Cornerstone minister berating congregants to avoid caring about global warming, because environmentalism is apparently a sin.  This is definitely one of those lopsided issues, where the workaday right winger is primarily motivated by his loathing for effete liberals who do girly things like care about the planet and the human race’s ability to survive, but liberals are in this because we can’t afford to lose this one. Facing down a roomful of mouth-breathing morons gabbing about how Al Gore invented global warming, Taibbi had a really hard time not blowing his cover.  Now, I thought, you know how it feels to have your basic rights to family life or bodily autonomy assaulted for the same self-serving reasons, faux populist reasons.

This Week's Grand Jury Prize For The Sixth Most Obvious Example That Obama's Attempts To Get All Of Us To Love And Respect Each Other Is Succeeding In Tapping That Vein Of True Progressive Love And Respect We've All Come To Love And Respect:

And our worst fears about the worst elements of our society have been backed up by the piles of threats that Obama has received.  This isn’t going to get better, but worse, I suspect, because on top of the crazy white supremacist stuff, you’re going to see the development of a cottage industry dedicated to spinning conspiracy theories to “prove” what most wingnuts are eager to believe, which is that Obama is not a legitimate President.

This Week's Grand Jury Prize For The Seventh Most Obvious Example That Obama's Attempts To Get All Of Us To Love And Respect Each Other Is Succeeding In Tapping That Vein Of True Progressive Love And Respect We've All Come To Love And Respect:

I don’t think the wingnuts who started this story were consciously up to anything more but floating a blatant lie in order to slander Obama and imply that he thinks he’s some big deal.  But I do think there was a subconscious element of begrudging him and the people who voted for him Obama’s popularity and openness, because the preferred President of wingnuts is a loathed figure who really does think he’s too good to show respect for the trappings of democracy.

Sentence #2:

Obama gets Beyonce to sing for him, and lucky Bush got Ben Stein to crack unfunny jokes.

17 words. Boy, that puts it all into perspective, doesn't it?

Sentence #3:

Agnostics, non-religious and openly anti-religious people, too. 

Fewer words than necessary. Remember: Proofreading is the enemy.

Sentence #4:

Hey, I can’t be the only person who had a “holy shit” moment when Obama recognized non-believers in his inaugural speech.

22 words. Why would non-believers say "holy shit" in the first place?

Sentence #5:

Nor can I be the only one bracing myself for the wingnut outrage, since there’s so much effort dedicated to vilifying atheists as the ultimate cancer eating away at our supposedly secular nation.

33 words. Actually, we're sitting around wondering if anyone will villify Amanda Marcotte to the extent Amanda Marcotte villifies believers... and especially Catholic believers.

Sentence #6:

Perhaps even the most hardened wingnuts will realize that Obama included non-believers in the spirit of inclusiveness he’s been trying to foster in his speeches for awhile now.

29 words. We're taking bets that the "hardened wingnuts" will grasp the whole inclusiveness thingy in less time that Amanda did when the issue was Rick Warren giving the invocation.

Sentence #7:

Acknowledging atheists as equal citizens to the faithful has a ton of policy implications, ranging from small things like the Pledge to bigger issues, like the right to use birth control and abortion.

33 words. Atheism = Pro- birth control and abortion? Who knew?

This Week's Grand Jury Prize For Irony-Proof Projection:

Far be it for me to say, but I think a lot of wingnuts are mildly relieved that Obama is going to be President.  The whole point of being a wingnut is nursing grievances, and it’s much harder to pull that off when your people are in power.  But now that the evil liberal agenda with all their reading and weekend mornings spent naked in bed doing pleasurable things is back in power, it’s time to start screeching with resentment again.

Who nurses grievances more than the Pandagonians? Amanda Marcotte nurses femnist grievances, Pam Spaulding nurses lesbian grievances and Jesse Taylor nurses "Gee, I'm better than Oliver Willis but nobody cares" grievances. And they do it on an hourly basis...

This Week's Grand Jury Prize For The Most Cogent Explanation Of Why Amanda And Her Friends Are Really Cool And You're Just An Uptight, Anal-Retentive, Sex-Starved, Envious, Furrow-Browed, Mouth-Breathing, First-Cousin-Marrying Retard Who Watches Reruns Of "Mork And Mindy" On Channel 57 Instead Of Going To All The Really Neat Parties Thrown By Other Really Cool People:

Artists really make perfect right wing villains, don’t they?  In the popular imagination, artists are enviable people, even if they’re not well off.  They have fashion sense and interesting friends, and they spend their time drinking coffee or wine and having meaningful conversations.  They’re creatively fulfilled and presumable sexually fulfilled, because being an artist really gets you a lot of that kind of attention. They don’t just visit New York City or San Francisco; they live there. They don’t have to lean on cheap racism to make funny jokes, and their music collections are genuinely interesting.  They engage the world on a deeper, more meaningful level.  Even people who would sooner die than eat dinner sitting on the floor with lighting provided by a candle shoved in a wine bottle must have pangs of envy imagining the bohemian lifestyle after a day of work under fluorescent lights followed by a fast food dinner and entertainment provided by second rate sitcoms.  The tension between squares and bohemians has been a popular theme for more than a century now, and shows no signs of dying.  And it’s a tension that makes the sworn squares feel like, well, squares, and thus like dishing out the hate.

Well, that was really, really bad, now wasn't it? Choose your favorite brainfart and leave your vote in the comments sections. All votes will be carefully tabulated by Richard Murphy.

This week's winner will receive, free of charge, one genuine Amanda Marcotte...

 

... "It's A Jungle Out There" racially insensitive lithograph that is suitable for framing.

 

"Mmm... stereotypes..."

Disreputable Me...

Sorry for the unannounced disappearance, but a week ago Monday I contracted the mother of all flu bugs, which morphed into the mother of all head colds, which morphed into the mother of all killer sinus infections. I haven't had anything remotely like this since I quit smoking back in 1998.

Anyway...

In my absence Richard "Our Dickie" Murphy was alerted by one of his dim-bulb readers that I, Kenton E. Kelly, CPA, was a complete fraud, and that my sophisticated yet soothingly syncopated moniker was not my real name but yet another devious nom de guerre utilized by the anonymous yet offensive fellow blogging as Dennis the Peasant. As usual, neither Dickie nor his readers can handle a fact without mangling it. As you can imagine, Our Dickie was not amused in the least by my commenting under my real name... It seems that in his world, I'm bringing my profession into disrepute by leaving straightforward, nonabusive questions and comments under my own Christian name at other people's (i.e., his) web sites.

The man is dumber than a box of dead crabs.

In any event, Murphy never did get around to actually providing documentation supporting his contention the entirety of 4 years worth of profits earned by the S&P 500 "weren't real", although he did address a meandering and for the most part off-topic post to yours truly entitled "What is profit?". Evidently that was supposed to tide me over. It didn't.

What is of interest to me in this whole episode - beyond confirming that in any battle of wits Richard Murphy will enter the fray virtually unarmed - is just how bad the journalism was in the original New York Times article that Our Dickie quoted. Here's the link to said article.

The first thing I would ask you to note would be the title of the article:

Easy Loans Financed Dividends

That's a pretty straightforward, declarative statement, right? You'd assume - or at least I'd assume - that if some reporter from the New York Times was writing an article with such a title, there would be some evidence of businesses actually borrowing money to pay dividends, right?

Wrong.

Look at this statement from the article:

From the fourth quarter of 2004 through the third quarter of 2008, the companies in the S.&P. 500 - generally the largest companies in the country - reported net earnings of $2.4 trillion. They paid $900 billion in dividends, but they also repurchased $1.7 trillion in shares.

Notice anything? Like the rather minor fact that if you subtract $900 billion in dividends from $2.4 trillion in net profits you end up with a residual net profit of $1.5 trillion? Based on the numbers supplied, it would seem there would be no need to borrow money to pay dividends, right?

Wrong again.

It least you're wrong if you buy into the argument of New York Times journalist Floyd Norris. According to Mr. Norris (and absolutely nobody else), open market share repurchases by companies are a form of shareholder dividend. Why?

Who knows.

When one gets over the hurdle of accepting Norris' rather novel construct, one can then subtract the $1.7 trillion in share repurchases from the residual $1.5 in net profits and voila! - Wall Street has financed dividend payments to customers by borrowing cheap money printed by The Bush Administration. (The bastards.) However, it should be noted that there's a tiny problem with Mr. Norris' analysis, such that it is.

It's wrong.

And meaningless. Other than that, though, it seems to reach the level of journalistic competence one associates with the New York Times. The first problem I noticed is obvious: Mr. Norris has assumed that the S&P 500 companies repurchasing shares did so with borrowed money. Why?

Who knows.

Norris provides no statistics regarding cash positions or debt levels from either the fourth quarter of 2004 or the third quarter of 2008 to support his contention. Evidently it never occurred to Norris that companies could have had on hand (or generated) the $200 billion in cash that was in excess of anticipated needs. In his primitive world, net profits and cash flow move in lockstep (which they most certainly don't in the real world).

Had Mr. Norris a bit of learning, he'd know that when a company finds itself with a pile of cash on hand that exceeds the company's operational needs, the company has a number of perfectly valid options for using that excess cash. Several of those options are as follows:

• investment in new business lines
• a one-time dividend to existing shareholders
• repurchase of shares on the open market
• debt reduction
• investment in existing business lines

Obviously, the decision amongst options is dictated by the individual company's circumstance. And once again, had Mr. Norris a bit of learning, he'd know that when a company repurchases shares on the open market, it can have several reasons for doing so. First, and most obvious, is to attempt to boost share price by reducing the number of shares available. However, there is a second, and we'll mention it here because it demonstrates just how far off base Mr. Norris could be...

Let's say Peasant Enterprises is an S&P 500 company selling chrome balls and plastic pink flamingos in the lawn ornament industry. Peasant Enterprises has 100,000 shares of common outstanding, which is presently selling for $50/share. The common has a yearly dividend of $5/share, and therefore yields 10%. This means Peasant Enterprises pays out $500,000/year in cash as dividends.

Now let's assume that the President of Peasant Enterprises, Mr. Dennis T. Peasant, is a greedy capitalist bastard who votes Republican and drives an SUV. He'd rather pay himself a larger salary for his hard work in looting and pillaging than pay shareholders $500,000 per year so they can retire in poverty at age 65. So what does Mr. Peasant do? If he lowers the dividend, chances are the stock price takes a dive, which will in all probability will get shareholders and analysts all cranky. No, that won't do at all...

Well, how about this: Mr. Peasant goes to the bank and borrows $200,000 @ 6.5%. He has just incurred an annual interest expense of $13,000. However, if he repurchases $200,000 of Peasant Enterprises common stock, he will save himself $20,000 in dividend payments (4,000 shares x $5/share) per year. And if Peasant Enterprises' marginal tax rate is 30%, the company will save itself $3,900 in taxes. All told, borrowing the $200,000 could increase Peasant Enterprises' cash flow to the tune of $10,900 per year ($20,000 - ($13,0000-($13,000 x .3))).

So you see, you could actually increase your company's cash flow while at the same time lowering net profit and increasing debt. Is it the wrong or right thing to do? That's entirely dependent on the facts and circumstances surrounding that particular company. Which is why Mr. Floyd Norris of the New York Times is so completely off base in his assertion. Then again, it seems clear from the tone of his article that he isn't so much interested in providing fact-based analysis as he is providing his readers a quick and easy villain to a economic situation that is well beyond their (and his) comprehension. For Norris, it's less taxing and more rewarding to nudge his readers and remind them that it's all about Greedy Capitalists. That, of course, is what attracted Richard Murphy's attention in the first place.

Fools And Cranks...

As many of my regular readers have noticed, in the past several weeks I've picked up a new dimwit to pick on: Richard "Our Dickie" Murphy. Murphy is a Chartered Accountant out of the United Kingdom, and quite alarmingly, he seems to have a certain cachet amongst Lefty/Progressive Euroweenies in matters having to do with accounting, finance and economics.

The reason I find his status alarming is simple: He's a fool and a crank.

The reason I say this is equally simple: Facts never trouble a fool or a crank. And the bottom line is Richard Murphy does not care a whit about facts. He has a dauntingly simplistic worldview that is based on a couple of pet notions, and his interest lies in nothing more than snatching whatever factoids he might come across that seem (and I emphasize the word seem here) to confirm those pet notions.

The fact that he's your basic garden variety anti-capitalist, anti-free market statist doesn't offend me. What offends about Richard Murphy is (a) his ignorance about a remarkable number of different aspects his profession, and (b) his hypocritical indifference to fact.

It further offends me that he is the British equivalent of a Certified Public Accountant, which means there are folks out there who could end up making the assumption that all Chartered Accountants and C.P.A.s are as sloppy and stupid as Richard is.

The first thing to remember here is that Richard Murphy spends a great deal of time claiming that the real problem with audits and auditors is that they don't "look behind"(i.e., audit beyond what is required by Generally  Accepted Auditing Standards) the valuations required by Generally Accepted Accounting Standards and establish a "true and fair" valuation based upon some sort of cosmic measure of worth.

It a standard he holds everyone but himself to. 

Here's Murphy's post:

Modern finance: making dividends out of loans

The N[ew] Y[ork] T[imes] reports:

From the fourth quarter of 2004 through the third quarter of 2008, the companies in the S.& P. 500 - generally the largest companies in the country - reported net earnings of $2.4 trillion. They paid $900 billion in dividends, but they also repurchased $1.7 trillion in shares.

We know the profits weren’t real. [My emphasis - DtP] Much of it was simple mark to market revaluation. [My emphasis - DtP] In which the dividends and share repurchases were paid for out of borrowing. [My emphasis - DtP]

No wonder leverage has shot through the roof. And now companies will fail as a result.

I know this is the US and they use different rules, but the IASB has a lot to answer for in releasing this madness on the rest of the world.

Those are three genuinely amazing generalizations. Here's the question I posted at his site:

Richard-

You say we know these $2.4 in earnings “weren’t real”.

Really?

Would you have anything in the way of documentation to support your assertion? Like, perhaps, a detailed analysis of that $2.4 trillion in earnings?

Just leave a link, if you please.

Thanks

Here's his response:

Kenton

Try this:

“A big part of the problem is that accounting rules have allowed banks to inflate the value of their assets, he said.

“Accounting has become a new exercise in creative fiction,” with the result that banks are carrying a lot of “sludge” assets clogging up the balance sheet, hindering their ability to fuel economic growth, he said.”

That’s Lazard Ltd (LAZ.N) Chief Executive Bruce Wasserstein

http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE49T77O20081030

Why are you in denial when the rest of us aren’t?

Is it all hunky dory in your world?

Richard

And my reply was:

Dennis-

Why, in this context, would you ask me if all is hunky dory in my world? What a strange response to a straightforward question.

What I am trying to do is verify that your claim has is based in fact. That’s all.

Given that the financial sector represents 20% of the S&P 500, what you are claiming is the following:

1) All $2.4 trillion in profits are directly attributable to the financial sector of the S&P 500.
2) The remaining 80% of the S&P 500 had profits and losses netting to $0.
3) All of the $2.4 trillion in profits were a result of market-to-market gains.
4) The financial sector had, on a net basis, $0 in operating profit.

In other words, you’re claiming that 100% of the S&P 500’s profits for October 1, 2004 through September 30, 2008 were the result of mark-to-market accounting for marketable securities.

Those are extraordinary claims, which is exactly why I asked you to provide meaningful substantiation. I find it interesting that what you provide is:

1) An opinion expressed by a Wall Street executive, and
2) An accusation that I am “in denial”.

You know, you often go on at great length about the duty of an auditor being an obligation to “look behind” the numbers to get to the “true and fair” value of an asset.

What I am doing is much the same. I am attempting to look behind your claim (to the actual numbers - not Wall Street opinions) to get the true and fair value of its merit.

That has nothing to do with denial. Or the level of hunky dory in my world. What is has everything to do is with having a appropriate level of professional scepticism for sweeping generalizations and extraordinary claims.

Again, I request that you provide appropriate substantiation.

This is where we stand at the moment. Once again I have not linked to Murphy's post because he seems to still be unaware that Kenton E. Kelly, CPA and Dennis The Peasant are one in the same. For my purposes I would prefer to keep it that way for the time being.

I find it interesting to see the sort of replies I am getting as a named member of his profession... You'd think (or at least I'd think) he would understand that as a C.P.A. I'd be harder to bluff than the average bear, but evidently that is not the case.

To the extent that Murphy continues to oblige, I'll continue to report here.

Update: Well, it's been roughly 24 hours and Our Dickie still hasn't found the time to provide us the information we requested. He has, however, found the time to put up a few new posts. Guess he was talking out his ass. Imagine that.

Yet Another Last Week's This Week's Amanda Sentence...

Leonard Pinth-Garnell here with yet another episode of Bad Femnist Blogging. This week's episode highlights the efforts of the finest practictioner of Bad Femnist Blogging known to Mankind. And Womynkind.

Let's have at it then...

Sentence #1:

The last thing your average comic book geek needs---and I say this with full love, a comic book on my lap, and piles of them around my house---is to dig way past the adorable geeky stage into the scary misogynist Republican geek stage, from someone who maybe strikes out on occasion to someone who radiates so much loathing and self-loathing that potential sex partners flinch and run away.

71 words. Isn't a law or something that all pretentious twits under the age of 35 must refer to comic books as "graphic novels"? So what gives? Beyond that, I had no idea that comic book reading could lead to Republicanism. Should there be a warning label or something?

Sentence #2:

I’m amused at the ever-growing list of media outlets that are not news outlets yet have, according to hysterical wingnuts, an obligation to either lean right (which is “fair") or, if they can’t lean right, they have an obligation to pretend that their creators have all been struck so stupid that they can’t tell one candidate or side of an issue from another on a dare (which is “balanced").

70 words. We've all had a good laugh over that one, haven't we?

Sentence #3:

The act is a way to get around the Supreme Court’s use of a really strained technicality to invalidate discrimination claims filed by women who discover they’ve been getting paid less due to the irrelevant to job performance innie/outie status of their genitals.

44 words. Amanda passed on law school to become a femnist writer. She raised the I.Q.s of both professions in doing so.

This Week's Special Grand Jury Prize for Unintentional Irony:

If all this seems very unfair, consider that right wingers have to be handicapped because they fall so far behind in the logic, reality, and compassion departments.  Honestly, letting liberals talk at all when they have such a huge advantage when it comes to basic reason seems deeply unfair.

So true. From Day One I was struck by the size of Amanda's huge advantage...

Sentence #4:

Even though the hard right sees Terri Schiavo as the perfect woman, as if she was an overgrown fetus with her inability to speak or think, in reality she was, before her heart attack, exactly the sort of human being the hard right doesn’t think has a right to really live---a thinking, breathing, feeling woman.

61 words. One of the things that has always impressed me about Femnists is how compassionate and nonjudgemental they are.

Sentence #5:

It’s a real shame that she’ll be remembered as a vegetable because of their hard work, and not so much as a woman with a real personality and life.  Makes me shudder to think they’d do to the rest of us, if they had a shot.

46 words. I wouldn't worry too much if I were you, Amanda. The transition from Amanda to vegetable would most likely be missed by just about everyone, including yourself.

Sentence #6:

It’s really unwise to remind the public time and time again that, for the right wing base, sticking your nose in other people’s business for no other reason than to make their lives as bleak and miserable as possible is priority number one.

43 words. Amanda, if you didn't stick your nose into other people's business in order to make their lives as bleak and miserable as possible, you wouldn't be a Femnist. Or a Progressive, for that matter.

Sentence #7:

One thing that’s interesting about the choice is I think it highlights a relevant issue for the thinking liberal, namely the difference between the free market and capitalism (which are erroneously conflated in our culture).

35 words. Amanda then goes on to erroneously conflate them (see several of the Grand Jury Prizes below). Markets are markets. They are a method and system of exchange. Capitalism is a type of asset ownership. As is Socialism. As is Communism. Oy.

This Week's Special Grand Jury Prize for 'Mandanomics Made Easy:

On the first part, it’s a real shame to me that people think that capitalism is the same thing as a free market, which perversely means that a large percentage of Americans, probably the majority at this point, would think that a monopoly is acceptable in a free market.  In truth, the free market ideal is one where anyone is free to enter into the market and compete, and the natural tendency of corporations to stake out a monopoly is actively resisted by the government for the good of the consumer. 

Actually, there is absolutely no indication that a large percentage of Americans would think a monopoly would be acceptable per se. Certainly allowing monopolies in sectors of the economy were it has been deemed (as a matter of public policy) harmful to the general good has been a governmental no-no for about one hundred years now. And it should be noted that there is no "natural tendency" for corporations to stake out a monopolistic position in all markets. Monopolies can only exist in certain types of markets. Markets were companies have few barriers to entry and/or products that are fungible will never yield a monopoly, and the competitors within that market understand that full well. Other than those two points, Amanda's dead on.

Sentence #8:

Because they were working in a free market and not in the ideal capitalist situation (where they have a monopoly), they had to cater to consumer demand.

27 words. Here we have an example of the American public erroneously conflating free markets and capitalism. Someone call Amanda, please.

Sentence #9:

People don’t love Ann Coulter because she wants to steal their Social Security and spend it on martinis; they love that she’s a meanie who makes their penises feel bigger.

30 words. Oh boy, spankings!! My penis feels larger already!

This Week's Special Grand Jury Prize for Managing to Make Naomi Klein Look Smart:

Capitalism is a system where you try to give the least amount of service for the most amount of money in order to maximize profit.  A free market controls that, by making sure that the providers have to compete with each other for your money.

You have to kind of wonder why Paul Krugman couldn't write that. After all, the S.O.B. has a Pulitzer.

This Week's Grand Jury Prize for Silver Tonguedness:

April is a pretentious twit, but her problems don’t stem from childhood trauma.  Her problems are more immediate, the first one being that she’s dedicated her entire life to a man that she finally realizes sucks donkey balls. 

I'm tempted wonder about the sort of psychological wellsprings that present Amanda with this sort of imagery, and I tempted to wonder about the sort of intellection processes that allow Amanda to actually think sharing such imagery will enhance her reputation, but temptation always ends when I consider that somehow, someday, I may actually be presented with the answers...

Sentence #10:

Plus, she does that irritating thing where she pretends she’s being brave for getting her “feminist card” revoked, when in reality it’s braver to wear the feminist card proudly and face up to the insecurity and anger that generates in many people, men and women both.

46 words. When folks cross the street to avoid you, Amanda, it isn't because you make them angry or insecure. Trust me on that one.

This Week's Grand Jury Prize for the Finest Ann Landers on Coke Analysis of Intergender Interpersonal Relationships:

Still, the advice feels right on a certain level, and I propose it’s not because women are desperate or men are emotionally retarded.  It’s for a basic, simple reason, which is that men have more social power than women.  When it comes to romantic relationships, there’s a certain belief that men should take more risks and more responsibility if they’re sincere and caring about a woman they’re with, because men have more power.  And this is a clear-cut situation of how this works.  A woman who says, “I love you,” first and gets rebuffed is running a major risk---in some social circles, up to 100%---of being labeled as a crazy bitch.  Desperate.  Grabby for the ring.  Shallow, possibly a gold digger.  A man doesn’t run much risk of being labeled these things if rebuffed unless it’s a really weird situation, like he said it in the first week or something.  Most of the time, getting rebuffed after a certain time investment in a woman will result in sympathy for the man---what’s wrong with her, when he’s such a good guy?  Women are so picky, and they’re masochists, too, who go for jerks instead of nice guys who say they love you. 

This Week's Grand Jury Prize for the Finest Ann Landers on Meth Analysis of Intergender Interpersonal Relationships:

 To make it even more unfair, because the risk is so much greater for women, most of us will refrain from making such a dramatic move as saying “I love you” first out of self-preservation.  (And that’s self-preservation, not even necessarily relationship-preservation.  There is a difference, though you wouldn’t know it from reading most dating advice aimed at women.) Thus, if you’re a man and you’re eager to say it, you can take into consideration the chance that she’s eager, too, but knows that she better wait for you to go first for dignity-based reasons.  Of course, you don’t know for sure if you’ll be rebuffed, but if you know that the vast majority of women will sit on it until you speak first, you can read body language and figure out the chances that she’s eager. 

This Week's Grand Jury Prize for the Finest Ann Landers on Crack Analysis of Intergender Interpersonal Relationships:

It’s a perverse way that the patriarchy perpetuates itself in romantic relationships.  Men have more power, and so it’s only fair to make them take more responsibility, right?  They run a lower risk when they ask someone out, make a move, say “I love you”, suggest moving in, or propose marriage.  But by letting men take charge, we reinscribe their power, and deprive women of their right to go with their feelings, too.  I very frequently see people (mostly men, interestingly) suggest that the only way for this cycle to be broken is by women taking initiative and putting themselves out there more, knowing full well that all blows they take are twice as heavy.  And there’s no guarantee that this method will actually reduce male power over women.  It might just be running a lot of risks, taking a lot of blows to your reputation, and not getting the payoff of more equality anyway. 

This Week's Grand Jury Prize for the Finest Ann Landers on Coke, Meth and Crack All At The Same Time Solution To The Whole Who Says "I Love You First?" Thingy Currently Plaguing Intergender Interpersonal  Relationships:

On this subject, I figure it’s ideal if you kind of both say it at once so quickly you can’t remember who said it first.  But I’ll be damned if I know how to make it happen that way.  Memory is faulty, and so my memories of it working out just so are faulty as well.  Part of it is holding off until you’re really sure that the other person will reciprocate and immediately, I’m sure.

Isn't it wonderful that Punkass Marc is keeping Amanda out of circulation? And by wonderful, I mean really, really, really wonderful?

Well, all-in-all that was quite horrid, now wasn't it?

As always, be sure to vote for your favorite. This week's winning voter will win one genuine Pandagon Feminst Sex Toy of Death that has been personally signed by Jessica Valenti of Feministing!

Let's Talk Stimulation...

Well, we're starting to get some of the specifics of President-elect Obama's plan for stimulating us back into the '90s, and given that it has already upset Paul Krugman, I suspect parts of it actually make some sense. What I'm interested in is the two initiatives making up the bulk of Obama's proposed tax cuts. The first is the $3,000 tax credit to companies for every job created. The second is the liberalization of tax-loss carrybacks.

The $3,000 Tax Credit For Jobs Created

Critics are already pointing out that this sort of scheme will be difficult and expensive to administer as well as vulnerable to fraud and abuse. It is difficult to argue with that. What I haven't seen anyone mention that a $3,000 tax credit simply isn't enough of a credit to provide a real incentive for companies to seriously consider hiring new employees. Think of it this way:

The Peasant Accounting Corporation, a C corporation based in Ohio, is considering whether to create a new position for a CPA. Here are the fixed costs associated with the potential hire:

Salary:  $50,000

Employer portion of the Social Security payroll tax (FICA):  $3,100  ($50,000 x 6.2% of first $90,000 of wages)

Employer portion of the Medicare payroll tax (FICA):  $725  ($50,000 x 1.45% of all wages)

Federal Unemployment Tax (FUTA):  $56  ($7,000 x 0.8% if covered by state unemployment, applies to first $7,000 of wages)

State Unemployment Tax:  $180  ($9,000 x 2% of first $9,000 of wages... Note the rate starts at 5.8% and lowers on a yearly basis based on company experience. I used 2% largely because I'm drinking a glass of 2% milk at the moment.)

State Disability Insurance (Worker's Compensation): $1,250  ($50,000 x 2.5%... For an accountant working both in-office and outside at clients. If your running construction company in Ohio, your bill is 25% of wages, if you do landscaping, you pay 22%, roofing is 36% and if you trim trees using a bucket truck, you pay 60%. As you can see, SDI is a huge variable, and tends to be high for many blue-collar jobs.)

Basic Health Insurance: Say my candidates are all married with a wife and two kids and no pre-existing medical conditions. I've seen rates run from $200 to $600 per month. Add a pre-existing condition and I've seen it as high as $950 per month. For the sake of argument, we'll go low end:

$3,600  ($300 x 12 months, employer pays 100%)

Total cost of adding a new employee (ignoring office space, telephone, travel, supplies, etc.) works out to be...

$58,911

Update... Oops! Sharp-as-a-tack reader Jeffrey W. pointed out that I had the whole break-even thingy completely wrong. The tax credit actually doesn't change the break-even point for PAC. It remains $58,911. What the tax credit does is shield income over and above the break-even point. For example:

PAC's marginal tax rate is, say 25%. The amount of income shielded by the credit is $12,000. The tax savings are $3,000 if PAC's new accountant can generate $70,911 in revenue. The primary problem is this; the tax credit won't motivate an employer who doesn't think a new employee will generate at least $58,911.

(Sorry about that. It's what happens when I try to write posts about taxes after spending 10 hours working on corporate income tax estimates and payroll tax returns.)

In any event, I still am not a fan of this particular tax credit scheme. It would be very difficult and expensive to administer properly, to put it mildly. If you're intent on blowing money to stimulate, in this case just forget this tax credit and let Dick Durbin build that $18 billion "green" coal plant in Illinois he's all warmed up about (so to speak).

The Liberalization of Tax-Loss Carrybacks

Professional journalism being what it is today, I have yet to see a discussion in the mainstream media about this issue where the journalist(s) in question actually understood what they were talking about.

Yeah, I'm shocked too.

Anyway, here's the deal. Under tax law, the Peasant Accounting Corporation can, when appropriate, utilize tax-loss carrybacks and carryforwards to minimize their taxes over a period of years. Presently companies are allowed to carry back losses two years and carry them forward 20 years. The Obama plan would increase the carryback period from two to five years.

Here's how tax-loss carrybacks and carryforwards work:

In the years 2003 through 2007 the Peasant Accounting Corporation had taxable income of $100,00 per year. In 2008, due to the economy and whatnot, PAC managed to lose $325,000. Under present tax law, PAC would then file amended returns (Form 1120X, or in certain cases, a Form 1139) for 2006 and 2007. The amended returns for each year would use $100,000 of 2008's loss (for a total of $200,000). Then the IRS would send PAC checks for 2006 and 2007 refunding all federal income taxes paid. The remaining $125,000 of 2008's loss are then set aside for use against future profits (hence the term carryforward).

Under the Obama plan, because the carryback period has increased from two to five years, PAC can then amend tax returns for 2005 (applying $100,000 of the 2008 loss) and 2004 (applying the last $25,000 of 2008's loss). PAC receives a couple more checks from Uncle, and doesn't have to wait for profits in future years to qualify for an additional tax refund.

The bottom line is this: Increasing the tax carryback period from two to five years generates a timing difference... Companies don't get more taxes refunded per se, what they get is more of the tax refund now, as opposed to in a year (or more) from now.

Personally, I like this proposal. It will be easy and cheap to administer, will be difficult to defraud or abuse, and could provide meaningful and immediate help in the area of cash flow.

So in my book, Obama's batting about .500 right now. Of course, whether either provision makes into law is anyone's guess.