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Monday, February 18, 2008

 

Musings on Jolly Roger

My main thought on Roger Clemens and steroids is, it couldn't happen to a nicer guy. He was always a hump, always hitting and intimidating hitters, beaning Piazza, throwing a broken bat at him (without provocation) etc. Should he be in the Hall of Fame? The interesting thing is he had Hall credentials before he took his first steroid. The steroids simply extended his career. Same for Barry Bonds, by the way. This is in contrast to Mark McGuire who never had Hall credentials until he broke the home run record on steroids. So I would vote for Barry and Roger, but not Mark. Harder ones are Rafael Palmeiro (Hall career numbers, but who knows when he started on 'roids?), I-Rod and Sammy Sosa.

Steroids are a major problem in organized sports, because their use puts pressure on other competitors to take them to keep up, and their long term use is undoubtedly harmful. Athletes do all kinds of things to maximize performance, most of which are healthy and therefore encouraged. But when most experts believe Bonds turned to steroids to keep up with McGuire and Sosa, then you understand the importance of banning them from baseball. Bonds' conversion to a steroidal freak was so tragic because before he ever took one, he was already the best player in the game.

Baseball's failure to deal with this issue on its own will now have even more unfortunate consequences, since it appears that Bonds has possibly perjured himself in court and there is little doubt that Roger did last week before a Congressional Committee. This takes their transgressions beyond baseball's jurisdiction and into the criminal courts.

By the way, do these Congressional hearings constitute a reasonable use of our representatives' time and staff expense? Of course they love the publicity. But somone's priorities are screwed up if our lawmakers believe that they are really protecting the public in this case. What's next, an investigation of professional wrestling? As I said above, baseball should and could have handled this by itself, and might have if the Commissioner wasn't a team owner and a putzhead.

Of course, football is even worse, and a lost cause. Does anyone really believe it's natural for a league to be chock full of offensive linemen who weight 340 pounds and run the forty in 4.8? As the famous Nick Nolte line from North Dallas Forty went, better living through chemistry.

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If there was ever an endorsement that meant nothing in an election, it has to be the one for McCain by President Bush. I'm trying to determine whether Bush 41's endorsement meant a little more.

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Meanwhile we have Hillary promising to let the capital gains tax cut expire with the rest of the Bush cuts, presumably going back to the 20% rate (the result of a reduction) that she and Bill installed during their 1990's co-Presidency. Mr. Obama's prescription is somewhat more draconian, proposing a 28% rate. At that rate, my investment formula will change, since for me, when you include NY State's 7%tax (which extends to capital gains), it will cost 35% to take a profit and that's too much. That means less trading, a larger cash position, and selling from the IRA only, pretty much. When will the Dems get it through their heads that changes in tax rates cause changes in taxpayer behavior? I can guarantee my capital gains taxes will go down when rates go up, just as they have gone up as rates have come down. What will happen is that smart investors will start selling immediately after a Democratic victory in 2008, to book their gains while the rate is still 15%. They will save their losing positions for after the rates go up. This will mean that capital gains tax collections in 2009 will balloon (as people file 2008 taxes), continuing into the year the tax increase becomes effective, at which point they will immediately dry up.

This is the opposite effect from what we get when we cut income tax rates on a delayed basis, as people postpone income until the tax cut takes effect. So tax revenues slump at first, but balloon in the year after the cut is effective. This happened with both the Reagan and Bush tax cuts, and has happened every time we have had a capital gains cut.

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