Month: July 2022

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Travels with George: 1968 to 1972 (Part II)

George Noga

Playing golf in Portugal was much cheaper and easier than in New York.

Travels with George: 1968 to 1972 (Part II)

By: George Noga – July 31, 2022

During these dog days of summer, I am taking a break from defending liberty and skewering government. I worked at a major airline in New York City from 1968 to 1972 and had a pass good for free first-class travel on any airline anywhere in the world. This is the second part of my misadventures; if you missed the first part last week (Israel, Athens, Marrakesh, Hong Kong, Macau, Djakarta), it is on our website.

East Africa: I went on a photo safari in Kenya, Uganda and Tanzania. Seeing my first lion in the wild was exciting; seeing the 100th lion, less so. Unfortunately, my visit coincided with Idi Amin expelling the Indians from Uganda. I planned to go from Nairobi to Bombay, but the airport was jammed with thousands of Indians trying to get on flights to India; more thousands were camped around the airport. Just getting inside the airport was daunting. I was lucky it took me only two days to get on a flight.

India: My bad luck continued; I arrived in Bombay just as war broke out between India and Pakistan. The Pakistanis were bombing Bombay and there was a blackout in effect the entire time I was in India. I had a pre-dawn flight from Bombay to Bangkok and my taxi ride from the hotel to the airport (a considerable distance) in total darkness was harrowing, as no vehicles could use headlights nor was there any street lighting.

Portugal: Beside me, there were a few other unmarried TWA management personnel who liked to play golf, which was next to impossible living in Manhattan. It actually was easier and cheaper to golf in Portugal. Periodically, we flew (first class) Friday after work, arriving in Lisbon early Saturday. We checked into the 5-star Hotel Palacio in Estoril just outside Lisbon. We then played 36 holes with caddies at a nearby championship golf course. We napped briefly before dinner at the best restaurant in Portugal, followed by a succession of fado bars. We played another 18 holes Sunday before our afternoon flight to JFK. The total cost for everything – $60 per person!

Note: A few words are in order concerning prices: The USA was on the gold standard until 1971 and Europe was still recovering from WWII. Consequently, the dollar was absurdly strong; in many places the local currency seemed like monopoly money.

Hungary: I took my parents to Hungary as my mother was of Hungarian descent and spoke fluent Hungarian. This was my first time behind the iron curtain and crossing from Austria into Hungary was unforgettable. Our train was descended upon by a phalanx of armed police before crossing no-man’s land of dogs, razor wire, minefields and towers with searchlights. Welcome to the people’s paradise of Hungary.

Even after converting our dollars into forints at the official exchange rate, everything was ridiculously cheap. One night we had dinner for six (we invited a family we had met on the train) at a fine restaurant with ample Hungarian wine; the tab was $20. We stayed at a guest house in Budapest; the cost for all three of us including lodging and breakfast was $1.20. We traveled to the village where my grandmother was born and met relatives who never knew we existed. It was draining emotionally for everyone.

Austria: Just as with golf in Portugal, it was cheaper and better to ski the Alps. Over the Christmas – New Year’s holidays we would ski in Lech, Austria, one of this world’s top resorts. We stayed in a 5-star hotel that cost $16 per person per night including lodging, three meals and afternoon tea with live music. I skied Lech 6 times; one memorable trip there was with my wife in 1976. We spent an entire month in Europe during which we skied for three weeks in Lech. We stayed at a nice hotel (including breakfast) with a balcony overlooking the slopes, skied every day but one, and ate dinner at the finest restaurants. The total cost for the month including air was $2,000. Note: I took my family of four to Lech in 1999; the cost was well over $1,000 per day.

Switzerland: During all my travels I never missed a day of work. Once I flew from Australia arriving at JFK at 7:00 Monday morning. I changed at the airport and arrived at work on time. The only time I missed work was on a late flight from Switzerland (I was skiing in Zermatt) that got cancelled for mechanical reasons and there were no other flights to the US. It was on the flight the next day that I met my future wife.

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Ruminations: I visited over 30 countries while still in my 20s. I visited most of them again 40 to 50 years later after I had retired. A half century ago each country was distinctive; today, they all blend together. It was interesting to observe the incredible changes that took place throughout the world during the 50 years between my visits.

Although not well-off by any stretch, I was able to travel the world in high style at a young age. Thanks to my airline pass, huge airline discounts at hotels and an incredibly strong dollar, I was privileged to sample the very best this planet of ours has to offer.

WE ARE TAKING A SUMMER BREAK. THE NEXT SCHEUDLED POST IS SEPTEMBER 4; HOWEVER, WATCH FOR POSIBLE UNPLANNED POSTS.

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Next on September 4th: Labor Day and MLLG preview for remainder of 2022

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Travels with George: 1968 to 1972

George Noga

I was privileged to travel the world at a young age and when the dollar was king.

Travels with George: 1968 to 1972

By: George Noga – July 24, 2022

As suggested by some long-time readers, I am lightening up with personal anecdotes during the dog days of summer. Everyone my age has some gripping experiences and I certainly have my share. The headline above is a knockoff of Travels with Charley, about Steinbeck’s travels across America in the 1960s – a good read. Enjoy!

Upon completion of my MBA and military duty, I was hired by Trans World Airlines in 1968 as a financial analyst at its headquarters in midtown Manhattan; I remained at TWA until 1972. As management, I had a pass enabling me to fly anywhere on TWA. In 1969 I was promoted to middle management and received a pass permitting me to fly free first class on any airline anywhere in the world. Following are highlights.

Israel: I walked alone throughout the old city of Jerusalem, along the Via Dolorosa and to the Wailing Wall – all in territory recently liberated by Israel and long before tourists arrived; it was too dangerous. I then went to Bethlehem where I was the only non-Muslim in the town and the only person in Manger Square. I visited a kibbutz and went, along with a heavily armed patrol, to a nearby swimming hole. Everyone took turns swimming while the others stood guard with automatic weapons at the ready.

I rode the Marrakesh Express – literally and figuratively.

Athens: I arrived discombobulated after a long flight and awoke well before dawn. I took a cab to the Acropolis just as the sun crept over the horizon. I had the Acropolis entirely to myself for an hour; I was free to roam anywhere. The last time I was at the Acropolis, there were at least 5,000 tourists and much of it was closed off to visitors.

Marrakesh: After flying into Casablanca, I rode the Marrakesh Express to Marrakesh, both literally and figuratively – if you follow my drift. I stayed in the ultra-luxe La Mamounia Hotel, where Winston Churchill was a habitue. I paid $16 per night; today it would cost $1,000. My father was stationed in Marrakesh during WWII and his letters from there (which we still have) are very descriptive, adding cogency to my visit.

Hong Kong: I arrived in Hong Kong just as Chinese New Year was in full swing. The scene was pulsating, like nothing I had seen or even imagined. I intrepidly ventured into the street and mingled with the frenetic crowd as it paraded through the streets.

My bathroom consisted of a hole in the ground and a shovel.

Macau: I took the hydrofoil to Macau to test my luck; there were only two casinos back then. As I was boarding the last hydrofoil back to Hong Kong, a Chinese gentleman recognized me from the casino and, using sign language, beckoned me to follow. He led me to the penthouse suite where there was to be a private blackjack game with 10 people, not one of whom spoke English. I panicked when my turn came to deal because I knew if I lost the first few hands, I would be out of money. Fortunately, they were bad players, and I thankfully won the first several hands.

Djakarta: I was enroute to Singapore from Australia and foolishly stopped in Djakarta without hotel reservations. There was but one first-world hotel back then and it was full – people were even sleeping in hallways. I ended up at a hotel where the bathroom consisted of a hole in the ground and a shovel. It required several fingers of duty-free scotch to get to sleep. I awoke with lice and cajoled my way into the Intercontinental Hotel swimming pool where the chlorine was strong enough to kill the lice.

To cap it off, I was detained at the airport when leaving Indonesia and questioned in an intimidating soundproof room. The gendarmes thought I was a foreign intelligence agent and couldn’t understand why anyone my age would visit Djakarta without family or business. At length, I was able to convince them I was an airline employee. I barely made my thrice weekly flight to Singapore, which was heaven compared to Djakarta.

Next week, Travels with George continues with more misadventures in Africa (Uganda, Tanzania and Kenya), Austria, Switzerland, Portugal, Hungary and India.

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Soaking the Rich and Big Corporations

George Noga

As blue states hemorrhage tax base, they raise taxes and cut services.

Soaking the Rich and Big Corporations

By: George Noga – July 17, 2022

I begin with new IRS data that show the fiscal effects of the ongoing blue state to red state migration. This is followed by the paradox of the massive Trump tax cuts that actually produced (just as we predicted) a veritable gusher of new tax revenue.

Starting next week, I lighten up my posts for the remainder of July with blogs of a personal nature. Some long-time readers have suggested I try this; please stay tuned.

Tax Base Migration from Blue to Red States is Accelerating

The massive human and financial migration from blue to red states is surging, fueled in part by working from home. Just released IRS adjusted gross income (AGI) for 2020 shows NY lost $20B, CA $18B and IL $9B; other big losers were MA, NJ, and MD, all deep blue. The big winners were FL $24B, TX $6B, AZ $5B, SC $4B, NC $4B, NV $3B and TN $3B. Other winners were CO, ID, UT, WY and MT – mostly deep red.

Blue states are trapped in a vicious circle; they lose tax base, then to make up the lost revenue they raise taxes, cut services and neglect infrastructure. They lose even more tax base, and the cycle repeats. When will they learn?

The annual loss of tax revenue is $1.6B for NY, $1.4B for CA and $700M for IL. The loss of AGI has a compounding effect, as the lost income from the current year is added to prior losses. For red states, AGI gains also are compounded. As blue states hemorrhage tax base, liberals respond by raising taxes, cutting services and neglecting infrastructure, which causes even more people to flee, which further erodes the tax base and culminates in a vicious circle. Meanwhile, red states are in virtuous circle and use the tax revenue gained from blue states to further cut taxes, improve services and rebuild infrastructure. Will the last person leaving New York please turn off the lights?

Trump Tax Cuts are Soaking the Rich and Large Corporations

I have blogged repeatedly that the only way to soak the rich is by cutting – that’s right cutting – taxes. The 2003 Bush tax cuts resulted in the biggest tax increase on the rich in US history as their share of taxes doubled. The same thing is happening with the 2017 Trump tax cuts. Moreover, it also is occurring with respect to corporate taxes.

Hauser’s Law: Tax revenue is a constant share (around 18%) of GDP whether the tax rate is 90% or 28% – for reasons explained below.

Individual income tax revenue is up 68% while corporate tax revenue is up 21%. Overall revenue is up an astounding 39%. Just as we predicted, lower rates resulted in more revenue; yet, progressives want to jack up rates for class warfare purposes. Progressives really don’t want to soak the rich; they want only to appear to be soaking the rich. If they really wanted to soak the rich, they would cut taxes.

Lower tax rates work due to Hauser’s Law, i.e. when tax rates are low, the rich are disincentivized to take measures to reduce their taxes. When rates are high, the wealthy work, save and invest less; they barter, retire earlier, hide, defer and underreport income, convert income to capital gains and defer gains without offsetting losses.

With high rates, high-income taxpayers use tax shelters; seek tax-free income; change the amount, location and composition of taxable income; exploit ambiguities and loopholes; shift income to corporations and/or to lower-bracket family members. They lobby aggressively for tax breaks, move to low tax venues, transition into the occult economy, employ top tax lawyers and accountants and much, much more.

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Next week we lighten things up with: Travels with George 1968 to 1972.

More Liberty Less Government – mllg@cfl.rr.com – www.mllg.us
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Annus Horribilis at the Midway Mark

George Noga

The gates are down and the lights are flashing but there is no train coming.

Annus Horribilis at the Midway Mark

By: George Noga – July 10, 2022

I published a special posting on January 1, 2022, (read it at www.mllg.us) warning that this year would bring unprecedented geopolitical, economic, political and financial horrors. Never before in 15 years and 600 posts did I make any such forecasts. Rarely in human affairs have predictions come true so quickly, accurately and completely.

Geopolitical Horrors

I predicted that if Putin intended to invade Ukraine, it would be in 2022; Putin invaded in February. I wrote Putin and Xi would form an entente; they issued a statement stating, “their friendship has no limits“. I said Iran would race toward a nuclear weapon and threaten its neighbors; they have enriched uranium to weapons grade and threaten Saudi Arabia. I predicted North Korea would act up; they have resumed test firing ICBMs, threatening Japan and even the USA, and testing nuclear weapons. I wrote if Xi intended to invade Taiwan, it would be this year. I now assess this as less likely due to the unexpectedly robust global opposition to Putin’s Ukraine invasion.

Economic Horrors

I forecasted inflation would exceed 10%. The Producer Price Index is up 11% and other indices are up 8.6%. The real rate of inflation is 15% if computed on the same basis as the last time the US had high inflation. I predicted the Fed would surge interest rates leading to a recession. The Fed is now increasing rates three-quarters of a point at a time just as I predicted. They are doing too little too late. The economy shrank by 1.5% in the first quarter. Throughout US history when this has occurred, there is a 94% chance of a recession. The United States likely is already mired in a recession.

Per Barack Obama “elections have consequences“. Indeed they do!

On the economic front, the worst is yet to come. I expect inflation to remain stubbornly high and intractable. The Fed will be forced to raise rates much more than they now contemplate. There will be a prolonged period of stagflation, i.e. inflation combined with stagnation. Ultimately, getting control over inflation will result in a severe recession. The recession, in turn, will lead to out-of-control spending and deficits in a futile attempt by Biden and the Democrats to salvage their tattered political prospects.

Political Horrors

In January I predicted a Biden horror show. The ineptitude of his Administration has exceeded my worst fears. They have hit rock bottom (and are still digging) on every issue: inflation, immigration, energy, supply chain, pandemic, crime and foreign affairs. Identity politics has resulted in widespread incompetence. The following were selected based solely on identity: Harris, Austin, Yellen, Buttigieg, Raimondo, Becerra, Granholm, Cardona, Mayorkas and a slew of lesser lights. Sadly, the gates are down; the lights are flashing; the whistle is blowing, but there is no train coming.

Financial and Investment Horrors

I wrote that in December 2021 I moved my investments into a highly defensive posture with over 70% in cash, cash equivalents and ultra-short duration bonds. I also doubled my holdings of gold, commodities and TIPs. Thus far, the NASDAQ is down over 30% and the S&P 500 over 20%. Commodities are up 30%, but gold is up only slightly due to the strength of the dollar and higher interest rates. The markets are not likely to hit bottom until 2023 or even 2024, but the worst is yet to come. In the immortal words of Barack Hussein Obama “elections have consequences“. Indeed they do!

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Next on July 10th: Soaking the rich and fat cat corporations.
More Liberty Less Government – mllg@cfl.rr.com – www.mllg.us
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Best Time to Have Lived as an American

George Noga

From 1776 to 2022 – When was the best time to have lived as an American?

Special Independence Day Posting . . .

Best Time to Have Lived as an American

By: George Noga – July 3, 2022

As I celebrate Independence Day 2022, I feel privileged to have lived at the best time to be an American. Regrettably, my joy is tinctured with sadness for reasons you will see infra. For years, I have heard an eerily similar refrain from people of my post-war generation and of all political persuasions. Most expressed it unsolicited and with fervor, i.e., the belief our generation has lived during the best time to be an American.

When my interlocutors express this view, invariably they are making a statement that is much more about the future than about the past. To a person – they believe the future will be worse and our children and grandchildren will inhabit a dystopian, multi-polar world of wokism and climate madness, combined with an existential debt crisis. America in 2022 hauntingly resembles Yeats’ The Second Coming; his apocalyptic poem describes a world coming apart and foretells of an impending crisis.

Turning and turning in the widening gyre

The falcon cannot hear the falconer;

Things fall apart; the centre cannot hold;

Mere anarchy is loosed upon the world,

The blood-dimmed tide is loosed, and everywhere

The ceremony of innocence is drowned;

The best lack all conviction while the worst

Are full of passionate intensity.

There is a strong case that the period from WWII to the present was the best time to be an American. Although there were wars in Korea, Vietnam, Iraq and Afghanistan, the post-war period was devoid of hot wars involving major powers. Astounding advances occurred in every field: medicine, genetics, transport, computers, consumer electronics and life expectancy. There were transformative advances for women, blacks, LGTBQ, elderly, and even animals. Economic progress was breathtaking and included the virtual elimination of poverty, increased leisure and an active period of retirement measured in decades. No prior period comes remotely close to such progress.

The time since WWII has indeed been great; but Americans always have believed, as an article of faith, that the future would be even better. Strikingly, not a single one of my interlocutors believes the future will be brighter for our progeny. Consequently, the belief that my generation lived at the best time to be an American has a profound and dark corollary, i.e. the conviction that America’s future will be worse – much worse.

There is a crisis of authority – turning in the widening gyre, the falcon cannot hear the falconer. Politics has become extreme; people demonize those with opposing views – the centre cannot hold; mere anarchy is loosed upon the world. There will be a Clockwork Orange (blood-dimmed) future where our children’s innocence is drowned. Too many Americans (conservatives) lack the conviction to stop our drift to socialism while the worst of us (progressive ideologues) are full of passionate intensity.

All the institutions Americans always could fall back on in difficult times have become hopelessly corrupted and politicized. The media eschew truth and embrace advocacy; fact checkers distort and lie; truth is elusive. Science is politicized, including climate, pandemics and gender. Education, from kindergarten through college, is hyper-political and fails to teach. Sports is corrupted with wokism, BLM and gender issues. Our criminal justice system favors criminals with abolition of bail, decriminalization and prosecutors who won’t prosecute. Immigration is badly broken and politicized.

Our politics is extreme and caters to identity and to the lowest common denominator among us; it seeks to separate Americans by race, gender, income and age. Our election systems are wide open to fraud on a massive scale. Corporations have been infected with woke capitalism, substituting symbolic and rhetorical placebos for economic value. Our military has become woke and is afflicted by white privilege and transgender issues. Religion, including even the Pope, is confused about right and wrong. Climate madness spawns mass delusion. Economists embrace MMT and tell us we can borrow without limit and that the moon is made of Stilton.

All our trusted institutions have self-destructed and we are slouching toward socialism and ultimately to Gomorrah. I close with the final two lines of The Second Coming.

And what rough beast, its hour come round at last,

Slouches toward Bethlehem to be born?

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Next up on July 10th: Annus horribilis at the half way mark.

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