"Not One Single Dime"

Today Congress is debating whether the Bush Tax Cuts should expire or be renewed. The fact that this is being debated at all amazes me. The worst thing you can do during a recession is raise taxes. Everyone knows that; even the most uneducated among us.

The second worst thing you can do is try to spend your way out of a recession. But of course we know the Obama Administration has already attempted that. And, as expected, it has failed miserably regardless of what the President and Mr. Geithner are saying at every opportunity.

During the Presidential campaign in Dover, New Hampshire on September 12, 2008, then candidate Obama stated the following:

"I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.... You will not see any of your taxes increase one single dime."

This sounds strikingly similar to George Bush’s claim in 1988: “Read my lips, no new taxes.” We all know he broke that promise. We all know he failed to get reelected. Hopefully, the same will happen here. When Obama allows the George W. Bush tax cuts to expire on December 31, 2010, it should be the final nail in the coffin for hope and change. All of us who are hoping for change may now actually get what we want.

It should also be noted for the record that President Obama has already broken this promise once before. The Health Care Reform Act contains a number of tax increases that originally were called penalties. After much chagrin, the Obama Administration finally had to admit these were taxes not penalties. Since that has been opined upon to death by commentators, I will not dwell on it here. Just suffice it to say he has already increased taxes on the lower and middle classes.

This article is primarily about the Bush tax cuts. And if they are allowed to expire, beginning in 2011, your taxes will increase by much more than one single dime as Obama stated. The raise will be much, much greater. Here's why:

Ryan Ellis wrote an article published July 1, 2010 on a website called Americans for Tax Reform. Mr. Ellis goes into some detail regarding what lays ahead if Obama and the Democrats get their way and allow the tax increase which, by the way, will be the largest tax increase in American history. Voters should arm themselves with this information now in order to make intelligent choices in the voting booth in November. By the way, it may not help regardless of who gets elected in November because a lame duck Democratic Congress with an angry Leftist President may be the most dangerous thing this country has ever seen. Beware mid-November through January!

Here are some facts on the tax increase scheduled for January 1, 2010:

• Personal income tax rates will rise...

- The 10% bracket will rise to 15%

- The 25% bracket will rise to 28%

- The 28% bracket will rise to 31%

- The 33% bracket will rise to 36%

- The 35% bracket will rise to 39.6%

• The child tax credit will be cut in half from $1000 to $500 per child.

• The standard deduction will no longer be doubled for married couples relative to the single level thereby bringing back the so called marriage penalty.

• The dependent care and adoption credits will be cut.

• There will be a 55 percent top death tax rate on estates over $1 million. (If this is allowed to happen, then George Steinbrenner saved his heirs almost half a billion dollars by dying this year).

• The capital gains tax will rise from 15 percent to 20 percent.

• The marginal rate on dividends will rise from 15 percent to 39.6 percent

• Health savings (HSA) and flexible spending accounts (FSA) can no longer be used to purchase non-prescription, over-the-counter medicines.

• A $2,500 cap on flexible spending accounts FSAs will be added.

• Tax on non-medical early withdrawals from an HSA will double to 20 percent.

• Small businesses will no longer be able to expense up to $250,000 in capital purchases. Instead, the allowance will be reduced by 90% to only $25,000.

• Large business will have their expense deductions slashed by 50%.

• The “research and experimentation" tax credit will be eliminated,

• The deduction for tuition and fees will be eliminated.

• Teachers will no longer be able to deduct classroom expenses.

• The student loan interest deduction will be eliminated.

• Charitable contributions from IRAs will be eliminated. Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA.

To make matters worse, the Alternative Minimum Tax (AMT) will now be levied on at least 28 million families. That's a seven-fold increase from last year when it was levied on 4 million. This “AMT” disallows many deductions and exemptions such as state and local income, sales tax, property tax, accelerated depreciation, medical expenses and other tax preference items such as Intangible Drilling Costs. Instead, it sets a minimum tax rate of either 26% or 28%.

And because the AMT is not indexed to inflation, the number of households affected by this tax will dramatically increase over time. This was predicted by the Congressional Budget Office way back on April 15th, 2004, when it issued this statement:

"Over the coming decade, a growing number of taxpayers will become liable for the AMT. In 2010, if nothing is changed, one in five taxpayers will have AMT liability and nearly every married taxpayer with income between $100,000 and $500,000 will owe the alternative tax."

In short, the AMT disallows deductions otherwise available under standard IRS rules, and is based upon a very complex set of criterions.

If these changes are allowed to happen, it will be disastrous for the economy. Small business will be stymied. Spending by private business will be substantially lowered or cease completely. What does that mean? Unemployment will go up. We will not only have a double dip recession, we will probably have an economy worse than that of the Great Depression.

Right now, every economic indicator shows that the economy is barely holding onto the ledge. Anything that would cause investors and/or private sector business owners to stop spending may be the straw that breaks the camel’s back. These tax increases contain a number of such straws.

For example, if you raise the Capital Gains and Dividend Tax Rate, you will be directly hitting investment. Investment is what drives the economy. For every dollar an investor pays in taxes, it is one potential dollar that will not be used to finance another company or to increase capital expenditures in an existing company. It also makes less dollars available to hire another few employees should the need arise. It also takes the incentive away to make more money. Remember the Lauffer Curve whether you agree with it or not.

The same is true if you increase the write-off period on big ticket items. If a company is permitted to expense $250,000 in capital expenditures each year, it may be more inclined to make purchases of big-ticket items than if it can only expense $25,000 per year. Anything over $25,000 would now have to be capitalized and charged off over a number of years. Private sector business will no longer make those purchases or they will decrease dramatically. Look at what happened after the Homebuyer Credit and Cash for Clunkers ended. It would be the same thing. Jobs will be lost and/or not created.

Middle Class homes will not make additional purchases as well. If you cause an average family to pay an additional 5% in taxes, that is 5% less discretionary income to keep the economy moving. Plus, if people lose faith in the economy, more money goes into savings which is also dangerous because money saved is not money spent. Personal savings rates are already up so this is already happening.

In addition, we are on the verge of a deflationary spiral which is considered a disaster to an economy in the sense the people do not tend to spend money when they think prices are going down because they are waiting for price decreases. Manufactures, then lower prices to stimulate purchases. This does not work because every price decrease is met with more expectations on the buyers for more price decreases. The last time this happened in the United States was in the 1930’s. We have now had three straight months of decreases in the Consumer Price Index. At what point are we officially in such a spiral?

When you couple the tax increases set for January, 2010 with the possibility of deflation, we are on the precipice of a disaster the likes of which this country has never seen. Also, by the way, does the printing of fiat money in the manner that the government has in the past 18 months scare anyone? Shouldn’t we be in the midst of the greatest inflation this country has ever seen? This is a doomsday scenario waiting to happen.

In closing, it is my opinion that this tax increase cannot be permitted. It is not the way to close the budget gap. Congress must find other ways to do so. They cannot rely on more taxes. They must limit the size of government by necessity even if that is not what they want. Governor Schwarzenegger has had to do it in California and it has made him extremely unpopular. Sometimes the tough decisions are the necessary ones.

Congress must reign in spending. Keep the tax cuts in place for another 4-5 years or make them permanent. Give the economy a chance to cycle its way out of this depression. Do not make it any worse.

Maybe we can start by eliminating some government programs. Maybe the Department of Energy which has proved useless should cease to exist? Maybe the Health Care bill should be left unfunded? There are many other ways to curb the spending even to the extent of privatizing the Post Office.

A tax increase to allow uncontrolled spending to continue is not the answer, especially in light of the fact that President Obama will be breaking one his most solemn campaign promises. Of course with him that does not seem to be an issue. He is breaking promises ever day he is in office. Maybe that is why his approval rating currently stands at about forty-three percent.

© 2010 by Craig Covello and Frank DeMartini. Used with permission. All rights reserved.

Of Free Speech, Illegal Immigration and Border Wars

As all of my friends, relatives and acquaintances know, I have just returned from Bangkok, Thailand where I have been since January prepping and shooting a film called “Elephant White” with Djimon Hounsou and Kevin Bacon. On the whole, the experience was rewarding. Working with Prachya Pinkaew, the internationally acclaimed Director was both a treat and a learning experience. I know it will continue as such during the post-production period.

However, while in Thailand, I also was a student: A student of free speech and the right of assembly and tolerance. Three items that I used to believe we had here in America. Thailand, the country were a military coup took over control of the government a few years ago is now on the verge of a civil war. Even though it is a military run country, its people have more freedom of expression than we have here in the United States thanks to the PC movement, the ACLU and our friends on the Far Left.

The political situation in Thailand can be considered fragile at best. The two political parties are on the verge of what may be a violent and bloody civil war. When I left there about ten days ago, the Red Shirt Party had taken control of downtown Bangkok and, for all intents and purposes, had occupied it. The party in control, The Yellow Shirts, has allowed this to happen.

What started as a peaceful protest against the government is on the verge of becoming violent. Already, there have been minor skirmishes in which guns have been fired, grenades have been launched and a small group of people on both sides have been killed.

However, for the most part, the military and local police have exercised restraint and did not permit the situation to get out of control. They were ready to defend the populace by being fully armed and patrolling the streets, but they did not do anything to take away the rights of the protestors. Freedom of Speech and Assembly were respected by both sides.

Unfortunately, this is not what is happening in the United States. The Far Left, as stated in some of my prior articles, has been doing everything in its power to take away these freedoms in our country. In fact, Nancy Pelosi has actually called the Tea Party protestors the equivalent of Nazis. She has stated that she would like them to cease from all activities and simply does not want to give them the right to protest.

The same also seems to be true of a large portion of our country in response to the Arizona Immigration Law. In fact, the City of Los Angeles and other organizations are calling for a boycott of Arizona in response instead of recognizing that Arizona has a right to protect itself if the Federal Government refuses to do such. Arizona is merely exercising its Tenth Amendment Rights.

A careful reading of the Arizona Law shows that it is nothing more than a state codification of the current federal law; all legal immigrants and legal non-immigrants are required to show proof of their right to be in the country if requested by proper authorities. The law is not fascist nor a return to Nazi Germany as has been suggested by those who oppose it. And, it is not an affront on the Hispanic Community. It is simply an affront on illegal aliens. It is an affront on those who have no right to be in the United States, whether they be Hispanic, Eastern European or Asian. I am the grandchild of immigrants. My grandparents came through Ellis Island at the turn of the last century. They followed the law and became American in the proper manner. They did not hold onto the Old Country. In fact, my parents barely spoke any Italian at all. They were told to become American. They were no longer Italian.

Arizona is dealing with a problem that must be dealt with. In fact, the immigration statute is so popular that a number of other states, including Texas and Michigan, that’s right liberal Michigan, are considering similar statutes. A poll released today shows that 64% of the population approves the law.

The illegal immigration situation in Arizona and other states on the Border has reached crisis proportions. Arizona State Senator Sylvia Allen explains the law and her reason for supporting it in her commentary on why she voted for the statute. You can find a full text of her commentary at: http://tucsoncitizen.com/the-cholla-jumps/2010/05/01/state-senator-sylvia-allen-responds-to-sb1070/. In that article, she explains the problems on the Border; the uncontrollable influx of illegals and, drug traffickers using the border in Arizona as the principle means of bringing drugs into the United States.

The facts are clear. Illegal immigrants are filling up both state and federal prisons; they are a drain on federal and state welfare; and, they are a drain on our education system. They are responsible for a large portion of the murders and other felonies throughout the country. In fact, the situation on the Arizona Border has gotten so bad that it can almost be considered a war zone. People are being murdered on both sides of the border daily. That’s right, daily. The Federal government is doing nothing to stop the situation and would grant illegals amnesty if permitted. The states must take the matter into their own hands. They are going bankrupt and must do whatever is necessary and legal to protect their citizens and budgets.

You may wonder why the Federal Government is not doing anything to curb the tide of illegal immigration. The answered is simple. The party in power sees illegal immigrants as a potential voting block that would support them. If the Democratic Party cannot get votes from naturally born and/or naturalized citizens, then it will get them from wherever it can, especially in Arizona and Texas which lean heavily to the right. Imagine giving illegal immigrants the right to vote in these two states. It could be just enough to tip them to the left.

Cinco de Mayo was celebrated a few days ago. This is a national holiday in Mexico. In some states with large Mexican populations including Arizona and California, it is becoming a day of celebration too. A group of students in a Southern California High School decided that they were going to celebrate America on Cinco de Mayo by wearing shirts with the American Flag on them. The administrators in the school decided that this was inappropriate behavior and demanded that the students change their shirts or turn them inside out. It must have been the administration’s viewpoint that the American Flag should not be displayed on Cinco de Mayo.

The students were then subjected to discipline by the school board when they refused to remove their shirts. When the parents of these students found out what was happening, they went to Fox News with the story. Fox News chose to air it. It was later picked up by both NBC, CBS and @ yahoo. In my opinion, the school district is clearly violating these students Right to Assembly and Free Speech. To date, the school district has not apologized for its actions. However, they have ceased the disciplinary proceedings against the students.

Since when did it become bad to love the United States? Since when did it become in bad taste to be a dissenter? Don’t the Federalist Papers and the Equal Protection Clause state that protection of the minority is one of the guarantees of the Constitution? Apparently, in this school district the non-Mexicans are the minority and they are being disciplined for exercising their Constitutional Rights and showing love for their country.

In similar story, a grammar school student in another part of the country was stopped from drawing an American Flag with the words God Bless America on it by her teacher. The teacher felt that this drawing was inappropriate content. I guess the teacher felt that God shouldn’t bless America or that the American Flag, a symbol that millions have fought and died for, was not a proper art project for a student at the elementary school level.

It appears that the Administrators in the Southern California school district and the grammar school teacher have less tolerance than the military controlled government and people of Thailand. This also appears to be unfortunately true for most of the left leaning people in this country, including our current President. We all need to remember this in November when we cast our votes to take our country back.

© 2010 by Frank T. DeMartini. Permission to copy will be granted freely upon request.

The third degree with Kevin Bacon and Elephant White

Here is an article about my Thai movie. If you can find the full article in "The Nation", a Bangkok Newspaper, you can see some quotes I have made about the current political situation in Thailand which also shows my views on Free Speech as expressed in this column.


The third degree with Kevin Bacon and Elephant White

Nullification and Federalism

Occasionally, I like to write an article historically based and not necessarily based upon events of the day. However, the issues addressed in this article are not just historical. The issue of Nullification and its effects on the United States are far reaching and in reality were probably the cause of the Civil War. There is a strong movement in the country now based upon Nullification and The Tenth Amendment. The Tea Party movement and Ron Paul are just a small fraction of the groups which are actively supporting these theories and principles.

To understand Nullification, one must first have a basic understanding of Federalism. The United States is a Federalist country. It has always been so from the beginning. A Federalist country is a group of smaller units, in this case States, which are joined together as a union for the common good. In the case of the United States, Federalism comes from historical roots and is embodied in the Constitution. Another example of a Federalist country is the Federal Republic of Germany. Mexico has states but is not truly Federalist in that all the power is concentrated within the Central Government.

Nullification is based on the principle that the Constitution was ratified by the States not the people. James Madison pointed out that each state was ratifying the Constitution for itself, whereas had it been a truly national endeavor, a binding ratification vote would have been taken among the American people as a whole. Thus, it is the States which control the government and not the people. And, it is the people which, in turn, control the individual States.

So, the Framers of the Constitution understood that they were creating a Federal Government in which the States had ultimate control and the Central Government had limited powers set forth in the Constitution, specifically in Article 1, Section 8. Further evidence of this is found in the Tenth Amendment which clearly states that:

“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

However, since the drafting and ratifying of The Constitution, the powers of the States have gradually dwindled. The “Alien and Sedition” Acts and the Tariffs of 1828 and 1832 were some of the first major battlefields involving the power of the Central Government. In both cases, the Central Government won. In the case of the Tariffs, South Carolina nullified the laws and later threatened to secede from the union. A compromise was reached which lowered the tariff thereby ending the crisis before it came to a head.

Unfortunately, this was not the case over the issue of Slavery. From the Missouri Compromise until the election of Abraham Lincoln, the issue of States’ sovereignty came up many times on this issue alone. Prior to the start of Secession in 1860 and the Civil War, many battles were fought in Congress over whether the individual states had the right to be slave or free.

The issue was quite simple. Could a state enter the union based upon its own decision whether it wanted to be slave or free? The South argued that since slavery was guaranteed by the Constitution, any state applying for admission to the Union had the right to declare its choice on this issue. The Northern Abolitionists felt the Federal Government had the right to limit slavery and to eliminate slavery in the Southern states which practiced it. The Republican Party of the time was split on the issue, but mostly believed that Slavery should not cease in the States where it already existed, but could be limited by Federal authority in new states applying for admission.

The whole issue came to a head in 1860 when the initial Southern States seceded from the Union stating that since they had volunteered to join the union, they could also voluntarily secede. We all know the ultimate result: The bloodiest war in the history of the United States. Over 600,000 American lost their lives over this issue.

Eventually, the North won and the South was forced to accept that the Central Government had the power to end slavery and enforce the solidarity of the union. The Tenth Amendment’s claim to power and threats of Nullification and Secession ended. However, it should be noted, that even though the North was victorious, slavery could not have ended and slaves did not become citizens, nor have the right to vote until the passage of the Thirteenth, through Fifteenth Amendments.

States’ rights have dwindled ever since. Most legal precedent for the growth and power of the Central Government come from the clause in Article 1 Section 8 of The Constitution which states Congress shall have to power to regulate Interstate Commerce. This clause has been interpreted by the Supreme Court to give Congress the power to do practically anything provided it affects Interstate Commerce. In fact, the Interstate Commerce Clause is the main reason being used to counter Tenth Amendment arguments on the pending Health Care Legislation.

The theory of Nullification goes back a long way. The Kentucky Resolutions, written by Thomas Jefferson in 1798, contained the following which has often been cited as a justification for both nullification and secession:

“ … that in cases of an abuse of the delegated powers, the members of the general government, being chosen by the people, a change by the people would be the constitutional remedy; but, where powers are assumed which have not been delegated, a nullification of the act is the rightful remedy: that every State has a natural right in cases not within the compact, (casus non fœderis) to nullify of their own authority all assumptions of power by others within their limits: that without this right, they would be under the dominion, absolute and unlimited, of whosoever might exercise this right of judgment for them: that nevertheless, this commonwealth, from motives of regard and respect for its co-States, has wished to communicate with them on the subject: that with them alone it is proper to communicate, they alone being parties to the compact, and solely authorized to judge in the last resort of the powers exercised under it… “

Now, you may ask, why am I making such a big deal about Nullification? It should be clear. There is a strong minority in the country who believe Nullification should be permitted by the States in regards to the Health Care bill and much other unpopular legislation being proposed by the Obama Administration.

One of the most recent examples of the use of Nullification is Montana’s Nullification of the REAL ID Act of 2005. The Montana Legislature Nullified the law under the theory that the Act was unconstitutional and an improper use of Federal Power. Implicit in the argument was The Tenth Amendment.

Further issues of Nullification are coming up now in many states regarding the medical use of marijuana and, in some instances, the legality of recreational use of marijuana. Federal Agents are using Federal Laws against marijuana to arrest proprietors and users under these state statutes, but thus far, no test case has gone far enough for the Nullification and Tenth Amendment arguments to be scrutinized and ruled upon.

However, that day is coming and will probably come soon; especially if the Obama Administration gets its way and continues to increase the power of the Federal Government. If the Health Care bill passes and 1/6 of the US Economy comes under Central Government control, I am sure that some States will be forced by their citizenry to consider Nullification in the same manner that Congress is considering the unconstitutional use of Reconciliation to pass the bill.

The only question really left is whether the use of Nullification is good or bad. People who believe in the Tenth Amendment, of which I am one, feel that Nullification is good. However, it should be used sparingly and only when there is a strong belief that the Act of Congress and/or the Administration are beyond the powers permitted them by the Constitution.

If this power is used too often, there are many potential ramifications. As written in a prior Article, the Texas Governor has already threatened secession. This is not good. We are the United States of America and we must be united forever. However, when the Federal Government goes beyond its Constitutional powers, then Nullification is the answer and the right comes from The Tenth Amendment and the Constitution itself.

For further information about Nullification, its history and legal theories, as well as the Tenth Amendment please see:

www.campaignforliberty.com/article.php?view=57

http://www.tenthamendmentcenter.com/

© 2010 by Frank T. DeMartini. Permission to copy will be freely granted upon request.

Now More Than Ever

My friend Al Ramirez is running for Senate against Barbara Boxer.  I am supporting Al because I believe that he has the correct ideas to help the nation and stop the partisan politics that are destroying the nation.  I believe in Al because California needs new blood to protect its decaying economy.  I believe in Al because California needs someone to support the environment without destroying industry or agriculture.  I believe in Al because he has the right ideas to get the country and the state back on track.

Please click on the link above to learn a little bit more about the man.

Thank you,

Frank

More on the Space Race (Or Lack Thereof)

A few days ago, I wrote an article about President Obama’s decision to cease funding our manned space program and put an end to any plans NASA had for returning to the moon. My friend Ira Schwartz wrote a follow up article a few days later. Collectively, these were the two most commented on articles in the history of this column.

As most of you will recall my article was full of memories from my childhood growing up in New York. It also dealt with some of the reasons why the space program is a necessity. Many of you disagreed.

In my prior article, I mentioned and stressed the national pride created by the Space Program to the United States and it citizens. This is true. The space program in the 60’s did bring a lot of national pride to the country. Unfortunately, what is left of the space program does not.

Why? The answer unfortunately is very simple. We have not had a visionary regarding space exploration in the White House since the resignation of Richard Nixon. Since that time, NASA has been the easiest chopping block because many people think that it is nothing more than a source of pride. “Since there is no more “space race”, there is no need for NASA.” This is another statement that I grossly disagree with.

NASA brings jobs, technology, and lastly, national pride.

During the heyday of NASA in the 1960’s and 1970’s there, were thousands of people employed either directly or indirectly by NASA, as well as thousands employed by its contractors and subcontractors. For example, besides the obvious employment in Houston at Mission Control and Florida at the Kennedy Space Center, there were thousands of people employed all over the country.

Grumman Aerospace on Long Island, one of NASA’s biggest contractors, employed hundreds on Long Island when it was awarded the contract to build the Lunar Modules. I am proud to say that my father was actively involved in the construction of the LEM. Hughes Aircraft (now Raytheon) was involved in the construction of many NASA items. As was Boeing and a slew of others. A partial list of NASA Contractors can be found at: http://en.wikipedia.org/wiki/List_of_NASA_contractors.

In fact, the top 25 NASA contractors in 2008 included: Lockheed Martin, California Institute of Technology, Honeywell, ITT, University of California System and University of Arizona System. The full list of the top 25 can be found at: http://www.govexec.com/features/0808-15/0808-15s13s1.htm.

In plane and simple language NASA means jobs. But, that’s not all: The Space Program also means advances in science and technology.

A list of common items that are a direct result of the space program and space exploration includes: integrated circuits, scratchproof lenses, composite golf clubs, high-density batteries, blue-blocking ultraviolet sunglasses, the computer mouse and freeze-dried food. For a partial list, please see: http://www.independentmail.com/news/2009/jul/20/technology-nasa-space-program-continues-touch-ever/ , and http://www.nasa.gov/home/hqnews/2008/oct/HQ_08255_SPINOFF_08.html.

Today I was listening to CNN and they were talking about the launch of one of the final planned manned space missions. The Challenger took off in a flawless nighttime launch yesterday. During the discussion on CNN, it was stated that NASA is already planning 8,000 layoffs as a result of President Obama’s decision last week. That does not include any people that will be laid off at the myriad of NASA contractors. Is this the right thing to do during a recession? Maybe save some of the money on welfare and entitlement and put it into NASA.

This is just more evidence of the current administrations short sightedness. So, forget about the national pride, forget about technology. Keep NASA funded just for the jobs. And, maybe our children and grandchildren might have something to remember, especially if their dad is still employed.

© 2010 by Frank T. DeMartini Permission will be granted freely to copy upon inquiry.

From the Earth to the Moon

I am a child of the 60’s and 70’s. I was born on Long Island, New York and raised there during that turbulent era. It was a time filled with the desire for peace and the search for love. It was a time when the United States was at a crossroads. It was also the time of many of my fondest memories. In fact, the period from 1968-1975 was a time that shaped the future of the United States.

It was the last time the country was in great turmoil. We were deeply into the worst part of the Vietnam War. The country was split in two over many decisions made in that war. It was very hard to watch the news every night and see our soldiers dying in Vietnam and being ridiculed back home in the United States. The war demonstrations were happening and being televised daily.

It was also the last time there was a constitutional crisis in our country. It was the closest the country ever came to an internal revolution. The crisis peaked with the Watergate Scandal in which Richard Nixon was forced to become the first and only president to resign the office in August, 1974 (which by the way was the first year of Saturday Night Live). President Nixon abused power and paid the price.

However, the price the country was forced to pay because of Nixon’s indiscretions was the election of the worst president the country has ever seen, Jimmy Carter. When Mr. Carter left office in 1981, the economy was in shambles and our international policy was considered a joke. But, that is the topic of a possible future column.

For now, I want to talk a little bit about 1969. Forty-one years ago. Hard to imagine, but that’s how long ago it really was. 1969 was the year of many firsts. It was one of the greatest years to be a New Yorker. It was one of the greatest years to be an American.

It was the year of the first and only Jets’ Super Bowl win; the year of Joe Namath’s guarantee. It was the year of the first New York Knicks’ NBA title; the year of Walt Frazier, Willis Reed, and soon to be Senator Bill Bradley. And, it was the year of the New York Mets’ first World Series Championship: The year that those of us who are Mets’ fans will never forget.

The Mets won the World Series again in 1986, but it did not have the emotion and impact of 1969. 1986 was not the year of Tommie Agee, Cleon Jones, Don Clendenon, Bud Harrelson, Jerry Koosman and one of the greatest pitchers of all time Tom Seaver. It was a dream come true as a New Yorker for former Brooklyn Dodger first baseman Gil Hodges to lead the hapless Mets to that 1969 championship.

It was also the year of Woodstock; what some people call the end of the hippie era. The three day festival of music and love in upstate New York started as a simple rock concert and turned into a legendary event that has since become the Mecca that every rock extravaganza tries to emulate.

It was a truly wonderful year to be a New Yorker.

And, it was a wonderful year to be an American.

It was the year of Apollo 11. There is not one person alive on that July date that does not remember Neil Armstrong stepping his foot onto the lunar surface and uttering those immortal lines:

“This is one small step for man and one giant leap for mankind.”

And, it was. As most of you know, I am in Thailand prepping a feature film to be directed by Prachya Pinkaew. Just yesterday Prachya and I were talking and the Apollo missions came up. Prachya told me that in Thailand there was no school on that July day except for the students to watch the lunar landing on TV. It was truly an international event.

Since that July 1969 day, man has gone to the moon 5 more times. The last of which was Apollo 17 in December 1972. In the 38 years since, we have not returned. I often wonder why? It took us eight years to get there the first time. Why is it taking so long to get there a second time?

For those of us that were alive on that July, 1969 day, it will never be forgotten. Those under 40 were not there and cannot understand what I am relating. They have no recollection of the heroes that were the astronauts; of the great pride in being American; of the wonder of going outside and seeing the moon and knowing that we had placed someone there. We put men on the moon six times and returned them safely. No other country has ever accomplished it. No other country has ever tried. Tom Hanks came close to showing the emotion attached to that achievement in the HBO miniseries, “From the Earth to the Moon.” But, he only came close. You had to live it; to experience it. You had to be there.

Just last week, President Obama gave his State of the Union Address. A speech that was uninspired and really proves that this is a man without ideas: a man who was elected to a position that he is unqualified to hold. He is a man lost in the complexity of his vision and his ambition. Thus far, he is a failure.

Today, President Obama is releasing his budget for the next fiscal year. A budget that proposes the largest deficit in the history of the United States: 1.6 trillion. That’s right, trillion. According to Fox News, it is a budget that freezes discretionary spending, except for defense. It does not address the fastest growing parts of the federal budget; social security, Medicare and Medicaid. It leaves them to grow unabated along with the deficit.

However, it does address one issue. It scraps NASA’s plan to return to the moon. According to the cited CBS News article, http://www.cbsnews.com/stories/2009/07/17/tech/cnettechnews/main5168126.shtml, NASA had planned to go the moon by 2020 and set up a permanent base there to be used for missions to Mars and beyond. Imagine that, we were going to bring that glory back to our country.

Upon hearing this last year, my childhood memories of the Apollo Astronauts and the entire space program came back. The national pride came back. The desire for scientific knowledge came back. We were going to continue our search to the stars.

The CBS article is a good primer for all of the reasons to go back to the Moon and to continue space exploration. I will not repeat most of them, but I will say that the expense is worth it. It is worth it in more than national pride. It is a real stimulus package. It will create jobs. It will create new technological advancements. And, it will do so over a number of states. The beginnings of the program are already active in 11 different states.

So, I say to President Obama, if you have any vision; if you want to be remembered for something other than your failures; if you want to do something right, then echo the immortal words of John F. Kennedy:

“We choose to go to the moon. We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win. . .”

The full text of Kennedy’s, September 12, 1962 speech at Rice University can be found at: http://er.jsc.nasa.gov/seh/ricetalk.htm.

So, President Obama, while you still have a chance to save your failing presidency, do you have the guts to challenge America in such a way? Do you have the guts to have such a vision? Do you have the guts to show any love for the country you lead?

© 2010 by Frank T. DeMartini. Permission to copy will be granted freely upon request.

The How's and Whys of Runaway Production

I am sitting in my hotel room in Bangkok on a Sunday afternoon; taking a break from prepping a film that will star Djimon Hounsou and be directed by the Steven Spielberg of Thailand, Prachya Pinkaew. Prachya is famous for Om Bak, Chocolat and Tom Yung Goon, three of the highest grossing films in the history of the country. You may be wondering why I am in Thailand and not somewhere in the United States. Why am I in a country 9,000 miles away from home when I could be shooting this movie anywhere in America including Los Angeles.

In the case of this film, the answer is more complicated than in others. The location of this film is South East Asia and, it is directed by a Thai national. That is not always the case. And, more often than not, the location of the film and its director is not even an issue. Many films that could be shot in America are not. In fact, many films with American locations are shot outside of America.

Why? The answer is simple: cost. Because of the ridiculously high labor costs and other production costs in America, it is just simply not feasible to make a movie in America anymore; especially a lower budget independent film. And, unfortunately, this is a symptom of the entire economic problems facing America today. I would love to work in the United States and be home with my family, friends and my little kitty Sidney. I cannot.

The clothing industry does not manufacture in America. The steel industry is all but gone. The automobile industry is all but gone. There are countless others. It is just too expensive to create almost any type of product in America. Unfortunately, this is leading to the elimination of our middle class. The working man can no longer work in America. If my father were still alive, I do not know how he would make a living.

The remainder of this article will be about the film industry as that is my area of expertise. But, keep in mind while you are reading that these problems are prevalent in all of the industries mentioned above, as well as others, not just the film industry.

Independent films and many studio films are now shot mostly in Eastern Europe, Canada, South East Asia and/or South Africa. The only real production in America these days is in heavy tax incentive states such as Louisiana, Michigan and the Carolinas. New York and Los Angeles, the homes of film production and the industry since its inception, only have production that either involves a star with the leverage to force production in those cities or if they are location specific to either state (and not always in that case either). In fact, we have shot films that take place in New York in Bulgaria on occasion.

The major culprit in the destruction of this industry and in most others is, as always, the unions. The unions refuse to work with the producer to make shooting in America cost effective. The average independent producer has a fixed amount of money to make his movie. The pocket is not deep. Even studio films are looking for ways to save money now. When you are a producer with fixed funds, you shoot the movie where your available money will bring the most bang for the buck and insure the existence of your ever decreasing profit margins.

For example, you could make a low budget action movie in 1995 for about 2.5 million dollars and be pretty sure you would get 3.5 million dollars back within 18 months. Now, that same movie can only be made for about 1.5 million dollars and the producer is struggling to get 2.0 million dollars back. Keep in mind that the same movie you made in 1995 for 2.5 million dollars would now cost 3.7 million dollars. (Calculated using an average of economic indicators, not just CPI) So, by making that movie for 1.5 million dollars you are making a far lower quality product.

If you tried to make that film for 3.7 million dollars, you would make the equivalent of the same film but you would almost guarantee the producer a loss as the sales on such films have gone way down in the past 15 years. You would probably only get the same 2.0 million in sales that you would have gotten if you made the film for 1.5 million dollars.

The average cost of shooting outside of the United States is often about 30-40% of the cost in the United States. For example, you can shoot an action film in Eastern Europe for about $700,000 per week. That is about one-third of the cost in Los Angeles and about 70% of the cost of shooting in a major tax incentive state.

I am shooting this movie in Thailand for even less. In fact; substantially less. We are shooting this film for 48 days of principal photography and our overall production cost is about ½ of the cost of Eastern Europe. No wonder I am forced to spend four months in a hotel room in Thailand. Do you blame the investors?

If I were to go to the unions in Los Angeles and say, “I want to make this movie in Los Angeles.” They look at you and say to pay the union rates, the standard pension, health and welfare and residuals. You are told if you do not have the money to pay them, then do not make the movie. You are never given the opportunity to negotiate a deal that works for the particular film in question. You are given a mandate and told to live by it. And if you do not like it, then tough.

Further, when you do shoot a film in the States, you are forced to obligate yourself to the payment of residuals forever. I ask you, in what other business is the investor/owner forced to pay the employee for work done years ago, every time he makes a dime?

The union people are now going to say that I am typical management and do not care about the working man. They will say that residuals are cheap. If the movie is made with all entertainment unions, the total cost of residuals is less than 10% of the total income. But, if you are only making a 25% return on your money, the residuals eat up approximately 10% of that return, leaving you with only a 15% profit. A motion picture production company cannot survive on that.

I would think that the working man in the United States of which I am one would rather work at a lesser rate inclusive of the medical protection than have the work go overseas. But, the general consensus is not.

Of course, if you shoot outside of the United States, you do not pay residuals at all except for some money to the Screen Actors Guild* who must be used no matter where you shoot. You get to keep your measly profit and hopefully put it another movie that will keep residents outside of the United States employed.

I can go on with this column for another 10 pages or more and never repeat myself and maybe I will in the future, but for now, I am going to spend the rest of my afternoon relaxing. I have a big week coming up.

* See my prior article on the Screen Actor’s Guild and Global Rule One printed earlier in this column.

© 2010 by Frank T. DeMartini. Permission to be copied will be freely granted.

The Kennedy Legacy Ends

As you all know, I am in Thailand prepping a movie.  However, my joy is overflowing right now.  We have begun to take back our country.  The Senate seat held by Ted Kennedy for longer than a lot of people have been alive is now in the hands of a Republican.  Goodbye super-majority in the Senate to the Democrats.  Goodbye to Ted and the rest of the Kennedy clan.  May their legacy rest in peace and may they finally be out of our lives.

Long live the United States of America.

No Toilet, No Blankets, No Luggage

Through no luck of the TSA another terrorist plot was thwarted on Christmas Day. Another lunatic Muslim Extremist attempted to blow himself up on an international flight from Europe to Detroit. The passengers of Northwest Flight #253, seeing what was happening, immediately jumped the suspect as he tried to ignite his explosive device. Apparently, it was just in time and 290 plus people are still alive.

And what does the TSA and Ms. Janet Napolitano, the Secretary of Homeland Security, have to say about this? “The whole system worked.” Can you explain to me how the whole system worked when a man with PETN (a very strong explosive) strapped to his leg was able to board a US bound Northwest Flight; especially in light of the fact that he was on an international warning list as a terror suspect.

The system did not work. The system completely failed. President Obama finally admitted this today after being mysteriously absent on the golf course for the past four days. In fact, Obama’s quote that the system failed on multiple levels says it all. Because of the “systemic failure” a small group of passengers on the plane were forced to act and, as a result, saved everyone on it. This would have been the second terrorist act on American soil in the last few months. Do not forget Ft. Hood which definitely was an act of terror. Oh, and by the way, both the Northwest Bomber and the Ft. Hood killer were both in contact with the same radical Muslim Iman, Amwar al-Awlaki.

So what is the TSA’s response to this systemic failure? The immediate response was to stop passengers from: using overhead bins within one hour of landing; using the toilets within one hour of landing; and, using a blanket within one hour of landing. Give me a break. These are just more ridiculous rules. Just like removing shoes at x-ray machines after the last nut tried to blowup a plane. If this is the best she can do, Janet Napolitano should immediately resign as she is blatantly unqualified for her position. She should go back to the southwest and enjoy her retirement.

After Ms. Napolitano was strongly criticized by both the mainstream media and Fox News, reports are circulating that full body scanners are going to be used in more airports beginning with Chicago’s O’Hare. It is about time as these are the only types of scanners guaranteed to pick up the PETN that was strapped to the bomber’s leg. Although, I can promise you the ACLU will have something to say about them as they show a bit more of the female and male body than the individual being scanned may choose to expose. And, to be totally honest, the constitutionality of them may be an issue.

But, the scanners are not enough. It is time we stopped being politically correct and started racially profiling. I say we stop doing full body searches of little old ladies going to see their grandchildren. We stop bugging families traveling with children. We stop full body searching the obvious businessman on a short hop flight. We should be searching and searching and searching anyone that: a. has a one way ticket; b. is from a Middle Eastern country or background; and, c. is a Muslim from about 18 to 40 years of age: especially if they have been put on any type of suspected terrorist list.

These are the potential bombers. These are the people killing themselves in the name of Allah. These are the people that want to see the end of the United States of America. And, these are the people we are fighting. They will not stop until our way of life, which scares them, is gone from the face of the Earth. Remember, to them, this is Jihad.

I know people will call me racist because of this position. I know people will say I am being unfair to Muslims. But, I ask you, has there been one terrorist act against this country or other countries in the last ten years that was done by someone other than a Radical Muslim? No. All of the major attacks since 9/11 have been by Radical Muslims; whether it be 9/11, the Spanish train bombings, the Bali Bombings; the terrorist siege of Mumbai; the shooting at Ft. Hood; and, the two nut jobs that tried to blow up airplanes with explosives attached to their bodies.

Please do not tell me I am a racist. I am not. I love all people whether they are Muslim, Christian, Jewish, Buddhist or Hindu. I just do not love people that are trying to destroy my country and my friends. As I and many others have said before, “Not all Muslims are terrorists, but all terrorists are Muslims.”

And, until it is proven otherwise, these are the people who should be profiled at airports, train stations, and border crossings. The harder we make for it them, the harder it will be for them to recruit. And, the harder it will be for them to succeed. This is who we are at war with whether President Obama wants to admit it or not.

© 2009 by Frank T. DeMartini. Permission to copy will be freely granted upon request.

Merry Christmas

It is finally Christmas Day.  This is the day that we celebrate the birth of our Lord and Savior Jesus Christ.  It is a day that we use to celebrate all of the good things in humanity.  It is a day that we pray that the bad things will all go away.  It is a day to celebrate with family and a day that every Christian child in the world waits for.

On this day, let us think about the military protecting our country both inside and outside the natural borders of our country.  Let us pray that they never have to go to war again.  Let us pray that God will keep them safe and return them home to their families so that they can celebrate next Christmas with their loved ones.

Let us also be thankful that those who are not Christian have the ability, in this great country, to pray to whatever God they believe in.  Let us pray that all religions will be able to live together in peace and harmony and that the current conflicts between the religions are resolved peacefully so that more do not have to die in God's name.

In closing, I wish all of you a Merry Christmas.  Enjoy your celebrations.

Avatar and Boycotts

Over the last weekend, I had the privilege of seeing “Avatar.” This is a film of epic proportions and although I had some problems with it cinematically, from a technological standpoint, I recommend that everyone should see it. However, do not go and see it if you are expecting a live action film or good acting. It is a combination of live action and animation and it should be viewed as such. Just expect the equivalent of a technologically advanced, “Who Framed Roger Rabbit?” I was disappointed because I was expecting a fully integrated live action film.

However, there is one thing about the movie that really upsets me. It is blatantly anti-military and less blatantly Anti-American. Without giving away too much of the plot, the bad guys in the movie are the United States Marines. Apparently, in the future, the world has become one big country that seems to be controlled by the United States. The United States Marines are sent to the planet of Pandora to destroy the opposition to the New World Order’s acquisition of its substitute for oil which just happens to be located on Pandora.

There are scientists assigned by the New World Order to Pandora to negotiate a peaceful solution, but they are overruled by the military and the business interests at every turn. Eventually, the military solution is the final solution. The military then attacks with pure hatred and determination the locals on the planet. They do not care for the sanctity of the alien life, whether it be women or children. And, they attack with sophisticated weapons against the bows and arrows of the natives.

The glee with which the American Marines participate in this massacre is appalling and does not show the true feelings and concerns of the real United States Military. James Cameron should apologize to the American Military and should make a statement that he does not truly feel this way about them. He should also apologize to the American public for painting our young men and women that defend this country as cold blooded killers.

However, I am sure the Mr. Cameron will not do this as the movie is obviously a political comment on Iraq and Afghanistan.

On another issue, all of my regular readers know that I am a firm believer in Free Speech. I believe that this aspect of the Bill of Rights is absolute. Neither the left nor the right should have any say in limiting it. I agree with the United States Supreme Court on the few limitations on Free Speech they have declared as there is an obvious reason for those few and rare limitations.

In the past few years, many department stores such as Target have decided that the use of the word Christmas should not be permitted in their stores. The new corporate policy is that it is the Holiday Season and these are Holiday sales. My brother wrote an article in this column a few weeks ago dealing with this very issue. I agree with my brother’s concerns.

However, it has just come to my attention that Starwood’s Hotels has now adopted the same policy. I have been informed that all of their employees have been told that they are not permitted to say Merry Christmas or to type Merry Christmas in e-mails. To me this is a clear violation of both Free Speech and Freedom of Religion. If a person wants to wish another person a Merry Christmas, they should be able to do so freely.

I have many Jewish friends. I wish them Happy Hanukah and many of them wish me a Merry Christmas. This is one of the Freedoms that are allowed in this country. If someone chooses to say “Happy Holidays,” that is also their own personal choice. But, when a company I am working for tells me that I cannot say “Merry Christmas,” this is going too far.

Accordingly, I am asking that all people should begin a boycott of Starwood Hotels. Everyone that reads this column should pass this on through their e-mail lists, their Facebook account, their My Space account and their Twitter Accounts. The American public was able to force Target and other department stores into changing their policy back to the way it used to be. Let’s see if we can get Starwood to change its policy as well.

© 2009 by Frank T. DeMartini. Permission to copy will be freely granted upon request.

What A Difference a Year Makes

It is pretty much the end of 2009. It is also the end of the first decade of the Millennium. Hard to believe that we’ve gone through ten years since the Y2K scare. Also, hard to believe we had three different presidents since the turn of the Millennium: One that was impeached, one that retired extremely unpopular and one that is becoming extremely unpopular.

Barak Hussein Obama has been president for 11 months. So, this year is his for all its good and bad. There is no doubt about that. When he became President, the entire world was energized. America had elected a new savior. He was young, energetic and promised hope and change. And, he is the first African American President in US history. All of the scars of the past had disappeared. Per the Progressives, we had become a true shining city on the hill. The Republican Party was in deep trouble.

Now, that we have had him as President for one year, nothing has changed and the hope is dimming by the minute. His first year in office has been notable for basically one thing: he has accomplished nothing. Gitmo is still operating. Health Care Reform may or may not happen. Cap and Trade is effectively dead (especially in light of Climategate). The Recession is still destroying the lives of millions of Americans. And, based upon yesterday’s latest report, here comes the inflation we have all been dreading. The President, for all intents and purposes, has been a failure.

Obama’s approval rating is at the lowest ever for a President in office for one year. That is a bad thing for the country, but a good thing for the Republican Party. When you factor in the approval rating of Congress or should I say its 68% percent disapproval rating; the universal dislike of Nancy Pelosi, Harry Reid and Chris Dodd; and, the insistence on passing a health care bill even though almost 70% of the country do not want it, things do not look too rosy for the Democratic Party in 2010.

In the past few days, it has become evident that Democratic Congressmen see the writing on the wall. They are beginning to announce their retirements. As of my last count, four have decided not to seek reelection. The most recent being a long term Congressman from Tennessee.

Will 2010 be a repeat of 1994? Or, will it be even worse for the Democratic Party than 1994? Who knows? I can just say for the record I would not want to be running for reelection as a member of any party right now; especially the Democrats.

The Tea Party movement which has been largely ignored by the main stream media and scoffed at by the Democratic leadership is currently polling higher than the mainstream Republican Party. On its face, this would appear to be bad for the Republicans. But, it may actually be good because the Tea Party movement is, for the most part, all Republican. So, unless they form their own party, these people will be voting Republican in November. Of course, if they do form their own party, as I have said in the past, it will represent the end of the conservative movement as we know it. The Democrats will have control for years to come.

A few days ago, I firmly believed that Congress would pass some sort of health care reform within the next 60 days. However, yesterday’s events may have made it less likely. Just when Harry Reid seemed to have reached a compromise to get his filibuster proof 60 votes, his own party began to splinter. Ex DNC Chairman Howard Dean went on the record as saying that the entire Senate Bill should be scratched because it has become spineless. Per Mr. Dean, without a public option there is nothing to discuss. If Dean is successful, whatever Reid was accomplishing in the Senate will dissipate quickly. Only then, will Health Care Reform have to become bipartisan for anything to happen. Abortion, Tort Reform and the Free Market for Health Insurance will have to be addressed. If Harry Reid and the President are smart about this, they may be able to pass Health Care Reform with Republican support, albeit the left wing of the Democratic Party will be left in the dust! Good riddance to them I say.

On another front, just this morning, Iran launched another test missile. In the past year, President Obama has done nothing to stop Iran’s nuclear program. Will the events of the past 24 hours change his attitude? Or, must the world rely completely on Israel to stop this threat? It seems that this is going to be the case. Facing extreme opposition from the left wing of his party, President Obama is not going to confront Iran in any way that will scare its leadership into submission. Our only hope is that Obama does not try to stop Israel from doing what is necessary.

By the way, I was at a dinner last week in which a very prevalent Congressman was speaking. Congressman Mark Kirk from Illinois, a member of the House Armed Services Committee and the current Republican hopeful to take President Obama’s Illinois Senate seat, stated that one of the biggest blunders made by President Obama in foreign affairs was the removal of the missile shield from Poland. Appeasing the Russians here was a tragic strategic error. Kirk made it clear that the missile defense system in question was not just to protect NATO countries. Apparently Poland is a direct line between Iran and the United States. That missile defense system would be protecting the United States from an Iranian missile attack.

I could go on forever, but this is enough for one of my last columns of 2009. In concluding, this has not been a very good year for the country, its President and its Congress. However, I do not hear anyone saying right now that the Republican Party is dead and should be buried. In fact, all I hear is that the Republican Party is going to possibly take back Congress in 2010. Of course, if the economy turns around in the next nine months, 2010 could turn into a good year for Democrats again!

© 2009 by Frank T. DeMartini. Permission to copy will be granted freely upon request.

Global Rule One Has Cost Actors Jobs

As we all know, the American economy is currently battling double digit unemployment. The current unemployment rate is 10% and most major economists believe it will go higher. The Screen Actor’s Guild which has over 100,000 members would love to see an unemployment rate that low. On any average day, their unemployment rate is probably over 80%.

Of course, you can argue that many members of the guild should not even be actors and that is why they are unemployed. You can also argue there is not enough demand for 100,000 actors and a large percentage will always be unemployed. Both of these are somewhat true. However, if the Screen Actor’s Guild (‘SAG’) made life easier for the producer and its own members, many more actors would have steadier employment; especially the ones that can actually act.

SAG has jurisdiction against producers only within the boundaries of the USA. They are not recognized outside of the United States and hence have no controls. Many other countries such as the UK, Canada and Australia have their own actor’s unions which are considered sister unions of SAG. Because of this lack of jurisdiction, SAG cannot force producers to shoot movies outside the USA under its collective bargaining agreement.

However, there is a clause in the SAG agreement that every actor becomes obligated to when he/she becomes a member of the union. That clause states in substance that “by joining the union, I agree not to work as an actor on a film or television show that does not agree to abide by the SAG collective bargaining agreement.” This is SAG Rule One and its enforcement overseas is now known as Global Rule One.

Prior to the turn of the Century, SAG never enforced Rule One outside of the USA. An American or foreign producer was free to hire SAG actors to shoot a film in Eastern Europe or anywhere else, and did not have to conform to the SAG collective bargaining agreement which, as you know from a prior article written by me, is a nightmare to an independent producer.

The stature of the actor was not an issue. You could hire an “A” list movie star or a scale character actor and hire them for whatever rate the actor was willing to work for. Plus, you could fly an actor coach, pay them a smaller per diem and not be forced to conform to SAG’s rules regarding turnarounds and meal penalties. Hence, it was a free market to both the producer and the actor outside of the United States. As a result, American actors were hired all the time to work on overseas productions regardless of the country of origin of the project.

In approximately 2002, SAG decided it was going to enforce Rule One everywhere in the world. SAG told its members that if they worked non-union outside of the United States, they would be subject to discipline by the union whether they made one million dollars or one dollar on a film.

The rationale SAG gave its members for this change in policy was it would increase SAG employment and help actors qualify for the health plan by allowing them to make the minimum amount of dollars necessary for qualification in the plan. The “evil” producers were taking advantage of helpless actors, and forced them to work long hours on non-union overseas productions. They were not paying contributions to the health plan. SAG and its members would benefit from this new policy.

What has happened is exactly the opposite. SAG members are not being employed overseas unless they are the one or two actors that help finance the movie: i.e. the stars. The rest of the actors are coming from other countries so that the acting fees come within the boundaries of the budget. The bottom line being that SAG costs the producer more money and sometimes, especially in current economic times, the producer cannot afford the extra cost.

For example, the SAG agreement states that on all overseas production, the actor must be flown First Class. To Europe that can amount to as much as $15,000. The same price is true for Asia give or take. A business class ticket runs about $5,000 and a coach class ticket can be as low as $1,000 depending upon the time of year.

If you are a producer of a film shooting in Eastern Europe and you have a part for an actor that works two weeks, are you going to hire a SAG actor at $2,900 per week plus overtime (SAG minimum) if the airfare to get that actor to the location is more than $10,000? Of course not. You may bite the bullet for the SAG actor if the airfare is $1,000.00, but not for almost twice the acting fee.

So, what does the cost conscious and proper producer do? He hires a British or local actor for the same amount or sometimes even a slightly higher fee because the overall cost is less. The quality does not suffer, but the employment of SAG actors does.

The amount of English speaking films that shoot outside the United States is probably twice that of those that shoot in the United States. Each of these films has approximately 10-20 speaking roles that would go to SAG actors if SAG would stop enforcing Rule One. Instead SAG actors are not being hired and their employment rates stay low.

Does this make sense? No. Does anything the Entertainment Unions do make sense, no. Do these unions care about their members or their employment? Sometimes, I wonder.

I realize this article is not something that fits the usual tone of this column. However since I do make a living as a Hollywood producer, occasionally I will write about my industry. This is the first of such articles. I hope you enjoy them as they will be told with my usual political leanings in mind.

© 2009 by Frank T. DeMartini.

Why is Charley Blaine Wrong about Unemployment?

A few weeks ago, I sent out a short e-mail to all of my readers saying, 10.2% unemployment, need I say more?” In response, one of my readers sent me an article by Charley Blaine explaining why this is not the end of the world. You can find the article at: http://articles.moneycentral.msn.com/Investing/Dispatch/market-dispatches.aspx?post=1356156.

The article clearly states 10% unemployment is no big deal because unemployment usually lags the economy. By the time that number is reached, the economy has already picked up or is picking up. He uses historical numbers from the 1982 recession as his guideline. However, he is missing one big point.

His article, in its key sentence states: “Then the economy began to surge in early 1983, fueled by tax cuts and, more importantly, substantial interest-rate cuts by the Federal Reserve.”

Unfortunately, this is not the case in 2009. The Federal Reserve cannot lower interest rates anymore. We are already at a target rate of approximately 0.25%. In fact, the actual rates may be closer to 0.0%. And, there are no Reagan era tax cuts right now. Most of what Congress is doing at the present time would be considered tax increases.

Hence it is my belief the 10% unemployment number will be far exceeded in the next two quarters or so before it finally starts to come down. I believe we might see 12-13% unemployment before this recession is over.

As stated above, the Reagan era policies are not being followed. In fact, they are being scoffed at. We are increasing taxes across the board. Many of our President’s followers will deny this, but even if they just let the Bush tax cuts expire, which is all but a done deal, there will be tax increases. Further, if this disastrous health care package passes, there will be tax increases even for the lower-middle class.

Secondly, the Fed’s policy is not to lower interest rates right now; it can’t, but instead to print money with nothing backing it up. We are building up mountains of debt. This President and the Democratic Congress has done nothing but spend money over the last 11 months. And, the President has done nothing to lower the deficit. He is even saying that the current rate of spending may create a prolonged recession. Accordingly, what we should have is mounting inflation, almost to the point of hyper inflation. But, that is not happening. In fact, we are teetering on deflation which is even worse than rampant inflation.

Based upon all of this, I do not believe that Charley Blaine is correct in his analysis. What I do believe is that we will see a double dip recession similarly to the Great Depression with the second phase being worse. The only thing that will get us out of this mess is decreased spending and lower taxes. Maybe then, the deficit will start to go away. After all, jobs must be created in the private sector and tax breaks tend to have the effect regardless of whatever the lefties dictate.

© 2009 by Frank T. DeMartini. Permission to copy will be freely granted upon request.

Who Really Has the Courage?

Last Saturday night, in what was mostly a procedural vote, the Senate approved moving forward with debate on the health care reform bill. The vote was 60-39, the barest minimum necessary for debate to start in the Chamber. To listen to Harry Reid and his cohorts after the vote, you would think the Senate had just accomplished the greatest feat since the creation of man. What they really did was nothing . . . . . yet. (I’m sorry, maybe they did do something. It appears they bought the vote of Senator Mary Landrieu from Louisiana with a staggering amount of pork.)

Sometime after Thanksgiving, true debate in the Senate will begin. The pros and cons of Mr. Reid’s bill will finally be debated in front of the American public. But, will it be a true debate at all? Or, will it just be a front in which enough pork will be put into the bill to get the votes of Joe Lieberman, Mary Landrieu, Blanche Lincoln, and Ben Nelson; the four Democrats who must be swayed into Harry Reid’s pack of wolves. The same pack of wolves whose intent is ruining America under the guise of health care reform.

Each of these four has told Mr. Reid, in no uncertain terms, they are not going to close debate now that it has opened, unless a few specific issues in the bill are dealt with to their satisfaction. Three of these mavericks come from right leaning states and are, frankly, worried about their jobs. One comes from a far left state: Lieberman, the distinguished Senator from Connecticut, who seems to be the only Democrat left in the Senate with any balls and brains.

The Republicans are ready to make their stand in the Senate. It seems they have been successful already in killing “Cap and Trade” there. Now, it is up to them and any one of these four rogue Democrats to succeed in destroying this nightmare health care legislation in the Senate. We only need one of them. Who from these four will be the savior of the country?

I am reminded of the famous book written by John F. Kennedy entitled “Profiles in Courage.” That book, written in the mid-1950’s, told the story of eight senators throughout history, who defied their party and/or public opinion, to do what was right and in the best interests of the country. Among those stories, is that of Senator Edmund G. Ross from Kansas who defied his party and voted for the acquittal of Andrew Johnson in his impeachment trial thereby preserving the integrity of the Presidency.

Who will be the Democrat that will defy the whims of a power hungry President, the Senate Majority Leader and the Speaker of the House? Who will be the man or woman that will save this country from bankruptcy? Which of these four has the courage to buck the demands of the power elite and do what is right for America?

Senator Lieberman has said that he will not vote for any bill that has a public option. On Meet the Press yesterday, Lieberman confirmed he will support such a filibuster. He also stated that the CBO has confirmed that the proposed Senate Public Option will have higher premiums than private insurance currently does. He stated that competition among the current insurance companies is the only real solution. Will he ultimately have the courage?

Where does Mary Landrieu really stand? Is she being bought by Senator Harry Reid? The allegations are coming fast. In fact, it appears that that page 463 et seq. of the Senate version of the bill is a direct 100 million dollar bribe to the state of Louisiana. Apparently, the house bill has the same thing in it as well. Regardless, I firmly believe that Ms. Landrieu is too afraid of her job to vote against her conscience. The same is also true of Ms. Lincoln from Arkansas, except for the bribery. I too feel that she will vote her conscience when push comes to shove.

That leaves Mr. Nelson from Nebraska. Where does he really stand and can the Republicans and the rest of the country depend upon him to save the day. My answer would be yes. Even if Lieberman, Landrieu and Lincoln cave, I believe that Nelson is strong enough to tell Harry Reid and the President, “No!” He has publicly stated that he will not support a single payer public option; that he will not support publically funded abortions; and, that he will not support a bill that is not revenue neutral. Fortunately, for us Republicans, the current Senate bill includes all three.

In fact, if all of these problems with the Senate Bill were resolved to the liking of Senator Nelson, then many Republicans might actually vote for the bill as well.

So, at the end of the day, which of these four will have the courage? Who will save the United States of America? My guess is that any of the four may do it, but if that idiot from Maine votes with the Democrats, maybe we really need two of these four.

I will address particular problems with the Senate Bill later.

© 2009 by Frank T. DeMartini. Permission to copy will be freely granted upon request.

Obama Swinging to the Right?

This is not going to be a formal post, but I think all of you should note three things that have happened in the last 24 hours:

1.  President Obama, while being interviewed by Fox News, stated that too much government debt could fuel a double dip recession;

2.  President Obama, in the same interview, stated that closing Gitmo is a lot harder than he thought and that it would remain open longer than he expected; and,

3.  Eric Holder, in a Congressional hearing this morning started using the word "War" when describing the current state with Terrorists.  He also guaranteed convictions of the Muslim Extremists.  This is actually odd.  I don't know any prosecutor at any level that would guarantee convictions.

Am I missing things here, or are these major flip/flops?

Or, maybe something deeper is happening here?  Maybe Obama is beginning to realize that the Republicans are correct on certain positions?  Now, if he could actually admit it, there would be a chance at bipartisanship.

Maybe, he can actually admit it on "Health Care", "Cap and Trade", and "Iran", and "North Korea," soon too.

Or, am I dreaming?

Copyright 2009 by Frank T. DeMartini