Happy Holidays

Starbucks_Holiday_Cups-lowresLife was tough for those living in northern latitudes during prehistoric times. When the growing season ended they had to survive on what food they stored and what animals they could kill. Each day the darkness came a bit earlier and lasted longer into the next day. They feared the sun would disappear forever and leave them in permanent darkness and cold. solstice_StonehengeAfter the solstice passed, they would begin to take heart that the sun would return, giving them reason to celebrate and to hope. Even without instruments, to measure the solstice, after a few days they could tell the sun was moving higher on its path, giving cause for celebration.

Beginning in the 3rd century BCE, the Romans honored Saturn, the god of the harvest. The Saturnalia celebration began on December 17 and lasted for a week. The festivities included giving gifts and lighting candles. Romans being Romans, over time it degenerated into a week of debauchery and revelry.

An ancient Syrian god, Sol Invictus (“The Unconquered Sun”) became the chief god of the Roman Empire in the 3rd century CE. The Roman citizens celebrated his holiday on December 25.

Theologians and religious historians estimate that Yeshua, later known as Jesus, was born in the autumn, sometime between the years 7 and 4 BCE. By the 4th century CE, western church leaders felt they needed to celebrate Christ’s birth. They chose December 25 because that date was recognized throughout the Roman Empire as the nativity of various pagan gods. There being no central church authority at the time, it took centuries for December 25 to be universally accepted. Ireland began celebrating Christmas in the 5th century. England, Austria and other European countries did not begin until the 8th century.Coca-Cola-Christmas-christmas

Christians adopted many pagan symbols, such as holly, mistletoe, decorated evergreen tree, gift giving and, yes, magical reindeer. The Romans decorated trees for their Saturnalia festivities. Vikings adorned evergreen trees with pieces of food and clothing, and small statues of the gods to persuade the spirits to return in the spring.

yule-DruidSanta Claus is an amalgam of a number of pre-Christian stories. German mythology includes the character Odin, a wise old man with a beard who rode an eight-legged horse. Ancient Anglo-Saxon solstice celebrations featured Father Time, King Frost or King Winter, dressed in a green hooded cloak wearing a wreath made of holly or mistletoe.

Our pilgrim antecedents were not enthusiasts of Christmas. In the mid 17th century, Christmas was actually outlawed in the city of Boston. The first Congress under our new Constitution was in session on December 25, 1789. It was not until the years after the Civil War that Christmas started to gain popularity in the U.S.

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The religious – “Christ’s Mass” – and the profane – St. Nicholas – both gained recognition. Washington Irving (The Sketchbook of Geoffrey Crayon, gent), Charles Dickens (A Christmas Carol), Clement Clarke Moore (A Visit From St. Nicholas) and Thomas Nast (Santa Claus illustrations)thomas-nast-santa-claus helped popularize the celebration. Christmas finally became an official U.S. Holiday in 1885. Now we celebrate Black Friday.

A final thought: what does this have to do with Starbucks and the war on Christmas? Historically, the war on Christmas has been waged mostly by Christians.

 

Special fun bonus link: The story of the Starbucks mermaid.

Muddling Through Somehow

have1It’s the Christmas season but Esther Smith’s heart is not filled with joy. Her father has announced that he’s being relocated to New York for his job and the family will be moving there. The move will separate Esther from John, the boy she loves.

Esther, played by Judy Garland in the 1944 film Meet Me in St. Louis, is the second of four daughters in the Smith family. The year is 1903. Esther’s brother and three sisters are unhappy about leaving behind their school friends and romantic partners. To make things worse, they will miss the greatly-anticipated world’s fair the following year.

On Christmas Eve, Esther soothes her little sister Tootie (Margaret O’Brien), singing to her Have Yourself a Merry Little Christmas. The song has since become an inescapable part of the holiday background. The music-licensing company, ASCAP, once named it the third most-performed Christmas tune.

Judy Garland, her co-star Tom Drake and director Vincente Minnelli all thought the song as originally written was too depressing and so asked the lyricist Hugh Martin to make some changes. He came back with a more upbeat version. The line “It may be your last / Next year we may all be living in the past” became “Let your heart be light / Next year all our troubles will be out of sight.”

Thirteen years later, Frank Sinatra was recording a Christmas album, have2A Jolly Christmas. He went back to Martin asking him to “jolly up” the line “Until then we’ll have to muddle through somehow.” The composer changed it to “Hang a shining star upon the highest bough.” This became the standard version. Later, Ms. Garland sang these revised lyrics on The Judy Garland Show Christmas Special.

The list of artists who have recorded this song is almost endless, usually with the “shining star” lyric. One, Chris Isaak, recorded both versions of that verse.

And the Smith family? When Mr. Smith realized how unhappy his family was, he changed his plans, cancelling the move to New York. They all got to go to the 1904 St. Louis World’s Fair.

Plus ça change*… plus c’est la Dick’s Drive-In

Wendy’s is promoting its “Baconator” high-calorie, high-fat sandwich… and salt, lots of salt. Jack in the Box is advertising a “Ribeye” burger. McDonald’s features “Buttermilk Crispy Tenders.” (And don’t forget their occasional McRibs.”) At Burger King, you can get a “Farmhouse King.” (1,220 calories) In-N-Out has its “secret” menu. Going against the trend, Dick’s Drive-In has pretty much the same menu as when Dick Spady opened his Seattle restaurant in 1954: Hamburgers and Cheeseburgers – Regular and “Deluxe” – French Fries and made-with-real-ice-cream shakes. No breakfast, no fancy stuff. Dick’s doesn’t do special orders or accommodate requests for substitutions.

Mr. Spady died in January 2016 at the age of 92. The business, still owned by the family, has grown to six restaurants, including the newest in Edmonds, on the northern edge of Seattle. Dick’s patrons chose that locale; more than100,000 voted their preferences for the new location. A seventh restaurant is in the works, after 177,000 ballots cast, in the city of Kent, near SeaTac airport. The Queen Anne, Seattle, location is the only one with indoor seating. All the others are order-at-the-window takeout. The older buildings have been remodeled, adding customer rest rooms. Dick’s owns them all; none are franchised.

Dick’s is known in the Seattle area for paying higher than the prevailing fast-food wage, as well as medical and dental benefits. Employees can take advantage of child-care assistance and scholarship opportunities. According to the web site, Dick Spady founded Dick’s Drive-In with the following business philosophy:

  • Make a profit
  • Invest in your employees
  • Invest in your community

You have probably noticed asterisks on restaurant menus warning you of the danger of food-borne illness from undercooked food are a legacy of the Jack-in-the-Box E. coli outbreak in 1993. Undercooked hamburgers served at fast-food outlets in California, Nevada, Idaho and Washington put 171 people in hospitals and killed four children. Jack in the Box had decided that cooking their burgers to the recommended 155 degrees made them too tough; they served their ground-beef patties at 145 degrees. The resultant law suits cost them $50 million.

Dick’s no-substitution policy served them well. During the Jack-in-the-Box fiasco, the local newspaper surveyed area restaurants about how they handled customer requests for burgers cooked rare or medium. Dick’s did not equivocate. They cook all theirs well-done. Period.

* Plus ça change, plus c’est la même chose (The more things change, the more they stay the same)

Death and Taxes

2016 was a tough year for hedge funds, their managers anyway. The combined income for the top 25 managers was a paltry $11 billion, the lowest since 2005. That’s just a little over half of the $21.2 billion they “earned” in 2014. Don’t feel too sorry for them, though. Most of their income is categorized as “carried interest” and taxed at a rate of 20%, compared to the 39.6% top tax rate for “earned” income. Your investment in a hedge fund is subject to the typical “two and twenty” fee structure. The fund manager annually takes two percent of your invested assets plus twenty percent “performance fee” on profits realized. (The performance fee is considered carried interest.) What if your assets lose money? Does the manager suffer 20% of the loss? Ha, ha, that was a joke.

While campaigning last year, our president said, “I have hedge fund guys that are making a lot of money that aren’t paying anything.” He said he would change the tax system to force those who work for hedge funds to pay more. “They’re paying nothing and it’s ridiculous. I want to save the middle class. The hedge fund guys didn’t build this country. These are guys that shift paper around and they get lucky.”

What little that has been revealed about the Republican “tax reform” includes a reduction of the tax rate to 15% for “pass-through” income. This is trumpeted as relief to small family businesses that are S corporations – meaning the business is not taxed. The income is passed through to the individual owners who are presumably taxed at a lower rate. Guess what – investment firms can be pass-through businesses also. If carried interest is taxed at the higher rate, who cares, because as pass-through income it will be taxed at even less than before.

The United States nominal tax on corporations is 35%, purportedly the highest in the industrialized world. The effective tax rate, because of endless incentives and breaks, is not so high, about 22% for profitable companies. Of the Fortune 500, nearly forty percent paid zero Federal tax in at least one year between 2008 and 2015. Some, including General Electric, International Paper, Priceline.com and PG&E, incurred a total federal income tax bill of less than zero over the entire eight-year period — meaning they received rebates.

Our president recently delivered a speech to an audience including hundreds of truckers – “hard-working men and women” who are “the lifeblood of the economy.” He touted a lower tax on manufacturers as a boon to truckers as it will increase growth and demand for trucking. He also wants to eliminate the estate tax, pejoratively called the “death tax” by Republicans. He claims this will allow truckers to pass their assets on to the next generation, allowing their businesses to stay in business. Republicans have previously said keeping family farms alive was the overriding reason to abolish estate taxes.

The first $5.49 million of your estate is exempt from estate tax; for a married couple, it’s $11 million. Tax experts calculate last year 80 farms were subject to any estate tax at all; for trucking companies, it was 30. Elimination of the estate tax is estimated to save the Trump family approximately a billion dollars. That assumes that The Donald does actually own anything.

As billionaire hotelier and husband of another New York real-estate magnate, Leona Helmsley, famously said, “We don’t pay taxes. Only the little people pay taxes.”