After a U.S. jobs report from the Labor Department showed modest gains in November, last Friday’s report for December showed a loss of another 85,000 jobs. We also learned on Friday that the Eurozone’s unemployment rate has now joined the U.S. at 10%+. These unemployment rates remain stubbornly high, in spite of the fact that both economies grew in the second half of ‘09. (FT 1/9/2010)
So it’s not surprising that job creation remains at the top of the list in most political polls, but politicians on both sides of the Atlantic seem more interested in tax increases, as opposed to tax incentives, to drive job creation. For example, the U.S. Congress is starting to once again discuss changing the way “carried interest” is taxed for venture capital partnerships. (Yes, I am backed by Austin Ventures, but I have held this belief for more than 20 years.) I believe a more productive discussion would be how to incentivize venture capital firms to make more investments that lead to new jobs, rather than trying to tax their partners’ gains as ordinary income. To get a better understanding of this issue, I recommend visiting the site of the National Venture Capital Association and reading “Carried Interest Tax Policy.”
President Obama did acknowledge that the December data represented a setback, “while outlining plans to deliver $2.3 billion in tax credits to spur manufacturing jobs in clean energy.” (NY Times 1/9/2010) As I have stated in the past, the U.S. midterm elections in the fall will revolve around jobs and both parties will need to address this issue. This will also be a major issue in the U.K. election this spring that will determine if the Tories replace Labour.
As we have made our way through this very difficult economy, most of my wine recommendations during ‘09 were driven by value. I decided to kick off 2010 on a more optimistic note, at a small dinner party Mary Claire and I hosted at our home in Blackhawk, by tasting several older California cabernet blends. I went into my cellar and chose three wines:
1982 Dunn Howell Mountain: Randy Dunn has a long history working at some of northern California’s best-known wineries, including Caymus and Pahlmeyer. His Dunn Vineyards offerings have a storied past, particularly his Howell Mountain wines.
1985 Rubicon Estate: This is the flagship release of Francis Ford Coppola’s Rubicon Estate. Coppola is still best known for the Godfather, which was released in 1972. 1985 was a very good year in Napa Valley.
1995 Dominus Estate: This winery is owned and operated by the celebrated French winemaker Christian Moueix, of Chteau Ptrus fame.
The votes came in and gave a slight edge to the Godfather’s ‘85 Rubicon,over the ‘82 Howell Mountain. Both wines still had fruit that was remarkably young, soft tannins and excellent balance. The only disappointment was the Dominus, which did not stand up well next to the two other contenders.
Here’s to the winners and a recovery that creates jobs in 2010!