Sunday, February 08, 2009
My whereabouts
I'm flying home today and will not be able to gete another post up until late afternoon, so consider this an open thread. Or, if you cannot bear to go without something to read on the banking crisis, this is a not wholly ridiculous story from the Associated Press. If the spirit moves me, I'll write something on the plane.
MORE: The TH father-in-law recommends this column, which proposes key elements of a successful reconstruction of the financial sector, as "sensible."
12 Comments:
By 
, at
Sun Feb 08, 10:34:00 AM:
That was indeed a sensible column. Ultimately, improving trading markets will help improve the perception a lot of assets that are toxic now, and these suggestions will help improve trading markets.
On an unrelated topic, here's more on the continuing realization of the "empty suit" qualities of our new President.
By , at
Sun Feb 08, 10:59:00 AM:
Don't underestimate Obama. The current media consensus that Pelosi is taking advantage of Obama over the Stimulus Bill is smoke. It weakens resistance from the right. We're all being played. Behind the scenes Obama and Axelrod are high-fiving each other, as they're about to make a major advance in pushing their agenda.
They've built a consensus that the Stimulus Bill is necessary to avert catastrophe, even though most agree that it's too big and too pork-ridden. Almost all the Democrats in Congress have fallen in line, and a few key Republican Senators have been turned. The debate is shifting to whether an extra $100 to $150 billion is in or out ... Obama and Axelrod have won and are lighting up cigars.
The Stimulus Bill will have little "pound for pound" effect on the current recession ... even the CBO is saying that. That's because it won't really kick in until 2010. But it will enable Obama to get funding for many of the stupid "yes we can" ideas he talked about on the campaign trail. Going into the 2010 mid-term elections, Obama can tell his base that he delivered.
I'm still trying to figure out the implications of all this spending ... how much of it is deluded ... and how much of it is Machiavellian clever.
Spending for "energy independence" ... for example ... seems largely delusional. Little benefit will come from this spending. We could buy a lot of nuclear reactors with a few hundred billion, and actually get a result.
As to Machiavellian clever, the single worst thing in the Stimulus Bill is "tax rebate checks." There are a large number of Americans who don't pay any income tax. Many will now start getting a check from the government, paid for by the rest of us. This is pernicious, and can have far-reaching implications.
There are a lot more voters who make less than $50,000 than there are those who make more than $250,000, so Obama & Co have figured out that they can buy the votes of those making less, and get the "rich" to pay for it. As we get near future elections, look for Obama & Co to increase these payments, while redefining "rich" downwards. It's a means to buy a permanent voting majority ... and to level society ... which is part of their master plan.
Obama & Co are sneaking this through as part of the Stimulus Bill with nary a whimper of specific objection.
"... but I didn't know until this day, that it was Barzini all along."
Link
By , at
Sun Feb 08, 01:44:00 PM:
There are a large number of Americans who don't pay any income tax. Many will now start getting a check from the government, paid for by the rest of us.
I hate to burst your bubble Link, but under the Bush administration these very same people received rebate checks in 2001, 2003 and again in 2008 when Bush signed the Economic Stimulus Act of 2008. These folks may not pay income tax but they do payroll taxes just like the rest of us.
Problem is the cuts didn't work under Bush, and it's likely they won't save the day under Obama:
What good is a tax cut when the ranks of people paying neither income OR payroll taxes is increasing at a rate of 600,000 plus per month because they're unemployed!
By , at
Sun Feb 08, 03:43:00 PM:
Response to Anon 1:44pm
What's different from Bush's rebate checks is that Obama intends to make his "negative income tax payout" permanent. There's also a direct tie between these checks to Obama's campaign promises, when he was trying to win votes. In the 2008 election, Obama stole the traditional Republican mantra ... "Democrats will raise your taxes, Republicans will cut them" .... by promising a tax cut for 95% of Americans, to be paid for by the other 5%. Now he's delivering on that promise.
This promise pre-dated our current economic crisis ... you also had to read the fine print to see that it meant sending checks to people who weren't paying any income tax. Obama is using the crisis to push this through, even though we've learned that "rebates" aren't effective stimulus.
By the next election cycle, this will be packaged cleverly ... something like "Obama's bonus check" ... "Romney/Palin/Pawlenty want to take it away!"
The federal income tax is already complex and highly politicized ... but a burden we all share to fund our current collective needs. It's a bad precedent when it starts becoming an accepted tool for income redistribution ... where people are getting a direct transfer from the rest of us to fund their current personal needs. Some people may fairly need help, but blanket blank checks funded though the federal income tax aren't a good way to achieve this.
Once this precedent is established, game theory suggests that Obama & Co will want to move 95% - 5% to something more like 70% - 30% as a way to buy a permanent voting majority ... and what's to stop them. It's pernicious and dangerous precedent ... and one I used to think we'd say was "anti-American."
There's a high correlation between what's in the Stimulus Bill and what Obama promised on the campaign trail, and very little in it that will help the increasing ranks of the unemployed.... which is why the Stimulus Bill is such a pig, and so problematic ... I think we're agreed there.
I would go further and call it the Obama 2012 Re-election ... Let's All Go Socialist Bill.
... but Obama & Co have the votes, so it's a done deal.
****
Payroll taxes are supposed to be funding a mandatory retirement / health care plan. So if you are paying in, you're supposed to be getting a direct personal benefit back. There's several debates we can have about many aspects of this -- but that's what the government tells us: "Social Security / Medicare aren't welfare programs but paid for benefits."
Payroll taxes are too high. You really see it when you you're self-employed and have to pay both sides of it directly ... just ask Tim Guenther.
But the real scandal is that many of us who are paying in may not see anything back ... that's an especially hard burden on our younger working poor.
Link
By , at
Sun Feb 08, 05:10:00 PM:
What's different from Bush's rebate checks is that Obama intends to make his "negative income tax payout" permanent.
Huh? "Negative income tax payout" permanent? You don't know what the %$()% you're talking about.
By , at
Sun Feb 08, 05:12:00 PM:
The delay in spending is precisely what is clever about this bill. The economy will recover even if we do nothing, so by delaying spending Obama can (a) give himself credit for the recovery, (b) use the recovery as justification for additional spending, and (c) use the recovery to get his pals in Congress reelected.
By , at
Sun Feb 08, 05:13:00 PM:
Heh. Don't forget to check for BoogeyMen under your bed before you go to sleep tonight, Link.
By 
Purple Avenger, at
Sun Feb 08, 05:20:00 PM:
I just bought a bunch of BAC and C stock. I figured I was a better shot than buying a lottery ticket.
By , at
Sun Feb 08, 06:36:00 PM:
My apologies, I got a key detail wrong. The bill doesn't provide for a rebate check ... instead, if you're not paying any federal income tax, you get a reduction in your personal social security / medicare payroll tax ... your employer still pays full freight on their half of the payroll tax. This will show up in reduced withholding retroactive to the beginning of 2009. It would be effective through 2010. To me this is clever packaging ... folks like me can't rant about checks in the mail, although it has the same economic effect. I still stand by my general points.
Expect Obama to propose an extension ... and even an expansion ... of this going into the 2010 mid-terms. If we have a modicum of recovery, expect Obama to propose balancing it with higher taxes on the "rich", however defined ... my over/under for 2010 is $150,000. If you're a Republican, try countering that instead you want to raise taxes on a larger number of voters. Once this door gets opened, it may never close ... and will likely just open wider.
My main point is that the stimulus bill ... which we're told is critical to averting catastrophe ... has been drafted more with a view to letting Obama "make it rain" for his supporters than it is to fix our immediate crisis. I expect more of the same from Obama & Co, which is why I do see monsters under my bed.
Ultimately this is a fight over "those who get checks from the government" and "those who don't."
I have a 17-year old son who I believe could be a good surgeon. Is it it worth the hard work and investment, given where this is going?
Link
By , at
Mon Feb 09, 08:43:00 AM:
Obama further complicates management lines of authority, giving the NSC formal control over broad swaths of international policy.
Overlapping authority never works well. Never.
By , at
Mon Feb 09, 08:48:00 AM:
Also, more on the great Census heist. This story should get bigger coverage because it is such a brazen thwarting of law. And, I had such hope for change....
By , at
Mon Feb 09, 08:56:00 AM:
Rhambo has issues. And we haven't even heard from Fitzgerald yet, so he can expect to have even bigger issues then. Where I come from, we'd call Emmanuel a "wounded duck", ie, a guy who's not going to last very long without significant help.
After the President sacrificed his popularity to pass the Democrat orgy bill (I love paraphrasing the Nancy Pelosi justification, 'We control the Congress, so we're making up for all the Bush years'), I don't see him mounting much of an effort to save cabinet appointees who can't defend themselves. It'll be interesting to see how this develops.
