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  • The American dream is dead: We grew up with the promise that hard workers would get ahead, but now only half the country believes it. Or perhaps all the angst is overwrought and alarmist - things aren't perfect, but they're far from disastrous.  [View news story]
    Whatever else Americans are, or are not, I've always found the majority to be very fair minded. I find it astonishing to read so frequently that "Obama" and his "socialist programs" have ruined the country.

    I voted for Ford, for Reagan, for Bush 1, for Bush 2, and I probably voted for Nixon, but who remembers the 70s? But Obama has not been in office long enough to have screwed up the country. How does Bush II get off the hook, while a guy who wasn't even around for the party get the blame?

    Dubya spent eight years letting Wall Street run rampant while he spent a Trillion Dollars on pointless Iraq and Afghan adventures, all of which was, it turns out, borrowed from the Chinese. He cut taxes on the top 1% radically, while eliminating them for the bottom half of income earners. Yeah that really worked out well.

    If you are looking at marginal tax rates to judge what the wealthy pay, you're not very rich. Capital gains rates turn the income tax into a consumption tax. When you need money,you sell something and pay 15%. Otherwise, you pay nothing at all.

    It's just laughable. Buy a calendar. Do the math. Do you really believe that cancelling the scheduled expiration of the Bush tax cut is going to make America great again?.

    The bottom line is that Bush stayed in office by letting Americans borrow the earning power that America lost when we "offshored" all the jobs in the pursuit of cheaper consumption. Any moron could see that was an accident waiting to happen.

    We ran out our string, and now it's time to spend less, save more, work harder and stop whining about how "unfair" it all is, If you seriously believe that a third term of Bush would have solved everything, America is in even bigger trouble than I thought.
    Sep 24 08:55 PM | 22 Likes Like |Link to Comment
  • The IMF's report that the U.S. needs to grow at 14% in perpetuity to close its fiscal gap leads Laurence Kotlikoff to conclude that "our country is broke and can no longer afford no-pain, all-gain" Ponzi solutions. Hard-core Keynesians who say any short-term stimulus won’t affect our ability to handle long-term deficits are "wrong as a simple matter of arithmetic." (also)  [View news story]
    Either Americans are going to consume less and reduce their standard of living substantially or a falling dollar is going to do it for them.
    Aug 11 06:17 PM | 21 Likes Like |Link to Comment
  • Few could have anticipated that Ben Bernanke would (apparently) reverse an economy rapidly spiralling out of control, and still get so little credit.  [View news story]
    Jeremy Grantham suggests the Jasper M version. To Wit: Fed pumps economy with cheap credit, boosting stock market artificially, and temporarily, by making stock yields look better than bond yields.

    Stocks skim over the trees for a few miles after takeoff and crash into a field 18 months later. No new jobs are created. Wealth effect from stock price rise goes into reverse with a vengeance. Jobless U.S. economy bumps along at 1% real GDP growth while Emerging Markets cruise at much higher growth rates.

    Commodities and energy go up, and stay there, the 30 year bear market in food and commodities having permanently bottomed in the face of double digit Asian GDP growth.
    Nov 11 07:24 PM | 15 Likes Like |Link to Comment
  • America may be slowly transforming from a full-time to a part-time employed society, as the U.S. has lost 10.5M full-time jobs and added 2.8M part-time jobs in the past three years. What happens to a country when millions of its citizens lose the economic support of work - not to mention a habit that lends balance, structure and dignity to their lives?  [View news story]
    That may work for seven million. There are 300 million others. Working part means earning less. They will have to re-train, learn to live without credit, or go on public assistance. Possibly all three.
    Dec 13 07:26 PM | 12 Likes Like |Link to Comment
  • The estate tax is set to come roaring back in January. A real fear is that some families might pull the plug on grandpa rather than get stuck with a massive bill.  [View news story]
    There is nothing new about the U.S. estate tax. What qualifies you to decide what Americans hold dear? Being from Cincinnati instead of having a "foreign-sounding name".?

    Get your facts straight. "Traditional American society" only extended voting to landholding white males. With time, the U.S. came to believe that extending suffrage to all, and promoting income and estate tax policies, was necessary in a true democracy to eliminate extremes of wealth and poverty that tend to undermine the social contract -- the contract to vote and accept the result, rather than pick up a gun and get your share.

    I think that being a reasonably egalitarian society -- with opportunity for all but only handouts for the helpless, is exactly what America is all about. What -- your not disgusted by the billions made by the financial pigs that pyramided mortgage debt profit from the destruction of the U.S. housing market?

    Do you really think that "what's mine is mine, let 'em eat cake" is what America's all about? That's what Venezuela is all about.

    Have you ever tried living as a "have-not" in a totally oligarchic society based on levels of impregnable wealth that puts individuals above the common good, and let's the incompetent children of the wealthy build up limitless wealth over generations without bothering to work for a living? I've lived in half a dozen, and I think you would see is as quite un-American.

    I hate paying estate taxes as much as anyone, and I think they are too high, but a lot of Americans have spilled blood to give you the freedom to build your company, not exactly the best deal for them, either. Freedom has its price.
    Jul 9 10:24 PM | 12 Likes Like |Link to Comment
  • "Capitalism as we knew it" died Sept. 15, 2008, Paul Farrell says, and whatever replaces it will be "far worse, far more self-destructive," because America is "sliding deeper into an economic sinkhole with no soul, no values, no 'Invisible Hand.'" The "Doomsday Capitalism" virus is spreading, he says, with a Great Depression II sinking democracy and your retirement.  [View news story]
    I'm an American living in an "emerging market" country. Did you notice how fast the poor, beaten down dollar rose when "global crisis" hit the news? Have you looked at a map and observed how lovely it is to live in a large, resource rich, democratic, transparent, firm rule of law but reasonably just country, with only 36 people per square mile [80 in Europe, 180 in China, 380 in India] surrounded by large oceans, a smallish southern border.

    And to the north we have Canada: 30 million people dependent on the U.S. to hold on to one of the world's largest and resource-rich countries. [What, you don't think Russia wouldn't start drilling in the northern territories tomorrow if not for the U.S. nuclear umbrella?]

    I keep a house in the U.S., guns and ammo in my safe, and make sure I can get back to our borders even if I have to swim when the whip comes down. Abroad is cool, but it ain't home, buddy.
    Jun 15 09:18 PM | 11 Likes Like |Link to Comment
  • Paul Vigna skewers Jim Cramer as an "insufferable jackass": "He’ll never be honest with his viewers, because being honest apparently isn’t how you get viewers on CNBC... He knows stocks are overvalued. He knows stocks are rigged. But he still tells people to buy them."  [View news story]
    CNBC'S funnier. Unless you take their advice.
    Mar 3 06:45 PM | 9 Likes Like |Link to Comment
  • The First Stage of Inflation Has Already Hit, Next Up Is the Currency Collapse [View article]
    You bet. It has nothing to do with managing inflation or deflation in the U.S. We are in a trade war with China -- which has inflation soaring off the charts but which is managing its currency to maintain maximum export advantage.
    Dec 17 11:48 AM | 9 Likes Like |Link to Comment
  • Obama's budget so carelessly abdicates his responsibility for managing the nation’s finances, Evan Newmark writes, that "he shouldn’t be surprised if the U.S. bond markets, not Republicans, end up determining his political destiny." His numbers depend on tax hikes that have already been rejected, and suggestions of the deficit commission were ignored.  [View news story]
    Ben Bernanke and the Fed are doing their best to cover for Obama and the Congress -- or possibly calling them out. With no meaningful budget cuts in sight through Presidential and Congressional cowardice, Ben's going to inflate away the debt. That may or may not work out well.
    Feb 14 06:58 PM | 8 Likes Like |Link to Comment
  • Felix Salmon argues the stock market is becoming irrelevant, little more than a place for speculators and algorithms to slug it out for profits, and not reflective of the economy - "a noisy sideshow that churns out increasingly meager returns." Somebody get this man a price chart!  [View news story]
    I think he's more right than wrong. Check out the 10 year volume chart on the NYSE, and tell me who's buying beside the bots.
    Feb 14 06:54 PM | 8 Likes Like |Link to Comment
  • Marc Faber on The Coming Economic Catastrophe at Mises' "Austrian Economics and the Financial Markets." Worth the hour.  [View news story]
    Allow me to split the difference between the praise and ridicule contained in the comments made heretofore.

    I am also in the camp that thinks Marc Faber is probably insane. But reading him is an excellent antidote to the crowd-following pap endlessly regurgitated by the hordes of "analysts" who explain after the fact why everything has happened without the slightest ability to predict what might happen tomorrow.

    Mr. Faber is, by those lights, a very refreshing voice with apparently no fear of being thought ridiculous, nor any impulse to hedge his opinions in the event he is totally incorrect. Everyone who cares about markets should read him, if for no other reason than useful exercise of explaining to yourself why he must be wrong and why more "rational" commentators are on the mark. It's a challenge at times.
    May 31 08:25 PM | 8 Likes Like |Link to Comment
  • The Root Cause of the U.S. Housing Bubble Has Yet to Be Addressed [View article]
    I agree that no one "root cause" caused the housing bubble and subsequent crash. But the smoking gun has to be mortgage derivatives, which made possible the 2% teaser rate, the no-income verification mortgage approval, the 10-to-no percent down mortgage loan, mortgage extension to people with no intention of making it their principal residence -- and mortgage loans made by lenders who probably never set foot in the State where the house was located.

    This article makes much of the "government subsidy." The fact is that the U.S. government has been encouraging and subsidizing U.S. house ownership for decades through the interest deduction. Ask the less well off how they feel about getting no rental deduction.

    The U.S. government was clearly at fault. It had, and still has, a dysfunctional regulatory apparatus that couldn't even be made to notice Bernie Madoff much less understand the macroeconomic implications of allowing the average quality of U.S. mortgage indebtedness fall off a cliff. They were, and probably still are, asleep at the switch. I am open to suggestion as to how to fix the shamefully inept financial regulation in the United States.
    May 27 07:29 PM | 8 Likes Like |Link to Comment
  • Obama's use of competitiveness as a theme for the State of the Union may be smart politics but is "a misdiagnosis of our problems [that] could lead to policies based on the false idea that what’s good for corporations is good for America," Paul Krugman writes. "We’re in a mess because we had a financial crisis, not because American companies have lost their ability to compete."  [View news story]
    WJ, as usual I agree with part of you say -- the parts that aren't rhetorical. But maybe you should mention that "the government" is also us - we vote for 'em -- and when we elect officials who do what we want them to do, who's to blame? And what "we" [a majority, by definition] wanted was to maintain our outsize standard of living, in global terms, by importing cheaper products made by foreign [slave] labor and paying for those products with borrowed money while we provided "financial services" and sold real estate to each other [which were the engines of early 21st C job creation.

    Quite a party, but "parties ain't meant to last."
    Jan 24 08:54 PM | 7 Likes Like |Link to Comment
  • Seems that monetary policy was one of the pet peeves harbored by the nut who killed six people and wounded 14 this weekend in Arizona. Should that discredit those who hope for a return of the gold standard? Surely not, but such a stretch of logic might come naturally to certain economists, James Taranto writes.  [View news story]
    Agreed. It is provocation rather than commentary, an invitation to reaction rather than reason. More Seeking Omega than Alpha.
    Jan 11 11:43 PM | 7 Likes Like |Link to Comment
  • The "Giving Pledge" gang - Gates, Buffett, et. al. - are not representative of the "wealthy" whose taxes Obama wants to raise, Evan Newmark writes. "These are the local doctors who treat your mother, the McDonald’s franchise owners who feed your family, the Toyota dealers who sell you a car... America badly needs these 'wealthy' families to do well."  [View news story]
    The gap between rich and poor is getting bigger every year because richer people can earn money on their capital by investing in countries without negative savings rates that invest in growth. And why shouldn't they?

    In 2005, when the U.S. economy was booming, the U.S. savings rate fell to minus 0.5% -- Americans spent every dime they made, and then some.

    The fact is that Americans got used to being richer than everyone else. Americans uses 68 barrels of oil per day per 1000 people, compared to 29 in Germany, 6 in China, and 2.5 in India.

    But they didn't get used to investing in their own education and raising their game against these other countries, but instead started buying Dodge Magnums with 300 hp while U.S. infrastructure rotted away, and supported the U.S. government's decision to spend a Trillion dollars accomplishing I'm not sure what in Iraq. Imported oil accounts for two-thirds of U.S. consumption.

    As bfran stated above: we've become a nation of whiners. It's all the fault of the rich, Big Banks, Big Business, Wall Streeters, real estate speculators, tax dodgers -- but not the common man. You really think that the rich took out all those teaser rate, no income verification, subprime mortgages that needed bailing out?

    Get a grip. As long as Americans blame "the other guy" for their declining fortunes in a competitive world of very hard-working, low paid-but-high saving Emerging Market workers, rather than facing the reality that the easy money that came as a birthright for being American in the 20th Century has come to an end, our infrastructure will continue to crumble and we will continue to be the losers we are fast becoming in the global economic sweepstakes.
    Aug 5 10:42 PM | 7 Likes Like |Link to Comment