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Those Rich, Greedy People Making $200,000 Are Holding Down Economy

You guys rock! The response to the new poll was amazing. Hundreds of replies poured in, and they were all great. It's going to take some time to analyze them all, but we will. Please invite your friends and colleagues to take the same poll. I only wish the folks that are bringing us Stimulus Lite would take a look with open minds. The fact is that politics continue to drive economic policy, and it's maddening. It's the same script that ushered in the new era at the White House, publicizing bills that mean very little and would have very limited economic impact anytime soon. I like the idea of an R&D tax credit, and encouraging business investment, but it's just not the right medicine at this time. Drawing a line in the sand on tax cuts is nuts when nothing could have a swifter impact on the spending and psyche of the nation.

I also find it interesting that the President said extending the Bush Tax cuts (he didn't say Bush because there is an effort to suggest the tax cuts only targeted the so-called rich) for people making $1,000,000 would put an extra $100,000 in their pocket. Talk about politics of envy! Allowing people to keep more of what they earn encourages people to earn more instead of lowering the bar to avoid demonization and a relentless taxman. The immediate collateral damage happens to the 1.3 million people making between $200,000 to $249,000, and the hundreds of thousands of additional Americans earning more than $250,000, but less than one million bucks. It is derisive and backward.

How would you cut $700.0 billion out of the U.S. budget?

 

http://www.wstreet.com/gutstocut.asp

It's Not Better

"And how can you mend a broken heart?
How can you stop the rain from falling?
How can you stop the sun from shining?
What makes the world go round?
How can you mend a broken man?
How can a loser ever win?
Please help me mend my broken heart and let me live again"
- Bee Gees

I want to rip my hair out from the non-stop selling of the economy and economic plan. This new era of non-stop campaigning is sickening, particularly when you have to blow smoke 24-7. Robert Gibbs is blowing like one of the singing Gibb brothers, except we shouldn't be dancing, as the economy is barely staying alive and there are more broken hearts now than two years ago. Still, the White House Press Secretary has made the most gaffes this side of Joe Biden, and many are simply insulting.

Yesterday, the Federal Reserve released its Beige Book report, which underscored that growth is slowing. Forget the spin, slowing and decelerating economies aren't going to gain traction on the things outlined by the White House yesterday.
 

Saying by every measure the economy is better off today than two years ago is factually off base. I would say there was more hysteria two years ago that actually was fanned by politicians that had no clue, and a slow-moving Fed that maybe had less of a clue.

Better By Any Measure?



*Gallup Poll "Public Attitude Towards the Public Schools" the 1.89 grade the worst ever (poll began 1981) A=4, B=3, C=2, D=1
University of Michigan Consumer Confidence reading for September 2008 73.1 the consensus was 64.0.

How can you mend a broken nation? Not by throwing mud, never admitting mistakes, and stubbornly pushing policies that don't work in part because they were never designed to work.

How can a loser ever win?

How Can a Winner Ever Lose?

The downfall of America continues according to the World Economic Forum in its annual report on global competitiveness. For 2010, the United States has slipped to fourth from second in rankings based on a set of criteria I list below. On one hand, any competitive list that doesn't have China ranked in the top ten is a little skewed, but it's remarkable how much this list reflects my concerns about our nation. I know President Obama feels like a citizen of the world, and respects the learned opinions of European intellectuals, but in this case he should use this report to stack his priorities for the nation. The main reasons for America's unceremonious tumble from number one a couple years ago to number four are the runaway deficit and distress of politicians.

When ranking the United States against 138 other countries, our infrastructure comes in 15th place, which isn't too bad, and doesn't scream out top priority! Our macroeconomic ranking of 87th says it all; the nation is stuck, and focused on an unnecessary witch hunt of successful people from the guy that owns a couple auto body shops in your county to business executives that worked their way through the corporate maze (overwhelmingly) through hard work, sacrifice, smarts, and guts. My personal number one concern, primary education, ranks a shocking 42th. We've bludgeoned the financial markets by spooking away private players and letting the government take the lead. Talk about being bold. There is no doubt in my mind that one of the best things President Obama could do is shorten the summer by at least a month and for communities falling behind by a month and a half.

Because he is black this can be done now, otherwise in the future it will be labeled racist. But to save our nation all Americans must be able to compete, further coddling is more than a disservice, it's a sin. On the Most Problematic list, I find it interesting that poor public health is less of an issue than even a possible coup.

It's a no-brainer that access to finance continues to be a serious problem, and financial regulatory reform isn't going to help the situation. Nor is the war on prosperity. Government bureaucracy ranks high on the list of problems so the solution there is to make it larger and more cumbersome. The idea of more rules and regulations coming down the pike has cast a pall over many critical business decisions.

I was shocked at how high work ethic ranked, but it might be the right wake-up call. When I was growing up I was expected to work hard even if others got ahead with less effort. My mother prepared me for the real world. These days, reality show nonsense has replaced parental guidance. I know too many kids that think they're above working at McDonalds (NYSE:MCD) even though they don't have a high school degree.
 



Today's Session

McDonald's continues to rock, but its monthly sales numbers disappointed a few, and that's pushing the share price lower. But, the big news that initial jobless claims decreased by 27,000 to 451,000 rather than the just two thousand expected has added some turbo to equities before the open. This is a great example of the expectations game. Any initial jobless claims number above 400,000 is dismal. On the other hand, Mickey Ds enjoyed strong sales around the world. Same-store sales:

* Asia Pacific/ Middle East/ Africa 7.8%
* Europe +2.2% (France was weak)
* US +4.9%



Disclosure: none