Wednesday, October 3, 2012

SAR #12276

We've gone from 'Hope and Change' to “Hope He's Changed.”

Tell Me More: Romney says that one way to pay for the 20% across the board tax cut would be to limit deductions to $17,000, “and higher income people might have a lower number.”

Codeword: In the coming months we'll here a lot about "comprehensive deficit reduction". When you come across that phrase, simply think "cutting Social Security, cutting taxes for the rich, and abolishing social safety nets" and the rest will fall into place. Is it necessary? No. Is it a betrayal of the people? Yes.

Horse's Mouth: Bernanke – in the usual camouflage of financial mumble jumbo – says this is not the time to undertake deficit reduction because the economy still needs 'support'. Which might be another way of saying 'stimulus'.

Batter Up: The administration is reportedly preparing to initiate unilateral strikes on groups in North Africa that are terrorist, or can be called such following a drone strike.

Over There: If new car sales are a barometer for the French economy - as they are in the US - things are somber: New car registrations - 'only' down 13.9% year to date - were down 18.3% in September y/y. things are so bad in Europe that the head of VW wonders "if automakers can survive without government help..." There was also a second shoe, in the form of France's PMI which dropped to 42.7 in September, the lowest it has been since early 2009. Shucks, even Spain outperformed France.

Spade, Named: Some say the US fears Iran's nuclear program because if they were to get nuclear weapons they could deter US attacks. And not only on Iran.

Late To The Dance: Reports say that Wall Street views charter schools and privatization as "the next big thing." Wrong. Not "the next" - Wall Street climbed on this bandwagon some time ago. You didn't think all the noise was really about educating the kids, did you?

Good, Bad and Ugly: Australia's Great Barrier Reef is in steep decline - about half of it has disappeared in the last 30 years. There are still relatively pristine reefs in the northern portion of the reef system, but those further south are fast dying off. But the loss cannot be completely blamed on man-made global warming. Much of it is caused by man-made nutrient runoff from agriculture, while crown-of-thorns starfish also get some of the credit. the bad news is that large reef-building corals could become largely extinct within this generation, which would seriously disrupt the oceans' chain of life.

Point Of Order: Historically, the debasement of a money leads to the debasement – and generally the end – of the afflicted society.

Some Doctor, Some Cure: The Great Non-Depression resulted from an immense housing bubble and an irrational credit bubble that had fueled a decade of excessive consumption. In order to bestir the dormant economy, the Fed is intent on reviving excessive consumption by re-inflating the housing and credit bubbles. It's a plan.

Austerity On Ice: While Europe and the US continue to bail out bankers at the expense of their citizens, with little to show for it, Iceland seems to be recovering nicely. Of course they put their crooked bankers in jail.

Alternatives: A Commonwealth Fund study shows that Romney's health plan would leave 72 million uninsured, Obama's would leave 27.1 million stranded, and a single payer national health system would cover everyone.

Thought Experiment: The headlines scream that "the home price rally is spreading to more housing markets..." as though this was a Good Thing. Why do we think that a rapid inflation in house prices is a sound thing? How quickly & how far can prices rise before they become another unrealistic bubble? For the long term, are we even sure prices have fallen far enough yet?

The Parting Shot:


Seasons end.


Anonymous said...


Corporations are People but People are not Corporations. I am a business just like a Corporation. I have income and I have expenses, lots of them. If I had the same rights as a Corporation then I could deduct all my expenses. Entertainment, food, laundry, housing, transportation, education, healthcare for starters.

So why aren't these conservatives advocating corporate tax breaks for all citizens?

OkieLawyer said...


Corporations are persons under the law, not people. Mitt Romney should have known better when he made his infamous statement, being a lawyer and all.

I know it is a distinction that is hard for non-lawyers to understand. People are individuals and corporations are not.

OkieLawyer said...

Re: Horse's Mouth

I think I tried to tell you a few months ago that inflationary policies helped those in debt. The writedowns never occurred; and Bernanke was left without options. There was a news story on Bloomberg yesterday that Bernanke stated he knew his policies hurt "savers." The purpose is to force that money being hoarded into riskier (i.e. business formation) investments that will lead to job creation.

You have a better idea? Let's hear it.

Charles Kingsley Michaelson, III said...

OkieLawyer - If that was aimed at me, I'm not sure why. I included the item because I thought that Bernanke lecturing Congress made a nice turn from them bitching at him. He's right, we need a stimulus. I think that his approach is far too indirect and won't work. I'd be in favor of direct creation of paid jobs - not quite the CCC and WPA, but that idea adapted for the world our kids will inherit.

Not being in debt, I'm not big on inflating our way out - keep it to 2% or so. We've also got to remember that energy starved economies will not grow nearly as much nor as quickly, thus acceptable inflation will be lower.

Or so it seems to me.
- ckm

OkieLawyer said...

Sorry, I should have been more clear by saying "you all."

I also would favor a CCC and WPA massive infrastructure project. But that actually factors into my point: which is that, given who is in power in Washington, we will not get that. Therefore, Bernanke's policy is the best of the bad choices he has.