Recently in Economic meltdown 2008 Category

...for dismantling capitalism. Not. Read all about it here.

So what's wrong with Buffet? Has he been palling around with Bill Ayers....?

As part of his ongoing effort to portray Obama as the source of all evil, seemingly oblivious to the economic meltdown of 2008, my good friend John Galt complains about how it's a crime that April 13 has been calculated by one group as the first day you can stop working for the government and start working for yourself.

If John were being fair, he'd point out that this April 13 "tax freedom day" comes earlier than many recent years, thanks in part to Obama's efforts.

If John were being objective, he'd look at some other numbers that show that the "tax freedom day" is a bit overhyped, as revealed by our own CBO's numbers.

# Estimates from the Congressional Budget Office (CBO) show that middle- and even upper-middle-income Americans pay less of their income in federal taxes than the "average" tax burden reported in the Tax Foundation's "Tax Freedom Day" report.
# In fact, the CBO estimates indicate that some 80 percent of U.S. households pay federal tax at rates lower than the Tax Foundation's reported average.

And if John wanted to see the silver lining, he could see that America has consistently been ranked by the Heritage Foundation and other conservative and libertarian groups as one of the most economically free nations in the world. Will Obama's outrageous tax cuts to most Americans and mild increase to the wealthy drop us out of the top 10? I doubt it.

The real concern with Obama is that he's gambling that his costly long-term investments will give us the infrastructure that we need to grow faster than our debt. Since Bush supporters say that he'll need a generation before his efforts can be judged, how about at least, oh, a year or two for Obama....? Instead, we get this talk about "tyranny," which somehow wasn't a problem when Eisenhower and Reagan were overseeing higher rates of taxes, or when Bush was pushing through Patriot Acts. That's why I think John's constant lamenting about Bill Ayers and Jeremiah Wright shows a generalized annoyance at Democrats rather than a focused, valid concern.

This week's tea party protests seem to have been a mildly successful grassroots effort to show popular sentiment against bailouts and higher taxes.

I'm sympathetic, to a degree. The Bush administration blamed its overspending on its predecessors and its political rivals. The Obama administration is doing the same. And the national debt mounts.

I personally wish that the nation's best economic minds had a more free-market, fiscally conservative approach to stimulus and bailout programs. But they don't. The pols who posture about posterity's unbearable debt load are too cowardly to present real solutions -- solutions that would involve political accountability. John McCain promised to "go after pork" -- even though pork is not much more of an issue in the federal deficit than it is in a Jewish deli. No one seems serious about tackling debt.

And yet we have to pull the nation out of a ditch, and that seems to cost money. We have to get the nation's engine running again, and the best minds claim a laissez-faire approach won't get that baby humming anytime soon. I don't believe that, if a Republican had won instead of Obama, we'd be somehow lowering our debt over its current levels.

I wish there were a better way, but no one has stepped forward to show that way. And the tea-party crowd seems painfully naive in going after the new administration as the partisan source of all our collective irresponsibilities.

Funny, my mom, your mom and all the experts swore real estate is the only sure way to financial stability. Not today. For those like me who've never owned, I shrug, smirk, and move on.

Unlike Sarah Palin and today's "tea party" revolters, I believe it's patriotic to pay my share of taxes -- and even a higher proportion of taxes than those who make less than me. That reflects my willing participation in the world's greatest nation, a free democracy built on consensus. I may not be taxed enough, based on the large and growing debt that has characterized our habits since the advent of Reagan. But since I don't have kids, I suppose I'll be willing to pass the debt along to John Galt's kids.

For the Tea Party folks, I'd want to pose some questions:

* Many of you complain that "hard-working" people don't have enough of a chance to get ahead when taxes exceed, oh, 3 or 4%. But is there real, demonstrable evidence that hard-working people work less hard with 5-10% fluctuations in their tax rates?

* If some Americans came into sudden wealth through mere speculation on margin, should they be protected from higher taxes as much as "hard-working" people?

* Have you ever demanded that a small-government politician put forth publicly a balanced budget, rather than merely complaining vaguely about overspending?

* If other people in India work harder than you -- and four times cheaper than you -- in the same job that you have, what does the global economy owe to you? Don't those people deserve a level playing field that means you'd be making far less than what you do currently?

I guess I'm getting at a larger question: Is it really about "What we deserve economically as hard-working people"? Or is it about "What we can get away with in the short-term as the world's top economy"? The Bush years seem to have shown that "what we can get away with" is less and less. So what comes next? Responsibility. And gratitude for what we do have. Many religious people, who taught the need to be grateful for even tyrannical governments in years past, now preach ingratitude in the world's greatest nation.

I find that odd.

What looks to be a local high-school jazz band has been playing for the past 20+ minutes preceding Mayor Antonio Villaraigosa's State of the City address at a Harbor City factory where electric trucks are made.

I have no idea where the kids are from, but for the most part they're pretty good. Sure there's a horn player in there somewhere who's more than a little flat. I won't single out winds or brass, so you've gotta listen yourself if you seek additional information.

A girl delivered a pretty good-sounding flute solo (who doesn't love jazz flute, am I right?), and there was a fine sax solo by another girl after that. I also dig the vibes — meaning the vibraphone — you don't see that very often in a high-school band.

The CEO of the electric-truck company is giving a speech now, and I guess that takes the pressure off of Antonio, who should be on at any minute.

Obama's administration may well be a concentrated version of the Jimmy Carter presidency. He may well be looked back upon as the worst leader in the history of the republic. He may well turn the United States into a blown-out shell of its former self. Citizens may well resort to anarchy, or worse yet, veganism. He may well fail so badly that future citizens will reinstitute slavery in a knee-jerk reaction against him. He may well turn us into the Soviet Union Part Deux.

Then again, he may succeed, and may turn the United States into the sort of nation it needs to become to succeed in a new day that is dramatically different from the one on which the sun has already set.

It will come down to whether Obama and his administration are mainly a learning organism or an ideological organism. Learning leaders survive and ultimately thrive; ideological ones flounder over the long haul. Bush and Carter attempted mainly ideology. Obama seems to be more of an ideologue than I'd have guessed three months ago, but he and his people still seem to be learners. Are they sufficiently interested in learning. I hope so.

Ideologues would have crowed that today's 500 point Dow jump vindicated their economic prescriptions. The embattled Geithner shows some maturity here in not needing to make that case. Obama's team may well be learners, playing for the long haul. Their ideological opponents, who need to imagine themselves as superior even if it requires them to light candles and pray that the economy fails over the next four years, will detest this and will look for the next opportunity to resuscitate their argument that short-term stock movements are exposing America's contempt for Obama's leadership. Fair enough. But Obama's administration appears to be playing for the long haul, and may be playing wisely. Let's hope they are indeed more interested in learning than in ideological battles.

I tend to defend the mainstream media (the dreaded "MSM") from charges of having a liberal agenda, even though I'll concede they have a liberal tilt. I just feel that the tilt toward liberalism is laughably minor compared to their tilt toward sensationalism, controversy, titillation and anything that gets attention.

I'm going to go out on a limb and guess that the fussing about Obama's "special Olympics" quip to Jay Leno is a reflection of the political correctness that's part of their liberal tilt. CNN et all are making way too much out of that self-deprecating crack, and overestimating how much stock ordinary Americans put into PC speech (answer: not much, even when crises aren't brewing on the economic and international fronts).

Free-market champions of the Reagan stripe are hyper-aware of the ability of government to be bureaucratic, stifling and unimaginative. State-control types are hyper-aware of the ability of private enterprise to place short-term gain above the public interest.

While the free-marketeers have won the societal and economic debates since Reagan, they're on a losing streak that threatens to tilt the game excessively to populists who would crush America's entrepreneurial spirit in order to save it. AIG is tipping many people away from a trust in the invisible hand of the market -- and the danger is that we will overreact.

Historians will look back on this era as a time that reshaped American views of economics. My hope though is that we can reshape our own economics in a way that finds the right balance between private enterprise's can-do spirit and government's prudence.

Good words from Larry Summers to the Brookings crowd today:

An abundance of greed and an absence of fear led some to make investments not based on the real value of assets but on the faith that there would be another who would pay more for those assets. Bubbles were born. And in these moments, greed begets greed, and the bubble grows. [Later] greed gives way to fear, and this fear begets fear.

This is the paradox at the heart of financial crisis. If, in the last few years, we've seen too much greed and too little fear, too much spending and not enough saving, too much borrowing and not enough worrying, today our problem is very different. It is this transition from an excess of greed to an excess of fear that President Roosevelt had in mind. . . . It is this transition that has happened in the United States today.

I wholeheartedly agree. Greedy people are by nature fearful. And greedy people addicted to rapid gains fear having to wait out slumps. They recede rather than invest. That then hurts everyone else. We've seen that on Wall Street. And whichever party is out of party blames the party in power for Wall Street's fear. But Wall Street needs to grow up.

Summers says Washington now must "create confidence without its leading to unstable complacency." It's a challenge, but it's doable.