Fixing It

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Don — Tue, 20 Oct 2009 13:55:28 GMT

"[T]here's a beautiful Earth out there.

Cheryl Cotterill — Sun, 09 Nov 2008 21:26:02 GMT

“Now, we were just saying that there’s a beautiful Earth out there.” Apollo 8 mission commander Borman, December 1968. (TIME, 1968 40th Anniversary Special)

On Christmas Eve 1968, “the astronauts took turns solemnly reading the first 10 verses of the Book of Genesis: ‘In the beginning, God created the heaven and earth . . . And God said, Let there be light: and there was light . . . And God made two great lights; the greater light to rule the day, and the lesser light to rule the night; He made the stars also.’” (TIME, 1968 40th Anniversary Special)
__________

We’re on our way! This time we’re going to make it there because we can and we will.

I look forward to the day when peace and truth converge and love remains everlasting.

I look forward to the day when people let go once and for all their belief in and notions of evil. That they see that the idea of a devil or a satan has been a myth—a sad story that we’ve all been told about but that simply holds no shred of truth. When we let go of this myth and stop perpetuating it, then we must take a long hard look at ourselves in the mirror and accept responsibility for what mankind has done to itself and this world.

Then we must get to work to fix it.

Copy the British Health Care Program

s34738 — Thu, 03 Apr 2008 19:15:53 GMT

There's no need to reinvent the wheel. The British system works very well and they would probably jump at the opportunity to send some of their experts to help America out.

We already borrowed their language, their foot-pound measurement system, and the ideas from their Magna Carta. We might as well jump on the bandwagon with their healthcare system too.

Plus we would seem less arrogant to the rest of the world, which is always a good thing. We could copy the French or the Canadians but that would be a little too humiliating.

Republican filibuster of Renewable Energy bill

rorickb — Sun, 29 Jun 2008 21:35:31 GMT

43 Republicans (44 if you add McCain, who did not vote) voted against cloture for HR 6049, the Renewable Energy and Jobs Creation bill. 4 of them (Stevens/AK, Sununu/NH, Dole/NC, and Wicker/MS) are in tough fights this fall to keep their seats. This bill is just what America needs, but Democrats are paying for it by closing a tax loophole that benefits hedge fund managers. The bill is a middle-class tax-cut and moves toward a wise energy policy. Yet Republicans lie and say closing the loophole is a middle-class tax cut! (Most hedge fund managers are not middle class, sorry.)

Is anybody targeting these 4 -- this should be a huge exposure for them given what is happening with the economy.

Another Slate piece that I basically agree with

Larry — Fri, 04 Apr 2008 20:46:58 GMT

Since I don't think I'm changing, something must up at Slate. Furman's budget piece is non-cynical (or maybe just naive) but it does an admirable job of describing the state of play.

Of course, taxes are the most tendentious issue, and I wish he'd been a bit more aggressive on the reform side.

We need to treat all personal income alike (no special treatment for cap gains and dividends) and in return kill off the "corporate" income tax (which should be known as the pension fund income tax because that's who pays it now who wouldn't under this change.) This would have huge ancillary benefits. For example, corporations would slash their lobbying budgets - which now consume billions - helping corporations seek new loopholes.

We also need to replace the mortgage interest deduction with a tax credit, and get rid of the housing cap gains loophole.

I'd also like to see reform rather than termination of the AMT. AMT is much simpler for taxpayers, but the rates are too high. If they cut those rates, then many taxpayers would happily choose to pay AMT instead of playing the deduction game with their accountants.

Was going alright...until THIS

genedio — Sat, 05 Apr 2008 12:49:47 GMT

Changing the official measure of inflation. Social Security, the tax system, and other aspects of the economy are all indexed to a measure of inflation that is widely acknowledged to overstate the increase in the cost of living. If the government switched to a newer, more accurate measure, it would reduce the growth of Social Security benefits for retirees and raise tax collections—both in a manner consistent with the intentions of policymakers. The budgetary savings from such a policy would accumulate over time. Such a bald-faced lie ( I cannot term it anything else) has to detract from the entire article.

OVERSIGHT or Die: Real Governance, Not Corporate Govt

Usama2 — Sat, 05 Apr 2008 15:52:25 GMT

I've watched a few CSPAN broadcasts over the past weeks in order to gain a functioning comprehension on the kind of mess Bush and the Friedman minions have done.

One of the primary diseases infecting America is the absence of oversight and regulation across the board. According to CSPAN broadcast of Congressional hearings on homeland security, subprime mortgage crisis, FCC advancements, oil prices, etc., private industry leaders, academic experts, and govt officials alike, conservative to liberal, have all stated that the absence of oversight has been a leading, if not primary cause of the above and other problems.

There was no oversight in national security which would have enabled someone to connect the intel before 9/11. Today, security agencies have outsourced so many aspects of security that there is not proper oversight, allowing all kinds of problems, such as fraud, and loopholes and problems with security which everyone realizes.

And the subprime mortgage crisis, according to chief economist at Freddi Mac, was a result of brokers NOT requiring sufficient down payments and escrows, allowing for 13% of ARMs subprime to account for 50% of all defaults. These brokers did not require collateral, and then sold these mortgages on the market with investors supposedly not realizing the risk. The absence of govt oversight meant there was no 3rd party objective oversight to catch the failure.

And rise in oil prices are a result of oligopolic gas industry where oil companies have bought out and dominated the refinery industry, pushing out independent refiners, thereby controlling supply from overseas, refinery capacity- they've closed refineries and intentionally failed to build new ones- distribution, and thus prices. Sen Tom Wyden stated back in 2005 that there was insufficient oversight to investigate antitrust and oligopolies developing, where supply is now monopolized by oil companies contrary to market demands. Rather, refinery capacity was INTENTIONALLY diminished in order to restrict supply, thereby raising the prices ( since demand is ever increasing and lacking elasticity).

Bush has been lauded as 'running the govt' like a corporation. But corporations are run to make a profit. How does Bush run the govt? To run a profit, but for corporations, not 'the people'. And according to the Corporation, corporations are essentially psychopathic. And Bush has essentially been psychopathic as well: very much consistent with corporate governance.

More of the will undoubtably lead to privatization of infrastructure: roads, utilities, bridges, water sources. This is want corporations and their consortiums want: they are gauranteed long term investments. Thus, a consortium made up of financial giants fronts several billion in exchange for a 'long term lease' stretching 50-90 years wherein they can level tolls on roads and control utility costs related to market pressure.

What will America do? Will the people ever regain control their society again? Will corporations ever be restricted? Or will the people give away all of their resources to private industry who will make them pay just to breathe clean air and drink clean water?

Two arguments I don't buy

revrick — Fri, 04 Apr 2008 14:27:33 GMT

Furman generally offers some sensible proposals here, but there are two arguments I just don't buy --

1). He says that the effort should be bipartisan. But he ignores the political reality that one party has become enamored of an inflexible dogma concerning tax cuts as the panacea for all ills. As even the Wall Street Journal is forced to concede http://blogs.wsj.com/washwire/2006/07/11/do-tax-cuts-pay-for-themselves/ these tax cuts never generate enough revenue to pay for themselves. Yet, the Republican party refuses to accept any tax hikes.

In fact, the Republican party dogma holds that all tax cuts are good and virtuous, ignoring the obvious reality that the deficits incurred are a form of child abuse inflicted on all future generations. Asking for bipartisanship in this political environment would be kind of like asking the Tibetans to negotiate with the Chinese government over the dimensions of their prison camps.

2). Claiming that the current methods overstate the rate of inflation is quite frankly bizarre. As this CNN Money/Fortune article points out, the current method may, in fact, systematically understate the true rate of inflation. By excluding food and energy items from 'core' inflation, it conveniently ignores the fact that the prices of those items no longer fluctuate, but have, in fact, climbed steadily upwards for the past several years and that trend shows no sign of abating. And for those at the lower half of the income spectrum these price increases hurt even more.

fully acocunt for the budget, etc

jerbmi — Sat, 05 Apr 2008 12:53:53 GMT

The proposal to end the mortgage deduction clobbers homeowners in high-cost states far more than those in low-cost states. People in California, New York andother high-cost areas have far larger mortgages than those in, say, North Dakota. Ending the deduction will not only lead to higher tax costs for such homeowners but will also lead to a lower valuation of their homes. Ending the deduction therefore discriminates against those in such areas.

"Lipstick On a Pig"

run75441 — Sat, 05 Apr 2008 16:30:00 GMT

Daniel puts the current problem of the home mortgage issue to the end of his article. I would move this up to the front and ask the why question, why did this happen and what led to it?

In 1987-1999, there was a major effort by Wall Street, banks, and the business-minded politicians to first change it and then retract the Glass-Steagall Act, which prevented financial institutions and banks from conflicts of interest in underwriting stocks and bonds in the stock market promoting their own interests first.

Led by the maestro of the economy/fed in 1987 (wasn't that Reagan then?); Greenspin helped rewrite section 20 of the Glass-Steagall Act. In a 3-2 vote by the Fed over Voelker's protests, section 20 was rewritten:

"The vote comes after the Fed Board hears proposals from Citicorp, J.P. Morgan and Bankers Trust advocating the loosening of Glass-Steagall restrictions to allow banks to handle several underwriting businesses, including commercial paper, municipal revenue bonds, and mortgage-backed securities. Thomas Theobald, then vice chairman of Citicorp, argues that three "outside checks" on corporate misbehavior had emerged since 1933: "a very effective" SEC; knowledgeable investors, and "very sophisticated" rating agencies." www.freedom4um.com/cgi-bin/readart.cgi?ArtNum=74200

As if Citicorp did not have any issues to protect and promote with WorldCom. And hey look, there is JP Morgan on the list of advocates also, a bank that Greenspin was on the board of directors previous to his appointment to the Fed and eventual promotion to Fed Chief in 1987. Voelker protested the rewrite of section 20 before his departure as the Fed Chief and express his fear that the Feds actions would lead to a lowering of standards in order to capture more lucrative securities offerings and in turn market bad loans to the public . . . securities risk versus deposit protection the same as 1929.

With the appointment of Greenspin as Fed Chief, the degeneration of the Glass-Steagall Act continued. 1990, JP Morgan received permission from the Greenspin led Fed to dabble in securities up to 10% of Revenue (up from 5% in 1987). In 1996, the Greenspin led Fed renders the balance of section 20 ineffective by allowing banks the ability to acquire securities firms (think Travelers, Salomon Brothers and Smith-Barney) with a limit of 25% of revenue derived from these operations. From 1984 onward, the Senate actively tries to kill Glass-Steagall.

Led by Sandy Weil, lobbying efforts to repeal Glass-Steagall with Greenspin and Congress plus an expenditure of $300 million; lead to its repeal in 1999 as signed by President Clinton in what is called the Financial Modernization Act. Weil merges Travelers with Citibank to become Citigroup Incorporated.

That is the history of what led to today’s demise as led by business. Here are some of my issues with the Treasury Secretary Paulson’s solution, a solution I consider little more than lipstick on a pig coming from a Treasury Secretary who was a former head of Goldman Sachs. The proposal does not fix the problem of banks speculating in lucrative and risky securities. The same as in 1929, we have banks speculating in risky securities rather than in the protection of bank deposits and investments. The Treasury Secretary proposes less regulation by giving over the reins of regulation to a financial industry that has “again” proven they are incapable of regulating themselves when it comes to protecting investments or deposits as opposed to risk adverse investments. Hello, this is a rerun of 1929; just maybe not as bad because of other stop-gap measure such as printing more money and funding the market with it at the taxpayer’s expense.

Replacing the rules of the SEC with the goals of a to-be-created industry based group to regulate is silly at best when the very industry that is to be regulated can not determine the adversity of the risk of a security as measured against their investor’s trust and money. Foxes guarging the chickens? Leave the SEC alone and force them into doing what they are supposed to do with the required funding. Force the Fed to use its power of requiring greater margins by banks and financial institutions regulated by them. Under Greenspin, the Fed has slept through one bursting bubble, and most of another, and has manipulated the outcomes of legislation that has seriously impeded our ability to control speculative investments. Place Bear Stearns, Lehman Brothers, and Goldman Sachs type businesses under the same Fed regulations as banks. Put together a legitimate committee to study the issues indepth that is not chaired by investment firms and is headed up by depositers and investers.

It would seem as if a decentralization of these institutions would be advisable, the same as what existed pre-Greenspin. I would call for a reinstitution of a similar Glass-Steagall act that would limit the amount any bank could invest in securities as a percentage of their business even if it appeared under the Fed. It seems as if the business men of the world can not be trusted when it comes to other people’s money.

Mortgage Deductions

Miket61 — Fri, 04 Apr 2008 18:41:50 GMT

I disagree with the assertion that few people take the mortgage interest deduction because it requires itemizing. I have a two-year-old $225,000 mortgage (fixed, at a relatively low rate) and my interest payments alone are three times the threshold that makes itemizing viable. I would think that most people with mortgages would choose to itemize.

I do agree, however, that interest on mortgages for second homes shouldn't be deductible. As far as capping the deduction for a first home - a million dollars might buy a mansion in Topeka or Cleveland, but it's a moderate two-bedroom in Manhattan or Palo Alto.

What Bill You Pass Matters More!

RogerClemens — Thu, 03 Apr 2008 21:42:52 GMT

(a) Health care costs are increasing, and increasing fast. Why? health economists mostly agree--technology. This trend has been ongoing for a long time (and it is completely disingenuous to suggest it is something Bush "broke").

(b) Health care coverage has been falling. Again, how much of this is Bush's fault? Some. But his health proposals were not enacted. First, his proposals to expand coverage through targeted, and refundable, tax credits were not enacted when the GOP ran Congress. Second, his proposals to reduce the deductibility of premiums (which the CBO estimated would expand coverage by 7 million people and *save* money) was not enacted when the DEMs ran Congress. Bush, for his part, was unwilling to support further expansions in Medicaid. Plenty of blame to go around.

The problem is that we have lots of proposals for expanding coverage (some which are more expansive, let more expensive) than others. However, we have few proposals for reducing costs. Ideas to reduce costs are out there (such as a move to a British-like system--something which no candidate is proposing) or to expand research on "comparative effectiveness" and "cost effectiveness" research.

The problems with reducing costs boils down to the following. Technology that can save lives exists, but is expensive. Who is going to say "no more"? Under either a British-like system or the current system with better knowledge of what treatments are cost-effective, someone (either the government or private insurance companies) are going to have to tell patients that a treatment that might benefit them is not worth the expense to the rest of us. This will be hard--very hard--to do.

Government-run health care is no panacea. Cost-growth in Medicare has been just as large as in the private sector.

Before you advocate passing something fast, Ezra, we'd better figure out what we want first. Until we do, incremental reform is the way to go. On this point, the Bushies were mostly right (although one can disagree with their specific approaches).

Roger

wow that was vapid

im1 — Fri, 04 Apr 2008 17:18:25 GMT

They outlined the problem...We spend too much on health care.

But other than a few buzz words: competition, decoupling employment and insurance, universal, public-private, no real analysis of how we start spending less on health care. I talk about this at home all the time, my hubby is going into ER medicine, and he can at least give a better analysis of where you start to find the savings but it isn't pretty. And there is zero analysis of how you explain a system so full of regulation, complication, rules, and perverse incentives to a mostly ignorant public.

I give this "fix" and F for Forgettable.

Educational Success is about $$$

drjohnrich — Thu, 08 May 2008 09:27:57 GMT

See the recent posting on my blog about NCLB and how we can improve academic achievement.

www.john-untouchable.blogspot.com

Main points:

1) Teacher quality;

2) Post-education prospects;

3) Free market approaches: Education as Business

Unions and Professionalization

Inquisitor — Tue, 01 Apr 2008 14:15:00 GMT

Teachers unions in there present incarnation are incompatible with increased prestige/professionalization of teaching. You cannot have an organization that rewards all employees the same regardless of ability, work ethic and dedication and expect professionalism. It is demeaning and demotivating to tell someone that regardless of how hard they work or how fantastic their results they will be paid the same as the laggard down the hall who can't be fired because they have been here more than two years. I have friends how work in the public schools and I admire them for sticking with it when they have indolent morons getting paid more than them and getting better assignments simply because they have been in the system longer. I could not and would not participate in such a system.

Broadband Czar?

fromar — Tue, 01 Apr 2008 14:17:26 GMT

Can we find a more freedom-hating name than "Czar"? Broadband Warden? Maybe Broadband Dictator? Creating a new federal bureaucracy that will increase regulation and the cost of doing business will have the opposite intended effect. Amazon.com, Google, MSN, etc. have all done just fine without creating the Department of Homeland Internet. The United States is the world leader in many forms of technology. Just because some countries have better Broadband penetration rates than we do in the USA does not mean that we need to straddle the entire Internet with a government-driven dictated broadband policy. This is one of the worst ideas I've heard in a long time. The biggest issues of the Net that could warrant intervention, net neutrality and broadband penetration, can be solved through deregulation, not tighter regulation. The government-imposed geographic monopoly that broadband carriers receive is clearly the problem here.

Our Drug Czar's office has been a huge disaster. Our Broadband Czar will be no different. Please, let's not waste our resources, money, and freedom on such grand plans destined to fail. We are smarter than this.

Anyone ever ask an educator?

FordTruck5Speed — Tue, 01 Apr 2008 12:09:01 GMT

Where to begin. The NCLB law is flawed from many perspectives, but it seems to me that the "solutions" posed here are just more of the same...increased central control and federal mandates. Isn't that the problem with NCLB in the first place? Let's examine this.

First of all, the idea of testing has been a long-fought battle. The biggest complaint about standardized testing is that the tests are too "one-size-fits-all," yet the proposal here is to standardize them further. Pennsylvania already has the PSSA (going on as we type, actually) that students must pass in order to graduate, and now we need to go even beyond the state? If the spectrum of student intelligence and aptitude were "normalized," in other words, if there was a narrower spread from high to low, it wouldn't be that big a deal to give a one-size-fits-all test, because then it actually would fit all. However, in the day and age of inclusion, this is most clearly not the case. We're saying that a kid that is lucky to remember how to tie his shoes in 8th grade should be tested on a national scale, and rank his school according to his results?

Oh, wait, we do that. The law is called "NO CHILD LEFT BEHIND." Mr. Ryan says we need to track things like socioeconomic status (among other things, I'm sure), but that's what this law already does!!! In fact, that's one of its major flaws. Look, if a school district's overall achievement across the board improves, but just one subcategory of students (poor students, black students, white students, Latino students, special ed students...take your pick) slips, then the entire school district goes on the "improvement plan." While Ryan suggests eliminating the federal punishments, he still goes along with the flawed idea that every subgroup, no matter how small (if you only have 3 black kids in the high school and those 3 kids average lower scores in 11th grade than they did in 8th grade, you're on an improvement plan) is a reflection of the district's ability to educate students. By the way, my parenthetical example does happen.

Now, he's right about a few things. Kids are over-tested and they are put under extreme pressure to do well (the future of the entire school district lies on the shoulders of a 5th grader). Schools are ignoring vital curricular areas in the name of math and reading. Just ask a music teacher. Also the written goals of the law, by the admission of those that wrote it, are absolutely unrealistic. So, why not scrap this law and start over? Well, as we see from Mr. Ryan, the law does one thing he likes. It puts the bulk of the control into the hands of the federal government. After all, the federal government knows how to educate your children better than their teachers, right?

Now, there's something to be said about national standards. In 1967, a bunch of music teachers got together through the Music Educators National Conference, and decided amongst themselves what should be included in music education programs throughout the nation. By 1980, there were 9 comprehensive national standards adopted by the music education community that are still used today to shape and mold music instruction. The best part was that no bureaucrat had a hand in it. I suppose this is why the MENC National Standards for Music Education are accurate, meaningful, and effective. Compare that to the four PA state standards for arts education (yes, 4 standards for all the arts as opposed to 9 for music alone) that are vague and confusing. Yes, they were developed by bureaucrats. I wonder if there's a connection?

Now, the idea of federal funding frightens the hell out of me. What people don't realize is, once you take one penny from any level of government, they own your ass because now you rely on their cash flow. When they say jump, you ask, "How high" while bouncing around the room like Daffy Duck. Otherwise, you ain't getting the money. Simply, once a school accepts federal money, it loses control of its own education program. It doesn't matter if the professional educators find something about the national curriculum that is suspect, they have to do it if they want to get paid.

I am also bewildered by his idea of pushing preschool. Kids are already forced into kindergarten by age 5. Keep in mind that, in 1982, I went right to 1st grade (no kindergarten). The law has now forced a 13th year of public education on kids, whether they really need it or not. Now, this guy is pushing federally funded preschool. First of all, what can kids learn in preschool that parents can't teach them? The alphabet? Counting to 10? Spelling their name? Knowing mom and dad's first name? Knowing their phone number and address? That's the parents' job to teach that. No school in the world should have to teach those things. Hell, an episode or two of Sesame Street could take care of the first two. We don't need to be shipping 4 year-old kids off to school. Good grief, let them be kids, for crying out loud. Not to sound like a conspiracy theorist here, but I've seen my share of indoctrination taking place in schools during my lifetime. If you want to embark on the "Brave New World," a good way to do it is suck the kids in before parents have time to instill their own values in their children.

The biggest problem is that federal law isn't going to fix schools. Teachers need to be allowed to be the professionals that they are and make sound decisions in their classrooms. Yes, testing is necessary to an extent, but remember that the teachers and administrators in your school district know your kids better than some bureaucrat in Washington does. The law has already eliminated your ability to choose a school without packing up and moving or double-dipping out of your salary. Do you want the feds to have total control over what goes on? You need to leave the decision making in the hands of those that directly impact the kids (yes, that includes parents). I know there are some crap-tacular parents out there, but making our kids "children of the state" is the worst idea you could come up with. If you really want to fix education, start at home and work your way up instead of starting with the federal government and working your way down.

No Immunity for Telcoms

dobbsfox — Wed, 02 Apr 2008 11:49:55 GMT

As an American citizen, I do not want the government taking away my right to sue a telecom company that goes along with Bush's insane, clearly illegal policies. These billion-dollar companies know that if anyone did take them to court, and the Constitution was correctly interpreted, they would lose. But that's the risk you take for falling in line. Keep the Nanny State in check and let corporations know they will be held accountable for their actions just like anybody else.

Liberals please answer this

bobroberts — Mon, 28 Apr 2008 20:37:20 GMT

Libs have been saying the same thing about major weapons systems since the later stages of the cold war. "It's too complex, it won't work, it's not needed", and then what do you know the weapon system works great.

Now my question for people with a more leftist viewpoint. I distinctly remember Hillary Clinton in one of her debates talking about setting up no fly zones in Darfur and shooting down Sudanese aircraft that attack or attempt to attack the black population in that area. Now what I want to know is how exactly the U.S. is supposed to enforce this no fly zone when many of our current aircraft are aging and are scheduled to be retired in the coming years and folks like Kaplan feel that replacements like the F-22 are “cold war relics” that aren't needed? Aircraft just like any other piece of machinery suffer problems like metal fatigue, corrosion, etc. and must be replaced at some point. Is it your view that the U.S. Air force could or should enforce said no fly zone with Cessna’s or what?

Free Thinking, Tarawa and the Red Dot

Tyrtaios-rising — Tue, 01 Apr 2008 04:49:05 GMT

We are in what some of us call fourth generation warfare.

It pits those relatively young officers, that have fought in Afghanistan, Iraq or have run naval operations in theater, against the institutional thinkers.

In the middle are the mid-level, or field grade who aspire to reach the stars. They realize, as do their superiors, fourth generation warfare does little to increase turf and budgeting.

This relegates our company grade officers to polite discussion at happy hour, as they are shuttled into irrelevence.

Those with mentors are reminded on how the game is played once again. Something that is instilled in them from day one out of officer candidate school.

The mindset is about not questioning rules, offering radical ideas in military journals, and questioning doctrine. Afterall, it's all above your pay grade lieutenant or captain!

Unfortunately, by the time they too are generals, they do not speak up for what is right, but go along with the prevailing wind.

Another challange is money. It is the root of all evil. I've read our Pentagon now controls the worlds largest planned economy.

Our service chiefs become consumed with budgeting - - - not war fighting.

Let me leave you with a story. During the early days of JFK's administration, he was getting briefed by the JCS on invading Cuba.

When it came time for the Commandant of the Marine Corps, then Lietuenant General Shoup, who was sitting in as a courtesy in those days,the General put a map of Cuba up, imposed the state of Rhode Island inside, and further put a red dot inside that.

When asked what the red dot was, the General stated, this was Tarawa,( he was awarded the Medal of Honor there), and made the case against it. The president could see it was folly, for a time anyway.

General Shoup became John F.Kennedy's favorite that day. Our president, of that time, encouraged free thinking!

Our next president must do the same thing. He must also make the case to the American tax payer, what role our military is to play in protecting our legitimate interests.

The Most Important Regulation

the_slasher14 — Mon, 07 Apr 2008 03:24:24 GMT

I agree with these proposals and would add that allowing the Bush tax cuts to expire for anyone making over $250,000 in non-wage income is another way to help put the Federal government back in the business of serving its citizens with such worthless goodies as safe roads, aid to education, and assistance so that the next Katrina doesn't leave a region in ruins for years.

Of all the proposals, the one that's most important is mentioned here only as part of a general call for regulation. Obviously, when an industry requires a bailout that puts taxpayer funds at risk (anybody out there want to argue that this is NOT what has happened?), it needs to be regulated. Instead, as Jim Jubak, MSNBC's stock analyst has noted, it's trying to use the current crisis to push for LESS regulation -- that's what the Paulson proposal is all about. The theory behind letting the markets work without regulations is that they will produce wealth. The opposite has happened. Sorry, guys, if you were welfare recipients getting into this kind of trouble, you'd be calling for firing squads. Bend over and shut up.

The key regulation is actually not all that onerous -- it's simply that a limit should be set on leverage. I can understand why CEOs get upset about something like Sarbanes-Oxley (though, again, they brought it on themselves with the Enron scandals). It adds a layer of bureaucratic expense both inside and outside the government. The next round of regulation can be much simpler. Just stating that no investing entity can take on leverage beyond a fixed number, on the other hand, limits the risk of a crash for all of us.

As one market follower I've come to trust has noted, the famous subprime mortgages were no more than about 1% of some of the tranches that were sold as debt packages, but when companies were borrowing over 95% to purchase these things, it didn't take many defaults to sink them.

This has been done in the regular stock market for years -- Regulation T of the SEC states that you can only borrow up to 50% of your assets to buy stock. (This rate used to vary but, in fact, it hasn't since the early 1970s.) The rate is lower for bonds -- as they're considered to be safer -- and I'm not going to make a specific proposal except to note that the rate for U. S. Treasuries is higher than what Bear Stearns was leveraged at, and Bear Stearns was doing this to buy instruments a lot riskier than T-bills.

Of course, stock transactions are part of a public record, and part of any regulation is going to have to be to remove from private equity funds the opacity in which they currently operate, or else they'll simply ignore whatever regulations are promulgated.

What has happened is that a small band of men made a LOT of money out of the housing bubble and the government is now hitting the taxpayers to bail out the industry. If this happens without regulation, the lesson will be clear -- make as much as you can during the next bubble (already starting in commodities) by leveraging to the max, and when the whole thing crashes, Uncle Sap will step in, bail out the economy, and leave you with your six second homes. Regulation is the NICEST thing that can happen to people who cynically rape their fellow men in this manner.

Mortgage Interest Deduction

t2k — Sun, 13 Apr 2008 15:50:36 GMT

What is the point in being able to deduct mortgage interest payments from personal taxes? This was abandoned in most developed countries years ago and had zero effect on home ownership, nor on the growth in second home ownership.

588-2300 EMPIRE

doodahman — Mon, 31 Mar 2008 14:54:18 GMT

Gosh, what shocking insight from Kaplan.

ZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZZ

The last time the Slate tried a "fix it" deal, it was David Plotz and others telling us how to make Iraq a wonderland of fun and profit. That was in 2003.

The problem with that earlier "fix it" piece and the current "fix its" is that they both missed the forest for the trees. The problems that we faced both in Iraq and in the world generally are big picture items-- the fundamental objectives and means exercised by the US since the end of the second world war.

In Iraq, the problem was not, as the Slate writers argued, a matter of improving the process or changing some minor aspect of our objectives (though they were never honest or insightful as to what our real objectives there were). Rather, the problem was simply the exercise of imposing our own sovereignty on a population that, for the most part, refused to accept it.

This problem was compounded and made utterly intractable by another fundamental truth-- that there was a fundamental conflict of interest between ourselves and Iraq. They sold oil, we bought oil (on credit). They were a key Islamic nation, while we were the key supporters of Zionism in the region. In fact, the only thing we shared in terms of interests with the Iraqis was defending against Iran, and look how well that turned out, after essentially guaranteeing that Iranian backed political parties won the elections held in Iraq.

You can take much of what was wrong with Iraq-- the imposition of our sovereignty (globalization) on people who might not want it, or at least might not want it as a fully developed packaged imposed on them; and, the essential conflicts of interest that we have with the rest of the world. Those can be summed up by simply recalling that we, as 6% of the world's population, are consuming between a quarter and a third of the energy and other depleting resources of the planet.

Parenthetically, one might also recall that it's not really 6% taking all 30%-- rather, it's like one sixhundredths of one percent of the world's population (i.e. the top 1% of US wealth owners) taking like 15-20% of the world's energy and resources.

That all said, the two key elements that must be addressed in order to resolve our current international slump are this: reestablishing American soft power and, what to do about the Empire.

Let's take the Empire first-- on the post down thread............

Anyone wonder who these people are?

FordTruck5Speed — Fri, 04 Apr 2008 17:51:29 GMT

I am always amazed that there are still people left in the world that think higher taxes will somehow revive an economy. Karl Marx, call your office.

The identity of the "problem solvers" here is pretty clear. They are left over Marxists that weren't lucky enough to live in the Soviet Union during the peak of the communist utopia that so many Russians and Ukrainians and Khazakstanians had come to enjoy. These are the people that think that they can manage your money better than you, and that the only reason their socialist policies haven't worked is that they haven't done enough of them yet.

These are also the "fairness" police that think an economy is based on everyone having as much (or as little) as everyone else. Hmm, the USSR comes to mind. No one had anything. Oh, except for the elites that ran the place. Of course, they deserved it. After all, their job is tough and they're more important than you, so they should have all the money. God, it makes me wretch to even joke about that...wow. Anyway, the point is that these people feel the need to play Robin Hood and take from the rich because, well, they don't need all that money. We shall nobly take it from them and give it to someone who deserves it more. Ever notice how the elites with money think they are the world's judges of who deserves what?

The analysis is simpler than the Marxists would want you to believe. When a bunch of people speculate on any market (stocks in the 20s, housing today) and run themselves into a cavern of debt, something's got to give. I'm no rich man, and I am more aware of this than anyone else on the planet. Hence, why I didn't buy a $300,000 house like some other geniuses in my income bracket did. People swarm around what they think is a good deal and squeeze themselves so thin that any increase in expenditures will break the bank. They didn't plan a budget and thus, didn't give themselves any wiggle room. No one took advantage of them. They just wanted the biggest house that their current paycheck could afford. The little 2-bedroom wasn't good enough (nor was the $500 a month apartment). So, what's the solution? Tax lending firms (or any "rich" person that claims $200,000 a year in income) until their spleen ruptures. Good thinking.

Slightly off topic, but relevant to the economic debate, it's like Barack Obama's "plan" to reduce fuel costs. Tax the hell out of oil companies. Soooo, who bears that cost? The oil execs? Nope. You do. Jack up their tax burden, your price per gallon goes up, guaranteed. An even better idea is the proposed $.50 a gallon at-the-pump gas tax. So, the government is going to reduce my costs by making me pay $4.00 a gallon instead of $3.50...uh...So the economy will pick up and fuel expenditures will go down if we increase taxes on the fuel providers and/or consumers. Anyone else having trouble wrapping their brain around that one?

Folks, beware of the man who decries wealth, because he's probably coming after yours. Ironically, that person usually has plenty of it.

One Toe Dipping

Jayson R. Jones — Sun, 13 Apr 2008 14:39:55 GMT

Professor Wu,

Frankly, we need fewer 'professionals' advising Policy, and more 'regular people'. Those with a financial stake have controlled much of (arguably ALL) government policy since the Shrub took office. This leaves the 98% of the rest of us out in the expensive cold of their decisions.

What is needed in this country, first and foremost, is guidance from those with no financial stake in the outcome. Concerning the Internet, this is critical to our survival. With Internet connection becoming as criticle to life as the Interstate Highway System, we seem to be taking the wrong side of the raod. We are selling off the Interstate Highway System, and have sold off the entire Internet already. No money equals no access. Access speed is directly related to how much money you have to spend on acquiring it. With only one shining exception (San Francisco) high speed Internet for the poor is dead.

There are already two Internet concepts, free and commercial. More and more, the free sites are disappearing and the real information becoming available only to those who can pay. In the very near future, our penchant for Vampire Capitalism that has already impoverished the bottom 80% of Americans, will destroy any useful free sites. When accurate information becomes available only to those who pay for it, only the already wealthy will be in control.

I'm old enough to remember when television was new. For a while, it was a boon to all people equally. Once a person bought a television set, they could bring the world into their homes at no cost other than the electricity it took to run the set. In that era, profit was secondary to content, and "Public Interest" had meaning. The early Internet was the same, but once Vampire Capitalism gained the upper hand it, too, became just another rich man's playground.

America has become the self fulfilling prophecy of Capitalism and Free Market Economics, instead of what the Founding Fathers (and Mothers) envisioned. All men are created equal is a sham in a country that is so economically stratified. Liberty, Equality and Justice in America are only for those who can afford them. Are we actually a Nation of Laws, when only the wealthy get to write the LAWS?

Here is the view from the bottom. We have to stop selling off our infrastructure, and start rebuilding it as a Nation (in other words: NOT FOR PROFIT of a few). Included in this infrastructure are the basics of Transportation (Highway, Rail, Sea and Air), Energy (Capturing, Distribution, Allocation), Government (get the money out), Education (highest quality to those who academically qualify, not those who can afford it), Utilities (water, electricity, heat, should never be a matter of being able to afford them), Health Care (no person without it regardless of income), and Internet (public construction and ownership of access, no cost to those unable to afford it).

These things will never happen as long as PRIVATE PROFIT stays the Prime Directive. Milton Friedman is not only dead, but also dead wrong. All that 'Trickles Down' is the excrement from the Privileged Few.

We currently produce enough high tech people to fill all the jobs, but with their huge financial debt incurred in gaining that knowledge, they can not work for the low wages offered. Fix their cost of education problem and you will fix the need to use cheap foreign high tech workers.

So, you have one little toe in the water of needed change. Would your credibility suffer if you pointed any of this out in your articles? Why not become an advocate for real change instead of helping organize the deck chairs on the USS TITANIC.

Respectfully,

Jayson R. Jones