Yesterday’s post elicited a comment from bettinak, who contributes to boycottrepublicans.com. She closed with “To be fair, I will post your article and my comment on my blog, http://boycottrepublicans.com. I hope you do the same.”
Well, she “posted” my article as an unlinked URL (like those I just provided to her blog). No big deal except for her readers who might have appreciated a bit of, you know, context. In any case, I thought I would provide some context, and some education, by also posting my TOC comment response as a comment at her blog. Unfortunately, when I went to do that I found that it either doesn’t like Macs, or it doesn’t like Firefox. Couldn’t get it done. So, I’ve decided to reciprocate at a higher level. This (you can also just scroll down) is my post upon which Bettina comments. Here’s her comment:
Yes, rely on Sarah Palin to carry your libertarian agenda tonight. Good luck! :)
Your “fact sheets” on tax proposals (only 5% of those targeted for a tax cut by Obama pay taxes) and on bank bailouts are so flawed, it’s amusing…Lehman was allowed to fail, AIG might still fail.
Wall Street investment bank giants are dead on arrival already. The only institutions “bailed out” will probably your and my community banks– you know, the one that gives a you a small business loan when you need it as well as foreign institutions that hold a giant portion of our debt. But of course, you think, the world will continue to invest in US instruments even if they turn out as worthless as – say- Chechen junk bonds? You probably think we don;t need foreign investments to carry our one trillion dollar federal budget deficit, nor do we owe anyone pay back to restore the trust in our “this the greatest nation in the world’s” financial system. Let everything default and money will continue to flow our way..:)
Yes, the poor minority homeowner wanna bes caused it all, along with the liberal political cronies who enabled them. How about your friend, Sen. John McCain’s economic advisor and longtime ally, Republican Sen. Phil Gramm?
” In 1999, former Senator Phil Gramm (who is, incidentally, Senator John McCain’s economic adviser and cochairs his presidential campaign) set out to completely gut the Glass-Steagall Act… allowing commercial banks, investment banks, and insurers to merge … Sen. Gramm was the driving force behind the Gramm-Leach-Bliley Act, as he had received over $4.6 million from the FIRE sector (Finance, Insurance and Real Estate donations) over the previous decade, and once the Act passed, an influx of “megamergers” took place among banks and insurance and securities companies, as if they had been eagerly awaiting the passage of Gramm’s Act. “Shortly after George W. Bush was elected president… Senator Phil Gramm clandestinely slipped a 262-page amendment into the omnibus appropriations bill titled: Commodity Futures Modernization Act. It is likely that few senators read this bill, if any. The essence of the act was the deregulation of derivatives trading (financial instruments whose value changes in response to the changes in underlying variables; the main use of derivatives is to reduce risk for one party). The legislation contained a provision — lobbied for by Enron, a major campaign contributor to Gramm — that exempted energy trading from regulatory oversight. Basically, it gave way to the Enron debacle and ushered in the new era of unregulated securities. Interestingly enough, Gramm’s wife, Wendy, had been part of the Enron board, and her salary and stock income brought in between $900,000 and $1.8 million to the Gramm household, prior to the passage of the Commodity Futures Modernization Act…”
The people who speculated with other people’s debts caused this crisis and they were from your side of the fence.
Your experts say:
“Talk of Armageddon, however, is ridiculous scare-mongering. If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen.” Hey, I hope you come through for us!
Great idea to let everything bankrupt! That way, if AIG fails, and credit markets dry up, the municipal bonds insured by AIG and dependent on income from their investments will go to hell, too, taking with them the communities themselves. Then you Libertarians can sit there and live out your Libertarian utopia: No taxes, no infrastructure, no roads, police and schools– a return to caveman society. a dog-eat-dog world of survival of the fittest. I prefer a society in which we take responsibility for each other’s mistakes best as possible to help all of us out of this crisis with probably, positive returns in five years
Here is the response I couldn’t make on her blog:
Bettina,
Thanks for your comment.
I can’t see where I (or any of those quoted) claimed only 5% of those to whom Obama wants to give a tax cut actually pay taxes. What I said was 2/3’s didn’t pay taxes. That was a place holder from a draft and I neglected to change it. It’s 41% of Americans who don’t pay taxes, but will get a “refund” under Obama’s plan.
http://www.taxfoundation.org/news/show/1410.html
I am correcting the post.
Actually, it’s far worse than that, Obama’s plan actually increases marginal tax rates at the low end of incomes:
“As the chart shows, Obama’s give-and-take tax policy results in marginal tax rates of 34 percent to 39 percent in the $31,000 to $45,000 income range for this family. That’s an increase of 13 percentage points or more from the current rates.
What accounts for the higher rates? First, Obama expands the maximum child and dependent care credit for families with one young child from $1,050 to $1,500 and phases down the credit over a longer income range, from $30,000 to $58,000. Throughout this income range, the credit is phasing out at a rate of $30 per $1,000 of income, thus raising the effective tax rate by 3 percentage points. Obama also makes certain credits refundable, which introduces a tax penalty of 10 percent or 15 percent, depending on the income bracket.“
http://www.american.com/archive/2008/august-08-08/the-folly-of-obama2019s-tax-plan
I don’t know, but now that I think about it, maybe he’s giving tax cuts to the people whose taxes he’s raising and that’s how he gets 95%.
Yes, Lehman failed. Your point? So did Bear-Stearns, IndyMac, WaMu, Wachovia… If AIG fails it will be with the US government as an 81% owner.
http://www.iht.com/articles/2008/09/17/business/17insure.php
I’m not going to bother to reply to inferential speculation about what I think. I will point out that much of our trillion dollar deficit is owed to the Chinese already, and they’ve threatened us with it.
http://www.telegraph.co.uk/finance/markets/2813630/China-threatens-%27nuclear-option%27-of-dollar-sales.html
So to get the $700 billion, we’ll either borrow more from them or just print it. Which do you prefer?
If 0 down, interest only, ARMs were such good idea for the “homeowner wanna bes,” we can certainly ask Dr. Phil’s question -”Hows that workin’ out for ya?”
On the Glass-Steagall reform, I’ll let Bill Clinton, who signed it, respond:
“[When] asked … whether he regretted signing that legislation. Mr. Clinton’s reply: “No, because it wasn’t a complete deregulation at all. We still have heavy regulations and insurance on bank deposits, requirements on banks for capital and for disclosure. I thought at the time that it might lead to more stable investments and a reduced pressure on Wall Street to produce quarterly profits that were always bigger than the previous quarter.
“But I have really thought about this a lot. I don’t see that signing that bill had anything to do with the current crisis. Indeed, one of the things that has helped stabilize the current situation as much as it has is the purchase of Merrill Lynch by Bank of America, which was much smoother than it would have been if I hadn’t signed that bill.“”
http://online.wsj.com/article/SB122282635048992995.html?mod=googlenews_wsj
The people who speculated with other people’s money were first and foremost Fannie and Freddie as front-men for the Democrats in Congress. They wildly encouraged greed in Wall St. and no doubt Wall Street deserves to be punished – typically that would mean failure. These weren’t capitalists, they were corporatists, so they expect to be bailed out as Fannie and Freddie promised. As Barney Frank said, “I want to roll the dice a little bit more in this situation towards subsidized housing.” Snake-eyes, Barney.
http://www.usnews.com/blogs/barone/2008/10/06/democrats-were-wrong-on-fannie-mae-and-freddie-mac.html
I’ll again skip over the parts where you tell me what I want, and go to the bottom line: It’s fine that you “prefer a society in which we take responsibility for each other’s mistakes best as possible to help,” it just isn’t relevant to your hope for positive returns now or in 5 years, much less are your intentions useful to people with marginal credit who could have gotten loans before Fannie and Freddy screwed things up and now won’t be able to – bailout or no bailout.
Finally, you do realize that the $700 billion was a number picked out of a hat? No one has a clue whether it will even be effective in anything except devaluing the dollar.