Coffee break time! Hmm. I think I am going with the French Roast. Sort of in the mood to keep it dark. (Does that make me racist? :laugh
Lots of good stuff happening today. I can take a moment to throw a tidbit or two your way, though.
If one lives in a closed world, bounded by narrow focus and private agendas fostered by childhood trauma, one comes up with world views very similar to those being put out by Craig234 et al.
To he and his ilk the world is very clearly black, blacker and then there is that shining bright light that only he can see. There are those to blame and those to attack, there are those who have not been miraculously enlightened and those who stubbornly refuse to be saved. They don't read the right book of wisdom and don't accept the dogma - they are fools, they say, fools!
I have a commitment to learn something new every day - for one hour a day I do my best to learn about a subject that I may have only a passing knowledge of. This mental exercise is fun if you don't keep going back to the same sources all of the time - try it yourself sometime!
Like most people who prefer to deal with primary data, I have some difficulty in getting through the Cliff Note version of things. I always want to stop, ask for the backing data, review the methodology, whatever. But I don't have the time to be a wonk most of the time. I have to make decisions and I have to be particularly careful with placing my trust in others' judgments. But the rush of life does require that we all make those kind of choices.
Here is a link to the U.S. Census study the Atlantic references. Pages 7 and 13 contain charts with percentage change trends -
U.S. Census Bureau - Income, Poverty, and Health Insurance Coverage in the United States: 2008
Now, for the most part I do like reviewing the raw numbers that the Census provides. They make a real effort not to distort them and they take care to explain their methodology. But one thing they do
not do is go into what causes the numbers to change. Sure, they identify economic decline but make no mention as to what caused the decline.
For that, we might trust the Atlantic to provide linkages that are reasonable. Or we may not. The whole argument that is made in the article by a very bright author is that tax cuts cause economic pain. I don't accept his linkage, especially since he doesn't explain how he comes to that conclusion.
Ugh, why choose tax cuts specifically? The author of the Atlantic piece doesn't say. Could this be a preliminary defense of the huge pending tax increases of the Obama Administration?
Certainly Obama is
not following Clinton's tax policy at all - Obama and team have been actively working
against all four of the major themes of 1986: marginal rate cuts, tax base reform to increase neutrality and horizontal equity, distributional neutrality, and revenue neutrality.
So, the piece becomes a hit piece and serves no purpose other than to incite true believers like Craig234. Maybe this is an example of an incitement to riot, such as Madame Speaker Pelosi is crying about?
So, why
don't you do a little bit of reading from sources that are likely not to have ever willingly passed before eyes crossed from too close a perusal of Mother Jones and... the Atlantic?
Where to start, where to start? How about the CATO Institute? Pretty solid researchers and anathema to the leftish (they just can't come out with that level of product.) Beside putting out great research and analysis, the Cato Institute has received a 4-star rating from Charity Navigator, America's largest and most-utilized independent evaluator of charities and non-profit organizations.
Here are three interesting pieces that relate to the OP and offer significantly more insight than the Atlantic article.
Obama's Treasure Hunt
An extract -
...the Obama administration should rethink its devotion to tax increases as the solution to seemingly every policy issue. Tax increases make no sense in the competitive global economy, and they imply that there are no savings left to be made on the spending side of the federal budget.
How about that comparison of global taxation trends? Please note that this article is from July, 2007 and does not specifically recognize the tax burden Americans are facing with Obama's bankrupting economic and social policies.
Corporate Taxes: America Is Falling Behind
And finally, how about a quick review of one of the causes of the recent economic malaise.
How Did We Get into This Financial Mess?
Lawrence H. White is the F.A. Hayek Professor of Economic History at the University of Missouri-St. Louis and an adjunct scholar at the Cato Institute. He is the author of Competition and Currency, Free Banking in Britain, and The Theory of Monetary Institutions.
Executive Summary
As policymakers confront the ongoing U.S. financial crisis, it is important to take a step back and understand its origins. Those who fault "deregulation," "unfettered capitalism," or "greed" would do well to look instead at flawed institutions and misguided policies.
The expansion in risky mortgages to underqualified borrowers was encouraged by the federal government. The growth of "creative" nonprime lending followed Congress's strengthening of the Community Reinvestment Act, the Federal Housing Administration's loosening of down-payment standards, and the Department of Housing and Urban Development's pressuring lenders to extend mortgages to borrowers who previously would not have qualified.
Meanwhile, Freddie Mac and Fannie Mae grew to own or guarantee about half of the United States' $12 trillion mortgage market. Congressional leaders pointedly refused to moderate the moral hazard problem of implicit guarantees or otherwise rein in their hyperexpansion, instead pushing them to promote "affordable housing" through expanded purchases of nonprime loans to low income applicants.
(see the specific reference to our friends at ACORN and how they have been instrumental in the over loading of the housing finance system. The deliberateness of the overloading being another issue and one directly related to ACORN's political/societal goal of destroying capitalist systems. More on this at a later time. - PB)
The credit that fueled these risky mortgages was provided by the cheap money policy of the Federal Reserve. Following the 2001 recession, Fed chairman Alan Greenspan slashed the federal funds rate from 6.25 to 1.75 percent. It was reduced further in 2002 and 2003, reaching a record low of 1 percent in mid-2003 - where it stayed for a year. This set off what economist Steve Hanke called "the mother of all liquidity cycles and yet another massive demand bubble."
The actual causes of our financial troubles were unusual monetary policy moves and novel federal regulatory interventions. These poorly chosen policies distorted interest rates and asset prices, diverted loanable funds into the wrong investments, and twisted normally robust financial institutions into unsustainable positions.
Conclusion
The housing bubble and its aftermath arose from market distortions created by the Federal Reserve, government backing of FannieMae and FreddieMac, the Department of Housing and Urban Development, and the Federal Housing Authority. We are experiencing the unfortunate results of perverse government policies.
The traditional remedy for the severely mistaken investment policies of private firms?shut and dismantle those firms to stop the bleeding, free their assets and personnel to go where they can add value, and make room for firms with better entrepreneurial ideas?is as relevant as ever. A financial market in which failed enterprises like Freddie Mac or AIG are never shut down is like an American Idol contest in which the poorest singers never go home. The closure of Lehman Brothers (and the near-closure of Merrill Lynch), by raising the interest rate that the market charges to highly leveraged investment banks, forced Goldman Sachs and Morgan Stanley to change their business models drastically. The most effective and appropriate form of business regulation is regulation by profit and loss.
The long-term remedy for the severely mistaken government monetary and regulatory policies that have produced the current financial train wreck is similar. We need to identify and undo policies that distort housing and financial markets, and dismantle failed agencies whose missions require them to distort markets. We should be guided by recognizing the two chief errors that have been made.
Cheap-money policies by the Federal Reserve System do not produce a sustainable prosperity. Hiding the cost of mortgage subsidies off budget, as by imposing affordable housing regulatory mandates on banks and by providing implicit taxpayer guarantees on FannieMae and FreddieMac bonds, does not give us more housing at nobody?s expense.
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