Economy & Budget

Bubbles the Goose

Remember the oldie-but-goodie "Kill the Golden Goose"? It's an Aesop fable, actually, but who cares?

Aesop's point was you don't want to do that — you shouldn't kill the goose that's laying golden eggs.

But what if there are glimmers of toxic poisons inside those glittery shells that will nearly destroy everyone and everything when they inevitably escape? Do you kill the goose or hope you're wrong about the danger?

Right now you're probably asking yourself, "What in the HELL is Franken talking about?!" A good question.

The Worst is Still Yet to Come

The bad news about our nation's economic crisis is that we haven't begun even to smell, let alone see, the true impact of this nightmare. Even in its roller-coaster shifting, we still can't imagine where this financial tsunami will take us. People haven't begun to realize the losses they will suffer when this is finally over.

Today will be another bloodbath on the capital markets, and all signs indicate it will be another tough day for investors. Basically, the market hasn't come to the realization that the losses in the Collaterized Debt Obligation (CDO) market are in some cases two and three times larger than the principal invested.

The Markets Have Already Spoken About the Next President

The wild swings on Wall Street every day are almost to be expected, but they still are hard to stomach by even the most seasoned investors.

The extreme volatility in the markets, however, is very telling about the attitude of businesses, consumers and the larger investment community. In other words, no one seems to be optimistic about Nov. 4 and what is in store for the country in the months and years to come — whether the leadership is Republican or Democrat.

Why? Think Finance 101. The “efficient market theory” is one of the fundamental tenets of finance that suggests prices for assets like stocks and bonds reflect all known information. If that hypothesis holds true, the markets have already given their vote of confidence — or lack thereof — on both candidates.

Why is 'Socialist' an Insult?

Why is “socialist” an insult? At face value the word sounds good. It's got “social” in it. One of's definitions for "social" is as follows:

living or disposed to live in companionship with others or in a community

Well, so far that sounds good. I guess it's all about that scandalous little “ist” there at the end — there’s the problem. Terrorist, sadist, misogynist — all are pretty negative classifications. But on the other hand, philanthropist, dentist and specialist are all good things to be called.

To Save the Economy, Turn East — John Kerry’s Good Idea

As the American economy goes the way of Iceland’s, technicians daily suggest new initiatives, and not just Keynesians or free marketeers like Ron Paul, but Chaos Theorists with more exotic ideas like the Black Swan theory, which warns us that the end of the world is possible — because anything is possible. Throughout, almost none have come up with practical ways to deal day to day as we roll into the future.

But New York Times columnist Tom Friedman has. And he has been relentless in keeping the stick on the ice. Issues of economy are about work and the way we work and our attitudes toward work will bring us through as they always have. Friedman is a practical cat, not driven by ideological drivel, but with a pragmatic approach to issues, and consistently he has looked to India in the global economy, seeing a friendship there that could awaken America’s flagging work ethic and bring a vigorous new working partnership in which both our nations could thrive.

Obama’s 95 Percent Tax Cut? 100 Percent Not True

Facts have a pesky way of serving as a fly in the ointment to a perfect story or solution.

To wit: I continue to watch the Democratic candidate for president continue to say that he will provide a tax cut for 95 percent of Americans. Let me repeat: He will provide a tax cut for 95 percent of Americans if his plan is enacted.

This sounds great, but nearly 40 percent of Americans do not pay income tax at all. Providing a tax cut to those who don't pay federal income taxes sounds like wealth re-distribution to me — from those who have it to those who don't. The Obama camp immediately retorts that people who don't pay federal income tax do, in fact, pay payroll taxes — they should get a form of tax relief to alleviate this burden.

Taxes. Who Needs Them?

Sometimes an idea is so obvious we can feel foolish that we didn't think of it until now. This is one of those.

Get ready to slap yourself on the forehead.

Assuming Barack Obama is elected president, we can forget about who gets taxed, and maybe do away with taxes. When the government needs money, he simply raises the funds.

Fast Food Journalism: The Great Depression in an Afternoon — Clinton is the God that Failed; Obama the New ‘Planetary’ God King — McCain Chooses the West

Within moments of the first shock to Wall Street — just as Henry Paulson rushed into the room — the crisis was compared to the Great Depression. It is exactly like the invasion of Iraq. To crank up propaganda, apparatchiks, including McCain’s sycophant Lindsey Graham, were dispatched to the Stephanopoulos show to liken the bombing of the World Trade Centers and the Pentagon to Pearl Harbor; to compare the invasion of Iraq to the Normandy invasion and to imply that the capture of some random, bearded terrorist whose name and position has long been forgotten was as important as the Allied occupation of Paris.

It must be that little 3-by-5 card that all journalists today carry with them that says, “History repeats itself.” Actually, human misery repeats itself. The cycles of history and culture are far more complex, and if they suggest anything in our time, it is not the Great Depression and the Second World War but the division of American between red and blue and East and West in the first days of Andrew Jackson.

Time for Accountability on the Hill

Americans are voting with their wallets like never before.

A record number of Americans are pulling their money — or what’s left of it — out of the stock market. It is not surprising, given that yesterday was the worst day in the stock market since the crash of 1987 and last week was the worst on Wall Street since 1933.

Americans are sitting on more than $1.0 trillion in credit card debt, which is growing by the day, and it seems certain that the recession will be deep, long and painful. Unfortunately, it seems that all of the elixirs that the administration has injected into the economy and financial system cannot restore the confidence needed to stabilize the markets.

Nixon Goes to China

Only Richard Nixon, a well-known and fierce anti-communist, could have gone to China to meet with Chairman Mao and open relations with the largest Communist nation on earth.

We are seeing the same dynamic today.

Only George Bush and Hank Paulson, fierce free-market advocates, could take the measures they did today to have the government take an ownership share of the banking industry.

If Barack Obama had attempted to do what Bush and Paulson are doing today, he would have been condemned as a socialist or a communist. The business community would have risen up as one to stop him from nationalizing our economy. Protesters would have flooded the streets, and political commentators would have lamented the end of democracy and the free market.