Economy & Budget

We always have to declare winners and losers. So I should point out it was a clear victory for Barack Obama that William Ayers did not attend the debate. He was not in the audience, was not part of the discussion. That's probably because even John McCain decided Ayers wasn't really relevant.

To maintain balance, I'll mention the absence of that other bomb-thrower. I mean Sarah Palin, of course. She was probably sitting in front of a TV set, watching the exchanges, listening intently as her campaign tutors explained what McCain and Obama were talking about. Read more...

Many people (including Yours Truly) were concerned that the $700 billion rescue plan was a coordinated effort to bail out the Wall Street executives whose firms contributed to the crisis that has consumed the global economy.

The more recent emergency measures by the Federal Reserve and central banks around the world since then should be evidence that the bailout was, in fact, a desperate but much-needed measure to keep the financial system intact and the infrastructure afloat. Furthermore, the abysmal performance of securities exchanges around the world serves as a good litmus test that this crisis goes well beyond the concern of executive compensation and golden parachutes. Read more...

I remember late in 1992 when George Bush the First was running against Bill Clinton. I worked for House Minority Leader Bob Michel (R-Ill.) at the time.

The Michel team was trying to help the Bush campaign any way it could. I helped to draft speeches attacking Clinton. I did some research into Clinton’s very strange to trip to Moscow during the Vietnam war. We thought he was some stooge for the KGB.

Clinton had quite clearly dodged the draft. For conservative Republicans, that was disqualification enough to be president. Clinton had extramarital affairs galore, which we thought would turn voters against him. Clinton had all kinds of strange associations, many with people who didn’t like America very much. Read more...

Steve Fraser, who writes about Wall Street, noticed the other day a banner in the crowd there that said, “Jump!”

It recalls an image of 1929 that has become a conditioned reflex: Wall Street bankers, the few and the brave in 1929, losing the fortunes overnight and jumping out of windows.

In the wake of the Wall Street crash of 2008, 1929 immediately comes to mind, and with it comes visions of Wall Street jumpers, soup kitchens and long lines of the unemployed stretching around corners. And it brings a panic call for Spiderman to come and save us again, incarnate as he was in that bygone era in the person of Franklin D. Roosevelt.

We hear it everywhere. Rosa Brooks, the L.A. Times columnist, says it is time for an FDR moment. Read more...

Voters are told by politicians that the government can raise more money by increasing taxes on the rich. However, they must follow the logical progression of the effect of higher taxes on the rich to see the true impact.

For example, increasing taxes reduces the number of jobs in the private sector. Higher taxes mean the rich have less money to spend for goods provided by the private sector and less money to invest. Less money spent in private-sector consumption means few private-sector jobs. (Housekeepers, gardeners, artists, jewelers and high-end restaurant personnel need to begin looking for new jobs!) Less money to invest means less money in the bank that can be loaned to consumers for homes. It also means less money is available for businesses to expand and hire more people. Read more...

Here's the new campaign slogan for both presidential candidates: "Change? Maybe it's too late."

That's what it should be, if our politicians were being honest. Of course, they're not. I say "of course" because we Americans have finally realized that we've been played like fools. The trust that's needed to keep us together has been dissolved by the decades of toxic dishonesty. As a nation, as an economy, we are coming unglued.

When the presidential-wannabes talk about change, their proposals fall so pathetically short of what we need to do as a country, one could argue it wouldn't really matter if Sarah Palin took power. She may be vacant, but so what? She's no emptier than the promises the others are making. Read more...

The current financial crisis is a result of the law of unintended consequences of two political policies promoted by both Republicans and Democrats since the Great Depression: 1) encouraging homeownership for all Americans regardless of whether they can afford the costs and 2) over-regulation of the financial community. Both policies have turned into a deceptively sweet bubble of air in the veins of the economy.

First, the government artificially inflated residential real estate sales through several laudable — but sloppily executed — policies such as: 1) tax breaks on interest and property taxes for homeowners; 2) implicit government guarantees of the debt of Fannie Mae and Freddie Mac to purchase conforming home mortgage loans; 3) relaxed credit standards on home mortgage loans permitted by the banking regulators; and 4) encouragement of the collateralization and sale of mortgages to investors. Read more...

Last week, John McCain and Newt Gingrich cited Ireland's low corporate tax rate of 11 and 12 percent, respectively, (it's actually 12.5 percent) as evidence that American business were overtaxed.

Well, you don't have to be Warren Buffett or Bono to know that there are some large differences between the U.S. and Irish economies and that what works for the Irish economy is certainly not what would work for the U.S. economy (though I wonder why they didn’t mention Ireland’s universal healthcare system, or free tuition at its universities). Read more...

The intrepid investigator Bob Stevenson, former spokesman for ex-Sen. Bill Frist (R-Tenn.) and Sen. Pete Domenici (R-Tenn.) and now one of the most highly sought Senate lobbyists around town, did some quality research into the genesis of the current crisis, and came up with an interesting article from Steve Holmes of The New York Times. The article was published Sept. 30, 1999, nine years ago almost to the day.

It is a fascinating read: Read more...

It all comes down to this one basic question: How would a McCain administration differ from the Bush administration on America's economic policy?

The answer — one that the American people are figuring out — is that there is no real difference. If you liked the last eight years under George Bush, you will love the next four under John McCain.

Let's take tax policy. McCain would extend the Bush tax cuts and even expand them for the big oil companies and the super-wealthy. His plan would add over $3 trillion to the debt, further sink the middle class and reward the greed he has been trying to condemn. Read more...