Economy & Budget

This is getting out of control. First, Sarah Palin says “Washington was asleep at the switch” when it came to the Wall Street disaster. Then McCain repeats the same exact statement.

John McCain was chairman of the Commerce Committee in the U.S. Senate. He was one of the leading advocates for deregulation of the big banks and investment houses. Phil Gramm, the author of his economic plan, pushed through Gramm-Leach-Bliley with McCain’s help. That, and other deregulation encouragement of risky loans, led to this collapse.

Pardon me, John, you weren’t a critic of these “Washington acts” — you were at the switch. In fact, you were pulling the switch. Read more...

With the announcement recently of the federal bailout of insurance titan AIG, this country’s financial house continues to shake on shifting sands.

That decision marks the fifth major company where the Feds have had to step in and exercise damage control. I have to be candid when I say I’m disappointed in the anemic responses from our two presidential contenders. I know these are heady issues with a lot of complex, moving parts and econometric repercussions, but that’s what leadership is all about — stepping in and calling some shots. It’s the same scenario and expectation of our candidates when they spoke up regarding Russia’s invasion of Georgia. They each made a specific, compelling case for their respective sides, and let the public decide which plan made the most sense.

On this domestic crisis, I’m really only hearing more political pabulum. Read more...

Surely, good laws and regulations are essential in ensuring orderly societal direction and providing for the public good. A just, sound legal system can, in many ways, foster entrepreneurship and international trade. And by protecting the rights of minorities, they exemplify the best that Western civilization has to offer.

One idea for simplification would be to abolish progressive taxation and institute a single flat tax on all personal and business income. The Bible teaches us to tithe 10 percent of our income. It does not ask one person to tithe more of his income if he is rich and less of his income if he is poor. By tithing 10 percent, each pays to the common trust an equal proportion of his means. This practice alone would virtually eliminate the need for the army of accountants, tax lawyers and government agencies dedicated to enforcing the laws of this country. Read more...

With all the hysteria of how George Bush and John McCain got us in the current mess with Fannie Mae and Freddie Mac, I thought a little history lesson was in order. Syndicated radio talk show host Mark Levin revealed several interesting facts on his program last night that are too important for the mainstream media to overlook and that need to be brought to light.

To wit, The New York Times published an article on Sept. 11, 2003, that bears repeating here:

"The Bush Administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago. Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac ... the plan is an acknowledgement by the Administration that oversight of Fannie Mae and Freddie Mac ... is broken." Read more...

Barack Obama is trying hard to convince voters that he will not increase their taxes. It’s not working.

In stump speech after stump speech, Obama proclaims that under his plan, 95 percent of the American people will see their taxes cut. He seems to have learned a valuable lesson from Fritz Mondale. When it comes to taxes, never level with the American people.

Despite his best efforts, Obama has no credibility as a tax-cutter. Here are four reasons that most voters will never believe him when he tries to say that he will cut taxes despite his most passionate protests.

1) History: When it comes to cutting taxes, Barack Obama is a virgin. He has never voted for a tax cut in his legislative life. He has had 94 opportunities to vote for a tax cut in his Senate career, and he has voted no each and every time. When you have a long history of voting to raise taxes, you can’t convince voters that you are a born-again tax-cutter. Sorry. Nice try. Read more...

I agree. We have to be careful not to use words that are so heavy with emotion that they drag the economy down by their own weight.

So OK: What's going on right now is not yet a "Depression.” Perhaps, like Phil Gramm, we can call it a "Whine."

Whatever it is, it's mighty damned sad ... dreary, even. In this case, we can say that each “day WITH 'Whine' is a day without sunshine.” That's because of all the dark clouds on the horizon.

Obviously, this is no laughing matter. What is happening right now is a meltdown that is scary, mainly because we have no idea how much worse it's going to get. It's also infuriating. For good reason. Read more...

The news coming from Wall Street last night and today is troubling.

* Lehman Brothers, the New York-based investment bank that reported $691 billion in assets last year — a company with 26,000 employees — has filed for bankruptcy.

* Merrill Lynch, a company that defined the term "blue chip," is being sold to Bank of America for what is essentially a bargain basement price.

* American International Group (AIG), facing a credit downgrade, is seeking a $40 billion loan from the Federal Reserve. AIG, which employs 116,000 people, reported 2007 assets of more than $1 trillion.

How did the stock market react to the news? In 10 minutes of trading, the Dow Jones plummeted by more than 300 points. Read more...

We are in uncharted financial crisis waters.

In my 20 years in the financial communities, I've never seen so many major financial institutions going belly-up in such a short and record amount of time.

Let's call the roll: Bear Stearns, Lehman Brothers, Freddie Mac/Fannie Mae, Merrill Lynch and (rumor now has it) WAMU and AIG.

This is like the worst hangover you've ever had from binge drinking at a college party. The cause of this, in my judgment, started with an overinflated real estate market. Then the balloon burst and the collateral damage included homeowners with burdensome mortgages and the financial institutions that participated, both directly and indirectly, in real estate financing. Read more...

During the past 20 years a number of economic studies have been released showing that lower income tax rates actually result in more revenue for the government. Thus, the only reason for raising taxes only on the rich is to redistribute income from the rich to the poor. This reflects the failed socialist and communist ideology of Karl Marx and others who tried to manipulate earnings, incomes and taxes to create some strange version of economic equality.

The reason we have such high corporate tax rates is easily explainable. Politicians can push and vote for corporate tax rate increases because most individual taxpayers and voters do not understand or appreciate that they are hurt by high corporate tax rates in several ways. Read more...

Among John McCain's heralded achievements in this campaign is his endorsement of the troop surge in Iraq, which, from all indications, has been successful in helping to quell both al Qaeda and domestic sectarian violence in Iraq. However, with a recent Washington Post poll showing ambivalence about Republicans' prescriptions for the economy among working-class and poor Americans, he needs a surge of empathy to demonstrate he is concerned with the plight of everyday Americans.

The Post's poll also revealed, surprisingly, that Obama enjoys a 10-point advantage among poor working-class whites, a fact that underscores the pressing economic issues faced by many Americans. While many have expressed skepticism about Obama's elitism and distance from the pulse of the heartland, as well as his stance on energy exploration, they nonetheless feel that he is the more empathetic candidate when it comes to the everyday economic problems we all face. Read more...