Economy & Budget

The payroll tax is an implicit forced savings for most Americans. The purpose of these taxes is to give Americans minimum pensions and medical care in retirement. By cutting the tax we are cutting savings, which make future retirees’ benefits less certain. The government has essentially encouraged Americans to consume more for the present rather than saving for their future well-being.

To understand the investment value or lack thereof for a home, it is necessary to differentiate between an appreciable and depreciable asset. An appreciable asset increases in value over time and a depreciable asset declines in value. The house you own and live in depreciates over time unless you maintain it. The annual expenses for maintaining a home ranges from 5 to 10 percent of the value. Real estate taxes are 2-3 percent, insurance can be 1 percent, utilities and heat can be 2 percent, annual maintenance such as painting, plumbing, gardening and recurring repairs can be anywhere from 2 to 5 percent. If the cost of maintaining your home is 10 percent yearly, the increase in value annually must exceed 10 percent per annum in order for it to qualify as an appreciable asset. This level of appreciation has rarely been seen in the past and is not expected in our future. Therefore, a home is really a consumption item.

President Obama probably didn’t intend for the spat with Newark, N.J., Mayor Cory Booker to come at the start of National Small Business Week. The White House is now in a sticky spot, trying to explain that they believe in free enterprise … just as long as it’s not too big?
 
The fact is Democrats have tried to make Romney out to be a Wall Street barracuda, preying on working Americans. It’s true, the act of buying up failing companies, with the understanding that many employees with be laid off, as Bain Capital does, might sound “unfair.” (Jonathan Haidt might have some thoughts on why that is.) But this is an incomplete picture. While Bain Capital has “destructive” qualities, it also plays a constructive role, creating and expanding new jobs and opportunities.

If President Obama cared about government fairness rather than the mysterious decisions of providence, if he actually cared about equal protection under the law rather than under God, he would support a flat tax, like Steve Forbes and Gov. Rick Perry. This is not a difficult concept to understand: Everyone should play by the same rules and pay the same rate.

Ah, but here comes the objection to the heavens: But it’s not fair that certain people have and make more money than others! Well, they pay from a higher principal, for one thing, and for another, how exactly does one decide what is a “fair” rate? Why does the Buffett Rule push for 30 percent? Where did they get this number? Are only Harvard Law graduates qualified to make this judgment, or is the Oracle from Omaha a real oracle?

Standing ovation to Sen. Bernie Sanders (I) of Vermont for the truism of the year when he says that the problem is not how the government regulates the banks, but how the banks regulate the government. It was ironic that while JPMorgan announced a $2 billion loss that could become a $5 billion loss, the Republicans escalated their attacks against any serious regulation of banks, while President Obama, on his way to a Wall Street fundraiser, praised both JPMorgan and the modest regulations that fall far short.

There are more minority children than white children being born today. This is a game-changer in America. It is difficult to argue for affirmative action for a growing minority population that will soon become the majority. What will become important is the concept of equality based on the 14th Amendment; as America become a society of diverse ethnic groups, none of which has a majority. It is important that our government doesn't favor any particular ethnic group nor discriminate. 

The demographics today show that Hispanics are approximately 15 percent of America's population, blacks are 11 percent and Asians are a growing percent. In 20 or 30 years whites of European ancestry will become a permanent minority in America.

Vice President Biden indicated in a passionate speech yesterday that the American Dream was dying (Obama was elected president) for those not born with a silver spoon in their mouth.

It is difficult to understand how he has arrived at such conclusions. In fact, there are many hardworking Americans who, despite the difficult economic times, are finding ways to be successful and productive.

I predict there will be another banking crash sooner or later unless there is dramatic financial reform (which will not happen anytime soon).

Ron Paul right now could use his subcommittee chairmanship to begin the most far-reaching hearings ever conducted on the whole issue of "too big to fail" and why the system must be changed to avoid bailouts forever.

Elizabeth Warren, to her great credit, is calling for restoring the Glass-Steagall Act, protecting John and Jane Doe from banks that are too big to fail. Ron Paul, to his equally great credit, opposed ending the Glass-Steagall Act, and for this Paul deserves a standing ovation.

The issue is simple: When John and Jane or grandma and grandpa put their money in banks, those banks exist to protect them. There should be one kind of bank for them to put their money in. When the super-wealthy of the 1 percent put their money in banks to speculate, they should become even more wealthy if their speculation succeeds, but lose their money if their speculation fails, and these banks go bankrupt without one dime of taxpayer bailout.

In my column this week about the great populist wave, I challenged the pseudo-capitalism of the right. A new example has emerged with  the disclosure that JP Morgan has lost $2 billion from blunders very similar to those that caused the financial crash. I recognize that in some circles on the Republican right my opinion is not welcome, but a majority of voters agree with me, whether conservative politicians or their media allies like it or not. The dangers of the vulture capitalism of Mitt Romney and the Ayn Rand extremism and glorification of greed by Ron Paul are more obvious than ever today.