Dear patient readers,
Thin/no posts from me for next 24 hours plus. Meetings, packing, and flying on the agenda.
Big Freeze: Earth Could Plunge into Sudden Ice Age Live Science (hat tip reader John D)
The dark side of Dubai Johann Hari, Independent (hat tip reader Swedish Lex)
Men’s genes ‘may limit lifespan’ BBC
Millions in US lack bank access Financial Times
Australian Professor in Japan makes case for protectionism against China Ed Harrison
Who Cares Vampire Squid? Independent Accountant
Thrifty Britons cash in on low interest rates and falling bills Independent
Those dangerous yet well-capitalized banks Felix Salmon
U.S. housing market meltdown not over yet: Zandi Reuters
Open Thread: Is the Fed Chair’s Reappointment at Risk? Barry Ritholtz
The recurring gold “bubble” Tim Iacono
Jobs – A Solution at Hand? Bruce Krasting. This is very clever, easy to implement from an administrative standpoint, and is saleable if anyone had the guts….oh right, we are talking about the Obama Administration, scratch that.
Antidote du jour:
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Have a flight Yves.
A good candidate for a future linkfest:
http://www.scientificamerican.com/article.cfm?id=newborn-babies-chemicals-exposure-bpa
In regards to jobs, how come everything has to be trickle down? Trickle down has so overtaken everyone’s thinking that even Krugman, who is presumably considered to be a liberal economist, didn’t until recently recommend helping the people that need it most directly with a jobs program.
All most economists promote are low interest rates, stimulus, and bank bailouts. All of these ‘solutions’ benefit either those at the top or political cronies first.
How about we increase welfare to those at the bottom of the pyramid? What’s wrong with that? Imagine if all of the $700 billion stimulus and the $700 billion TARP had been directed to the 11 million or so unemployed. If my calculations are correct, that’s $100,000 for each unemployed person. Split that over three years and you get $33,000 for each unemployed person. A person can easily live on that. Instead of ‘straight to the bottom’ ideas like the above we instead get ‘trickle down’ and the unemployment rate continues to grow.
As for the one-year payroll tax holiday, I would be in favor if it was progressive or if all banks still had to pay it. No way I would want to see something like this go to benefit Goldman Sachs or the other criminal banking enterprises.
As far as the FT’s “underbanked” (which I’m betting overlap substantially with the “under the bus”), it turns out they’ve been rational actors, and they’d rather pay the check cashing place $3.00 than pay the banks for overdrafts. I assume that, in order to force us to continue to enable rent seeking behavior by the banksters, cash will become illegal at some point in the not-too-distant future (“Those poor people being charged fees! And what about the drug dealers?”). After that’s done, rents per transaction can be raised as high as the banksters like. And we already have the precedent that the government can force citizens to purchase a defective product from private industry by way of the Democrat’s health insurance “reform” efforts. Not to be overly cynical…
A payroll tax holiday is the uber-wealthy’s dream come true. Once the peasants don’t pay the taxes the political firestorm to re-levy will overwhelm the social safety net programs. It’s simply backdoor abolition of SS and Medicare. Notice the “means” testing SS requirement; again another firestorm for all those who paid in and now it’s become just another tax for the middle class.
Call it the Goldman Plan for the peasants and no doubt the next suggestion will be mandatory contributions to 401ks with a default to equities. After all the peasants won’t have SS to rely on so they must be forced to “invest” for their retirement.
And why exactly exempt all corporations from paying their share? This is a giveaway to the major corporations that have thousands of employees. Although the cloak of “small business” was a nice touch.
The math actually works out to $127,272 per person. So about $31,818 for each of the 11 million unemployed per year for 4 years. I bet that would have created one hell of an economic spark. People at the top would have been much poorer, but they made bad choices and should have ended up poorer.
Instead, all we hear about is trickle down which clearly doesn’t work.
I hope they create the right jobs…American jobs and not some foreign jobs, the kind they have been creating for the last 20 years by lowering interest rates to boost citizens’ indebtedness (directly or indirectly through their Treasury purchases) to foreign powers.
Call me a cynic, but the payroll tax holiday looks to me like the enshrinement in law of the very attitude that landed us in this situation in the first place. Money spent on the national credit card, just like that spent on personal credit cards, must be paid back eventually. Pretending that’s not true is what led to absurdities like allowing minimum wage earners to buy million dollar houses with 100% financing.
Yes, we could give every taxpayer $100,000, but it’s unlikely to have a positive effect in the long run unless we can be reasonably sure it will be channeled into productive activities and value creation. Given the resources currently being channeled into value destruction (propping up failed companies) or worse, value destruction disguised as value creation (the business with the banks) I’m not optimistic about this happening.