patrick.net

America really screwed the pouch replacing the elected guy with the special ed kid.

Dunno. The housing bubble may have been something that would have blown up on anyone's watch.

The republicans were active agents, but they did still control the House in 2000 and probably through 2006, even if Gore had won.

I think the housing bubble was the system's attempt to mitigate all the harms the 1990s policy changes had accrued -- NAFTA, rising trade deficits with China, rising oil prices.

Gore wasn't so great in these areas, either, AFAIK.

Neither is Obama for that matter.

11

Dan8267 2012 Aug 15, 3:14pm

Bellingham Bill says

Dunno. The housing bubble may have been something that would have blown up on anyone's watch.

I think the low interest rates was the seed for the bubble. And that seed was planted in G.W.'s first term.

12

bdrasin 2012 Aug 15, 3:21pm

Also, has it occurred to anyone that had Al Gore been appointed president as he legally should have been after winning the election in 2000, we would never had gotten Bush or Obama?

I've thought about it, and we'll never know of course, but I think the Republicans would have gotten Gore impeached for gross incompetence if 9/11 had happened on his watch (and the Dems would have rolled over as usual). Then we'd have had "President Holy Joe", and we'd have certainly invaded Iraq. Probably Iran and Syria too.

13 thomaswong.1986 2012 Aug 15, 6:45pm

Bellingham Bill says

I think the housing bubble was the system's attempt to mitigate all the harms the 1990s policy changes had accrued -- NAFTA, rising trade deficits with China, rising oil prices.

It was up to you as a consumer to say ... NO! to higher asking prices!

and as consumer you should have known that home prices do fall and not accept what the NAR kept pumping to the public. ...

the decline in RE prices from 1989 to mid 90s was obvious ! why did so many forget!

14 thomaswong.1986 2012 Aug 15, 6:48pm

I think the low interest rates was the seed for the bubble. And that seed was planted in G.W.'s first term.

repeating...

the decline in RE prices from 1989 to mid 90s was obvious ! why did so many forget!

For you I add...
interest rate also fell from 89 to mid 90s and so did prices.. so why didnt prices go up as your theory would call ?

Interest rates also fell over the past recent years.. and yet prices continued to fall...

The publics insane mania on RE.. has that changed ?

15 thomaswong.1986 2012 Aug 15, 6:54pm

Image how different things would have been had Gore been president...

16 Philistine 2012 Aug 15, 10:38pm

the kind of government your president Obama wants is waaaaay scarier than corporate America. When is the last time McDonalds went to war

The department of defense's global hootenanny and contractor welfare is arguably the largest corporate activity the US undertakes. It's hard to tell who gets more handouts from the gov't: military or banks.

business, in particular small business

Romney could give a rat's ass about small business.

17

Dan8267 2012 Aug 16, 12:08am

interest rate also fell from 89 to mid 90s and so did prices.. so why didnt prices go up as your theory would call ?

Stocks were going up. In 2002+ stocks were in the crapper and all the money started chasing real estate due to the low interest rates. Had the stock market been in a bull run at that time, I doubt real estate would have been bid up so high.

18

Dan8267 2012 Aug 16, 12:18am

Dan8267 says

Image how different things would have been had Gore been president...

If that's the worse thing that happened, Gore would have been the best president in at least 50 years.

Even if climate change was bullshit -- which it's not -- I'd take the repercussions on that rather than a million deaths in war, the Second Great Depression, and the end of basic human and civil rights in the United States.

Besides, the one and only thing that we do to fight uncontrolled climate change is to stop polluting, and that's something we should do even if climate change were bullshit.

Pollution itself is bad. Pollution itself is theft of wealth. Pollution itself is a government subsidy that distorts the free market. It's a subsidy because by allowing pollution government offsets the costs of providing goods and services by partially paying for them through depreciating capital resources like the land, air, and sea.

If you so-called conservatives actually believed in any of the economic philosophies you preach, you would be against the cost shifting and socialization of production costs for goods and services from the consumers of those products to the whole of society. Pollution is socialism! It literally makes you pay for a good or service that you do not use but someone else does. It takes your economic freedom away.

19 MB 2012 Aug 16, 7:08am

Thanks Nobody, I agree with you.

More tax cut for the investment. YES. Spur job growth

More tax cut for 1% of the high income earners. YES as part of greater tax cuts they will benefit. They do pay 80-90% of all taxes.

Cut the government spending on medicare. YES! If you are over 55 you will be fine, but for those under 55, CUT!!

Cut the social security. YES, it was never meant to be everyone's retirement plan! Stop the abuse now!!

Cut the budget on the following:
Education YES, eliminate the Educat Department. Education budget has exploded but results are worse. Why are schools raising people's children instead of educating them? Why are we feeding kids b-fast, lunch and dinner, and then the families during the summer? Bull SH**. Stop this crap and start educating kids. It is not the school nor the taxpayers job to raise your child and feed them. GET A JOB.

Social services such a child welfare protection. CUT IT! Stop the dependency and generation of elfare leeches. Without forcing people to find work and contribute to society, many have no guilt about sucking off of the punblic teat...it is perceived as their right as a citizen, or in many cases not even as a citizen, to get taken care of *Our Nanny State and democratic voters!)

Medical research to find cures. CUT!!! How hippocritical. Corporations are bad for finding cures to many life taking diseases because they make profits. I reject the idea that some beauracrat should choose what research to fund with my tax dollars. Leave it to the private sector.

Spending will not increase, reality will hit the free loaders like a ton of bricks. I HOPE THE GRAVY TRAIN IS OVER. No more "All aboard," it is now show me your cards that reflect you are contributing to society, otherwise it is a swift kick in the rump. BEAT IT! Welcome to the real world where work = $$ and $$ = eat.

Nuff said. MB Out!

20

rooemoore 2012 Aug 16, 7:19am

MB says

Nuff said. MB Out!

wow. you talk cool.

21 dublin hillz 2012 Aug 16, 9:33am

When is the last time McDonalds went to war or slaughtered their citizens like say um, the Soviet Union?

They don't need to engage is such violent overt atrocities. They will do it silently and without notice via whatever "chicken" there is in those "nuggets."

22 dublin hillz 2012 Aug 16, 9:35am

It was up to you as a consumer to say ... NO! to higher asking prices!
and as consumer you should have known that home prices do fall and not accept what the NAR kept pumping to the public. ...
the decline in RE prices from 1989 to mid 90s was obvious ! why did so many forget!

Correct - those who bought in the 2004-2006 period so that they could live "the american dream" must repent and learn from these horrendous errors and reevaluate their lives. I remember people who were normally discussing sports and movies were talking about "flipping" real estate at the time - a classic sign that the bubble was upon us.

23

lostand confused 2012 Aug 16, 9:51pm

You prefer big government solutions over freedom decidedly. END

Yeah, yeah, yeah. Yet it is republicans who brought in No Child left behind, Medicare Prescription drug plan, two wars fought by our tax dollars-while Bin Laden got away and kept taunting us with regular audio tape releases.

Oh and who brought us the big government war on drugs-ruining the lives of millions and millions of Americans and their families?? In 2010, the Texas republican platform called for criminalizing homosexuality-so big gubmnt wants to get into your bedrooms now. Wether it be abortion or stem cells, or now in some states, big gubmnt wants creationism taught as science-if this aint a Madrassa-what is?

Perhaps those of you on the right should stop ranting on trumped up rage and Fox News cliches and then take a good hard look at yourself and then go to the dictionary and read what the meaning of Freedom is.

24

marcus 2012 Aug 16, 11:36pm

Republicans also brought us the tax cuts and wars and thus our current debt and deficits.

And now they say it's the democrats fault and we need higher taxes on the middle class, lower taxes on the rich and to end medicare because of the mess Obama got us in.

25

bdrasin 2012 Aug 17, 12:40am

$50,000 a year times 12.8% = $6,400 paid in taxes
$21,000,000 a year times 13.9% = $2,919,000 paid in taxes
(Then multiply Romney's amount paid by 10 years)

I don't know if that's a correct interpretation:

Mitt Romney says

Romney defended his record Thursday, saying he has paid at least 13 percent of his income in federal taxes every year for the past decade.

It sounds like this might be a case of weasel wording, if he means that he paid 13% on his ordinary income (vs capital gains, which is most of what he makes). I have no idea if this is the case or not, of course, since we don't have any evidence to go on.

26 david1 2012 Aug 17, 1:31am

Or is it sitting in some investment bank where it is being used to loan out for other purposes in the economy?

Except it isn't being loaned out because demand for loans is at an all time low. This is why interest rates remain low.

Bottom line, we can fund our government by taxing the guys with all the money or by borrowing from the guys with all the money.

Lower taxes promote profit taking and capital hoarding. Higher taxes promote investment. Why don't people understand this? I use this extreme example: If tax rates were 90% and you owned a business, would you take profit out of the business and pay 90% in taxes, giving no direct benefit to your business, or would you invest that money back into your business? If you reinvest it in your business (by hiring someone perhaps or increasing marketing) you don't pay the tax.

The funny thing is, there are literally years of data backing this up. Chart GDP growth and taxes rates. Chart unemployment and tax rates. But guys like you have been fed so much b-s from conservative talk radio you don't think for yourself anymore.

Why would anyone hire more people if their taxes were lowered??? That is ridiculous and no one that owns a business believes it to be true. They might say it is true but they only say it because they want their taxes lowered.

27

MisdemeanorRebel 2012 Aug 17, 3:05am

david1 says

Lower taxes promote profit taking and capital hoarding. Higher taxes promote investment. Why don't people understand this? I use this extreme example: If tax rates were 90% and you owned a business, would you take profit out of the business and pay 90% in taxes, giving no direct benefit to your business, or would you invest that money back into your business? If you reinvest it in your business (by hiring someone perhaps or increasing marketing) you don't pay the tax.

BINGO. Thanks David. When taxes are high, capitalists reinvest their profits to avoid taxation (spending more on advertising, expanding sales offices, upgrading techne, etc.) When taxes are low, capitalists take the money out and buy bonds and engage in non-productive rent-seeking behavior.

28

tatupu70 2012 Aug 17, 4:10am

Or, does the bank take a portion of YOUR money and loan it out to other people to use for car loans, home loans, personal loans, etc. so they can "spend" it on items in the economy??

It depends. What if nobody is applying for loans? Or nobody that qualifies is applying?

29 krusty 2012 Aug 17, 4:23am

This tax rate discussion is ridiculous. Let me give you some real numbers. I am a hedge fund employee (this is true), working in NYC. My income is around 10-20 times the national average, and my expenses are also many times the national average: for example, in Connecticut where I live, the $250k national home price wouldn't buy half the land for a garage, let alone the garage itself. Preschool in my town costs me $25k a year and my monthly mortgage payment is around $9000. Even our electricity price is twice the national average.

My tax rate last year was about 38%. That is 28% Federal (would be 35% except for state tax deduction, which activates AMT), plus 10% for New York State. I also had some realized investment return taxed at an average of 17%, but not enough to noticeably affect my overall tax rate.

Since I work in NY, Connecticut receives virtually nothing from me though I do pay real estate tax to my town. If I made a bit more, and as a trader sometimes I do, sometimes I don't, then my taxes would go up to a max of 45%. This is the highest rate you will find in the USA unless you happen to live in New York City, which costs an extra 5% on top. Fortunately since I moved out of the city I don't have to pay that anymore.

I think my tax rate is pretty much where it should be. Of course I wish it were lower, everyone does. However I also understand that the government provides the services that make this a society instead of just a bunch of people competing with each other. If tax rates were much higher I would probably work less, but if they were lower it wouldn't stimulate me to work more. In other words I think its pretty much in the right ballpark for my income now.

What irritates me is that I am at the highest possible tax rate in the country while people like Mitt Romney, who "earned" twenty times more, pay far less than I do as a percentage of income. The reason for this is very simple: our asinine tax code favors passive investment income over employment income. I think this is really the only thing in our tax code that is horribly, horribly out of whack (other than its insane complexity) and yet it receives no discussion at all! People just focus on marginal rates, which have almost no effect whatsoever on the wealthy. The rich do not have significant income relative to their wealth--and when they do, they do whatever it takes to (quite legally) repackage the income and turn it into a capital asset. That's where the lawyers and offshore entities come in, but it can be done totally legit if the amount is worthwhile and you have access to some expensive expertise.

The effects of this system are pretty obvious: if you already have money you will be able to grow it forever and pay almost nothing in tax. But if you are trying to *earn* money by working you will pay ordinary tax rates, which are actually fairly steep already for high earners. This makes wealth an exclusive and hereditary club, especially since we have very, very low estate taxes. In other words, our tax system now creates and nurtures an aristocracy.

The simple fix: treat all income the same. Move dividends and unrealized gains into ordinary income. Rich people would pay as much as I do in percent terms and the deficit would shrink. I would recommend an estate tax in-line with global norms, too; this would be around 75% or so after some deductions. Dead people don't need money.

To anyone who says that raising investment tax rates would reduce capital investment I call total BS: If you have $100mm lying around (I'm talking to you, Mitt) you are going to invest it *somewhere*, or at least spend it, just so long as the tax rate is less than 100%. The only alternative is a guaranteed loss (i.e. opportunity cost) and a rational person would rather get, say, 50% of some return than 100% of no return. This is basic finance and basic common sense to everyone except Republicans.

The weirdest thing to me is that most Republicans don't even have enough investment income to benefit from the dumb system they have supported. Why would someone do that to himself?

30 thomaswong.1986 2012 Aug 17, 4:53am

krusty says

What irritates me is that I am at the highest possible tax rate in the country while people like Mitt Romney, who "earned" twenty times more, pay far less than I do as a percentage of income. The reason for this is very simple: our asinine tax code favors passive investment income over employment income.

Yes, there is a difference between the two. If your a Finance major it should be clear as the reason why taxes on investments are lower.

NYC, today is no different form 40+ years ago, regardless of wages/salaries earned. On the other coast, Santa Clara (Silicon Valley) was farmlands transformed by investment dollars, encouraged by favorable tax laws that spawned an industry, created jobs, and incomes. When tax laws as in the case of SV change, it discourages investment and R&D and you see contraction in jobs and investments.
I seen that too.

There is a difference!

31

tatupu70 2012 Aug 17, 5:20am

Another asinine comment... what does your statement have to do with the reference to "velocity" in my post???

Do you really not get it? There is no velocity of money if people aren't demanding (or qualified for) loans. The money just sits there. Interest rates at almost zero currently is a very good example of this.

32

bdrasin 2012 Aug 17, 5:49am

Mitt Romney can kiss at least 13.6% of my ass. Or something like that.

33

Dan8267 2012 Aug 17, 5:51am

bdrasin says

Mitt Romney can kiss at least 13.6% of my ass. Or something like that.

Which 13.6%? That can't be all anus.

34 bob2356 2012 Aug 17, 6:04am

NYC, today is no different form 40+ years ago, regardless of wages/salaries earned. On the other coast, Santa Clara (Silicon Valley) was farmlands transformed by investment dollars, encouraged by favorable tax laws that spawned an industry, created jobs, and incomes. When tax laws as in the case of SV change, it discourages investment and R&D and you see contraction in jobs and investments.
I seen that too.

You need to travel more or study history more. NYC is a very different place than it was 40 years ago. As is the entire tri state area. I lived on 110th in the late 70's, I can personally attest it's an entirely different city today. The amount of investment made in the last 40 years is just stunning. Even former no go under any circumstances war zones like the South Bronx have gentrified.

Am I missing something about SV here? The huge growth in SV happened for the most part before 2001 when capital gains was reduced to it's current very low level. The first wave of really big expansion in SV, along with the invention and big initial big growth of venture capital, happened in the 70's when cap gains was as high as 39%. So what is your point?

35 MB 2012 Aug 17, 7:04am

I have $10M in the bank, I paid the taxes I owe on it, since I didn't really earn it without governments's direct involvement.

I hold that money in my account live large and wait to spend it or pass it on through living trusts or some other vehicle to minimize the additional blood letting that Uncle Sam will strive to do.

Or, Uncle Sam gives me incentive to invest that money back into the market where I take all the risks trying to pick a proper investment that will lead to growth of that investment. If that risk and gains on my investment of post tax money is treated as regular income, I'll keep my money on the sidelines. Sure those with $100s millions will invest some, those with 2, 5 or 10 million may not. How many have 100s millions?

No incentive....no investment. Forget it. My risk, not the governments. They are just a bystander trying to figure out how to take more of $$s that are sitting on the sidelines.

If someone inherited money and lives off of the cap gains, good for them. They paid taxes on the inheritance.
The government is trying to tax money at every exchange.

Lower everyone's taxes, cut spending, simplify the tax code, put freeloaders to work and do not covet thy neighbor's goods. Voila! It is that simple.

36

bdrasin 2012 Aug 17, 7:21am

"Mitt Romney and Paul Ryan" is an anagram of "My ultimate Ayn Rand porn". Just sayin'.

37

lostand confused 2012 Aug 17, 8:47am

I love it when I can have a discussion with 2 people calling themselves Crazy and Lost and Confused.

Can you people ever go one or two comments without invoking Fox News?
I don't watch it. I don't even watch tv much.

But I will say of course Fox News is right wing so what? Heres another deal Lost and Confused, I'll trade you Fox News for every major network and newspaper that makes up 90% of the news.

What cliche am I "spouting" from Fox News given I don't watch it? Use words.

LOL.. Perosnal insults-the usual. Since you claim you don't watch Fox Nerws, watch it a few days and compare your silly posts-then come back. Of course the only thing I can expect is a few more trollish comments without any substance-more screeching .

38

CBOEtrader 2012 Aug 17, 9:06am

bdrasin says

"Mitt Romney and Paul Ryan" is an anagram of "My ultimate Ayn Rand porn". Just sayin'.

This is pure genious...

39 Honest Abe 2012 Aug 17, 10:38am

MB - they've got you in their cross-hairs, the libs here hate common sense. Get used to it.

The productive class is NOT going to resign itself to being tethered to a permanent millstone of egregious taxation in support of the consumption class of bureaucrats and those with a enlarged sense of entitlement. Game on.

Consumption class = Obama supporter

Productive class = Romney supporter

40

lostand confused 2012 Aug 17, 12:03pm