Mostly original content that examines financial surreality in equity markets in general, and the Japanese Stock Market in particular.
Monday, March 29, 2010
CDA Biz to CDA Gov: Raise Taxes! (Wot?!???)
According to the Globe & Mail, Canadian business executives say it's time to raise taxes? What?? Surely this is some mistake. What could they possibly be thinking? Is there something wrong with the water? Don't they know this is pure unadulterated heresy? Don't they believe (like their southern neighbours certainly do) this is akin to declaring "war" on their class and the future of the nation? Don't they understand what higher taxes actually mean....and what they lead too? (Answer: bureaucracy, give-aways, free-lunches, Nancy Pelosi's, yada yada yada, and more SOCIALISM, of course). The poll must be tainted. The Globe & Mail must be biased, run by Che Guevara fashionista Marxist-Lenninst sympathizers. And all this time, we've been looking at that long divide to the south, when, the REAL menace has been lurking to the north. It's clearly time Americans locked down their northern border or else we will soon be over-run with....ummm...... errrrr......prudence and, heaven forbid, common sense.
This blog was a lot better when it stuck to its knitting on material financial and economic issues instead of incessantly blaming the Right for every ill that has befallen the US. There is plenty of blame to go around on all sides ,and the current administration has been no more bipartisan and collegial than the previous administration.
ReplyDeleteThe problem we on the American Right have is not so much higher taxes (which are inevitably coming and do need to rise given the deficits) but that 1) higher taxes aren't going to lower the deficit, but to a new entitlement program that will almost surely exacerbate the deficit and 2) higher taxes aren't accompanied by belt tightening elsewhere, like lower discretionary or military spending and a higher retirement age. Anyone who believes that the US' fiscal situation can be rectified solely by tax increases does not understand the nature and gravity of the issue.
Let's not forget when the tables were turned 15 years ago and Canada undertook bum-clenching tightening on all fronts, it included tax increases, spending cuts, and (gasp C!) pro-capital formation and deregulatory reforms that the Left calls "Anglo-Saxon Reaganism/Thatcherism" and never fails to underscore all of its foibles without acknowledging any of its virtues.
Anonymous,
ReplyDeleteThanks for your comment. But I fear you [wrongly] attribute partisanship where none exists. If your frustration is with ideologues and demagogues, then we can sidle-up next to each other and buy each other rounds. Conservatives and progressives exist in the population BEFORE politics. They reflect the inherent trepidation one group feels in regards to change, valuing and finding comfort in the traditional, in contrast to the exhileration the others feel towards things new, and lack of tether to things traditional. These archetypes exist, most likely, for logical evolutionary reasons, and both are necessary for the health of a society. Of course modernity, rapid population growth, geographical dispersion of family, malthusian constraints, and the accelerating pace of technological change puts to test how these opposing forces co-exist. IN America, in stark contrast to other liberal democracies, has, for whatever reason, fared worse on this account.
But, cutting the sociological crap, we are here, now, because of very short-sighted policy choices to spend more while collecting less, and ignore the experiences of our liberal democratic peers nations in regards to some meaningfully large policy dilemmas (healthcare and energy policy) instead choosing to follow the dictate that the best policy is no policy (but sadly not for the greater public interest, and certainly not on a forward-looking basis, for posterity). The culpability is wide and deep, and goes far beyond Bush, or the Republicans. So if you thought I was pointing my finger at you specifically, I believe you are mistaken and unnecessarily defensive.
"But, cutting the sociological crap, we are here, now, because of very short-sighted policy choices to spend more while collecting less,"
ReplyDeleteI'm not sure its quite so simple.
As soon as the gold standard was abandoned the body public started operating like a commercial bank - lending to taxpayers (by providing them services they didn't have to pay for at the point of consumption) and accumulating the results of said lending as a deposit liability.
Gubberbank leveraged itself up along with all the rest. Spending more while collecting less may be as much an outcome of this transformation as any ideology.
Once we ditched the golden anchor and moved to a genuinely pure credit economy (apart from that beastly paper cash of course), perhaps it was inevitable that the whole circuitiste machinery (public and private) would leverage to its upper limits of viability, and perhaps no co-incidence that this event co-incides more or less with peak-population-growth.
I kind of view recent events and indeed the semi-madness of the last couple of decades as an inevitable phase of information-age transition that we had to go through perhaps, and one which is perhaps in the end more about technology than ideology.
C: Thanks for your comment. But I fear you [wrongly] attribute partisanship where none exists.
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You are not partisan, but you are an ideologue. You support the globalist-neoliberal perspective. You were a fan of the bailouts, which was a perfect example of that. And now, you're in favor of austerity packages that will allow the wealthy people who benefited from the bailouts keep their ill gotten gains.
We need wealth taxes, to recapture the spoils of Geithner's robbery from the taxpayer. We need protectionism, perhaps disguised like India and Japan do, such as a carbon tax that screws over imports from countries with lax carbon standards or carbon intensive fuels.
If we reinstitute protectionism, we can re-link wages to inflation, and burn away debt with inflation. Instead of austerity packages, like Obama's health care proposal, designed to help Geithner's patrons at Goldman Sachs, Blackrock, Pimco, etc.
I do not believe, that you know what I believe. I would challenge you to find any previous posts or comments in which I was a "fan" of bailouts, - certainly not as a result of an ideological position relating to a neo-liberal perspective.
ReplyDeleteAt best, you would find, coincidental to the heat of the moment, I was a pragmatic apologist for central banks providing liquidity to financial institutions as required to prevent "selling position to make position" at the same time as as the rest of the world was undergoing a deleveraging spiral. This is under the recognition that all financial institutions are illiquid and can be made insolvent under such conditions, and it serves no interest - public or private to force market-based liquidation in such circumstances. This is not ideological, but pure cost vs. benefit analysis based on the most general sense of the Public Interest. You would also find that I was certainly no "fan" of bailouts. Liquidity, where the public was on the hook, I believed should have been provided at painful levels; It certainly should have been provided, NOT at the equity level, nor perhaps even the CB-preferred, but senior debt, or a package of the two. I had no problem with CBs lending against collateral - any type, but not the outright purchase of it, and again for reasonable haircuts.
As for consistency, my line for the last decade has been that revenues are insufficient, and have believed (1) Bush tax cuts were wrongly skewed at best and completely unwarranted at worst (2) carbon taxes would be well prudent (3) single-payor healthcare is neither socialist, nor austerity, just common sense; (4) Crony capitalism is bad. I cannot say I believe GS BLK or Pimco are any more cronyistic than any other self-interested lobby, and that the problem is not the self-intersted, but a system that favors the concentrated self-interest (be it the elected, the lobby, or the narrow constituency) at the expense of the greater Public interest. (Having clarified that, I will now return to my previously scheduled work routine...)
No surprise there, lass. The Conservatives dropped their lower the VAT election promise when it turned out it was costing them votes. Canucks just have a habit of thinking that they get value for their government buck.
ReplyDeletec: At best, you would find, coincidental to the heat of the moment, I was a pragmatic apologist for central banks providing liquidity to financial institutions as required to prevent "selling position to make position" at the same time as as the rest of the world was undergoing a deleveraging spiral.
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That is totally wrong. If Geithner, Bernanke, Kohn, etc have actual legal and financial analysis supporting there decisions, then the NY Fed would not be fighting like hell to avoid disclosing the analysis done by its legal and financial advisors about putting AIG, Bear, Lehman, etc into bankruptcy.
If Geithner/Bernnakne/Kohn can't produce legal and financial analysis by their advisors defending their decisions, then they ought to amend for their failures by confessing all their illegal activities and ratting out all other parties. And pleading "no contest" to intentional violations of duties to take "prompt corrective action" by putting troubled big banks into receivership, aiding and abetting securities violations via the primary dealer liquidity facility, and other illegal acts.
Putting Bernanke/Geithner/Kohn and all their co-spirators in prison would restore the public's faith in the federal reserve and the financial system.
-- Or they can keep doing what they're doing until we see vigilante justice, like when the uprisings and assassinations the US saw in the 1960s. There is no forgiveness for stealing a man's patrimony.
Not really shocking. In our small but honorable kingdom the business execs are three generations deep, Torontonian aristocrats. What do they care if tax increases destroy the spending power of the middle class? Silly peasants, no Upper Canada college for you!
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