Mostly original content that examines financial surreality in equity markets in general, and the Japanese Stock Market in particular.
Friday, April 22, 2011
I *Heart* Jack Lew
Well-worth watching Charlie Rose's interview with Jack Lew. Consummately measured and balanced, uber-informed, politically astute and sensitive, Lew tackles most major political-economic issues facing the US, from taxes, deficits, inequality, healthcare, ageing & social security. He comes across with a knowledge one sees in one's BEST history teacher, with the demeanor of the best coach/father one saw amongst the other kids - the kind that is thoughtful, but never yells (in public), and is always constructive and positive in his criticism, and champions the values necessary to the success of the team. Such a man (or woman!) is oh-so-needed in this position - less to create consensus from amongst the vicious partisans across the aisle, but rather in order to appeal directly to the American people who will undoubtedly find sense in his patient explanation and no-nonsense communication style.
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ReplyDeleteWhile some of what you say is true, there is only so much fairness to go around before reality must be dealt with. One thing is certain: high earners will be worse off either way the chips fall. Asset owners universally got hammered during the last stagflationary period and kicked while they were down by the repair job thereafter.
ReplyDeleteFairness suggests everyone should pay: the bottom half pays regressively upon consumption and the top decile pays progressively to secure their property rights and prevent the cities and towns from resembling Sao Paulo.
I disagree fundamentally with your phrasing of the problem, however, which I will rephrase as: "The real problem is that Americans are deeply divided over how to pay the modest % of GDP the State expends relative to its Northern European peers." The ability to pay is more than there. And the gap can (and should be) funded both regressively and progressively and it will not cause material negative changes in either investment or national economic well-being. Americans get poor value and effectiveness as well, by comparison, for the State's expenditure. It is this which should make them furious and cause them to crusade for better and more effective expenditure, rather than reducing it. If you want a nice lawn, you don't pour agent orange on it, you pull the weeds, plant new seed and fertilize it.