The first characteristic that people look for in a leader is honesty.
Don A. Sanders
Can You Hear the Copters Overhead?
With manufacturing barely treading water, the worst housing market news in decades, GDP growth expected to slide to a 1.4% or so rate, and temporary hiring, a leading indicator of job growth, beginning to slow, Wall Street is eagerly awaiting what "Helicopter Ben" Bernanke ("toss money out a helicopter if necessary") has to say at Jackson Hole tomorrow. Will he once again try to flood the financial system via quantitative easing (i.e., purchasing things like bonds in the hopes of dropping long-term interest rates). I'm not sure I like that idea: it comes across like pushing on a string as a number of investors in a volatile stock market are already piling into Treasuries, pushing up prices; I think Bernanke would be pushing on a string, I suspect he may be considering other types of troubled assets. The single best thing he could do is to jawbone the President on making serious cuts in federal spending, deferring any tax hikes, and reducing the uncertainty introduced by convoluted regulations.
Mortimer Zuckerman: The Most Fiscally Irresponsible Government in US History: Thumbs UP!
The editor/publisher of US News & World Report added a subtitle to today's column: Current federal budget trends are capable of destroying this country. Mort mentions polls showing a bipartisan group of people think that banks have been the principal recipient of government recession policies. I disagree; the principal recipients of TARP funds were AIG, the GSE's and the auto companies (GM and Chrysler).
Clearly the haste of passing the $862B stimulus bill made government waste, including subsidies of fiscally irresponsible states, trivial tax distributions which more likely than not were saved versus spent, questionable white elephant projects (e.g., a high-speed train in Florida which will never cover its operating costs), and pushing-on-a-string distributions (e.g., an initial intent to give iPod's to encourage questionnaire completion by some Florida district school: how can we justify spending our grandchildren's money on that?) Mort cites recent polls showing the American people solidly against a rumored second stimulus plan from Obama and growing importance of the deficit and government spending as an issue.
Many economists recommend both holding down tax hikes and deferring spending cuts. I strongly disagree with the latter. It depends, of course, on the nature of the spending, but spending is not inherently virtuous. Otherwise, we should hire millions of people to dig holes and fill them up again.
I somewhat differ from Mort Zuckerman on the question of extending the Bush taxes on the top 2% of high-earning workers, at least in terms of timing (not while the economy is weak). If you concede that point from the get-go, the other side takes it as a given, considering it a down payment on their spending. But, depending on the circumstances, I would be willing to consider modest tax hikes--if spending is seen as bare-bone and we are imbalanced. I do like the way he addressed social security, including cost-of-living adjustments, flattening certain benefits for wealthier Americans, and higher age eligibility. Mort is more of a pragmatic conservative (like me); I wish that he had run for Gilliband's Senate seat (early held by Hillary Clinton).
Political Humor
Some originals:
- Miss Mexico, Jimena Navarrete, won this week's Miss Universe contest in Las Vegas. But she won't be driving home through Arizona: the state doesn't accept the legal status of her reign.
- Why did Obama cross the road? The teleprompter was on the other side.
Dinah Shore*, "Skylark"
(* My collection features Anita O'Day on vocals. I trust that the reader finds Dinah Shore's take on the standard worthy.)
