It’ll be nice to hear how the candidates think we proceed, so far, in the faulting of regulators or lack thereof, the two corporate candidates are where Ralph Nader and others were a decade ago. This financial situation is a result corporate greed and not just a happenstance of poor policy.

In the interest of fairness, diversity and values gained from a non-partisan discussion, rather than the bi-partisan facade that passes for fair and balanced, here is Tuesday’s press release from the Nader/Gonzalez campaign which includes a ‘10 point plan’ of what to do now.

http://www.votenader.org/media/2008/09/16/meltdown/

I would love to hear Nader’s comments on this. I like what he has to say, but he has as much chance of winning this election as Mickey Mouse.

It is a shame, I think Nader has been vilified so much because of the 2000 election which was a false pretense.

Gore lost because he let the Republicans get away with murder. Now after 8 years it seems they have gotten away with murder in the literal sense as well as metaphorically.

McCain’s economic plan is to increase the tax breaks so the top percentage will get more money.

For instance if you make 6 million a year under McCain you will receive a $200,000 increase in your income from the tax breaks.

Obama’s tax plan will take $700,000 in taxes from people earning this much.

In retrospect, does Mr. Summers think that the repeal of Glass-Steagall was an error? More generally, did the Clinton administration’s continuation of the process of deregulation set in motion under the Carter administration contribute to the onset of the current crisis?

John Taylor can sure spin bad news. Gad. Keep hammering him Tom.

John Taylor is just rehashing GOP Talking Points that are so discredited that they are worth less than the paper he is reading them from.

When will someone confront that fact that all of the spending that has taken place over the last several years, and now days, is the equivalent of a huge tax increase.

Our government sets the example for its citizens. Passing the buck to the next generation is a very lousy example.

I hope one of the candidates will stand-up and tell folks that these mounting bills must be paid.

It’s the Rating Agencies, S…

Barack Obama and Joe Biden need immediately to describe new, decisive and meaningful action that can be taken in response to the mortgage crisis/Wall Street meltdown. The description needs to be comprehensible and motivational to voters in general.

The message: The health of our economy and the safety of Americans’ personal assets rely on a wall between what is public—-and protected by state and federal regulators—-and what is private-—the domain of institutions and wealthy investors who have the sophistication to take big risks.

Now so-called “free marketers” have taken the wall out of Wall Street without letting the public know.

Insurance companies investing consumers’ premiums, retirement funds, banks managing securities portfolios: Americans trust all of these to hold their personal assets responsibly under the protections provided by bank and insurance regulations, SEC regulations, etc. The regulatory protections limit these trusted fund managers to purchasing “investment grade” securities as defined by the rating agencies. These protections have served America so well that Americans have ceased to be vigilant.

In a complete failure of their fiduciary responsibilities, the managers Americans have trusted with their nest eggs have tried to top one another’s performance by investing in high-risk securities that have historically been off limits. The enablers: hedge funds and rating agencies. In return for a disproportionate share of the profits, hedge funds have bought small portions of securities pools-—like packages of low-quality mortgages—-and have agreed to take the first losses. With the hedge funds’ having absorbed the first layer of risk, the rating agencies (Moody’s, Standard and Poors and Fitch) blessed the security pools and mortgage servicing companies with ratings that allowed insurance companies and retirement funds to buy in.

The rating agencies’ blessings—-which have grossly underestimated the risks of the securities they rated-—broke down the wall, creating a black hole of risky investments into which unsuspecting American consumers’ personal capital has poured.

We don’t need John McCain’s “study commission”. (That’s like responding to an eight-alarm fire in New York by assembling a group of mechanical engineers in San Francisco to design a fire truck.) We need an immediate, hard look at the rating agencies, hedge funds and private equity firms (all of which are unregulated) to understand how the wall was breached, to reverse whatever can be reversed of their inept and self-serving work and to assure that consumers’ hard-earned savings are never again misused by sophisticated investors to protect their own interests and multiply their profits.

We need the wall put back in Wall Street.

Why do you let John Taylor get by with telling un-confronted lies. John McCain has voted again and again for the largest spending increases in government history - funding for the Iraq war, for the Afghanistan war and for the department of Homeland security. John Taylor not only lies about John McCain’s record but lies about Senator Obama’s economic plan as well. John Taylor lies when he says Obama wants to raise taxes on small businesses. Anyone that does a quick read of his economic plan on his website realizes that this is a lie. The media lets the Republicans again and again from George W. Bush to John McCain get by with bold face lies.

While I respect both of the economists on the show today, I feel that this show is a waste of time because rather than learning from these two men how they really view the problems and possible solutions to this mess, we are getting posturing and pure campaigning.

McCain’s plan for health care is unacceptable. A $5000 tax credit is insufficient. I don’t know anyone who could purchase their current insurance at anything less than $8000 per year (for a couple only). My costs to insure my family of four was quoted recently at over $20,000 per year.

Let’s stipulate that there is enough blame to go all around, but that de-regulation, absent the controls that needed to be in place, is the prime culprit. De-regulation of the home mortgage industry put more capital in the system so more folks could buy homes. No problem there. The problems came because the people who were writing many of the loans had no stake in the creditworthiness of the applicants. They approve the applicants, some with inflated net worth, let’s not kid ourselves, collect the fees, then package and sell the loans in groups, dispersing the risk as best they can across the board.

Used to be if you got a mortgage you made your payment to the institution you obtained the loan from while the loan was active.

Now, your mortgage is a commodity to be bought and sold at will. The solution here is to make mortgage writers have the capital to back the loan for some established period, such as six months beyond the first adjustment for an adjustable and perhaps 25 percent of the length of a fixed loan. So 5 years on a 20-year mortgage. In other words, make the lenders/writers keep the loan on the books past the date when most folks are likely to default, where ever that line is. Then lenders would make sure that their borrowers were creditworthy. Quite simple but I don’t hear anyone suggesting it, just more nonsense that obscures the real problem and solution.

John McCain’s Heath care plan is Either a health care plan or a tax cut. It can’t be both. The Money can only go to one place. And the tax credit for health care is less than the cost of insurance so it will not wind up putting money in the hands of the people so to claim it as a tax cut is dishonest.

Why did Tom give John Taylor the whole opening with out Summers questioning it. Then Summers gets a few minutes and then John Taylor cuts into him. Where’s the balance?

Nice to see Summers coming back at him and calling him out on it.

I hear all this talk about John McCain’s health care plan in regards to his tax credit, but what about his plan to tax individuals on their employee-based health care benefits? Many people are surviving because they DO have excellent health care benefits from their employer, many of these working and middle class Americans, why is this not addressed? Do Americans know that indeed McCain DOES want to raise taxes, its just hidden in his health policy. I find many are not aware of this.

The American public needs to make voting decisions based on ALL of the facts.

Thank you in advance for addressing this matter.

It is fully predictable that John Taylor would concentrate on the Fannie Mae and Freddie Mac debacles, for which there IS blame to go around. But they did not create the atmosphere in which wild and totally unresponsible leveraging that took place in the “Investment Banking” industry which provided the “fencing” of the sometimes illegal mortgages issued by such companies as CountryWide. The atmosphere WAS created by those like Phil Gramm who wrote the bills that removed the Glass-Steagall provision and the December 2000 bill that FORBID the regulation of derivatives like the Credit Default Swaps that put AIG in mortal conditions. Neither of these bills were opposed by John McCain.

Then as soon as possible he switches the subject to deficit fighting, where the last DEMOCRATIC administration had an outstanding performance. Just that they didn’t cut the spending as much as John McCain would, which would take money out of the hands of the middle and lower economic classes.

In a certain way, I feel sorry for John Taylor; he has the impossible task of putting lipstick on a pig and making everyone think it is NOT still a PIG (in a poke)!

John Taylor just accused Barack Obama of being a “tax raiser” on businesses. He then said that McCain’s method of raising money would be to close corporate loopholes. Isn’t closing corporate tax loopholes the same thing as raising taxes on business?

These guys sound like small children having a fight in a sand box.

Where are the adults in this election?

John Taylor speaks about accountability

What is the Republican/ McCain version of accountability? That Carly Ferina gets 40 million dollars when she’s fired for losing eighteen thousand jobs at Hewlett Parckard? Who suffers for the failure of big business and fat cats? Over and over again, the Republican version of responsibility rewards the CEO’s, the architects of disaster, and the mega corporations for incompetence.

And still, McCain recommends tax breaks for the people and companies who profited from abuse.

What John Taylor fails to mention is that yes, McCain will give a tax credit for healthcare, but that is because he wants to count health care as a taxable benefit on paychecks.

Yes, yes yes, great comment DonaldB

Dear Mr. Ashbrook,
I am not a formally trained economist, but if one views this ‘crisis’ using a bit of common sense, I believe that you could extrapolate a cause-and-effect scenario:
Americans carry too much debt; our financial institution carry too much debt and leverage their assets beyond anything that represents prudence. The ‘crisis’ was well forecast and the remedy quite predictable at both civil, institutional and government levels.
We are an economy that is grossly out-of-balance and driven by consumption; e.g., the President’s response to 911: ‘Go Shopping’.
I believe that we - note WE - have created this ‘crisis’ and that the ‘correction’ will be long and painful!

I am at a complete loss as to how Sen. Obama is going to make any difference at all in the White House when dealing with the economic crisis. The fact that he voted present 123 times in the Ill. legislature is indicative of an indecisive person. If he has a history of not taking a stand on basic legislation, why should I trust him to solve this very painful economic issue?

Although I don’t particularly care for McCain (and I will not even talk about Palin) at least McCain has a track record in the senate that is indicative of someone who will take aggressive and decisive action on this issue.

In the interest of fairness, diversity and values gained from a non-partisan discussion, rather than the bi-partisan facade that passes for fair and balanced, here is tuesday’s press release from the Nader/Gonzalez campaign which includes a ‘10 point plan’ of what to do now.

1. I agree that the two parties are both in the pockets of big corporations but that doesn’t mean there’s no difference between them. If you compare our economy under Clinton to that under Bush II you can see that. Or if you compare the Supreme Court votes of Democratic -vs- Republican appointees.

2. The US is a right-wing, corporatist political culture, We are not a left-leaning progressive political culture so Nader’s ideas have no broad support here. Turning the US into Sweden is about as likely as turning Iraq into Switzerland.

3. Tiny fringe political parties like the LP or the Greens admit they have no political power but they congratulate themselves for “moving the debate”. I think they overestimate their influence. There’s very little evidence that anyone listens to them. Just because one of their ideas appears a few years later as a plank in a major party platform doesn’t meant they had anything to do with it. Take health care, for instance. For years fringe progressive parties have been asking for national health insurance. Now it’s actually in the Dem’s platform. Is this because of Nader, et al? NO: it’s because health care access has finally reached a crisis that affects huge numbers of mainstream voters.

Former Senator Phil Gramm wrote McCain’s economic policy statement and was McCain’s chief economic adviser until Gramm too stupidly said that Americans suffering from the current economic mess are a bunch of ‘whiners’. You might recall that when Gramm was a Senator, his wife was on the board of directors of Enron. Well, it turns out that it was Gramm who in late 2000 in the dead of night sneaked into a must-pass spending bill 262 unread pages of legislation which was written with the help of financial industry lobbyists and which enabled credit default swaps in bonds. This enabled Wall Street to turn risky housing loans into non-transparent debt which Wall Street then spread all over the world and which is what caused the current global economic meltdown. No one knows where the bad debt is, so banks are less willing to lend, even to one another.(Not incidentally for Enron, Gramm’s sneaky legislation also exempted energy trading from any regulatory oversight.) McCain is now running around the country saying that it was a greed on Wall Street which caused this meltdown. Well, Wall Street was, is, and always will be greedy, just as there are always cheaters in sports, but John McCain chose as his chief economic adviser someone who lets greedy cheaters write the rules of the game.

See the article in Mother Jones:

http://www.motherjones.com/mojoblog/archives/2008/09/9718_mccain_lehman_crisis_gramm.html

I believe the differences between the perspectives of the candidates ARE stark, as your guests suggest. It’s disappointing that the Obama campaign hasn’t capitalized more on this difference, in clearer, simpler language that will make intuitive sense to the electorate.

I just want to comment on the remark by Laurence Summers that “people are motivated by greed and fear.” You hear a lot of that trope during financial meltdowns, as if it is a general truth. My opinion is that SOME people are indeed motivated by these two weaknesses and unfortunately it can drive those people to fight their way to positions of power. The vast majority of people are NOT motivated by those emotions (though they experience them), and we are generally willing to let the powerful fight amongst themselves, to a limit, as long as the rest of us are more-or-less left alone to follow the motivations that we experience (love, family, beauty, thrill, peace, bread-and-circuses, what-have-you). But part of why we HAVE government is to make sure that the greedy-fearful-powerful are kept penned in to some reasonable degree: call this democracy, regulation, etc. When the big dogs are let out of the pen, then who can be surprised when they make a big bloody mess. It is a distinction, but an important one: Who let the dogs out…?

Trickle down was always a myth. Ask any plumber what it is that runs downhill.

Mr Summers claims Mr Taylor’s comment that we have a terrible economic condition was in fact correct! The asset bubble that was created during the Clinton/Summers watch (and for what they take the credit) came to a crashing halt and a plunge in the markets literally a few days after President Bush took office.

So, if Mr Summers takes credit for the economic growth, the Mr Taylor’s prophetic word about the crash is coming is true as well.

One could also make a strong case that in a year that Mr Clinton took office, the economy started booming and that the credit in fact goes to President Bush senior for setting the economic plan in place.

Mr Clinton hit a good stretch of the economy during his presidency and is taking undue credit for it!

John Taylor is NOT a moron. He rehashes GOP Talking Points because he knows they work. I do not support John McCain but I think John Taylor won the debate over Larry Summers because Mr. Taylor stuck to his points, got about twice as many words in and did not get ruffled one bit, unlike Mr. Summers. Mr. Summers is now touting the right line of whether our economic policies will benefit a small few at the top of the economic ladder or the majority of hard working Americans and those shut out of work. However, I think Obama should dump Summers as an advisor, both him and Taylor are proponents of globalizing neoliberalism which has proven to widen the gap between rich and poor not only in the U.S. but globally.

James Moran:
Apparently it is some kind of tradition in the Illinois legislature to vote present on many bills where either the strong advocates guarantee it will pass (or fail). You would have to make a study of the legislature records to verify that. But every state legislature passes a plethora of bills for honoring this or that or other petty issues that are not critical to the general citizenry. You would have to check what the subjects of the 123 bills he voted present on. There are probably other reasons, also.

And the subject being discussed now is so much more important: do you want more of the past eight years in low growth, or do you want the economy put on a more stable foundation. Economic growth in DEMOCRATIC administrations has grown by nearly 2.5% per year while it has only grown by 1.4% during REPUBLICAN administrations! Here we will be going in in real bad shape and Republicans are going to get us out?

Remember that the FED chairman, Paul Volker, was appointed by Jimmy Carter, and he was the one who pushed up interest rates to squeeze out the inflation that was a result of the 1973 OIL CRISIS. Carter warned us about the coming ENERGY squeeze, but we wouldn’t hear of it then and the Republicans still don’t want to hear of it. If we had taken the approach that the Danes did back then, we would be ENERGY independent now, instead of OIL dependent.

We are going to face a LONG recovery period, and I trust Obama to do what he says he will much more than I trust John McCain to do something that he has NEVER advocated until now, under the pressure of winning a campaign. I understand that he plans to keep many of the same Bush appointees that have lead us here (and would still be doing Dick Cheney’s work — read ANGLER, just out).

We need new economic innovations - if not a marked revamping of economic principles. Now is not the time for another round of Reganomincs, which is what the Republican platform wants. The economic environment is completely different now. It is more thoroughly global and developing economies are much stronger now. America cannot compete based on the same principles that worked 20 years ago, or even 10 years ago. We are in the fix we are in now primarily because we have not made effective adjustments. We cannot be a healthy economy without a cohesive collaboration with other emerging national economies. We cannot succeed if we keep avoiding developing and strengthening local and regional economies within our own borders.

I only listened to a bit, today, but has Lawrence Summers mentioned at all Franklin Raines, Jamie Gorelick, Penny Pritzger, or the several occasions on which John McCain (beginning in 2003) has sponsored bills looking for more oversight of Freddie and Fannie, and warned Congress on those occasions that their practices posed a danger to the financial health of the US?

Because I didn’t hear it.

Nancy says the Dems have NO responsibility, and Lawrence comes across as the kind of partisan hack that, apparently, he is.

Rarely does one have actual recent evidence that one of the parties’ policy does not work, so making the choice who to vote for should be easy this time. The policy of deregulation (Republican) has simply failed. Not that Obama can get us out of this mess. With rising social security and medicare costs, the US government is entering a few decades of tough times, not just one year.

Peter Nelson,
Again, the style with which you thunder into the discussion like the cavalry, speaking from your high horse as to suggest you speak for “the US”, has left me feeling I must respond to your points.

First, the Supreme Court, only two justices were nominated by Clinton, yet most recent decisions are not 7-2. For most citizens there is little difference in the economies of the last two administrations, both lost manufacuring jobs, relied on phony Wal*Mart prices to assuage citizens while giving Wal*Street the open door. Nader is not a socialist as you imply and I challenge you to read his platform and find something you don’t agree with.

Finally, third party issues that eventually get picked up by todays ruling parties are not a result of “crisis” but that moral high ground with which you are familiar. Women’s Vote, workers rights and abolition of slavery are examples of third parties being ahead of their time. Single-Payer healthcare is that issue today as is its greater context of making people a priority over profits, and the “right-wing coporatist political culture” does not represent the US, it has conned citizens with its “family values” and Wal*Street pyramid scheme which tap into the real US ideals of people before profits and feeling “invested” in life.

John Taylor referred to the fact that the McCain campaign has provided its detailed budget proposals to the Tax Policy Center. In fact both campaigns have, and Larry Summers is correct about the McCain proposals. The Center’s updated report has found the McCain proposals would increase the deficit $5-8 trillion from 2009-2018, not balance the budget by 2013 as John Taylor claimed on your show.

Interestingly, the Center also found that the Obama proposals would increase the deficit during this period on the order of $3-3.5 trillion. I don’t recall whether Mr. Summers made any claims about Obama balancing the budget. Your listeners might appreciate this information from a non-partisan entity such as the Tax Policy Center.

I would also hope that at sometime McCain lets people know that he wants to tax their benefits at all levels. The one that is the most troubling to me is taxing parents who work at Educational Institutions when their children get tuition as a benefit. He want to tax that tuition. Tom please ask his advisor about that..

“Women’s Vote, workers rights and abolition of slavery are examples of third parties being ahead of their time.

But in each one of those cases there was a strong, unified grass-roots movement pushing the national parties. The abolitionists, the sufferage movement, and the left-wing labor movement supporting the New Deal have no analogue today.

There is simply no evidence that Nader and the Greens and other liberal voices had been responsible for health care becoming a national issue in any way. I subscribe to the Wall Street Journal. A few years ago the WSJ ran a wonderful and heartbreaking series of articles on the plight of the uninsured in the US. (yes: the Wall Street Journal!) Shortly after this letters and op-ed pieces began to appear from CEO’s and CFO’s, especially of smaller companies, complaining that high health care costs were making them uncompetitive. So MY guess is the reason why the Dem’s are finally talking about it is that their corporate masters have given the the green light.

the “right-wing coporatist political culture” does not represent the US, it has conned citizens with its “family values” and Wal*Street pyramid scheme which tap into the real US ideals of people before profits and feeling “invested” in life.

So you’re saying that your beliefs and value systems are true and genuine and sincere, but that all those SUV-driving, Republican-voting, Sarah Palin -salivating, Fox and CNN-watching, up-to-their-ears-in-debt middle Americans are just “conned”? If you’re willing to give yourself credit for the ability to think on your own, why not also credit them?

I urge you all to keep in mind that 1789 was a great year for the common people in France.

Now I won’t deny that sometimes the guillotine was employed excessively.

However, I think people today would be amazed by how public priorities would be usefully reorganized in light of the heads of wealthy and powerful persons being lopped off.

Need executioners be ankle deep in blood? Of course not. Modern innovations like CSPAN would ensure that the numbers of the decapitated could be kept as few as 60 or 70 to achieve the desired effect.

By the following Monday morning, the action could cease, and public sanity would return, refreshed.

The fact is, folks, we have the numbers. And remember. There are ALWAYS solutions.

I think when times are good big financial corporations and banks should be paying into a special fund (kind of like a social security fund for investment banks). When times are bad the fund can be used to bail out whomever is believed too big to fail. Taxpayer should be left alone. Some guy at the Fed. whom nobody voted for can send $85 bil here or $100 bil there of the taxpayer money based on little more than his discretion. Talk about the power of the purse. Where is that in the Constitution?

As it stands right now they don’t want to be regulated because it stifles the initiative and they don’t want to pay taxes because that reduces their incentive to invest into innovations and create new jobs. They have to be paying somehow somewhere. No free lunch.

As someone who grew up in former USSR, i certainly take note of Groucho’s comment above. Don’t think it won’t happen here. ‘Cause it was hard to believe the USSR culd unravel so quickly either.

think when times are good big financial corporations and banks should be paying into a special fund (kind of like a social security fund for investment banks). When times are bad the fund can be used to bail out whomever is believed too big to fail.

Proper regulation is a better idea. If banks were properly regulated none of this would have been allowed to happen in the first place.

The problems with the “bailout fund” are:

1. It creates the expectation of a bailout, i.e., it creates a moral hazard.

2. It’s not fair to well-run companies. What if you are a fiscally-conservative, well-run financial institution? Why should you have to pay into a fund to support your reckless competitors?

Mr. Summers was out of line in his blatant disregard for Mr. Taylors airtime. For a man with his credentials to speak to Mr. Taylor as he did represents the fundemental crisis we have in this country today, socially and economically. If we can’t look to a former President of Harvard and Treasury Secretary for civility how are we going to solve these serious economic issues.

Whether a Dot com crash or a meltdown of real estate and banking markets, something’s not right in our system. These things have happened under the watch of both parties.

Suppose our next cycle of prosperity is found in energy markets with money going toward viable solutions. What will we do to encourage that growth? Will we prevent the next wave of prosperity by over-regulating or will we let it ride too long again by under regulating? These are tough issues to solve and Mr. Taylor was making some valid points that I would have liked to have heard more of.

Mr. Summers and the Clinton administration take far too much credit for the economic stability of the 90’s without claiming any responsibility for the economic instability that occured well before Clinton cleaned out the Resolute desk.

When Mr. Summers points the finger of blame he should look down at his own hand and count how many fingers are pointing back in his direction.

Hey Peter Nelson,
Actually I agree with most of your latest post. Its absolutly strong grassroots movements that deserve the credit, but I believe each success was based on a core truth, and voter support of the third parties which championed these movements can not be removed from the grassroots pressure. As for today, the “left” is fractured, and no single movement has similar grassroots support. This view however, ignores the seed of truth carried by each of todays movements and misses the forrest for the trees. Whether its climate change, the right to healthcare, social justice, environmental rights, or corporate crooks, even issues on the right like pro life, they all have a common denomenator, one thats hard to pin down but is something like recognition of people. Its a mistake, I believe, to see a mutitude of issues instead of one, and that distilled issue, that has a strong grassroots movement, it just needs to be unified.

I completely agree that the dems are speaking a universal heathcare language because of their corporate masters, its also what people want to hear.

And, “why not credit them?” why not? its a good question. To what extent are we all living in denial?

Republicans keep saying: “we need tax cuts to create jobs.” Does anybody actually believe that there is a direct correlation? During the 90s the capital gains tax was much higher but the jobs were in abundance because of the tech boom. In 1996 when my family came to this country “Help Wanted” signs were everywhere. Bush reduced the cap. gains tax significantly and yet it does not seem it helps much. I am saying there are other factors to take into account. We could have reduced taxes to zero, you think it would have prevented the financial meltdown and the consequent loss of jobs?

On taxes, its often said that higher taxes reduce incentive to invest and create new jobs. I would say the opposite. With low taxes(especially on the wealthy), there is more incentive to take home as much as possible. With high taxes, the incentive is to invest, grow your business, create more jobs and take home less to avoid taxes.

Republicans keep saying: “we need tax cuts to create jobs.” Does anybody actually believe that there is a direct correlation?

I don’t think even they believe it, but it sells, which is why they keep pushing it. Nobody likes taxes so if you align yourself against something no one likes, it works, politically.

No one can deny that the Republicans are GENIUSES at this stuff. They have systematically cut federal department budgets and replaced career managers with political hacks. The result is high profile failures such as FEMA, and the holes in the FDA’s safety net allowing numerous cases of food poisoning, etc. So no one thinks the government can do anything right, so they’re loathe to give them money. It’s brilliant.

So if I have a hot idea that will make me $5 million does the GOP seriously think that I won’t bother doing it because I’ll only get to keep $3.05 million (39% tax bracket) instead of $3.35 million (33% tax bracket)?

I’ll grant you that seriously confiscatory tax rates like the UK had in the 60’s (70-90%) probably do reduce prosperity because they drive highly productive people to leave. Many of their best businessmen and engineers left for the US, Canada, and Australia then.

“I’ll grant you that seriously confiscatory tax rates like the UK had in the 60’s (70-90%) probably do reduce prosperity because they drive highly productive people to leave. Many of their best businessmen and engineers left for the US, Canada, and Australia then.”

This is key. To figure out what seriously confiscatory means instead of just taking the premise that taxes are bad as given. There is a lot that people need to rethink in the Republican economic orthodoxy. They did have their chance to demonstrate the success of their ideology. I don’t think McCain should be getting another try at this. Too costly.

The Republican mandate is not only tax cuts but to make government so inefficient that they can drown it in a bath tub. They have been talking about this since Reagan.

You can’t run a good government without revenue.

When will people realize this. Of course there has to be a balance, 70 to 90% tax rates are out of control.

The top tax rate which Obama wants to put back at 39%, was between 80 and 90 until the early 1960s, from 1945.

As someone who is on the verge of loosing 30 years of a 401K and a husband who on the verge of retirement must keep working, enough is enough. No more conservative laissez faire economics.
In addition McCain’s so called health care plan will reuslt in much more money out of folks pocktey to cover the cost of insurnace. The proposed $5000 tax credit to cover the additional out of pocket costs for insurance is a joke if it weren’t so appalling.

John Taylor completely distorts the impact of Obama’s tax policy.
Enough is Enough.

My biggest complaint about taxes is not their amounts, but their complexity. Last year it took us a solid weekend (two full days) to do our taxes, and that’s not counting all the record-keeping we had to do leading up to it. And we STILL got hit with the AMT! (granted our return is complex due to investments and charity activities).

I’ve always preferred a flat tax with no deductions for anything, and a high exclusion to protect low-income people. An exclusion means that don’t pay any tax on the first $X, then you pay a flat tax on everything above $X+1.

So say the exclusion was $50K and the rate was 40%. If you make $49K you pay nothing. If you make $60K you pay $4K (=6.7% rate); if you make $100K you pay $20K (=20% rate); if you make $250K you pay $80K (=32%); if you make a $million you pay $399.99K (=40%). So this gives you progressive graduation without the complexity and “bracket creep” introduced by brackets. The actual numbers of course would depend on your revenue goals.

I dont intend for this commentary to be light. Fact of the matter is I’m a blunt brash opinioniated person.

I have more views on various things then I’m going to list but the 2 foremost topics in my mind are the bail out of AIG and the general economy.

The federal bail out of AIG wether not not a neccessary evil was wrong. We simply cannot ignore the fact that this is a free enterprise country and by removing the possibility of failure the government has given AIG is not only a show of interference in a free enterprize society but a show of favoritism towards those with the most money to be blunt.

I agree with the fact that the government had to take action but I see them bailing AIG out as not only irresponsible but lazy. AIG should have been required to sell off to smaller companies to galvenize a self recovery or to completely fold.

please forgive spelling errors and typos I’ve not much time to write in

I agree with the fact that the government had to take action but I see them bailing AIG out as not only irresponsible but lazy. AIG should have been required to sell off to smaller companies to galvenize a self recovery or to completely fold.

That would have been irresponsible and the economic damage to huge numbers of innocent people and companies would have been extreme.

The fact is that AIG will be sold off but doing it this way will allow that process to be orderly to minimize the amount of collateral damage.

All these right-wingers who moralize about why we shouldn’t be bailing out companies and thus creating moral hazards seem to forget that it’s not just the CEO’s and fat cats who get hurt when these companies fail; it’s the entire economy that’s damaged when these big companies collapse.

I mentioned a simple example yesterday - Evergreen Solar is a small solar cell maker in Marlboro Massachusetts. They’re currently expanding their factory and hiring workers. Lehman Brothers was the lead underwriter for some of their convertible notes and when Lehman disintegrated Evergreen suddenly found that 40 million dollars of their net worth went with it because they had done a stock loan to Lehman as part of the underwrite.

These big securities firms are vital to the funtioning of the economy and letting the crash because they did something bad is cutting off our nose to spite our face.

It is easy to place blame here, but to me the key factor is that for years we have an an American standard of living based on ever increasing levels of easily available debt. In many cases the consumer is to blame, but in far too many cases, people are getting in over their head in debt just to maintain a basic standard of living.

I have no sympathy for those who have lost a home though speculation, but for those for whom their home is their only residence and they just got in over their heads in an ARM, then we need to help them out, plus put in place sensible regulation so that this does not happen again. I favor Obama’s economic policy is that I think he understands that to truly improve the economy, we need to improve the lot of the average American family though lower taxes, better jobs and a better education. Instead of an economy based on consumer debt, we could have an economy based to a greater extent on earnings.

I just read this on Robert Reich’s blog and it sound to me like a very inelegant idea, why this was not done beats me.

Talk today about the Bailouts of All Bailouts eased market fears and generated a giant rally on the Street, but how realistic is it?

A better idea would be for the Fed and Treasury to organize a giant workout of Wall Street — essentially, a reorganization under bankruptcy, for whatever firms wanted to join in. Equity would be eliminated, along with most preferred stock, creditors would be paid off to the extent possible. And then the participants would start over with clean balance sheets that reflected new, agreed-upon rules for full disclosure, along with minimum capitalization. Everyone would know where they stood. Bad debts would be eliminated. Taxpayers wouldn’t get left holding the bag. And there would be no “moral hazard” incentive for future financial wizards to take giant risks with other taxpayers’ money.

Apologizes to Robert Reich.

Re: Jeff’s post at 1:39am - I think the same idea could apply to subprime borrowers in default. Organize a giant workout of borrowers - essentially, a reorganization under bankruptcy, for whatever people wanted to join in. Since they had little or no equity in their houses to begin with, the houses would be taken away, creditors paid where possible, defficiencies written off and people would be able to start with a clean slate renting. Their incomes they no longer have to spend on impossible mortgages could be spend elsewhere. Taxpayers would not be left holding the bag. Houses would go back to the market. And there would be no “moral hazard” for future housing gamblers to take giant risks with lenders’ or taxpayers’ money.

In many cases the consumer is to blame, but in far too many cases, people are getting in over their head in debt just to maintain a basic standard of living.

I think it’s an open question how much of this is due to people getting into debt just trying to pay basic survival bills - vs- people stretching unrealistically. I’m sure there are some people who go into debt to pay medical bills but I suspect that’s the minority. I’ll bet most people you see in the shopping malls and at car dealerships are paying with borrowed money.

I have no sympathy for those who have lost a home though speculation, but for those for whom their home is their only residence and they just got in over their heads in an ARM, then we need to help them out

I’ve been a homeowner for 23 years, 3 houses, and maybe 8 mortgages, counting refinances. Every time I’ve looked at ARMs I’ve rejected them as too risky, too unpredictable, too open-ended. Fixed rate mortgages are the only rational choice unless you are a gambler. So, frankly, I don’t have much sympathy for anyone who takes out an ARM.

This is very hard to take. Both parties have been complicit in getting us into this mess and to hear them is like listening to a campaign debate between surrogates. Time would have been better spent having independent observers commenting on the crisis. The public learned very little this morning. . . . .

The economist from Boston was right on. Too bad Mr Summers couldn’t be more specific about the complex lending environment that we are now facing. Rather he focused on the trivial fact that Obama wrote a letter.
Aside from his poor discussion skills, Mr. Summers generally had real difficulty in explaining a set of economic principles/goals and logically deriving policy alternatives for the audience.

I think today’s show with John Taylor and Larry Summers was appalling and revealed the host’s lack of objectivity and total lack of curiosity about or preparation on the Obama economic plan.

There is ABSOLUTELY no pretense of objectivity on this show - case in point was when the host asked John Taylor whether John McCain was responsible for deregulation and then, in a bad attempt to appear objective, asked Summers if BOTH Democrats and Republicans were responsible. There was no grilling on Mr. Summers like there was of Mr. Taylor.

There wasn’t a single difficult or informed question posed to the Obama supporter, Mr. Summers. Not a single one. I mean c’mon: “what do you think about 12% or 30% hedge fund returns?” What a lame, irrelevant question to a person who is allegedly there to answer questions about Obama’s economic plan.

The only redeeming aspect of the show was that it displayed Mr. Summers’s legendary and career-ending arrogance and nasty disposition when questioning Mr. Taylor.

I’ll keep listening to the show, but also diligently shredding (unopened) all of the WBUR fundraising letters I receive and avoiding Liberty Mutual Insurance. The host reminds me of my colleague who is usually ill informed and makes you feel uneasy by asking long multiple threaded questions which are an attempt to cover up the lack of knowledge or preparation.

Regards,
Jim Mangiaracina

While we are at it lets nationalize the Oil companies and use the profits to help pay for this mess instead of our tax dollars.

Now that I am a share holder of AIG, can I go to the board meetings?

Am I going to get any dividends if they do make any profits in the future?