Economic Cure, The Rennick Solution

Discussion in 'Politics' started by William Rennick, Feb 23, 2010.

  1. He cut capital gains from 28% to 20%. So not half as you state.

    Further, I would argue that increasing income tax rates while cutting capital gains is anti-worker (even if we're talking about relatively high wage earners), while cutting cap gains is a bone to the already wealthy, allowing asset holders to profit inordinately from inflation while paycheck earners lose purchasing power.

    Think about it. What has accounted for the vast increase in equity and real estate prices? Inflation, eh? Who is the chief cause of inflation? Government spending, correct? So on the most part asset holders have enjoyed vast portfolio appreciation not because they invested in a better mousetrap but because of reckless fiscal and accomodative monetary policies. (let's not even talk about the mortgage interest deduction) Hence, a capital gain is created primarily by Caesar. So rendering Caesar his share is not unfair. Forcing Caesar to grab a bigger piece of working peoples paychecks in lieu of collecting his rightful share of cap gains IS unfair.

    Your TRADING (sweat) income should be yours. Your INVESTING (inflation induced) income should be there's. Not in toto of course but you get the point.



     
    #41     Feb 24, 2010
  2. ---------------------------------------------------------------------



    Page 11 of the pdf



    http://www.openthegovernment.org/otg/dereg-timeline-2009-07.pdf

    "Ultimately, the fate of derivatives regulation was decided in Congress. Senator Phil Gramm, cosponsor
    of the Gramm-Leach-Bliley Act, was one of several Congressman to push legislation that
    would deregulate the market. Gramm, in particular, wanted strict language to limit the direct
    oversight of the CFTC and SEC. A group of regulators, including the Chairs of the CFTC and SEC
    as well as Treasury Secretary Summers, reached a compromise with Gramm, and Congress moved
    quickly on the bill. The day after the Supreme Court effectively decided the fate of the 2000
    Presidential election, the Commodity Futures Modernization Act of 2000 passed in Congress,
    attached as a rider to an 11,000-page spending bill. The legislation, passed without debate or review,
    exempted derivatives from regulation and made a special exemption for energy derivative trading
    that would gain notoriety as the “Enron loophole.”24"
     
    #42     Feb 24, 2010
  3. I'm not consecutively quoting your posts to beat up on you-I'm sure you're bright- but the rate hiking cycle was WELL UNDER WAY in 2005. One could just as easily argue that it was Greenspan's rate HIKES throughout 2005 and 2006 that exasperated the recent crisis.

    This is just one traders opinion but I believe the "macro recession" began in the spring of 2000. Only 'on paper" was the recession over in 2004 which was NOT a banner year for stocks until Q4 (after Bush won, btw) The economy was TEMPORARILY saved in 01-03
    by a combination of factors including dramatic rate cuts which were clearly stimulative (as you allude perhaps TOO stimulative). Those rate cuts facilitated lending and caused the dollar to tank which allowed U.S. exports (and employment) to increase. Unfortunately they also caused soaring commodities which as another poster mentioned, are a de facto tax on consumers. Ying-Yang.

    The fact is most developed economies have traded in lockstep-hell rates in Japan have been sub 2% for two decades-and I'd argue that global events are so cyclical that causation lies well beyond relatively mundane exigencies such as interest rate levels or marginal tax rates.

     
    #43     Feb 24, 2010
  4. piezoe

    piezoe

    Thanks for the details. I generally respect those I disagree with, but Gramm I have no respect for (wasn't his wife ultimately appointed to Enron's Board, or have i imagined that?) In fact, I can't stand him. When McCain chose Gramm as one of his chief economic advisors that ended any thought I might have entertained of voting for him. Of course his later selection of Palin as a running mate, made it absolutely impossible to vote for him. Can you imagine President Palin with Phil Gramm as Fed Chairman?!
     
    #44     Feb 26, 2010
  5. Piezoe, I am not good with all the history of the politics in finance, so I look for the time line. This pdf help with that.
     
    #45     Feb 26, 2010