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Rosenberg's Take On The Election Results And Other Matters
From today's Breakfast with Rosie:
There are just some articles that are worth reading and re-reading. What I’m talking about are some of the columns that found their way into yesterday’s WSJ editorial pages. Agree or disagree, but they were brilliant, particularly Why Obama is No Roosevelt by the venerable Dorothy Rabinowitz and Democrats Can’t Blame the Economy by Fred Barnes on page A21. The analyses are simply phenomenal. Obama’s Next Worry: A Restive Left Flank by John Fund on page 19 was not that far behind. If you missed these — I read them on the flight back from Boulder — I highly recommend that you get your hands on them.
It is hard to disentangle the effects of investors’ high hopes that the Fed’s looming QE2 program will work and how a GOP victory will shape the political outlook, in terms of what has really helped the stock market turn in back-to-back months of really solid gains.
My sense is that the expectations of a shifting political backdrop have been more dominant. Now I fully subscribe to the view that gridlock is not a good thing when the economy is suffering from a variety of intense structural problems and yet strong and effective leadership is lacking. But the market seems to be viewing the mid-term election as a barometer of Barrack Obama’s potential to be a two-term president. According to an Associated Press poll, 51% of Americans believe he does not deserve another chance in 2012 and amazingly, 47% of Democrats want him challenged in the primary, which would be a death-knell since in the past 50 years, every president that faced a fight for the party nomination lost the election (Ford, Carter and Bush senior). There are all sorts of stuff like this in the John Fund piece.
That aside, Mr. Market likes the fact that the Republicans are now going to assume control over the legislative agenda — oversight and expropriations to be precise. The push for “card check” unionization will be set back, and union political contributions are likely to be curtailed. Mr. Market probably does not mind at all that labour’s influence over the policy agenda is about to be rolled back. The beleaguered banks could emerge here as a big winner if the GOP translates into fewer teeth for the SEC in its quest to enforce the recently-legislated Dodd-Frank financial regulation bill. Foreclosure moratoria, supported by the likes of Harry Reid, are far less likely to re-emerge. Little wonder, then, that the NYT reported that 71% of financial sector donations are now being diverted to the Republican campaign compared to 44% a year ago.
There is a growing hope that the Tea Party has tapped a raw nerve and will serve as a lightning rod for change. And change is needed in a really big way when one considers the financial strains that mandatory entitlements, such as Social Security, will pose as the demographics, in terms of an ever-higher dependency ratio, ascends further. These mounting “locked in” fiscal costs have to be addressed as do the $3.5 trillion of actuarially unfunded state/local government pension plans. Social contracts will have to be re-written — perhaps with implications for contracts with bondholders.
But hope is never a good strategy. Results are what matter. It took two full years for the Reagan rally to really take hold. An economy growing at a 7% clip in the aftermath of the 1980-82 malaise and an unemployment rate that came crashing down more 300 basis points from the highs certainly helped. So, while there is hope that the stage is being set for meaningful political change in 2012 (where the Republicans stand a very good chance of reclaiming BOTH the House and the Senate) the near-term outlook is muddled. Investors should not lose sight of the fact that the recovery is so listless that we are only one negative shock away from tilting the economy back into contraction mode.
Let’s not forget, we have a weakened U.S. president and a lame-duck Congress on our hands at a time when some serious decisions have to be made that could make-it-or-break-it in terms of a ‘double dip’. Unless the Bush tax cuts are extended, 150 million people will be facing a higher tax bill starting January 1. If exemptions are not passed, then 29 million Americans will fall into the Alternative Minimum Tax (AMT) trap (seven times as many as this year). If left untouched, the estate tax rate jumps to 55%. And, another two million folks are about to roll off the extended jobless benefits, with an income drain estimated at $30 billion dollars, if not more — and at a time when rising food and energy costs are bound to divert consumer spending away from discretionary and cyclical consumer spending.
As for the Federal Reserve — on this score, it is not at all obvious that QE2 is going to have that much of an economic impact; the economy hardly lacks ultra-low interest rates nor does it suffer from a lack of liquidity. As an aside, according to various macro models, even a $500 billion package would exert just a 0.25% positive impact on GDP growth (see more on page C1 of the WSJ). The markets are operating efficiently. This was not the case with QE1 when mortgage spreads and corporate bond spreads were in the stratosphere and the capital markets were closed for business.
Is another 50bps cut to the general level of interest rates from their current record-low levels, at the margin, which is what a $500 billion QE2 plan would entail, really convince debt-strapped consumers who are focused on balance sheet repair to go out and borrow and spend more? Or will it entice capacity-idled companies that are already sitting on a trillion dollars in cash to go on a spending and hiring spree (today’s WSJ cites a survey showing that corporate R&D spending has declined for the first time in over a decade)? Even before today’s FOMC meeting, companies like Northrop Grumman was floating a $500 million 5-year note at a yield of 1.85%! Are the banks, who just sat on excess reserves the Fed plowed into the financial system in early 2009, going to unclog the credit channels when nearly one-in-three American households have a sub-620 FICO score and 25% of outstanding mortgages are “upside down”? Hardly likely.
Maybe the Fed will successfully bring risk asset values above their intrinsic levels to induce a more positive “wealth effect” on spending, but that has proven to have been a failed strategy over the last 15 years, which only ended in tears. Why go there again unless this is for short-term expediency? Maybe Bernanke et al will manage to depreciate the U.S. dollar even more but this risks a trade backlash from other countries, not to mention enticing speculative capital flows to emerging markets where inflation pressures are starting to intensify (and met with tightening measures out of China, India and Australia). The Fed simply does not have the appropriate tools to deal with the myriad of structural hurdles facing the economy, ranging from housing, to debt, to commercial real estate, to state and local government cutbacks and fiscal disarray, to excessive regulation, and the list goes on.
Moreover, if we are talking about the Fed having a really meaningful impact, like enacting a policy that can actually close the output gap completely and totally limit deflationary risks, the numbers we have seen are in the range $4 to $5 trillion worth of asset buying from the central bank. Imagine a Fed balance sheet so big it would be half the size of the overall economy. Yikes! Just the thought of it makes me want to go out and buy more gold and silver mining companies.
What really caught our eye was what Robert Gordon, the Northwestern professor who sits on the NBER (National Bureau of Economic Research) business cycle dating committee, had to say to the NYT on this matter:
“There is a substantial chance that the U.S. economy is headed into a lost decade, similar to what Japan has experienced in the past 15 years, possibly with zero inflation instead of actual deflation. But the consequences for the U.S. population will be much more severe than in Japan because of our higher unemployment rate, our lack of a social safety net, our system that ties medical insurance to employment instead of making it a right of citizenship, our greater inequality and our higher level of poverty.”
Ouch. Talk about being blown away.
Via Gluskin Sheff
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YOU WANT CHANGE?!
WHAT ABOUT HIGHER TAXES!
Enough change for you?!
I have change. I used to have dollars.
+100 :)
Austerity Bitchez!!!
I'm guessing the excess human resources during the austerity will get reoriented into some massive "moral equivalent of war" type of program that people will be motivated to do by Necessity in lieu of, yaknow, "money" whatever that was... A big people intensive industrial war like WW II can't involve us as we have nukes everywhere important now, ready to fly. Possibly no "moral equivalent of war" project can be invented, and all that slack human capacity will go for wefare dependency. That's how I'd interpret the vote for Harry Reid in NV. Things are so bad there, and the benes and extensions and so forth are running out before the economy turns. Lots of folks will cry for free this and that from the government and some "compassionate conservative" wing of the republican house majority will oblige them.
When Scott Brown of Massachusetts was elected, I said strap a camera or two to him and see how fast he gets co-opted by the lobbyists on Capitol Hill. Same goes for the newly elected teabaggers. Untill lobbying is outlawed, there will be no change on Capitol Hill.
EXACTLY
"Until lobbying is outlawed, there will be no change on Capitol Hill."
Right, citizens shouldn't be able to petition their government! /sarc OFF
Yes, let's ignore every positive bit of news this week - both ISM numbers strong, global manufacturing strong. ADP number double expectations, earnings have been pretty good to surprisingly strong. Yet that seems to be missing amongst the Rosie's of the world. He's been wrong for months but continues to stick with his, "we're just one jolt away" nonsense.
Let's be happy we're seeing some positive momentum now in the economy rather than focus on "if this happens, look out" garbage.
You would be referring to the $1 trillion worth of monetary stimulus we are about to get right? Hopefully that wealth illusion is working out well for the useful idiots out there discussed previously.
Anecdotal but important - my business sells consumer discretionary and we had our best September in 9 years. We're seeing what could shape up to be our best Holiday Season as well kicking off.
There is a wealth effect created by stimulating the economy. It will send investment to small business which in turn will lead to hiring. It's happening now. We added two more positions in our small place.
You guys need to get out and see what's really happening away from the doom repeated over and over on this forum. In small business, what I'm seeing right now at this conference and in our own, things are getting better, not worse. That's real life. Not some fantasy of "what if's" and "when this happens, look out" crap that most post here.
I connect w/ Small Business people every day and they haven't seen the needle move at all. Not an inch... and across several types of products/services. I don't know what crack you are smoking to think the people who are paying for your products are doing so with income earned. Do you own an AAPL store Harry? That's unemployment money they are paying you with! LOL
"There is a wealth effect created by stimulating the economy"
Good fucking god, people still believe this shit?
See you on the curbside in another couple of years, flagwaver!
If by "wealth effect" you mean wealth counted in nominal dollars, then possibly so. Personally I'm torn between a Tyler interpretation and a Mish interpretation. I guess in the short run we get a stalemate between the two, liquidity trap oblige.
The wealth effect is created by stimulating the market. Wealth (without the effect) is created by capturing excess capital and output from a smoothly growing (not stimulated) economy (unless you are a Primary Dealer, and thus share in zero cost capital). Out of curiosity, is your discretionary product food stamps or individual bankruptcy filing forms, both of which we agree are at either record or multi-year highs.
I am hearing the same things. I expect discussions around approving the debt ceiling will trim some sails and cause the ship to tack in a different direction.
"my business sells consumer discretionary"
that would be porn, right?
People have a lot free time in a bad economy. In subsaharan Africa that translates into really a lot of copulation. Very inexpensive(at the immediate) and very entertaining.
HarryW
Do not blithely confuse the micro with the macro.
The macro economic situation may not exactly be the same for every small business, or even certain sectors of the economy (such as weapons-making and financial swindling). Nor is there any credibility to extrapolating from what you personally see in a few "real life" small businesses.
Both major parties are now poised to enact a very selective "fiscal austerity" which leaves the military and financial racketeering, which are the main causes of economic malaise, untouched.
http://www.sourcewatch.org/index.php?title=Total_Wall_Street_Bailout_Cost
http://www.hks.harvard.edu/news-events/news/commentary/wars-sinking-the-economy
"The people’s concerns are not only not addressed; they are not even articulated by anyone in the lucrative, sinister game of King of the Hill played by the two factions, both of which are pledged, body and soul, to elite rule, corporate rapine and militarist empire."
http://www.chris-floyd.com/articles/1-latest-news/2044-dissatisfied-mind-flickers-of-hope-in-a-deadly-political-cycle.html
You must not live in Baltimore, Detroit, Cleveland, Las Vegas or Phoenix. Consumers in these areas have been crushed.
The small businesses I am meeting with are in Detroit. That's why I'm here. And I'm seeing a completely different story from even 9 months ago.
Illicit drugs then? Body armor? Earth moving equipment for razing whole neigborhoods?
Come on, give it up!
Stimulating the economy with printed money does NOT have a wealth effect. You cannot create wealth from deficit spending....that's textbook beginning economics. You can create liquidity of which you may temporarily benefit (but I'd save that and not spend it) but you can't create wealth.
Yes, we can create wealth from deficit spending! It depends on what we spend on. If (and it's a big if, given the political will, or lack thereof) we spend on productive assets, i.e. make investments, that have a positive payoff, wealth is created.
How do businesses create wealth?
they invest in {inputs} and the costs of {value added} and sell the {outputs} for a profit.
The government is not precluded from creating wealth, just because you say so.
Wrong for months, right for years. For investors (regular people) the latter is most important. Only traders care about the former. Buying apple doesn't make one a genius.
Ask yourself this, what happens when there is a mean reversion on interest rates.
Very good question. What do you think will happen?
It'll be great for housing. /sarc on
Happy news Harry? you mean like the McRib is back?
Yahoo has that statement on it's most emailed breaking news.
And one of the most recommended news bits "Dentist offer Halloween candy buy back program"
So Harry, if you think the economy is getting better, you must have loaded the boat with AAPL shares on that move down to $300 right? Right, Harry?
Harry,
You consistently whistle past the graveyard with a chronic case of 1 meter vision...
From a fundamental standpoint, what... what has changed from the conditions that caused the 08/09 meltdown? Is the financial sector healthy? Are they loaning? Is the MBS problem a tempest in a teapot? Does it not matter that the market is buoyed up by persistent Fed interference (without which, the S&P would be trading at 800 or lower)? Employment is dropping and the bosses are hiring again. Is that right?
Can you really sit there with a straight face and tell us that we are on the road to recovery? If you can, I have beachfront property in Arizona that I would like to sell you. It includes the Brooklyn Bridge as a bonus.
Straight face - yes. As I said the other night, I'm in Detroit this week. Met with some auto industry execs that were downright arrogant when it came to sales. As they said, once we get anything over 12 million units, it's like printing money. These guys were ecstatic about the pace of recovery in the auto industry. Someone's buying cars, right? Open your eyes a bit and get out and SEE what's happening rather than speculating on what might happen.
I admit I struggle with this subject. What I see versus what I think. But, it is has been beat into me over and over by my own mistakes that there is no "magic solution." The cold hard facts are that our society is largely debt saturated. That the shape of virtually every chart that matters looks parabolic. It is just a matter of time before this all catches up to us. And it won't happen in a linear or obvious fashion. Rather we are blowing awkward little bubble and big bubbles all over the place as the cash / debt flows in abnormal patterns trying to escape it's own inevitable demise. I am really glad to hear that your business is doing well. Seriously. And I hope it continues. But, I hope you are also hedging yourself at the same time just in case things change. I enjoy reading your posts, by the way... takes balls to play your role around this place!
"play your role"
as a government-funded dis-information specialist perhaps?
Why are so many chewing on Harry? If his business is improving, then good for him. Maybe it's a bubble. He thinks it's a trend. So why not listen and glean some data instead of working to stomp him into silence?
Macho,
no one is stomping him... But some facts and a broader world view would help... Most of us opine here on ZH, but the opinions in most of the cases are based on observable facts... If he is taking the contrarian side, then it would help everyone to mix in supporting data.
I wonder, If I go back for the last 9-12 months and look at auto sales for each of the manufacturers, would I find 12 million units for any of them? If I did, would that be part of a trend or would it be an outlier?
In my neck of the woods, and it is affluent, NO ONE, is buying new cars. People are hunkering down and cutting back and the homeless population is growing and growing fast.
Personally, I don't believe what the guy told Harry.
"Someone's buying cars, right? "
They didn't happen to share with you just where this demand is coming from and how, concretely they are so sure of it?
If are selling a physical product to a manufacturer, you are in a negotiation, all the same, where they are look for low prices and better deals. I.E. they may have some major turd polishing to do vis a vis their suppliers, no?
Well, I have individuals that live in my neighborhood and own multiple dearlerships and they would say you're smoking grass......there is no real recovery in the auto business. September and October were terrible months for both of them....One told me that 50% of the people that say they want to buy and sit down to do the paper work can't qualify.
How long ago was that Harry?
Like most of the people in here, I get out every day... I see stores that have been in business for over 60 years closing... I see America's manufacturing sector as a vast waste land... Detroit is a classic example... I see, food and energy costs going up for people who are out of work, under employed have several mouths to feed and can't afford to drive to job interviews... I see families burning through their 401K's and IRA's because their unemployment benefits have run out, and being very pissed because they had to pay tax on top of the penalty for early withdrawal... I see a lot every day and not some lard assed auto exec that's happy because cash for clunkers sent some customers his way to buy a shitty American made car... I wonder how it's going to work out for you auto execs when gas starts inching up to $4-$5/gal... Bet neither you nor them see that coming because everything is fine... Be sure to thank Ben for me for obliterating the dollar, but according to your world view, the shieks are all right with that and won't be repricing oil anytime soon, and I guess it's an outlier data point that oil is up at $85 per barrel...
As I said, it appears to me that you have very short sighted 1 meter vision compounded by a big set of blinders that prevent you from seeing the big picture.
12 million units??? see the above. QED
I was hoping for change and all I got was this lousy t-shirt that says
" I LUV Washington Mutual, a Stable Neighborhood Bank."
So what has the Japanese p/e been for the past 10-20 years?
Doesn't deflation compress pe's?
With 71% donations from the financial sector going to the republicans, of course the banks will continue their control-theft-lying. The only changes will be less aid to the people who need it the most, the unemployed, the average person. No change, corporate fascism continuing rape and plunder.
BINGO !! Lawrence got it with a bulls eye.
"There is a growing hope that the Tea Party has tapped a raw nerve and will serve as a lightning rod for change"... is purest, propaganda sucking crap. The multinationals threw in a couple of billion dollars for teevee, dozens of mailers to every household in the country, and arm-twisting for what is left of the non-Murdochized media.
The fundamental cause for such enduring unemployment problems is that the banks are still holding off on loans to ordinary businesses -- particularly in the Midwest. The national banks are all but killing the small- to medium-sized sectors of the economy. This never, ever gets reported in the financial press. You'd think that the research work of The Fed was embargoed or Top Secret.
Corporate fascism ??? That's what still gets the low-interest rate free money. Which then gets turned around to purchase more seats for the Chamber of Commerce crowd and their foreign partners. The Prescott Bush Wing of the GOP.
http://therookiecynic.wordpress.com/2010/10/13/how-the-u-s-avoided-socia...
The last thing most small to medium business need is a new and/or bigger loan. Why would you as a small business owner want to increase your debt and interest payments in an environment where your customer base and revenues are shrinking? And why would banks want to loan money to small businesses given those same conditions? Banks should not be political entities giving out loans as favors to the current administration. Look at China to see how well that works out. What small businesses need is reduced taxes, less regulations, and less government mandates, manadatory healthcare being a good example.
As someone NOT in the financial sector, but lurk here endlessly, I'm curious as to a "final analysis" so to speak.
I read three camps here, hyper-inflationists, deflationists and stagflationists, all with legitimate arguments for and against. My question is regarding all three camps, as "reports" are the economy is "growing slowly"; is this more of an assault on the strength of the U.S. Dollar?
I'm looking at this as not directly correlating the USD with the actual economy, similar to the outflows in the market not relating to it's current levels. Obviously there are a myriad of factors in our economy, but if it is "growing", is it the belief that this information is false, or that even if it is growing, it doesn't matter in relation to the other indicators involved (i.e. debt, ability to pay, strength of USD)?
I apoligize if my questions seem elementary to some, but I'm looking for argumentative strength. The article seems to connect politics and the economy, I'm not buying, as I believe the political system is beyond corrupt. Personally, I don't see where the millions of uneducated and unskilled are going to suddenly find jobs, so it makes me skeptical when I see anything regarding "recovery". I've made modest gains in food and water accumalation, and a variety of small "investments", as my other half "puts up with it" for now, in the belief of preparing for the worst, and if nothing happens, I just bought stuff at yesterday's prices so it's a win-win for myself and my family.
Thanks in advance.
As the saying goes, "There's lies, damned lies and statistics". I don't believe any economic data that comes out of any government agency. How many times have we seen upbeat economic data come out that only has to be revised negatively a month to 6 wees later. For example, how can it be possible to guage inflation if food and energy are left out.
John Williams over at http://www.shadowstats.com/ presents alternative data, and falls into the hyperinflationary camp.
I believe in fundamentals, food, shelter, water and gravity. If you link everything you hear/see to these it should become patently obvious what can be expected. Hint: what goes up much come down.
Perpetual growth on a finite planet, it's what's for death!
Come now...it's a related rates diff eq problem...even Earth has an escape velocity.
"So, while there is hope that the stage is being set for meaningful political change in 2012 (where the Republicans stand a very good chance of reclaiming BOTH the House and the Senate)"
Having Republicans running both the House and Senate would NOT result in meaningful political change. Both parties are in reality two wings of the same party - the statist party. Both parties expand government at every turn and give out debt fueled candy to their constituents and special interest groups.
If one is looking for meaningul political change do not look for it in either the Republican or Democratic parties.
"Both parties are in reality two wings of the same party - the statist party."
Yes thank you for flipping the oligarch coin for us today, and we have some parting gifts and a warm fuzzy feeling for you. Now back to the trenches.
" And change is needed in a really big way when one considers the financial strains that mandatory entitlements, such as Social Security"
I don't like that term "mandatory entitlements", you mean all that money that was taken from us by force, and that the government owes us, but has already spent with wreckless abandon?
Oh but we got no problem creating trillions out of thin air to give banks. But we got to cut those "entitlements". Translation, yes the government owes you YOUR money, but we shouldn't pay.
What about the interest on the debt, is that not a bank entitlement?
What about all the defense spending on war?
We can and will stick the little guy.
Austerity Bitchez!!!
error Bitchez!!!!
LOL!
Make no mistake here people you have but 2 ways this can go.
option1. De leverage the banks and let the government, tax payers, and the world share the pain. It will take 10 years and lot of pain to remove the shadow banking system derivative leverage and the pain must be shared.
Option2. Revolution.
Any questions?
You forgot the option of slipping into a Orwellian nightmare where your TV set watches you instead!
Hmm, oversimplify much?
Predictions are hard - especially about the future.
FWIW Jim Sinclair has bee the closest thing to Nostradamus over the last decade and he has been predicting a bit of hyperinflation followed by a somewhat gold-standardish tie between the dollar and international liquidity.
TD got junked on his own site. That took balls! LOL.
I digress though.
Anyhow, fuck it. Gridlock is what the masters want. And it will be what they get. They don't want the political asshats mucking things up. The real news is what is going on over at the Fed (err.... PD's). Hopey, changey BS... bah, humbug (getting into the xmas spirit early over here). I find the newly appointed Republican talk of change as insulting and stupid as any other promise that has come out of Washington from either party. "Gullible" has been elevated to whole new level now. The system is captured... what part of that do people not get. It does not matter Elephant or Donkey. Both smell and are beasts of burden.
Aw, where's the team spirit?! Somebody's team won, and the fact that t the spectators all burned in grandstand fire, well, that's not important!
get a clue, tp (pun intended) is funded by billionaires:
http://exiledonline.com/a-peoples-history-of-koch-industries-how-stalin-...
best way to control opposition is to lead it- lenin
Term Limits...2 x 4 = 8, not 18, 28 or 38! Nuff said...
Cool! Faster revolving doors, brilliant!
My interpretation is much different than those being pushed via TV news.
The election results of the process yesterday are very troubling to a citizen who understands the political process in Washington and the various state legislatures.
The divide between the Pacific coast versus the Atlantic coast could not be more apparent.
Middle America voted Republican and reflects conservative family and financial values.
However, the East Coast establishment believes that they have firmed control in Washington.
Yesterday's results in Nevada and California were rather clear. No matter how much money Goldman Sachs and other corporations throw into Senate and Governor's races, they can not buy a seat.
Meg Whitman, a former Goldman Sachs board member, failed to gain the California governor's house after spending $150 million dollars on her race. There are 45 million residents and only about 4 million voters who showed up to the polls. Therefore, after spending nearly $30 per vote, she failed to win the seat.
Carly Fiorina was also caught in the same trap.
The Republicans in California and the West Coast in general are unable to govern their own party, their own campaigns, and their own primary electoral process.
As a result, although The House Speaker is changing from the democrats to republicans, the reality is being missed by the TV news.
This election in California was about Jerry Brown running a $2 million campaign against a $150 million opponent who was buying media favors. In California the voters aren't that stupid.
Goldman Sachs was the party that lost last night.
At this point, the only guy who is standing between Goldman Sachs, JPMC, WF, Citi, and BofA and bankruptcy may be Steve Cooley, the newly elected Attorney General of California.
Cooley will need to take action on the fraud in mortgages in California. Jerry Brown is the Attorney General and has not clarified his position on the mortgage and title meltdown in California.
Fred Barnes and John Fund are 100% complete apparatchiks.
Of course, even a stopped clock gives the right time twice a day, so I would give these guys a 2/86400 chance of being correct.
The simple fact is that the mountain of derivatives is a giant black hole sucking in the economy - but because it is a bipartisan failure both parties will try to ignore it and kick the problem down the road. It is the same thing as the S&L problem only with more zeroes at the end.
I am becoming a fan of Dylan Ratigan - he is at least on the right track unlike EVERY OTHER NEWS & OPINION SHOW ON TV.
The tea party is going to cut more taxes and lower the deficit. Tax payers won't be on the hook for anything! Oh, also, bridges are for sale!
I think one of the top priorities for the tea party is to open discussions on re-working the tax status of trust foundations. That should be put on the table. It is a big issue that should be addressed and can be used to generate tax funding and also address some of the opaque machinations that have created the situation the world finds itself in.
I don't think you need to worry about the foundations moving off-shore or outside the jurisdiction of the United States. That act will speak volumes.
I usually enjoy (?) Rosie's forecasts, but this is one of his lesser posts. He must have had jetlag getting back from Colorado!
He claims to be worried that the Bush tax cuts won't be extended. This is a smokescreen - the only question, and it isn't much of a question anymore, is whether earners of over a quarter of a million dollars a year will have their cuts extended. There was never reallly a question that the other 98% of the population would have the cuts extended.
He points out the estate tax issue - seriously? How can that possibly affect the economy? Perhaps more people will elect to die this year? That would seemingly be stimulative, at least for the funeral industry!
Perhaps he's just overworked and doesn't have the time to put into his writings like he once did.
I think happiness should be a right, too, not just "the pursuit of". And unicorns.
Rosenberg, Iceberg -- they all can sink big ships.
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