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Posts Tagged ‘Ann Althouse’

So says Ann Althouse.

UPDATE:

Stacy McCain weighs in with “Althouse on the Cain Train”:

This is an unexpected but really quite welcome development. Professor Althouse has been critical of Cain previously and (like most in academia) is not generally a fan of the populist style.

And then adds:

We can agree that a flat tax will generally be of most benefit to the wealthy (who pay a much higher percentage of their income under the existing progressive system) without assuming, willy-nilly, that others will be impoverished as a result. And the point of “9-9-9″ is not to achieve “social justice,” but rather to unleash capital investment to spur economic growth. It is a supply-side solution to our current economic woes, and as such has been praised by the Club for Growth and by Art Laffer.

Would a man rather be unemployed and paying no taxes, or would he rather have a job and pay taxes? That’s the real choice, and yet David Gregory can’t seem to understand it.

We could update an old joke Ronald Reagan used to tell: “A recession is when your neighbor loses his job. A depression is when you lose your job. And a recovery is when David Gregory loses his job.”

MORE:

Glenn Reynolds asks if David Gregory is fit for the national stage:

SO LOTS OF PEOPLE ARE TALKING ABOUT HERMAN CAIN ON MEET THE PRESS, but what I noticed is that David Gregory doesn’t seem to understand the difference between state taxes and federal taxes. Here’s what he said:

MR. CAIN: We replace capital gains tax. We replace the payroll tax. We replace corporate income tax, replace personal income tax, and replace the death tax. It is a replacement tax structure.

MR. GREGORY: But where do state taxes go? You’re saying they’re going to be repealed?

MR. CAIN: If you–with the current structure, you have state taxes, right? So with this new structure, you’re still going to have taxes–state taxes. That is muddying the water.

MR. GREGORY: How so?

MR. CAIN: Because today, under the current tax code, state taxes are there if they have it. If they don’t have a state taxes, they don’t have it. It has nothing to do with this replacement structure for the federal tax code.

MR. GREGORY: But that doesn’t make any sense to me. If I’m already paying state taxes, and I have a new Cain administration national sales tax, I’ve got more state taxes.

No, you don’t have more state taxes, you have the same state taxes — unless, that is, you don’t know the difference between a sales tax and a state tax, which would seem to be the case for Gregory. If Sarah Palin made such an error, it would be seen as proof that she was unfit for the national stage. For Gregory, well . . . draw your own conclusions.

STILL MORE:

John Hinderaker piles on Gregory:

Reading the transcript, what strikes me is how slow-witted Gregory was. Repeatedly, Cain makes a simple, clear point, but Gregory doesn’t seem to get it. This became almost painful during an exchange about state sales taxes.

I’ll repeat what I said after the last CNN debate:

There are too many in the media that merely pick daily winners and losers, rather than performing serious analysis of candidates’ platforms and leadership history.  Newsflash:  It’s called “vetting”.  And that’s what primary voters want to do during the months that precede an election.

The media should have learned this lesson after their lack of such during the Obama campaign.

Is it any wonder traditional media, including NBC, continue to see their influence diminish?  Viewership statistics of the primary debates reflect enormous interest of the electorate.  Voters are looking for solutions.  Is Herman Cain’s tax plan one of them?  With such drivel from the ilk of David Gregory, they’ll have to figure it out without the press.

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Ann Althouse’s response regarding Maureen Dowd’s crush on William F. Buckley for his sesquipedalian facility.

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From Ann:

You know, when you’re calling somebody “a flat-out moron,” you’d better be sure you’re not missing something. It’s extremely common to portray environmentalism, as practiced in present-day America, as the equivalent of a religion. Just the other day, for example, I wrote: “enviromentalism is the religion taught in public schools, and it’s the kind of religion done with shaming young people.” Here’s a World Net Daily article from back in 2008 called “The Climate Change Religion.” The Freakonomics blog had an item in 2009: “Is Climate-Change Belief a Religion?”(“Actually, yes…”). Here’s a piece in Forbes from last April: “Climate Change As Religion: The Gospel According To Gore.”

In this context, Perry’s invocation of Galileo makes perfect sense, and if anybody’s a flat-out moron here, it’s Fallows.

UPDATE:  “On reflection, and in response to a torrent of near- identically phrased outraged mail”, Fallows apologizes:

I shouldn’t have called Gov. Rick Perry’s reference to Galileo during this week’s Republican debate “flat-out moronic.” That’s mean talk that I shouldn’t use about anyone, and I’m sorry.

Well okay, then.  He continues:

I should just have said that his comment seemed ill-thought-out, weird, and self-defeating, for exactly the reasons I set out the first time through.

Now it becomes less of an apology, as Fallows unwittingly describes his own attempt to further explain his still-flawed original argument.

Althouse responds:

Not much of a backtrack. I don’t know if I’m responsible for any or much of his “outraged mail,” but if you feel like going over there now and telling him off, please word your email in a manner that displays the unique person that is you.

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The Drudge Report is currently linking (in red and in CAPITAL LETTERS) to a breathless front-page New York Times “News Analysis” by Landon Thomas Jr. and Nelson D. Schwartz, proving once again that the Times is never the best place for financial news — or responsible “analysis” for that matter.

Unfortunately the piece, “In Euro Zone, Banking Fear Feeds on Itself“, does not give readers the basic facts or background to understand  financial institutions in general, the history and structure of the Euro and the Central European Bank, the current European economic and political climate, or general economic principles.  That’s what’s so breathtaking about this article.

The authors refer repeatedly to Lehman Brothers, its failure in 2008, and their comparison to it and contemporary European banks.  The comparison sets the basis for many of their assertions, but left out of the analysis are facts that turn this front-page article into a dangerous diversion.  For example:

  • Lehman Brothers
    • Lehman Brothers was an investment bank, and as such, American law prohibited it (by and large) from offering cash deposit accounts, and thus did not require insurance from the FDIC for up to $100,000 per account (the guaranty was raised to $250,000 during the Bush administration).  The lack of FDIC insurance significantly reduced incentives on behalf of the United States to ensure the bank remained solvent because there were no guarantees on deposits.  Moreover, there was no concern of a “run on the bank” from panicked depositors.
    • European banks (some of which also act as investment banks) have billions in cash deposits, which are insured — not by a pan-European entity (like the federal FDIC in the United States) but by the nation in which the banks reside.  Some countries, such as France and Germany, have no limit of insurance on each account.  Have a million in your checking account?  No problem, if your French bank fails, the country’s tax payers insure every euro.  Obviously every nation with a troubled big bank with insured deposits has a vested interest in seeing any weak banks remain solvent.
    • The authors assume Lehman’s failure caused a world-wide financial panic in 2008.
      • The failure of Lehman Brothers was a symptom of the economic crisis of 2008, not the cause of it.
      • After the U.S. government bailed out Bear Stearns earlier in 2008, the market assumed it would do the same for the too-big-to-fail Lehman Brothers.  This is what economists call “moral hazard”.  So what a surprise it was when the government said it didn’t have the legal authority to do so and refused, allowing the bank to fail.  Investors started to ask if JPMorgan Chase, Citigroup, or BofA could also fail, thus panic ensued.
      • The panic subsided only when government officials began taking actions that provided expectations that these large institutions were indeed too big to fail and would ultimately enjoy a bail out if need be — much of what we’re witnessing now in Europe.
  • Deposit insurance
    • If an Italian or French bank fails, it is the responsibility of Italy or France to insure the deposits, not some European entity based in Frankfurt or Brussels.  European policy makers may be “determined to avoid such a catastrophe”, and “are prepared to use hundreds of billions of euros of bailout money to prevent any major bank from failing”, but do these “policy makers” have the legal standing to do so?  A German court will tell us on Wednesday.  But even if the court approves, what are the political ramifications?  The Times analysis fails to tell us.  How many euros will Germany provide to shore up a French bank?  Or an Italian or Greek bank?  Who leaves first?  Greece?  Portugal?  Or Germany?
  • The authors go on: “Turmoil in Europe could quickly spread across the Atlantic because of the intertwined nature of the global financial system. In addition, it could further damage the already struggling economies elsewhere.”  This is rich.  Later in the article, the authors say, “Investors also continued to seek the safety of United States Treasury bonds.”  Do the authors realize the percentage of Treasurys purchased by European banks, investors, and governments?
  • Quoting George Soros, identified only as a “hedge fund investor”, the Times notes how he cites the lack of an authoritative pan-European body to handle a banking crisis of this severity. “That is why the problem is so serious. You need a crisis to create the political will for Europe to create such an authority, but there is still no understanding as to what the authority will do.”  Really.  George Soros opines in a New York Times “analysis” with nothing, I suppose, at stake for such an opinion?
  • Cross-border exposure, as noted by the authors, does not specify the assets held by American financial institutions, but the reader is left guessing if it’s government exposure?  Bank exposure?  Is it collateralized?  Guaranteed?  We’re left wondering.

I could go on, but what’s the point?  There’s no question that the Euro debt crisis is real and the consequences are significant, not only economically, but politically; not only in Europe, but here in America.

So how about a shout-out to Messrs. Thomas and Schwartz?  Here goes:

  • The financial complexion of a bank is simply a result of the underlying economy in which it operates.
  • The market continues to believe that most large European (and American) banks are too big to fail.  The expectation remains that governments will bail them out if necessary.
  • There are only so many taxpayer funds available to provide bailout money to large banks.  It’s quite conceivable that politicians will one day realize the limit of tax dollars and concede that there aren’t enough to save all of the banks.  If that happens, there will be another liquidity crisis, only worse than what we witnessed in 2008.
  • That European banks are in crisis is a symptom.  The problem is that governments have borrowed too much.  And governments are reflective of the electorate.  When forced with austerity measures, the Greeks decide to riot.  And so do other Europeans.  And yes, so do Americans.  Don’t believe me?  Read Ann Althouse for the best commentary on Wisconsin’s realty check.
  • Worldwide de-leveraging is a deeply painful process.  No Soros-promulgated  “authoritative pan-European body” or other bureaucratic panaceas will ease the pain of understanding that asset prices must reach equilibrium.  Individuals, municipalities, states, and nations have all borrowed more than they can comfortably repay.  Borrowing from our children and grandchildren is not the road to prosperity for us or for them.
  • Again, taxpayer bailout money is finite.  Every tax euro (or dollar) must be earned before it’s available to government entities.
  • If a bank (or any financial institution) is too big to fail, then it is simply too big.

As this sophomoric “analysis” article ends, the authors apparently believe the simple answer is more bank capital.

Huh.  More bank capital and our troubles are over.

If only it were that easy.

UPDATE:  From CNBC:  Stocks Soar as Italy and Greece Act on Austerity

Despite the fact that George Soros is warning the euro zone debt crisis could be worse than the Lehman Brothers crisis, stocks across Europe rallied Wednesday following news from Athens and Rome on how they plan to tackle their budget deficits.

On Tuesday, Silvio Berlusconi’s government unveiled how it plans to make up the recent concessions on austerity spending it had promised a number of special interest groups.

Italy’s value added tax (VAT) will be raised by 1 percentage point to 21 percent. Those earning over 500,000 euros (US$705,000) will be subject to at 3 percent levy, which Reuters reports will raise 35 million euros (US$49 million) next year and 88 million euros (US$123.4 million) a year from 2013.

The measures where welcomed by the European Commission, which said they showed Italy’s determination to meet its fiscal targets and deal with its deeply rooted structural weaknesses.

STILL MORE:  Germany’s Top Court Throws out Anti-Euro Bailout Lawsuit

However, the judges did say parliament’s budget committee must have a bigger say in any future bailouts.

“The government is obliged to get the approval of the parliamentary budgetary committee in cases of large expenditures,” said presiding Judge Andreas Vosskuhle.

The ruling was a victory for Merkel’s government policy

The decision will likely make it more difficult for Germany, and therefore Europe, to move quickly on future eurozone bailouts.

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Charlie Martin:

“I’ve been saying since before the 2008 election that Obama’s nearest historical analogy wasn’t Jimmy Carter or FDR, but Juan Domingo Perón.”

Ann Althouse:

“I realize “let’s take these sons of bitches out” can be interpreted to mean let’s vote these terrible people out of office. But “take them out” is not an idiomatic expression that corresponds to “vote them out.” Take them out? Maybe that’s not the phrase he intended to use, but if it was unintended, it was still a gaffe. A revealing gaffe. Unless you’re speaking in a positive way — referring to taking someone out on a date, for example — “take them out” is a violent command. With “sons of bitches” right there, it’s unmistakably violent. Now, you can say it’s only metaphorical, and all Hoffa really wants is to oust these people from office.

But it was only last January that Obama and many other Democrats were saying that violent metaphors, including a simple target on a map, were dangerous incitements for the unstable irrational folk out there.”

John Hinderaker:

“Did Obama disapprove of Hoffa’s incendiary message? Apparently not; he mentioned Hoffa only to say that he is proud of him. But, what the heck: he sat through “God DAMN America” for twenty years without protest, so I guess he can put up with Tea Party “sons of bitches,” too.”

But hey, as Glenn Reynolds said, it’s hard to get good goons these days.

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