Working out of the home office today, which makes for a nice change of pace. The comfort level is a lot better – my own cushy leather desk chair, my own comfortable-if-messy desk, my own big 22″ LCD monitor.
To the news of the day:
Barney’s New Excuse. “Barney” of course refers to Massachusetts congressman Barney Frank, one of the principal architects of the Fannie Mae/Freddie Mac meltdown. Frank, like many of his colleagues, is an economic illiterate – but then, he’s got plenty of company. Now it seems they are up to their old tricks again. Excerpt:
The notion of “housing” as a God-given right had been promoted by people like Barney Frank for nearly two decades. Their vehicles to expand homeownership for all were “government-sponsored enterprises” Fannie and Freddie — which, starting in the mid 90s, began buying up and placing guarantees on mortgages taken out by people with lower incomes and lousy credit histories.
Giving low-income people access to the housing market sounds nice enough — but the reality was far different. Housing prices were bid up to levels that made repaying mortgages nearly impossible. When the bubble burst, the government “sponsored” agencies were in hock for billions — and so was their “sponsor,” the US taxpayer.
And once Fannie and Freddie stopped making loans to anyone with a heartbeat (and many people without jobs), housing prices began to deflate, taking the banking system and the rest of the economy with it.Now it looks like Fannie and Freddie are back to their old tricks — with the evident support of both Barney Frank and President Obama.
Next up, from Investor’s Business Daily: Tax-Cut Chicken. I do object to the term “tax cut” for this issue; when the current rates were set in 2003, they were not tax cuts, they were (and are) marginal tax rate cuts. Now, the debate is not a tax cut – it is whether or not to keep the status quo. In effect, if the current marginal tax rates are allowed to lapse, it constitutes a massive tax hike. Excerpt:
Moreover, tax rates on capital gains and dividends, now both at 15%, would rise to 20% for capital gains and 39.6% for dividends.
This would hit saving and investment hard — killing off thousands of future jobs by hitting not just the “rich” but the “many small businesses that file their taxes through the individual tax system,” the economists wrote.
Recent reports support this idea. The National Federation of Independent Business, for instance, estimates that 50% of owners of small businesses with 20 to 250 workers would be in the top two tax brackets — the very brackets Democrats target for tax hikes.
Finally, have a read through Victor Davis Hanson’s analysis of President Obama’s declining approval ratings.
Stay tuned for more, True Believers! You ain’t seen nothin’ yet.