“It’s probably closer to the 15 percent rate than anything,” Mr. Romney said. “Because my last 10 years, I’ve — my income comes overwhelmingly from investments made in the past, rather than ordinary income, or rather than earned annual income.”So, for sitting around collecting dividends, buying and selling stock, speechifying and running non-stop for president for years on end Mitt pays taxes at a rate of 15%, while people who sweat and bleed and risk their lives on oil rigs and in war zones pay 25%, or 30% or 35%, not even including Social Security and Medicare taxes, which adds another 4-8%. That is, unless the Republicans get their way and it goes back up to 6-12%. Meanwhile, Romney doesn't pay a nickel of payroll taxes on capital gains and dividends.
I don't criticize Romney for paying that tax rate, or for making money through long-term investments. It's smart to optimize your income, and I don't begrudge him being rich (Obama paid 26%, which is a lot lower than many Americans). But I do criticize him for campaigning to make the Bush capital gains tax cuts permanent. Romney should man up like Warren Buffett and admit the inherent unfairness of the tax system. Capital gains should be taxed at exactly the same rate as earned wages, as they were before the Bush tax cuts.
In particular, gains on selling non-IPO stock are essentially gambling income, because repurchased stocks are just a bet that the price will go up. Companies never see a penny from repurchased stock, so buying shares on the stock market is not really an investment in the company. In fact, outstanding shares are often a liability because of dividends and loss of autonomy, and many companies have programs to purchase outstanding shares.
Incessant demand for stock price increases from shareholders is the number one cause of poor long-term decision-making in the management of companies. Since most execs have bonus plans linked to share price, their incentive is to do whatever it takes to jack the price up in the short term without regard to the company's future. If things go south, their golden parachute kicks in and they can just move on to the next gig. Most market players plan to sell off their shares at their peak price, and don't care what happens to the company after they cash out.
While it would be interesting so see Mitt's return from last year, I'm more interested in seeing his returns over the past 15 years. How did Mitt's income change before and after the Bush tax cuts, and how has he weathered the Great Recession? Did he make out like a bandit while all the vast majority of Americans suffered catastrophic economic and job losses?
The theory is that capital gains taxes should be low because it spurs investment and job creation. These taxes have been artificially low for 10 years now, and the only investment and job growth they've spurred has been in China.
Since the Bush tax cuts the rich have been getting richer and the middle class poorer. The Bush tax cuts have redistributed wealth from the middle class to the super wealthy like Romney.
It's time to end this welfare for the wealthy.
55 comments:
Good Lord, Nikto. If you want your arguments to be taken seriously then you really need to work on forming them with facts instead of innuendo and flat-out falsehoods. Start with the two most glaring falsehoods:
1) Companies never see a penny from repurchased stock
This is utterly false. You were called on that falsehood in a previous, but have resorted to framing an argument on it again either due to willful ignorance or intetional deceit.
2) Capital gains should be taxed at exactly the same rate as earned wages, as they were before the Bush tax cuts
(emphasis from source)
You emphasize this point as if it is the crux of your argument, and yet it is entirely inaccurate.
I do have to give you credit where it is due, however. You obviously feel passionately about this subject, and that passion serves you well when it comes to forming an intelligent sounding treatise. But until you can form such an argument without resorting to falsehoods then your post is more appropriately housed under Markadelphia's "Fantasies Here, Fantasies There, Fantasies Everywhere" header.
So supposedly Mittens made over $350K in speaking fees last year, but to him it wasn't much. That probably explains why he doesn't know how much he pays in taxes and thinks it is around 15%. Unless he has at least $250K in deductions he was paying more than 15%. Of course any capital gains he cashes in are taxed at 15%, so that would bring the average down.
The real story here is that Romney knows full well what the release of his tax returns will mean...he will now be seen as part of the 1 percent. His reticence shows that the 99 percent/OWS narrative is not, in fact, dead contrary to the wishful thinkers out there. With the economy being the number one issue on people's minds, Romney is going to have a tough time selling himself as being the solution guy for most Americans when makes as much as he does.
Investor, it's too bad that Nikto doesn't respond to his posts. I'll see if he can make an exception since you seem to know what you are talking about. But I'd like to know about the overall issue of companies like Bain and what benefit they give to the economy. In addition, what benefit do people that make money off of money give to society?
"since you seem to know what you are talking about."
So he will not lower himself to speak to the peasants as a general rule.
You both probably voted for Kerry too.
On the subject of Mr. Romney, his actual rate will also be impacted by the degree of loss-harvesting that he (read: his "financial guy") did. Income is only part of the equation. As Mr. Imprudent observed, deductions are important, although limited by tax law. But capital losses, both in the current year and carried forward from previous years, are important factors in reducing tax liability. Careful loss harvesting is an important tool in reducing one's overall liability.
Markadelphia, I'm not sure how to responde to your inquiries because I don't know what you mean by "companies like Bain" and "people that make money off of money". I suspect you mean them in very negative contexts, and are not referring to Bank of America, or somebody who earns 5% on CDs at Bank of America, to use simplistic examples.
Also regarding Mr. Romney, it is important to not generically categorize things as "income". There are important differences between how long-term capital gains are taxed and how short-term capital gains are taxed. Presumably most of Mr. Romney's gains are long-term, and therefore receive the preferential treatment. But some of the income may not be and is consequently taxed at a rate nigh indistinbuishable from that of ordinary income, very much in accordance with the demands of the original post. Far too many "time the market" investors are unaware of that distinction, much to their chagrin come audit time.
...he will now be seen as part of the 1 percent.
So what? So is more than half of Congress - regardless of political stripe.
...he will now be seen as part of the 1 percent.
Anybody who doesn't already know Mitt is in the 1% isn't paying attention. I think because Mark thinks it will be a big deal, he thinks everyone else will think it's a big deal.
In 2003, congress made the capital gains tax rate 15%. Democrats protested that large deficits would result. For anyone willing to read it, the January 2007 Congressional Budget Office annual report should settle any debate. Citing the original CBO forecasts of capital gains tax revenue of $42 billion in 2003, $46 billion in 2004, $52 billion in 2005, and $57 billion in 2006, Democrats who opposed the rate reduction in 2003 claimed that the capital gains tax cut would "cost" the federal treasury $5.4 billion in fiscal years 2003-2006.
Those forecasts were embarrassingly wrong. The 2007 CBO report revealed that capital gains and dividends tax collections were actually $51 billion in 2003, $72 billion in 2004, $97 billion in 2005, and $110 billion in 2006, the last two years nearly doubling initial forecasts.
In other words, forecasts in earlier CBO reports were low by a total of $133 billion for the four-year period.
CBO forecasts are guesses. CBO results are facts.
http://www.cbo.gov/ftpdocs/77xx/doc7731/01-24-BudgetOutlook.pdf
Page 104, table 4-3
But hey, let’s raise it to 35% Nikto, like you have proposed before on here. Your proposed hikes on capital-gains taxes assumes that people will invest and cash out in the same manner they do at 15%. They won’t. The fact of increasing the tax will discourage investors and encourage them to shift money out before the hike. Not only will the extra revenue vanish, but investment levels will drop.
I think because Mark thinks it will be a big deal, he thinks everyone else will think it's a big deal.
Boy, it really is like pulling teeth for you to admit that I'm right about anything, isn't it? I'd like to hear your reasoning as to why he hasn't released his tax returns yet and what sort of political impact you think it's going to have.
Yes, yes of course you have partisan hopes for dirt in Mitt's tax returns. But right now it is still an intramural fight, your time will come.
So supposedly Mittens
Wait, how did I miss that one? Mittens?!? Fucking hilarious, juris!!
I have no partisan hopes. This is about a bigger issue. You know me...width of vision guy. Will this country, given the state of the economy and jobs, elect a guy who who makes millions a year? And how many millions?
I suspect you mean them in very negative contexts
It is, Investor. I know you've posted here before but I'm not sure how regular a reader you are. Check out this post.
http://markadelphia.blogspot.com/2011/12/1-percent.html
"It's not the 1 percent that are the problem. It's the .1 percent. People that are with me in the other 9/10ths of 1 percent are doctors, lawyers, and wealthy small business owners. We have the same issues that most Americans have with money. We just have more of it. What we do adds to our society in the way of jobs and economic growth. But the .1 percent? That's the people on Wall Street with whom I invest my money. All they do is move money around. They add no value to society whatsoever.
I'm sure we are going to find out plenty of information about Bain as the year goes on but what value to they add to society?
I don't know or care what the reasons are behind him not releasing them. Im not a huge fan of him. Plus, it's kind of hard to know at this point whether you are "right" at this point in time because we're only talking about what the reaction "will be". I liken what you typed to you referencing some dumb quote some republicans said in mid-2010 and you declaring that you were no longer worried about dem chances that year based on little things like that that only matter to political junkies whose minds are already made up regarding who they are going to vote for.
You know me...
Yep, Mr. Black-and-White.
The "Mittens" tag is from reason, not me.
With the economy being the number one issue on people's minds, Romney is going to have a tough time selling himself as being the solution guy for most Americans when makes as much as he does.
With the economy being the number one issue on people's minds, Obama is going to have a tough time selling himself as being the solution guy for most Americans when makes as much as he does.
Whoops! Obama made 5.5 million in 2009 - the depths of the recession. Tell me again how he connects with the peasants and the OWS farce?
...but what value to they add to society?
Markadelphia, it's still not clear to me exactly to whom you are referring by "they". But to respond with the same level of generalities I would suggest that money managers, hedge fund managers, etc., serve an invaluable role to entities wishing to compete in the international market. I trust you are not suggesting that American investors - personal and institutional - only put American dollars into American markets? That would seem to defy your long-standing position of global interconnectivity.
But that's an overly simplistic example, again based primarily on the fact that I don't have an understanding of who "they" are in your question.
I also wonder if your issue is with the role that "they" play or if it is with how much money "they" make? Is your suggestion that the role is invalid (a contention against which I would certainly argue)? Or is your suggestion that they make too much money as compared to the role they play (something with which I would probably agree)?
>They should man up like Warren Buffet
You all are still smoking Warrens pole over his words. Never mind the fact that with regards to Berkshires money, one of Mr. Buffett’s famous quotes is this – “Our favorite holding period is forever”. You only pay income taxes at any rate on realized appreciation. An investment with a holding period of forever incurs a capital gains tax of 0%, while all along the holder can be getting wealthy from appreciation.
Never mind the fact that he has sheltered the bulk of his fortune from federal taxes by putting them into his foundation that will give the money away the way he chooses.
Higher capital gains tax rates aren’t going to hurt Buffet at all – he's structured his affairs so that they show as little income as possible because income, not wealth, is what the govt measures when it levys taxes.
Hung up on words, ignoring their actions...and ignoring the capital gains tax receipts to the govt from 2003 - 2006 that you can see in the cbo link I posted. 6kings, as long as they hear the right things from Warren and Obama, they seem to automatically believe them.
Mark, I'm amazed at how quickly you found the strength to criticize the eventual republican nominee.
First of all, he's not the nominee yet. Second, I still like Mitt Romney personally. I'm asking you for a political analysis which involves you admitting fault. That's the real problem here. You made the claim that the OWS and 99 percenters' narrative is dead. If it is, why is Rommey reluctant to release his tax info?
I also think you misinterpreted (not a surprise) my thoughts on Romney. He wouldn't be a terrible president. Huntsman, if I had to choose a GOP guy, would have been better. Mitt's my next choice because he more moderate than the others although not as moderate as Huntsman. Now, everyone else on the GOP side would certainly garner much more criticism from me as they are farther right.
And what's Romney's foreign policy? How is it going to be more effective than President Obama's policies? He's not above criticism but he's also not horrible.
If it is, why is Rommey reluctant to release his tax info?
Same reason all politicians are. Has Gingrich released his - which as far as I know he hasn't and that makes his calls for Mitt's disclosure all the more hypocritical. Then again, I have to recall your fondness for cheap demagoguery.
Admitting fault for what Romney "will be seen as" in the future? The jury is still out when you are talking about what will happen after a future event.
Huckabee and Guliani didn't release their tax info in 2008. It's nothing new. I won't be doing any political analysis of it because I don't think it will be the big hubub you think (hope) it will be because we all look for ways to avoid paying more taxes than we have to and I don't blame him one bit for working the tax code in his favor. As far as I can see, Mitt is taking advantage of the way the tax code is - and it is that way because the people you voted for want it that way, otherwise they would have closed the loopholes by now.
I did read a little about Mitt's IRA, which is said to contain between $20 million and $101 million (a big ol chunk of his portfolio). It isn't a Roth (he's above the income limit for that) and he is required by law to begin withdrawing funds from his account beginning in 2017, when he reaches age 70.5. Those withdrawals will be treated as ordinary income, which currently is taxed at a maximum federal rate of 35%. (IMO, whoever advised him to put those gains in his traditional IRA is an incompetent boob when it comes to financial advice but to each his own).
The contributions to OWS are sure dying. I saw the link that was posted by sw the other day.
Yes, because links from sw are completely without bias:) But let's say that it is 100 percent completely true. So what? It's part of the zeitgeist and is going to be a major factor in the election. You can't argue for the middle class and ignore the gross inequality in this country. The difference between Mitt and the president is that the latter is pushing to raise his own taxes while the former is looking to keep his low. Mitt, in many ways, is the poster boy for the 1 percent. How will that play in this election?
I notice that Mitch McConnell hasn't taken Warren Buffet's offer yet regarding donations to the Treasury. I think it was three times whatever McConnell put in, right?
http://www.drudge.com/news/152331/buffett-dares-mcconnell-taxes
"It restores my faith in human nature to think that there are people who have been around Washington all this time and are not yet so cynical as to think that [the deficit] can't be solved by voluntary contributions," Buffett said.
Is your suggestion that the role is invalid (a contention against which I would certainly argue)? Or is your suggestion that they make too much money as compared to the role they play (something with which I would probably agree)?
They do make too much money compared to the role they play. I guess I'd like to hear your take on how important their role is as we shift from a unipolar to a multipolar world.
I guess I'd like to hear your take on how important their role is as we shift from a unipolar to a multipolar world.
OK. But you still haven't identified who "they" are?
Yep, pushing to raise his own taxes while he will also take steps to avoid paying them. Just like Buffet, just like your pal Kerry, just like nearly all of them. You easily get hung up on their words and not their actions. I think Buffet says and does those things to avoid criticism from lefties. He comes across as a jolly old chap just along for the ride who says he wants to pay more in taxes but his finances are structured in a way that he pays the least amount possible and you and blk are both holding him up in this thread as an example of what you are talking about. You endorsed and supported Kerry (whose wealth is greater than Romneys) as a spokesman for the middle class even though he takes steps to avoid paying taxes and uses insider info to assist in perfectly times stock trades that net him hundreds of thousands but since he *said* the right things, he lured you in.
You seem to support Warrens call for voluntary contributions to the treasury but it wasn't that long ago on here that you told us your wife said one cannot make voluntary contributions to reduce the deficit. You going with your writings on here or Warrens words?
I believe I've stated this several times but here goes again. I'm talking about the .1 percent of this country...people who essentially make money off of other people's money...that call Wall Street their home. The financial sector folks and investment people who make hundreds of millions a year by risking other people's money to earn for themselves. So, for purposes of discussion, let's pick the top 25 paid employees of Goldman Sachs. What value do they add to society? Does their income match the value they add to society, if any? More importantly, how vital is their role as we transition from a unipolar to a multipolar world? Are they helping or hindering our overall economic security?
You easily get hung up on their words and not their actions.
http://www.drudge.com/news/152554/buffett-writes-check-treasury
http://www.cnbc.com/id/46043645/Impressed_and_Delighted_Warren_Buffett_Matches_GOP_Rep_s_Deficit_Donations
http://www.foxbusiness.com/markets/2012/01/18/exclusive-buffett-says-will-match-congressmans-donation-to-debt/
Oops. Now what? Time for a new narrative I guess.
But you are correct..actions matter. He's going to match, dollar for dollar, whatever any member of Congress contributes...3 to 1 on McConnell who, as of yet, has not taken him up on his offer. Instead, the Senate Minority Leader has stated that we need to shrink government so contributing to help the debt is a bad idea. Is that going to be your new talking point now?
You going with your writings on here or Warrens words?
You can't pay more than you owe in taxes. The government will send you a refund check. The original statement was "If you want to pay more in taxes, the government is happy to take your money." That statement is still false. You can, however, make a contribution to the US Treasury which is a separate type of payment. In addition, you can also buy T bonds which is essentially supporting the debt. Do you own in T bonds, last?
This whole thing is a fine example of the childish antics of the right. You redirect the discussion (away from raising taxes on people who can afford and receive far too much welfare as it is) to a school yard game of chicken. Well, Warren has called your bluff and now it's time to act like adults and talk about the overall tax system in this country and how it needs to be changed. That's what he's trying to say here and I think we can now see who's being the adult about dealing with it.
So, for purposes of discussion, let's pick the top 25 paid employees of Goldman Sachs. What value do they add to society?
My guess is that the top 25 paid employees of Goldman Sachs are executives and upper management, so is your point that executive compensation packages are too high?
If the people you voted for want the tax system changed they would have changed it by now. Your guy won, remember? Or did you believe their rhetoric about their intentions to change the tax system? Such loving intentions they had though.
When I talk about his actions, I mean how his financial affairs are structured. Also, isn't he still disputing taxes owed from the last several years?
Regarding your links - as I stated, I think Buffet says and does those things to avoid criticism from lefties. Publicity stunt IMO.
If you want to bring the discussion back to taxes notice that I posted data from the cbo in this thread about the receipts for capital gains taxes in the years following a capital gains tax cut...something Nikto talked about in the original entry. You and nikto haven't said a word about it. Who is chicken and who is calling whose bluff here? You also haven't disputed that Warrens financial affairs are as I stated - aligned in a way to avoid paying more taxes than he has to. So no, Warren isn't "dealing with it" via his publicity stunts.
so is your point that executive compensation packages are too high?
They are but that's not really my point. My central point is revolves around the transition that we are clearly going through as we head from a unipolar to a multipolar world. BRIC (Brazil, Russia, India, China) are likely going to be sharing power with us. My concern is that the inequality in this country has grown so much in the last 30 years that our power, given this new dynamic, will not be as great due to the insane notion that the financial sector is the backbone of our wealth...a financial sector that is directly responsible for much of this inequality.
Further, and to put it simply, what do they offer the global marketplace the brings real strength? For example, China now rivals us in solar energy. That's something substantial that has value in the world marketplace. Engineers build bridges. What do financial planners build?
I think I've laid out enough detail to my points. Let's here what you have to say on all of this.
Your guy won, remember? Or did you believe their rhetoric about their intentions to change the tax system?
We've been over this before. Nikto schooled you on this little bit of childish dishonesty. Go back and read again because apparently it didn't break through the bubble.
Sadly, Nikto doesn't respond to his posts so I can't really speak for him. I also think they you are being disingenuous about your cap gains discussion. Overall, how much lost revenue was there from the Bush tax cuts? Now combine that with the increased spending and that's why we have the problem we do. Revenue may have gone up under the cap gains umbrella but how does that fit into the overall picture?
We have to increase taxes combined with spending cuts. I know the former is anathema to you but this is no time for having religion about taxes.
And I'm still waiting on your answer to T bills.
What do financial planners build?
OK, so financial planners. Which, curiously, is such a small component of Goldman Sachs.
I don't know what the textbooks say, but to me the ultimate goal of a financial planner is to build and protect wealth, the impact of which in the global marketplace is presumably self-evident. Like the architect who doesn't actually build the building, or the chemical engineer who doesn't actually manufacture a product, or the anesthesiologist who doesn't actually cure a disease, or the intellectual property attorney who doesn't actually own a product, a financial planner is somebody whose knowledge of one or more facets of finances is crucial to the successful execution of any number of different financial transactions.
Investments? Of course. But also Risk Management, Tax and Legal Compliance, Derivation of Funds, International Trends, MADJV, and any number of other things beyond the comprehension of mere mortals like myself. Can "American Startup X" hope to withstand a hostile takeover by Microsoft without understanding the intricacies of structuring their business in a takeover-proof manner? Can that same startup hope to compete globally without understanding the ramifications of the Yen weakening against the Euro and how to best manage against that eventuality? One strategy for managing such problems is to bury your head in the sand and hope they don't occur. But I bet you the corporate asset management experts at Goldman Sachs have different, far more successful strategies. Those strategies - concept and execution - come with a cost. To the individual on the sidelines that cost may be excessive. But to the investors, employees, and probably customers of "American Startup X", those strategies are crucial. Not exactly like your previous argument for medical knowledge and procedures, but similar to a certain degree. If you want to be successful on a scale larger than "mom and pop", you cannot simply ignore those issues and hope they work out in the end.
Does that answer your question?
I love that post Investor. I think what you saw was Mark thinking that because Goldman Sachs didn't provide much value to him, they must not provide much value to anybody.
It isn't childish dishonesty to point out that democrats controlled the white house, congress and the senate for 2009 and 2010, strong majorities at that. That is fact. It is also a fact that the tax system is just the way the politicians want it (even the ones you voted for)...if they wanted it different they would propose and pass legislation changing it. You were on here in 2009 and 2010 blaming republicans for the failures of the govt they weren't running.
"Lost revenue" is what you think of when you see tax cuts. Your holy government may have had to go without? Heavens Tibetsies! The next Solyndra (aka Obama campaign finance bundler) may not get their payback!
Revenue from capital gains taxes increased in the years following the cap gains tax cut. The cbo document I posted above proved it. That's my point. You can't dispute it so you just call it disingenuous. Try harder to redirect the discussion and move those goalposts to the "overall picture", "lost revenue", and "increased spending".
Nope, don't own any tbills. I invest to save for retirement...and I put my money in mutual funds whose expense ratio is well below .50, which is the mutual fund expense ratio you think wealthy people start fucking people over at.
Those strategies - concept and execution - come with a cost.
Yes, that's true but now weigh those costs with the value of what they offer. You said above...
Or is your suggestion that they make too much money as compared to the role they play (something with which I would probably agree)?
Can you expand on that more?
I think your answer is a good start but it doesn't address the pitfalls that have been laid bare these last few years with investment banks and the financial sector. How do those cons play in to your answer, in your opinion?
I don't think we should get rid of places like Goldman Sachs. They obviously have their place in our society. There does, however, need to be at least a partial return to Glass Steagall type protections that were enjoyed for 40 years. Dodd Frank is a start but I think we can both agree that these folks can't be allowed to hold the world economy hostage any longer.
It isn't childish dishonesty to point out that democrats
Yes. Either that or you aren't listening to the explanations. Frankly, I'm sick of doing it.
It is also a fact that the tax system is just the way the politicians want it
No, it's not a fact. The Democrats have always wanted the Bush Tax cuts to expire for the upper percentiles. It's your side that doesn't want that and now we get to see how that plays with the American people this November. Based on Mitt's reticence to release his tax returns, I think he's obviously grasped reality better than you have. Gordon Gekko isn't the hero to many folks these days, last.
You can't dispute it so you just call it disingenuous.
I'm not disputing it. I'm simply saying that a discussion which looks at the revenue from cap gains is limiting in any sort of overall discussion about the debt, the deficit and spending.
As Ronald Reagan said, "Everyone needs to pay their fair share in taxes." Do you agree or disagree with this speech?
http://www.youtube.com/watch?v=q1rhgjG0zyc&list=FLfNHS_6BXeZaS88Gj5P-o4g&index=33&feature=plpp_video
Pay close attention to the mention about the bus driver. I'm saying the same thing.
>No, it's not a fact. The Democrats have always wanted the Bush Tax cuts to expire for the upper percentiles.
Really?
Stephanie Cutter, an adviser to the Obama reelection campaign, wrote a memo the other day about Mitt Romney’s experience at Bain Capital, subtitled “Profit at Any Cost.”. Sure sounds like a sworn enemy of private equity right? Nope. A few years ago, she was a spokeswoman for J.C. Flowers, a private-equity firm. Why do work for J.C. Flowers when there are so many other worthy ventures needing communications help that don’t make insane amounts of money and pay incredibly well? Pretty remarkable that she is part of an Obama team that argues there is something inherently wrong with income inequality.
Let's take a look at the recent chiefs of staff. Obama’s new chief of staff, Jacob Lew, made $1.1 million in one year working for Citigroup. His prior chief of staff, Daley, made $8.7 million in roughly one year working for JPMorgan Chase. His original chief of staff, Rahm Emanuel, made $16 million working for an investment firm. Looks to the casual observer that your guy only feels comfortable entrusting his affairs to people who are members of the 1%.
haha
Obama’s first national economic director, Larry Summers, earned $600,000 as president of Harvard, then went to a hedge fund where he made $5 million in one year, before joining the administration. His first budget director, Peter Orszag, left to make $2 million to $3 million a year at Citigroup. His current national-security adviser, Tom Donilon, got $7 million from his work at Fannie Mae from 2000 to 2003.
Do as we say, not as we do. They all took positions in the administration to figure out ways to raise their own taxes. Riiiiight.
I can't view youtube videos at work.
I think your answer is a good start
I didn't really give an answer that was a start to anything. While portraying only a fraction of the services that a corporate asset management adviser might offer, the answer well represents the whole, and seems to be meaningful in that you acknowledge they "obviously have their place in our society".
Perhaps I am naive but I am not familiar with the "pitfalls that have been laid bare" vis a vis corporate asset management services at Goldman Sachs.
Pretty remarkable that she is part of an Obama team that argues there is something inherently wrong with income inequality.
See, here's what I don't get, last. Pretty much every time I point out a very simple fact about the GOP, your defense is always to show how the Democrats do it too. That's not a defense. It's called avoidance. Just once, I'd like to see you defend the GOP without resorting to "They do it too!" (aka childishness)
In addition, you must be believing the right wing media industrial complex if you think that all Democrats are socialists. Or that I am. I have said many times that I have no problem with people making a lot of money and there being people that don't make money and are poor. That's the nature of capitalism. My problem isn't with capitalism-it's with what is being done to it. You act as if you are shocked that the Democrats aren't trying to start a new Soviet Union and they actually want to make money as well.
The real issue here is that you are stubborn. You simply can't admit that the Democrats are more likely to act in your best interest...especially with all this new information that you've offered above, right? They don't mind if rich people make money (as many of them do so) AND they want to continue to support welfare capitalism. Why do you vote Republican again? The only answer I see is that you are loathe to change.
Generally speaking, though, I take comfort in the fact that as soon as you begin to realize just how much the inequality in this country is going to affect your future (and your bottom line), lo there shall come a movement!
with the "pitfalls that have been laid bare" vis a vis corporate asset management services at Goldman Sachs.
Why were they telling their clients to invest in products that they knew were going to fail and then taking out insurance on them in the hopes that they would fail and make a ton of money off of said demise?
I'd recommend watching the film "Inside Job" or the CNBC documentary "House of Cards" which was shown to me by the ever venerable last in line.
Here it is on Hulu
http://www.hulu.com/watch/59026/cnbc-originals-house-of-cards
Since you obviously have some knowledge regarding the financial sector, I guess the main question I have for you is one that Thomas Frank posed in his recent book, Pity the Billionaire: The Hard-Times Swindle and the Unlikely Comeback of the Right. How is it that, in the trough of the 2009 recession, Americans whose livelihoods had been destroyed by far-off bankers were actually rallying "to demand that bankers be freed from 'red tape' and the scrutiny of the law?"
This question is the very crux of my frustration.
Frankly, I'm sick of doing it.
I'd be sick of defending such a stupid position too, but it usually doesn't stop you.
Two years of complete control of the legislative and executive branches. I remember someone whooping about elections having consequences.
you can also buy T bonds which is essentially supporting the debt.
Supporting the debt by facilitating the creation of further debt? Hah! I guess 'supporting' is the correct word, but I thought the context of that riposte was the voluntary paying to decrease the debt. Providing an easy means of maintaining and increasing the debt does not decrease it.
Two years of complete control of the legislative and executive branches.
Wrong. Try again.
Guard Duck, do you own any T bills?
Yes I do Mark. But the point remains unchanged. The T bills I hold are part of the US government debt. If I went out tomorrow and bought more T bills I would be adding to the US government debt, not subtracting from it. Since the conversation was about reducing the debt by voluntary contributions your mention of investing in T bills as a method of doing so is a non sequitur.
your mention of investing in T bills as a method of doing so is a non sequitur.
No, it wasn't. We're having a discussion about taking action related to the debt. Owning T bills supports the government debt which essentially means that you have faith in the US government as a safe bet, right? How does that figure in to your ideology that says we are heading towards Armageddon? I guess I'm wondering why, in your own words, you added to the government debt by buying T bills.
OOOhhhh.....touche Mark.
You are right. You think I should go gut-punch my 97 year old grandmother for buying me T-bills (Actually T bonds) for my birthdays? That will teach her for supporting the indebtedness of the US government right?
And no, you are not right - your conversation was about reducing the debt by voluntary contributions and buying government bonds is not a debt reduction tool. It's not, as you say 'essentially', the same thing. What you are doing however, is 'essentially' hand waving in order to somehow confuse the issue enough to win the argument.
I see a mention of hand waving!!! That=Mark is right and I am sooooo mad about it!!!!!
Nice rhetoric serial........
Just add valid is my newly proclaimed "Thrilla's law" which posits that any argument for which serial thrilla comments is immediately null and void.
See how easy it is to dismiss an argument without actually making an opposing argument?
Ah, that's why the handwaving comes up so much. Now I get it.
GD, we're talking about the overall issue of debt and how to reduce it. Buffet's voluntary check writing is indeed symbolic but that's only part of the story. People that by T bonds are effectively saying that they do not think that we are quickly swirling down a boiling pit of sewage. The US is a safe bet and the debt isn't as bad as the apocalyptic cult is making it out to be. Voluntarily paying down the debt and buying T bonds both fall under the issue of debt support and management.
Jesus Mark,
You weave together tenuous threads of logic that are just magical......
There is no connection to paying down the debt and supporting the continuation of the debt. On the one hand you have to believe that the debt needs to be payed down and therefore the level of current debt is bad. On the other hand you have to believe the level of debt is fine and can even be increased.
Yeah, they both fall under the category of debt management, but at separate polar ends.
Oh, and a question? If the US is a safe bet and the the debt isn't bad - why would it need to be reduced?
Also, stop with the BS boiling pit of sewage bit. It's intellectually dishonest of a critical thinker who isn't black and white. I'd have thought when we had the conversation about the date when the world would end due to global warming you would have been able to sense the foolishness of your line of thought.
I'd recommend watching the film "Inside Job" or the CNBC documentary "House of Cards"
I'm not sure if that was intended to be some sort of "gotcha" moment, but clearly I've seen those documentaries, and have also heard any number of other points of view on the subject. Based on this statement it seems you have taken away clear opinions about what transpired and whose to blame, perhaps based in large part on those 2 documentaries.
Why were they telling their clients to invest in products that they knew were going to fail and then taking out insurance on them in the hopes that they would fail and make a ton of money off of said demise?
Regardless of what messages you take away from those productions, it is important to remember that they are, in fact, productions, and like any other source of information they have their biases and messages they want you to believe. For myself, I take away a different message. Namely, given the environment that was created in the early and mid 2000s, could I have reasonably expected anything else to transpire?
Personally, I think an even better assessment of the overall situation is the CNBC site called Boom, Bust, & Blame, of which House of Cards is one component. It's a long read, and may be a difficult one for some people, but in my opinion it's far more even-handed than is singling-out House of Cards and the messages contained therein. Plus, it doesn't rely so heavily on the stories that tug at the heart strings, which are so prominently featured in House of Cards, so it may not be so easily digested by some.
How is it that, in the trough of the 2009 recession, Americans whose livelihoods had been destroyed by far-off bankers were actually rallying "to demand that bankers be freed from 'red tape' and the scrutiny of the law?"
In my opinion this comes from the myth of the hyper-competent government. In the most general terms, people think that in America the business of business should be allowed to continue unmolested by government intrusion, and that everywhere the government needs to be involved they are already involved. Phrased differently, certainly they have learned their lessons from the subprime collapse and have taken steps to correct the situation, right? They don't necessarily understand who or how, but somebody out there is now looking out for them where they weren't before, right? Unfortunately, the general lack of understanding of the problem and misdirected blame means that your average person can't speak to the issue any more deeply than "Glass-Steagall." And, unfortunately, their faith that now somebody is out there looking out for them is terribly naive. Blame Bear Stearns or Goldman Sachs all you want. For me it's tough to pin blame on somebody who was simply doing what was inevitably going to be done by somebody.
There's nothing magical about it. Why are we even talking about Buffet if not to discuss the overall issue of debt?
I also don't think it's as black and white as "debt-good" or "debt bad." Because the US is a safe bet AND the debt should be reduced in the long run.
Regarding the boiling pit of sewage, I'm simply expressing the general sentiment of the right these days...how if we continue with the president and Democratic policies, our country will be destroyed. Isn't that what you think?
It's not really a matter of opinion as to what happened, Investor. The financial sector of this country was reckless and greedy. The facts speak for themselves and I guess I find it frustrating that you think these are merely opinions. Obviously, the government allowed them to be that way but this is a clear example of how laissez faire economics is just as much of a fantasy as socialism. It has to be a balance.
I do agree that people are naive in thinking that the government is looking out for them. We still have a Wall Street government in many ways. If, as you say, government should stay out of the way of business, do you honestly think that the financial sector is going to police itself?
Because the US is a safe bet AND the debt should be reduced in the long run.
Why should debt be reduced in the long run M?
It's not really a matter of opinion as to what happened, Investor.
Sure it is M - you have your opinion and that is all that matters!
The financial sector of this country was reckless and greedy. The facts speak for themselves and I guess I find it frustrating that you think these are merely opinions.
The opinion aspect of that is not related to whether or not people behaved recklessly and/or greedily. Of course they did. The opinion aspect of it is related to which actions are the root cause of the problem, and what if any steps can be taken to remedy the root cause. Where perhaps we are in disagreement is in identifying that root cause. Clearly for you the blame falls on the Goldman Sachses of the world, with the caricature of the financial planner sitting at his desk yelling "Yee Haw!" while siphoning money from the accounts of Johnny Lunchpail and Susie Homemaker. (That sounded better in my head...) But to stop the analysis there, as you apparently have done, is to tragically discount the role that easy money played. The easy money policiies that enabled politicians to promote homes for everybody. The easy money that Johnny and Susie took with the belief that there was no downside and with a complete lack of comprehension of what they were getting into.
Again, it really all boils down to this for me. Given the environment as it existed, the messages that politicians were delivering, and the mindset of a broad swath of the American population, is what happened any different from what you would have expected to happen? I can't see how. If "Wall Street Banks" would not have provided the financial vehicles that they did, somebody else would have, because the market existed for people to basically be given money freely, there existed a broad belief that if you didn't take that money you were being left behind, and the entire time the government not only allowed it but encouraged it. Hell, they got re-elected on it. I have yet to see a politician get (re-)elected on the platform of "I successfully protected you from yourself by preventing you from taking a loan!" In such an environment the options for financial institutions were few: either go along with it, while simultaneously hedging their position to guard against the inevitable collapse, or stay out of it, as some financial institutions chose to do. I would be hesitant to believe any of them stayed out of the market on moral grounds. Rather, the smart ones eschewed the quick, short term gain in favor of the stable, long term position.
Ultimately the point is this...somebody was going to provide the money to people, just like somebody is going to provide the drugs to an addict. Legal or not. If you want to hate the investment banks for doing that, you go ahead and do that. Heck, I feel better having a tangible enemy to blame. But if you want to be serious about identifying and fixing the root cause of the problem then you will have to go much deeper than caricatured enemies like Goldman Sachs and buzzwords like Glass-Steagall.
. The opinion aspect of it is related to which actions are the root cause of the problem, and what if any steps can be taken to remedy the root cause.
Certainly this is where government's faults can come in to the conversation. The rolling back of the protective barriers of Glass Steagall combined with a completely anemic SEC and Justice Department were the root causes. If we send just one of these guys to federal pound me in the ass prison for 6 months, that's the end of all the bullshit right away. It's nice that Dodd Frank regulates derivatives but it won't be enough because people like to make money and need more of it once they start making it.
(That sounded better in my head...)
Actually, I thought it was pretty funny!
I don't think we're far apart on the root causes. I guess I just get PO'd when people start coming at me with the CRA and Fannie/Freddie baloney...not that you were necessarily doing that. The government certainly set the stage for the bad behavior but then the financial sector took advantage of that. Everyone was making too much money so why do anything to fuck that up? I guess I'm naive in thinking that the leaders of our business community would have behaved better which they clearly did not.
But if you want to be serious about identifying and fixing the root cause of the problem then you will have to go much deeper than caricatured enemies like Goldman Sachs and buzzwords like Glass-Steagall.
The problem here is that then the folks at Goldman get to skate. I realize that's the government's fault, ultimately, but shouldn't they take ownership for what they did? It's amazing to me how the issue of personal responsibility only applies to poor people.
I don't think Glass Steagall is a buzz word. This was a law that clearly prevented disaster from happening and did so for several decades. Once GLB was passed in 1999, GS was pretty much decimated. Those protective barriers were not in place anymore and our financial sector became too interconnected (not too big) to fail.
If the last remanent (FDIC) of GS hadn't still been in place in 2008, people would not have been able to get money out of the banks. In essence, all of us were protected by the spirit of Franklin Delano Roosevelt.
Why should debt be reduced in the long run M?
Because of what happened in 2008 when the Russians tried to buy our debt off of the Chinese with the idea to turn it into junk to make us weaker. This is why I've always said it's a concern but not the end of the world and our civilization, as many on the right characterize it as, because it has more to do with how we are managing it and not so much the fact that we have it.
Because of what happened in 2008 when the Russians tried to buy our debt off of the Chinese with the idea to turn it into junk to make us weaker.
That's pretty weak, particularly since you argued vociferously that the debt didn't matter for a long time while you supposedly knew this.
Funny thing is, I can't seem to find any discussion of this Russian plot, or why anyone would consider it a credible threat. Remember the Krugman article you discussed that dismissed fears of Chinese control due to the U.S. debt they hold? Wasn't all that long ago. If the amount held by the Chinese isn't an issue, then the Russians buying it isn't either, is it?
You care to try again on why debt should be lower?
Because of what happened in 2008 when the Russians tried to buy our debt off of the Chinese with the idea to turn it into junk to make us weaker.
Wow. Tin Foil hat is a bit tight.
The issue of Russians buying America's debt from the Chinese was detailed in Andrew Ross Sorkin's Too Big To Fail.
You're also playing the game again, juris. I've always said that the debt is a concern, it's just not an apocalyptic one.
I've always said that the debt is a concern, it's just not an apocalyptic one.
But why Mark? If it is a concern now, if the debt was larger would it be more or less of a concern? If the concern is greater if the debt is larger - why? Because eventually too large a debt could be bad? Hmmmm.
Apocalypse? Boiling pit of sewage? Just what are you concerned could happen Mark?
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