It Could Be Worse
Posted on March 3, 2009
According to news reports, things could have been worse: “An asteroid of a similar size to a rock that exploded above Siberia in 1908 with the force of a thousand atomic bombs whizzed close past Earth on Monday, astronomers said on Tuesday.” Now, that really would have screwed up everyone’s 401K. The Obama Administration has had no comment on the meteor, but their budget plan has done pretty much the same thing to the stock market. You take away the incentives to profit and investors act negatively. ABC News reported that “rich people” are starting to find ways to be less rich so they won’t get socked with big taxes: “A 63-year-old attorney based in Lafayette, La., who asked not to be named, told ABCNews.com that she plans to cut back on her business to get her annual income under the quarter million mark should the Obama tax plan be passed by Congress and become law.” That’s what we need right now. People cutting back on their business. (He said sarcastically). I just got done reading a very interesting article by Michael Lewis in Vanity Fair about the rise and complete collapse of Iceland’s banking industry (http://www.vanityfair.com/politics/features/2009/04/iceland200904), which, truth be told, has continuing ramifications for the collapse of our own banking system. It is a chilling story (pardon the pun), about how greed, hubris, and culture combined to create the perfect bubble that has hurt all of us. Ben Bernanke says today that we need more to be more aggressive in stimulating an economy that seems destined to be in the dumps for a while. But I doubt he thinks that raising taxes on investors is a very smart strategy, though. It would behoove the new Administration to focus first on the financial industry. It seems to me that that is the meteor that has exploded over our economy, and if we don’t fix that first, we are doomed.