(UPDATED) Why The Global Financial Meltdown Is Like A Conflagration On A Distant Planet
Aug 9th, 2011 | 9 responses
I haven’t invested in stocks since the dot com bubble burst in March 2000 and my 401(k) was pretty much wiped out even though my investments were toward the conservative side. When the dust had settled, I was out about $60,000, a not inconsiderable sum that would have come in handy when it came time to retire in 2009. Well, I’m still working.
Nearly half of American households owned stocks in 2000, but that number has headed steadily south as the wealthiest Americans consolidate their grip on practically everything of value that can’t be nailed down and our trust in financial institutions ebbs. Today less than 20 percent of the bottom 90 percent of Americans wealth-wise own stocks, and come to think of it, none of my closer friends are invested in the markets, while the Dear Friend & Conscience, who had considerable holdings, didn’t like the omens she was seeing beginning in 2005 — or her Merrill Lynch stockbroker lying through his teeth — and converted her stocks into CDs.
All of this makes the current global financial turmoil seem like a conflagration on a distant planet.
I find the widely-accepted view that the turmoil is due in large part to the U.S. debt crisis and the subsequent downgrade of Uncle Sam’s bonds by Standard & Poors to be unconvincing. The bigger problem has been and remains the economies of European countries. Besides which, the U.S. economy has been in the crapper for several years, Congress has been abrogating its financial responsibilities for many years, the financial markets have been robust in the last year or so, and big corporations have been making obscene profits.
So why now?
Speaking of besides whiches, S&P is a criminal enterprise that like its competitors, you probably don’t recall, whistled past the graveyard as Enron self immolated and one Wall Street firm after another went on a subprime junk buying spree but kept their triple-A ratings. The toxic mess that Wall Street created helped deepen the Bush Recession and more or less led to where we are today.
Where we — that is to say you and I — are on the 9th day of August is screwed, glued and tattooed, and I am not heartened by President Obama’s assertion on Monday that “we’ve always been an always will be a triple-A country.”
Methinks once the turmoil passes — and there was a big sign on Wall Street yesterday that it already has in the form of a 429-point leap in the Dow — it is time to get real serious about raising the taxes of the super rich, either directly or by closing loopholes, and Obama will be abrogating his responsibilities if he doesn’t push hard on that.
Americans of most stripes have lost faith in the political system just as my friends and I have lost faith in the financial system, and compelling the super rich to ante up is a long overdue corrective. Besides which, it will be a terrific campaign theme against those wealthy-coddling Republicans in 2012.
9 Responses to “(UPDATED) Why The Global Financial Meltdown Is Like A Conflagration On A Distant Planet”
Class warfare doesn’t impress those with class.
Congress neglected its financial duties? Yes — it never began serious spending control and reduction, and above all else, entitlement reform.
If Obama plays the class-warfare card or demands gimmicky higher taxes, he loses respect (at least among the respectable).
Obama and Congress bungled a huge stimulus, a temporary, one-time reprieve from discipline and propriety we permitted them. They failed. Only a fool would want the same thing, or worse, something bigger (i.e., worse), now. We don’t have the money, anyway.
DLS:
Off base per usual. Taxing the super rich at an appropriate level is not “gimmicky,” nor is it class warfare. It’s called paying your fair share.
But I admire you for defending these poor, lonely souls at the top of the food chain.
Don’t tax you, don’t tax me, tax that man behind the tree. “fair share” is subjective.
YEAH!
Expire the Bush Tax cuts for the rich, raise Taxes yet again, and, raise Taxes again and again if necessary!
Cut defense, cut farm and business subsidies.
Start government sponsored hiring programs for the skilled and WFP type work/training programs for the unskilled.
Do it like Roosevelt did. It worked then and it WILL work now.
“Taxing the super rich at an appropriate level is not “gimmicky,” nor is it class warfare. It’s called paying your fair share.”
It’s also referred to as shared sacrifice, but that only makes sense to those who consider the USA to be one country. It’s an old and patriotic concept, probably doesn’t lend itself well to some modern “sensibilities”.
As goes the middle class, so goes America. Until steps are taken to provide opportunity and increase the spending power of the middle class, demand for goods and services will stay limited, limiting the profits of businesses, and eventually destroying share prices across the board. Since mostly the wealthy own stocks now, they will lose a great deal more money than the middle and lower classes who can no longer play the stock market. The wealthy can pay it in taxes or they can pay it(and at a much steeper rate) when the economy collapses.
It’s also referred to as shared sacrifice, but that only makes sense to those who consider the USA to be one country.
I disagree that changing the current tax rates on just one group is shared sacrifice, in fact it’s the opposite. Letting ALL the Bush tax cuts expire would meet that definition and be much more likely to provide enough revenue to balance the budget.
Fine with me DaGoat, let em expire. It would be the rational and conscionable thing to do.
As usual, Shaun, you’re wrong again. Facts are facts.
The false equivalence of tax progressivity with “fairness” [sic] is just a pathetic appeal to deranged emotion. Same with other stupid kinds of evasive euphemisms we see such as “shared [sacrifice]” (or in years past, calling progressive taxes simply “sharing,” strong-arm style) and also “revenues” for taxes or tax increases. Total BS that discredits the user even more than itself.
What’s being sought are unquestionably class warfare gimmicks, which are haphazard, stupid examples of tax increase, not to mention reform. It’s also a fact that the motives behind it are envy and resentment. Facts are facts. The earth is round, deny it as you do. (Too close for comfort?)
* * *
Yes, letting all the Bush tax cuts (current lower tax rates) expire is an easy partial solution to the budget. However, much more important is true tax reform. The expiration merely is an arbitrary and clumsy, however easy, measure. What’s needed is reform. It’s imperative especially because we need to be prepared to raise taxes in the future when the Baby Boomers retire.
I’ve recently re-posted serious examples of needed tax reform, including reasonable and sensible ideas for progressive income taxation if we were to stoop to it, maybe as a deal with Dems.
* * *
The problem the federal government has is excessive and undisciplined spending, and that’s where the real solution is found, particularly in entitlement reform. No “reform” with this is serious or honest budget reform. Go ahead, seek the tax reform first, but the real job is entitlement and to a lesser extent, other spending, reform. That defines real, serious, reform. (So does the other part of what matters, the overdue rationalization of federal, state, and local governments to decide which government does what within constitutional federal constraints, as well as mature introspection and judgment regarding what should be public and what should be (and remain) private. Too challenging for many, too repellent for the wrongful, but there it is, in front of everybody’s faces, as it has been for ages.)