Alternative title of this dairy was gonna be "Thomas Friedman and Robert Samuelson are Big Fat Idiots," inspired by this example of stupidity reported by Baker:
Thomas Friedman Competes for the Nobel in Ignorance
Thomas Friedman told readers that: "But now it feels as if we are entering a new era, 'where the great task of government and of leadership is going to be about taking things away from people,' . . ."
Unfortunately, Mr. Friedman apparently doesn't talk to anyone who has ever taken any economics. There are no serious forecasts that do not project that productivity will continue to grow for the indefinite future, and many project that productivity will grow at a more rapid pace than it did in the years from 1973-1995. This means that there is no reason, except incompetent economic management and/or the continuing upward redistribution of income, why the vast majority of the population should not experience improvements in living standards. This would mean an increase in both public and private services.
But, of course, upward redistribution of income has become inside-the-Beltway, bipartisan no-alternative common sense. We've had for years in the U.S. 15% income tax on many of the wealthiest and 25% on the middle class stiffs. Bipartisanly. Here's a comment on an article in the WaPost:
Gold-Plated Garbage is Still Garbage: The Fund Managers' Tax Break
While tens of millions of ordinary workers pay taxes at a 25 percent marginal rate, many of Wall Street's highest paid dealmakers get to pay tax at just a 15 percent rate. They get this lower rate because of the special treatment of "carried interest," also known as the fund managers' tax break.
The Washington Post has a piece about how the populists of the left and right can't seem to get the Senate to take away this special break for many of the richest of the rich. While the Post piece is useful in calling attention to the absurdity, that at this time of intense populist anger, this huge handout to the rich continues unchallenged, it implies that there is some rationale for the tax break.
The basic logic of "carried interest" is extremely [simple]. Most fund managers get much of their pay on commission. In addition to getting a flat percentage of the funds being managed (typically 1-2 percent annually), they usually get paid a share of the fund's earnings, typically 15-20 percent. This latter payment is the "carried interest." As a result of the fund managers' tax break, this carried interest is taxed at the 15 percent capital gains tax rate rather than being treated as normal wage income.
The Post errs by presenting the utter nonsense given by the tax break's defenders without challenge. There is no logical distinction between carried interest and the commission payments that a shoe salesman or a realtor receives. This commission payments are taxed as normal wage income. There is no reason, other than the power of Wall Street lobbyists, to treat the commissions of fund managers differently. The Post should have included someone who made this point.
Baker is also critical of the Federal Reserve, which was irresponsible for the Housing Bubble, but has also always been directed by law to pursue full employment. Well, here's Baker's criticism of both NYT economic reporting and the Fed:
Fed Exit Strategy? Where is the Article on the Fed Strategy for Full Employment?
The NYT has an analysis this morning of the Fed's "exit strategy" from its quantitative easing policy that was designed to support the economy after the collapse of the housing bubble. It seems that the Fed is pursuing an exit strategy, so it is reasonable for the NYT to report on the policy.
However, this implies the Fed is also violating the law that governs its operation. The law requires it to pursue the goals of price stability and high employment, which is defined as 4.0 percent unemployment. The Fed's own projections show the unemployment rate remaining above 5.0 percent for the next 5 years. With no serious threat to price stability on the horizon (the core inflation rate has been falling), there is no obvious justification for the Fed's failure to more aggressively pursue expansionary policy.
The NYT and the rest of the media should be running stories on the Fed's blatant violation of the law.
My sub-text now overt is 'Stop reading the fucking NYT and WaPost for economics 'reporting' and commentary'. These are Milton Friedmanesque economic propaganda sites, and theirs is a particularly right-wing project right now. |
