Daily Archives: March 3, 2012

David Stockman doesn’t like what he sees coming

Probably with good reason. I’m a little curious to hear a man who lives in Conyers Farm on wealth accumulated in his days as a leveraged buyout guy at Blackstone railing against Wall Street, excessive debt and the low taxes we all pay but as I try to gently (and so futilely) tell Dollar Bill, address the argument, not the man.

Q: Why are you so down on the U.S. economy?

A: It’s become super-saturated with debt.

Typically the private and public sectors would borrow $1.50 or $1.60 each year for every $1 of GDP growth. That was the golden constant. It had been at that ratio for 100 years save for some minor squiggles during the bottom of the Depression. By the time we got to the mid-’90s, we were borrowing $3 for every $1 of GDP growth. And by the time we got to the peak in 2006 or 2007, we were actually taking on $6 of new debt to grind out $1 of new GDP.


A: Let the Bush tax cuts expire. Let the capital gains go back to the same rate as ordinary income. (Capital gains are taxed at 15 percent, while ordinary income is taxed at marginal rates up to 35 percent.)

Q: Why?

A: Why not? I mean, is return on capital any more virtuous than some guy who’s driving a bus all day and working hard and trying to support his family? You know, with capital gains, they give you this mythology. You’re going to encourage a bunch of more jobs to appear. No, most of capital gains goes to speculators in real estate and other assets who basically lever up companies, lever up buildings, use the current income to pay the interest and after a holding period then sell the residual, the equity, and get it taxed at 15 percent. What’s so brilliant about that?

Q: You worked for Blackstone, a financial services firm that focuses on leveraged buyouts and whose gains are taxed at 15 percent, then started your own buyout fund. Now you’re saying there’s too much debt. You were part of that debt explosion, weren’t you?

A: Well, yeah, and maybe you can learn something from what happens over time. I was against the debt explosion in the Reagan era. I tried to fight the deficit, but I couldn’t. When I was in the private sector, I was in the leveraged buyout business. I finally learned a heck of a lot about the dangers of debt.

I’m a libertarian. If someone wants to do leveraged buyouts, more power to them. If they want to have a brothel, let them run a brothel. But it doesn’t mean that public policy ought to be biased dramatically to encourage one kind of business arrangement over another. And right now public policy and taxes and free money from the Fed are encouraging way too much debt, way too much speculation and not enough productive real investment and growth.


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All your bases are belong to us

Hackers elect cartoon character to D.C. school board University of Michigan professor and two students did it -took them less than two hours – after the board dared anyone to try to breach their “secure” system.

Earlier this week I posted an article on  Connecticut’s Demmerkrats pushing for same day voter registration. While online voting is not part of that scheme, yet, the Democrat’s Secretary of State did say, [p] eople should be able to register and vote on the same day. We have computers now.”

I think I know where this is going.


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Daily Kos speaks


Remember her?

North Korea no worse than South Korea or the USA

North Korea begs to differ: Three generations of defectors’  families will be executed.

It’s not just posters on Daily Kos who support North Korea, of course – the left loves the place, just as they love Venezuela and Cuba. Give me a communist dictator, I’ll show you Sean Penn.


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And you thought the YMCA dispute was complicated

Ipswich, MA: Testing donor’s intent, 350 years later.


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Feel safer now?


Janet Napolitano says she's a terrorist. Or our TSA head is just jealous.

Woman forced to milk her breasts in airport’s public toilet to prove her breast pump was “real”. We have spent billions on TSA airport security in the past ten years, we are not the least bit safer and we have created a force of thugs dressed in rented uniforms to intimidate and harass passengers. Government gone amok.


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Back from Mussel Shoals


Quick trip because these shoals are at Tod’s (at the western outlet from Eagle Pond, should you be so inclined). linguine and mussels tonight. You don’t even need a clam rake to harvest mussels, by the way, in fact a rake just breaks their shells. See them, pick them up, albeit a little effort’s involved in twisting them free from the rocks and fellow mussels they entwine themselves in. Wussies (is that a homophobic term?) can wear rubber gloves – I use bare hands because it’s easier.


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Obama: when will the white middle class get the benefits they’re entitled to?

Well no, the Great Unifier didn’t actually say that, but here’s what his hand-picked Attorney General did say:

Holder expressed support for affirmative action, saying that he “can’t actually imagine a time in which the need for more diversity would ever cease.”

“Affirmative action has been an issue since segregation practices,” Holder said. “The question is not when does it end, but when does it begin. … When do people of color truly get the benefits to which they are entitled?”

You could ask why the Attorney General, an officer of this country who is supposed to represent all its citizens, feels that some citizens are more equal than others. Or you might ask the basis for his assertion that blacks are entitled to benefits ripped from whites, hispanics, asians and anyone else who unlike Holder and his boss, doesn’t have an African ancestor.

Just as an example, how is it that U.S. citizens of Japanese descent, 18-year-old kids who weren’t even alive when discrimination against blacks was still practiced in this country, have a quota imposed on them by the admission committees of California schools? If I remember my American history, the parents and grandparents of these children were subjected to severe discrimination before the War and during the war saw their property confiscated while they themselves were rounded up and placed in concentration camps – where’s Obama’s concern for affirmative action, reparations and recognition of some sort of entitlement for them?

Or you could just reflect on the fact that the Attorney General serves at the pleasure of his president and the president serves at the pleasure of us citizens, and vote accordingly.


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