[Lobowolf]

jdonn, on Sep 30 2008, 05:12 PM, said:

Ok, I doubt I'll drag this on much farther since I feel like what you post keeps shifting just enough to keep the last thing consistent. It simply seems to me that you can find distaste in what she said, but that if it had any impact at all on the vote, the blame goes to only those (Republican[s]) who were impacted, not her. And since they are the ones saying she "poisoned" the vote...

I think that an overwhelming percentage of the blame goes to anyone who changed his or her vote. I think that ultimately (to the extent that there's blame for the vote), the blame has to mostly go to the people who voted.

However, particularly in view of the fact that most people give credit to those congress members who can bridge gaps and get bipartisan support for important measures, I think that some of the blame should fall on her as well; however, that blame is "theoretical," unless we know of a particular congress member who changed his or her vote because of her. I think she made a very bad (even reckless) choice; I don't know if that choice had an impact on the vote, though I suspect it didn't. Next time, it might.

[Lobowolf]

Or to be succinct, for a change, I never meant to originally imply that Pelosi was the reason it didn't pass; I meant to imply that her comments were stupid and sure didn't help, and (assuming you want a bailout to pass) I wouldn't have her do it again.

In blackjack terms, I'd say it was about like seeing someone hit an 18 against a face card, bust, and then watching the dealer turn over a 20. The action didn't hurt; it just wasn't smart. And if I had a stake in the results, I wouldn't want him to do it again.

[PassedOut]

Pelosi's speech was poorly timed because it gave the republicans an opening to blame the democrats for the failure of the bailout legislation. In fact, hardly any republicans were on the floor to hear her speech, and no one seemed to be bothered by it at the time. (You can look it up.)

After the republican leadership failed to produce the votes to pass the legislation that the Bush administration had declared essential for the nation, Boehner made his comments to deflect some of the criticism that he knew was coming. He simply provided a talking point to take some of the spotlight from him and his leadership.

No problem. All politicians do that (and they make partisan speeches when the rest of us wish they would cool it).

Shadegg: GOP Leaders Made "stupid Claim" By Blaming Pelosi Speech

Quote

Republican Rep. John Shadegg said Tuesday that House Minority Leader John Boehner and other Republican leaders made a “stupid claim” by alleging that Nancy Pelosi’s speech changed any minds on the bailout.

Quote

Shadegg said that he doesn't know of a single GOP vote that shifted because of the speech.

On Monday evening, Rep. Darrell Issa (R-Calif.), a lead opponent of the bailout, told the Crypt that the notion was "nonsense" and mocked the possibility that a Republican would be shocked or offended by the partisan nature of a Democratic speech.

I think most folks realized that Boehner was lying and just laughed it off.

[Al_U_Card]

luke warm, on Sep 30 2008, 05:15 PM, said:

cherdano, on Sep 30 2008, 12:17 PM, said:

luke warm, on Sep 30 2008, 04:09 AM, said:

why not just do away with the capital gains tax?

Jimmy, no serious economist from which I read comments in the last few days took this idea seriously. There is just no reason why this should work. Eliminating capital gains tax doesn't mean that suddenly everybody invests into the mortgage marked or starts buying investment banks, and the liquidity problem gets solved. (And I read about this in a lot of different places.)

I would suggest that you subtract some economic credibility from whatever source you got that idea from, seriously.

arend, there are economists who do say that eliminating the cgt would result in much more money in the markets... nobody posting here has the expertise to say it would do no good, imo

Back in the '80's Brian Baloney and the Conservatives had a CGT freebie to get rid of our tax dollars. It did nothing for the economy but helped a lot of his friends.

[cherdano]

luke warm, on Sep 30 2008, 04:15 PM, said:

cherdano, on Sep 30 2008, 12:17 PM, said:

luke warm, on Sep 30 2008, 04:09 AM, said:

why not just do away with the capital gains tax?

Jimmy, no serious economist from which I read comments in the last few days took this idea seriously. There is just no reason why this should work. Eliminating capital gains tax doesn't mean that suddenly everybody invests into the mortgage marked or starts buying investment banks, and the liquidity problem gets solved. (And I read about this in a lot of different places.)

I would suggest that you subtract some economic credibility from whatever source you got that idea from, seriously.

arend, there are economists who do say that eliminating the cgt would result in much more money in the markets... nobody posting here has the expertise to say it would do no good, imo

Given that I haven't come across any of them, I think it is fair to assume that they are in a small minority. (Could you point link me to one of them, btw?) This should be enough of a reason to be a little more skeptical about their claims.

The attitude "none of us has the expertise to judge this, and there are some who call themselves 'economist' on either side of the issue" is non-productive, it is the same attitude that would lead one to conclude "There is no way to tell whether global warming is happening, there are "experts" on either side of this issue".
Everybody should try to make educated guesses which of the economists are right. Given that there seems to be a huge majority on one side of the issue, this should be an easy guess.

[luke warm]

cherdano, on Sep 30 2008, 07:16 PM, said:

Given that I haven't come across any of them, I think it is fair to assume that they are in a small minority. (Could you point link me to one of them, btw?) This should be enough of a reason to be a little more skeptical about their claims.

The attitude "none of us has the expertise to judge this, and there are some who call themselves 'economist' on either side of the issue" is non-productive, it is the same attitude that would lead one to conclude "There is no way to tell whether global warming is happening, there are "experts" on either side of this issue".
Everybody should try to make educated guesses which of the economists are right. Given that there seems to be a huge majority on one side of the issue, this should be an easy guess.

i agree that we all read the experts we choose, for whatever reasons... but posting links will only get those on both sides to post counter-links that prove their experts are better... but here are a few

http://www.cato.org/...php?pub_id=1101

http://www.nationalreview.com/nrof_luskin/...00601270946.asp

http://www.heritage..../Taxes/wm47.cfm

[helene_t]

Jimmy: Those links are quite partisan and besides they just say that lowering capital gain tax is good for economic growth. Arend was talking about capital gain in the context of the current credit crisis.

[Al_U_Card]

Looks like lowering (removing) CGT is popular with those that have CG and not at all for those that don't...

[cherdano]

luke warm, on Oct 1 2008, 04:25 AM, said:

cherdano, on Sep 30 2008, 07:16 PM, said:

Given that I haven't come across any of them, I think it is fair to assume that they are in a small minority. (Could you point link me to one of them, btw?)  This should be enough of a reason to be a little more skeptical about their claims.

The attitude "none of us has the expertise to judge this, and there are some who call themselves 'economist' on either side of the issue" is non-productive, it is the same attitude that would lead one to conclude "There is no way to tell whether global warming is happening, there are "experts" on either side of this issue".
Everybody should try to make educated guesses which of the economists are right. Given that there seems to be a huge majority on one side of the issue, this should be an easy guess.

i agree that we all read the experts we choose, for whatever reasons... but posting links will only get those on both sides to post counter-links that prove their experts are better... but here are a few

http://www.cato.org/...php?pub_id=1101

http://www.nationalreview.com/nrof_luskin/...00601270946.asp

http://www.heritage..../Taxes/wm47.cfm

Jimmy, none of the links you give even claim that lowering capital gains taxes would solve the current financial crisis. Whether lowering this tax is a good idea is a reasonable debate. The claim that it solves the current situation is not. I wouldn't be surprised if it's one of the most laughable economic ideas spit out by one of the 4 caucuses in Congress.

[Al_U_Card]

One of the main issues in any speculation bubble (and its bursting) is LEVERAGE.

When the fed removed the 12:1 cap on leverage back in 2004 it was only a matter of time that the heavy bettors would run afoul of their own greed.

And who was leveraged more than 25:1?????

Bear Stearns, Lehman Bros. Fannie Mae, Freddie Mac, AIG.....what a surprise!

[Lobowolf]

Al_U_Card, on Oct 1 2008, 07:23 AM, said:

Looks like lowering (removing) CGT is popular with those that have CG and not at all for those that don't...

Well, yeah...and guess who supports higher taxes on cigarettes and who opposes them? Like the man said...a politician whose plan is to rob Peter to pay Paul can always count on Paul's support.

[luke warm]

helene_t, on Oct 1 2008, 06:23 AM, said:

Jimmy: Those links are quite partisan and besides they just say that lowering capital gain tax is good for economic growth. Arend was talking about capital gain in the context of the current credit crisis.

that's why i hesitated to post links, helene... i post links from sources i read, others do the same, etc etc... as for the present problem, i thought it was one basically of liquidity (maybe mike777 and others can weigh in on that)

cherdano, on Oct 1 2008, 10:02 AM, said:

Jimmy, none of the links you give even claim that lowering capital gains taxes would solve the current financial crisis. Whether lowering this tax is a good idea is a reasonable debate. The claim that it solves the current situation is not. I wouldn't be surprised if it's one of the most laughable economic ideas spit out by one of the 4 caucuses in Congress.

as i said to helene above, i thought it was a liquidity crisis more than anything else... as i also said, links are two-edged swords, but here are a few concerning this issue and cutting capital gains

http://thehill.com/leading-the-news/rsc-pi...2008-09-23.html

http://www.usnews.com/blogs/capital-commer...et-bailout.html

http://www.npr.org/templates/story/story.p...toryId=95026117

as i said in my first post in this thread, i have no idea whether or not the bailout is the way to go... i keep hearing that if we don't do it we're doomed, and maybe that's so

[mike777]

Jimmy given that money is fungible I do not know why this bailout plan is better than open market operations or getting rid of the capital gains tax.


I think we can all understand why getting rid of the capital gain tax and therefore flooding the economy with trillions in cash, which makes the top 2% much richer and the bottom 40% not a penny richer in the short term will never pass.

I have not read anything that compares one to the other.

Everyone seems to be 100% focused on the bailout plan is best, perhaps it is for some reasons, I do not know.

From what I read there is a liquidity crises, inst will not loan. There is a lack of price discovery on alot of these mortgage instruments. I assume massive liquidy helps these problems while it may create other issues.

It seems falling home prices is making the situation worse.

Sept. 29 (Bloomberg) -- The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression.

The Fed increased its existing currency swaps with foreign central banks by $330 billion to $620 billion to make more dollars available worldwide. The Term Auction Facility, the Fed's emergency loan program, will expand by $300 billion to $450 billion. The European Central Bank, the Bank of England and the Bank of Japan are among the participating authorities.

The Fed's expansion of liquidity, the biggest since credit markets seized up last year, came hours before the U.S. House of Representatives rejected a $700 billion bailout for the financial industry. The crisis is reverberating through the global economy, causing stocks to plunge and forcing European governments to rescue four banks over the past two days alone."

[luke warm]

mike777, on Oct 1 2008, 05:53 PM, said:

I think we can all understand why getting rid of the capital gain tax and therefore flooding the economy with trillions in cash, which makes the top 2% much richer and the bottom 40% not a penny richer in the short term will never pass.

yeah, i understand that too... the question is, would it in the end be good or bad for the country? i prefer market answers where possible, assuming they exist

[cherdano]

luke warm, on Oct 1 2008, 04:41 PM, said:

cherdano, on Oct 1 2008, 10:02 AM, said:

Jimmy, none of the links you give even claim that lowering capital gains taxes would solve the current financial crisis. Whether lowering this tax is a good idea is a reasonable debate. The claim that it solves the current situation is not. I wouldn't be surprised if it's one of the most laughable economic ideas spit out by one of the 4 caucuses in Congress.

as i said to helene above, i thought it was a liquidity crisis more than anything else... as i also said, links are two-edged swords, but here are a few concerning this issue and cutting capital gains

http://thehill.com/leading-the-news/rsc-pi...2008-09-23.html

http://www.usnews.com/blogs/capital-commer...et-bailout.html

http://www.npr.org/templates/story/story.p...toryId=95026117

as i said in my first post in this thread, i have no idea whether or not the bailout is the way to go... i keep hearing that if we don't do it we're doomed, and maybe that's so

Jimmy, I find this discussion a bit difficult. You say "how about reducing capital gains taxes" to solve the crisis. I say "I don't know a single serious economist who treats this suggestion by the House Republicans seriously".

Now you give three links, among which
- one of them just describes the proposal by the House Republicans,
- one of them just discusses in general terms alternatives to the bailout (which would happen to any proposed solution - no matter which solution is proposed by the Treasury, there would be reasonable economists disagreeing for various reasons)
- and finally one of them says that among many other things we absolutely have to do, it might also be a good idea to drastically cut the capital gains tax.

Let me double-down on my original claim. The proposal by the House Republicans to solve the crisis by suspending the capital gains tax is ridiculous. It seriously disqualifies them, and puts their credibility in question.

[mike777]

Warren Buffet last night:
1) We should tax capital gains at the same rate as ordinary income.
2) Lift the cap on social security taxes.
3) If we buy these mortgages and mortgage derivates at market price, this is a wonderful, great deal for all Americans.....He would love to be able to take 1% or more. BUT buy at market prices. Example if we are going to buy 700 million of one type of security......sell 100M in the market.......then have the govt buy the remaining 600M at same price.
4) He is very upbeat and positive on the American Economy long term, if we make the correct decisions now hopefully we can cap unemployment at 7% if not it make take 5 more years to fix and millions and millions more will be unemployed.


http://www.charlierose.com/home

[luke warm]

cherdano, on Oct 2 2008, 05:34 PM, said:

Let me double-down on my original claim. The proposal by the House Republicans to solve the crisis by suspending the capital gains tax is ridiculous. It seriously disqualifies them, and puts their credibility in question.

you might be right, arend... hypothetically, if the cgt was eliminated what do you think would happen in the economy?

[mycroft]

Hypothetically? Nobody that matters would lose their homes, nor their life savings, nor their guaranteed pensions, nor the lobby and campaign money.

In other words, the rich would get richer, the poor would not, no fewer houses would be foreclosed on, but that's okay, "I've got mine, Jack" and it's not like any of the foreclosures are Our Kind of People, Dear.

Of course, the current path of "give us a whole bunch of money we don't actually have and things will be okay" is going to achieve the same goal. Probably at the same cost, in the long run.

What, cynical, me?

[y66]

If your goals are to increase savings and allocate capital efficiently then eliminating the capital gains tax is a good idea. But I don't see how this is relevant for the current problem since the effects of such a policy are long term. In the short term, eliminating capital gains taxes can make things worse, if you don't cut government spending proportionally, since it immediately lowers tax revenues, which leads to increased government borrowing at a time when the government needs to be lending, for example, in the way that Warren Buffet is now lending to Goldman Sachs and GE. Maybe this Buffet style lending (smart, hard-nosed, return commensurate with risk) is what some posters are looking for when they refer to "market based" solutions. But the term "market based solution" seems like an oxymoron to me when the problem is that the market has temporarily ceased to exist.

[mike777]

The market temporarily failed to exist because it seemed banks and lending inst could not trust anyones including each others financial statements. There was a lack of price discovery. This despite the fact all of these exotic instruments are suppose to be marked to market.

I guess it was a shock to all these huge financial inst if you take on trillions of risky debt (affordable housing loans, mandated by law, forced lending to poorer people), then make this debt AAA rated only because FNMA,(usa) govt backs it and then the debt goes into massive foreclosure, this is shocking.

Banks through CRA were mandated to lend to poor credit risks. They did not mind so much as they turned around and sold the loans to FNMA who was required to buy trillions of this stuff. FNMA buying it made the paper AAA rated. Keep in mind loans are basically streams/flows of cash. Now Investment banks cut up these cash flows in exotic fashions and sold them but the underlying cash flows were rated AAA in terms of safety backed by FNMA and assumed backed by you the taxpayer.

Shockingly when everyone tried to sell trillions/billions of this stuff all at once.......there were a lack of buyers.


Wells Fargo's bid may trigger the end or the start of the end of this fear.

Perhaps the OPen Market Operations of the 29th helped in more than one way.