There is a peculiar reality that is coming out of the intense negotiations taking place in Washington and in the media regarding the stimulus package. I was very disappointed to hear that the 15K tax credit for home buyers was being taken out of the plan. A tax credit, unlike a deduction comes right off the top of our yearly payable. Given the love affair Democrats (except the president that is) have with tax revenue it comes as no surprise that the large credit wouldn't survive Congress. But the credit was important in a number of ways in that it signaled two promises of government that belly flop in the pool of reality.
First of the old saying, by the people, for the people, of the people, it all seems fairly academic. Government does what it has to do in order to serve the republic and it doesn’t matter whether you’re on the train or not. Sad a truth as it is the rules will always favor corporate needs (check the video of the “Grilling Lite” the Wall Street bankers took in Washington the other day) and their deep donor pockets that assure another day closer to re-election. The second glaring omission is all the commotion going on in Washington is the absence of any kind of neither detail nor confidence regarding any efforts to tackle the two biggest problems with the economy, housing and what to do with toxic assets.
Now not being one to believe in the almighty power of positive thinking, since it never stopped a sinking ship from sinking, I’ve always believed that in the best interests of the country solution should come with a healthy contribution of support from the general population, which is the same thing as say in that the rich won’t pay for it and the poor won’t pay for it the middle class will pay for it, as it always has. And if you don’t like it, don’t bother moving to France, they do the same, as do the English, the Japanese and every other industrialized democracy on earth.
So the debate going forward is, "is it working"? Obviously there are those who won’t think so, and those who do. I prefer to watch the indicators. Is confidence rebounding next month? Is Capacity Utilization showing support at 73.6%? Only jobs and consumption would get those two indicators going and historically speaking it happens when we lest expect it.
Rule:Everyone goes insane simultaneously and comes to their senses one at a time.
February 13, 2009
CRISIS, WHAT CRISIS?
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