A moment of silence, please, for all of us who are taking a bath in our 401-K’s and in the stock market today. And, in “breaking” news, the Fed rushes to the scene to administer oxygen only after the stock market experiences some brain damage.
No matter where you stand politically, the economy touches you. Even if you never buy stock, the market touches you. What is the correct fix? Too many seem to be looking in the wrong places for fixes. So, for a few lines, let me put my economics and professor hats on and brief you on things that just chap my hide.
1. Taxes are too high, still. Period. To get a bonus check and see barely half…and THEN to spend and get taxed to spend it…gimme a break. Don’t misunderstand…I’m happy to pay taxes and “render unto Caesar..” – but we are approaching the point of ridiculous. People are working harder just to make more money to pay the taxes they owe. And that is assuming that you are not in a tax bracket where the REAL penalties kick-in. No, the Alternative Minimum Tax is NOT fun; it is outdated and should be at the very least re-written or even abolished altogether. It is a hard lesson to teach my kids that a dollar is really worth about $0.68 after taxes.
2. Financial institutions are paying for their sins of subprime lending. We lived in a vortex for several years when these intitutions actually sought those with questionable credit. Why bail all of them out? If anything, my thought is that we should prosecute them for predatory lending practices. The banks took the form of casinos and broke people’s lives. Their house always wins…until now. How does it feel to fund another S&L-type bailout? And the ripple effect is felt across the entire globe.
3. Ahhh…so the government knows what’s best for us, eh? I just learned that in about five years, we will not be able to buy “regular” incandescent lights. We will be mandated to buy those silly flourescent-type swirling tube bulbs that make our skin look purple. Yet another way that the government thinks they know a thing or two about energy efficiency. Consider their attempt to mandate fuel efficiency. (Let’s all step back to fourth grade, because even a fourth-grader can understand this one). If government mandates fuel efficiency standards, then cars get more expensive to produce. When cars are more expensive to produce, the increased expense is considered ”pass-through” cost that ultimately the consumer funds. So, how exciting is it going to be to pay $80,000 for a car that gets 50 mpg? It all comes down to (here’s the fourth-grade simplicity) TOTAL COST OF OWNERSHIP. We will soon be the beneficiaries of a higher TCO with better fuel efficiency standards. Wow, am I excited. The change is designed to get car companies to move quicker to develop alternatives to fossil-fueled cars. I am not against the alternatives – I just want to be clear that we are not getting all of the story…which is that IT WILL COST MORE to own a car.
Let me be clear – I don’t want to live in any other country. Even with its flaws, our government and economy is second to none. However, we all need to be very aware that we usually don’t get all of the story. The rant today is purely economic. Before we devise another bailout, welfare plan, way to pay people for doing nothing or government program to determine which light bulbs will be outlawed; we better find a way to make a more nimble market for businesses and encourage investment. Can you say lower corporate and capital gains tax??
-MH
