From Fannie Mae to "WHERE?"

[iddee]

Here is a quick look into 3 former Fannie Mae executives who helped bring down Wall Street.
Franklin Raines was a Chairman and Chief Executive Officer at Fannie Mae . Raines was forced to retire from his position with Fannie Mae when auditing discovered severe irregulaties in Fannie Mae 'S accounting activities. At the time of his departure The Wall Street Journal noted, ' Raines, who long defended the company's accounting despite mounting evidence that it wasn't proper, issued a statement late Tuesday conceding that 'mistakes were made' and saying he would assume responsibility as he had earlier promised. News reports indicate the company was under growing pressure from regulators to shake up its management in the wake of findings that the company's books ran afoul of generally accepted accounting principles for four years.' Fannie Mae had to reduce its surplus by $9 billion.

Raines left with a 'golden parachute valued at $240 Million in benefits. The Government filed suit against Raines when the depth of the accounting scandal became clear. http://housingdoom.com/2006/12/18/fannie-charges/ . The Government noted, 'The 101 charges reveal how the individuals improperly manipulated earnings to maximize their bonuses, while knowingly neglecting accounting systems and internal controls, misapplying over twenty accounting principles and misleading the regulator and the public. The Notice explains how they submitted six years of misleading and inaccurate accounting statements and inaccurate capital reports that enabled them to grow Fannie Mae in an unsafe and unsound manner.' These charges were made in 2006. The Court ordered Raines to return $50 Million Dollars he received in bonuses based on the miss-stated Fannie Mae profits.
Tim Howard - Was the Chief Financial Officer of Fannie Mae . Howard 'was a strong internal proponent of using accounting strategies that would ensure a 'stable pattern of earnings' at Fannie . In everyday English - he was cooking the books. The Government Investigation determined that, 'Chief Financial Officer, Tim Howard , failed to provide adequate oversight to key control and reporting functions within Fannie Mae ,'
On June 16, 2006 , Rep. Richard Baker, R-La., asked the Justice Department to investigate his allegations that two former Fannie Mae executives lied to Congress in October 2004 when they denied manipulating the mortgage-finance giant's income statement to achieve management pay bonuses. Investigations by federal regulators and the company's board of directors since concluded that management did manipulate 1998 earnings to trigger bonuses. Raines and Howard resigned under pressure in late 2004.
Howard's Golden Parachute was estimated at $20 Million!
Jim Johnson - A former executive at Lehman Brothers and who was later forced from his position as Fannie Mae CEO . A look at the Office of Federal Housing Enterprise Oversight's May 2006 report on mismanagement and corruption inside Fannie Mae , and you'll see some interesting things about Johnson . Investigators found that Fannie Mae had hidden a substantial amount of Johnson 'S 1998 compensation from the public, reporting that it was between $6 million and $7 million when in fact it was $21 million.' Johnson is currently under investigation for taking illegal loans from Countrywide while serving as CEO of Fannie Mae.
Johnson's Golden Parachute was estimated at $28 Million.

WHERE ARE THEY NOW?
FRANKLIN RAINES? Raines works for the Obama Campaign as Chief Economic Advisor
TIM HOWARD? Howard is also a Chief Economic Advisor to Obama
JIM JOHNSON? Johnson hired as a Senior Obama Finance Advisor and was selected to run Obama's Vice Presidential Search Committee

IF OBAMA PLANS ON CLEANING UP THE MESS - HIS ADVISORS HAVE THE EXPERTISE - THEY MADE THE MESS IN THE FIRST PLACE. Would you trust the men who tore Wall Street down to build the New Wall Street ?

[George Fergusson]

WHERE ARE THEY NOW?
FRANKLIN RAINES? Raines works for the Obama Campaign as Chief Economic Advisor
TIM HOWARD? Howard is also a Chief Economic Advisor to Obama
JIM JOHNSON? Johnson hired as a Senior Obama Finance Advisor and was selected to run Obama's Vice Presidential Search Committee


I assume everything you've posted is correct. I'm not going to check. It's true even if it didn't happen, it sounds plausible, and it needed to be said.

Don't for a second think this means I'm voting for McCain and his attack dog Palin. I'm voting for Ron Paul. Of course, Ron Paul won't win the election. Obama will. McCain/Palin so doesn't stand a chance it's pathetic.

On a bright note, I honestly believe it doesn't matter who the next president of the United States is.

[randydrivesabus]

I think Obama's chief economic advisor is someone named Jason Furman.
Jim Johnson was replaced on the VP search committee in June '08.
There is no substantial evidence that Tim Howard is in any way involved with Obama.
It doesn't seem like copying and pasting random articles is very productive.

[George Fergusson]

Thanks Randy :)

[iddee]

>>>FRANKLIN RAINES? Raines works for the Obama Campaign as Chief Economic Advisor
TIM HOWARD? Howard is also a Chief Economic Advisor to Obama<<<


>>>I think Obama's chief economic advisor is someone named Jason Furman.<<<

So that makes 3. Wonder how many more he has or has had?


>>>JIM JOHNSON? Johnson hired as a Senior Obama Finance Advisor and was selected to run Obama's Vice Presidential Search Committee<<<


So who said he still is...It just said he was selected.

You haven't showed one thing to be wrong....Try again.

[Galaxy]

Thanks Randy :)George, you may want to view the evidence in these videos before you make up your mind.

These videos should be viewed by every American voter if they want to be informed. Note at the end of one of the videos, President Clinton agrees the Democrats blocked legislation to regulate and rein in Freddie and Fannie that he and Republicans tried to pass.

The videos document the actions of Democrats, Raines, Obama, Fannie and Freddie officials in defending the Freddie/Fannie cash cow and Republicans' attempts to regulate them.

http://www.youtube.com/watch?v=YL36nwCSYUM

http://www.youtube.com/watch?v=usvG-s_Ssb0&NR=1

Of course, we now know that CEO Mudd, who replace Raines, was unsuccessful (no great surprise) in his attempts to fix the problems at Fannie. However, this did not stop Obama from milking Fannie and Freddie for $126,000. which we now know was taxpayer money.

http://www.youtube.com/watch?v=63siCHvuGFg&feature=related

http://www.youtube.com/watch?v=9nU3fNh-PRk&NR=1 (http://www.youtube.com/watch?v=9nU3fNh-PRk&NR=1)

[George Fergusson]

George, you may want to view the evidence in these videos before you make up your mind.

Oh Pulleeeze! Mind's made up. Voting for Ron Paul, very likely the only honest person in Congress. Been saying that for months. You think I'm kidding?

McCain and Palin are the sorriest excuse for a presidential ticket I have ever seen, bar none- An aged crook and a cheerleader. Sheesh. Obama and whats-his-name aren't much better, IMHO. That doesn't change my opinion that Obama will be our next president, that's just me facing facts. Anyone who thinks McCain and Palin stand a chance of getting elected are delusional.

Oh yeah, and keep your "The Democrats Did It" conspiracy theory away from me! They're all in it together, Democrats and Republicans, a traitorous gang of complicit self-serving lying sacks of crap, every last one of them. They ought to all be put on trial. Except Ron Paul. Him I believe :)

[iddee]

>>>>Oh yeah, and keep your "The Democrats Did It" conspiracy theory away from me! They're all in it together, Democrats and Republicans, a traitorous gang of complicit self-serving lying sacks of crap, every last one of them.<<<<

Don't go bringing the truth into political discussions. You know it doesn't fit. :no:

I really don't think either one is worth a crap. I'm hitting the McCain lever to counter one more Obama vote, I just think he will do less damage.

[George Fergusson]

>>>>Oh yeah, and keep your "The Democrats Did It" conspiracy theory away from me! They're all in it together, Democrats and Republicans, a traitorous gang of complicit self-serving lying sacks of crap, every last one of them.<<<<

Don't go bringing the truth into political discussions. You know it doesn't fit. :no:

Sigh. You're right again.

I really don't think either one is worth a crap. I'm hitting the McCain lever to counter one more Obama vote, I just think he will do less damage.

Yeah I respect that. If I was to vote the lesser of two evils I'd vote for Obama. But I decided some time ago that if I didn't vote my principles, I might as well not vote.

[randydrivesabus]

>>>FRANKLIN RAINES? Raines works for the Obama Campaign as Chief Economic Advisor
TIM HOWARD? Howard is also a Chief Economic Advisor to Obama<<<


>>>I think Obama's chief economic advisor is someone named Jason Furman.<<<

So that makes 3. Wonder how many more he has or has had?


>>>JIM JOHNSON? Johnson hired as a Senior Obama Finance Advisor and was selected to run Obama's Vice Presidential Search Committee<<<


So who said he still is...It just said he was selected.

You haven't showed one thing to be wrong....Try again.

you are so right. i bet you never made any mistakes.

[iddee]

Just made my first.......responding to randydrivesabus. :doh: :D

[randydrivesabus]

Just made my first.......responding to randydrivesabus. :doh: :D

well at least you made me smile...thanks!

[Eaglerock]

So that makes 3. Wonder how many more he has or has had?





When I have an employee that I find doing wrong, stealing, cheating, or fail their backgound check, I let them go.

[Eaglerock]

Except Ron Paul. Him I believe :)

Why Ron Paul didn't make it before McCain is a puzzle. Why McCain made it before anyone is a puzzle. Tonight a Republican leader said all you need is a Cheerleading outfit and some pom pom's and she is set. He couldn't believe McCain raved about her after she bombed in the first interview. She has no clue and wouldn't answer the questions she was given in the debate. He said she should have been asked the questions again and again until she made a fumble fool of herself, and went back home.

He also said McCain can't be trusted.

[J-Bees]

Sigh. You're right again.



Yeah I respect that. If I was to vote the lesser of two evils I'd vote for Obama. But I decided some time ago that if I didn't vote my principles, I might as well not vote.

so then, your not voteing:


Sounds great ! ! !

[Bodo]

so then, your not voteing:


Sounds great ! ! !

Hehehe, seems that way, doesn't it?

[George Fergusson]

Sounds great ! ! !

A crook is a crook. You think voting for the lesser crook is a good tactic? You think condoning the corrupt actions of the lesser crook by voting for them encourages less crooked politicians? You'd be wrong. Then when someone comes along and says they're going to vote their principles, you make fun of them. Well I got news for you. People like you are the problem with politics today. If enough people just said NO, we could vote these crooks out of office but that won't happen now will it?

[tecumseh]

my other brother george first writes:
McCain and Palin are the sorriest excuse for a presidential ticket I have ever seen, bar none

and then...

Oh yeah, and keep your "The Democrats Did It" conspiracy theory away from me! They're all in it together, Democrats and Republicans, a traitorous gang of complicit self-serving lying sacks of crap, every last one of them. They ought to all be put on trial.

tecumseh:
might I footnote your first comment with the exception of the presidency of dick cheney and george bush (and yes the order does suggest who was really president). you could change a company name here and substitute one of the names above there and be describing the EXACT same behavior... ie individuals with limited credital but excellent personal connections using the cover of a corporate charter to fleese the public (customers) and investors while rewarding themselves way beyond anything that might be deemed reasonable (there is a bit of a family story that reinforces this flawed idea.... ie crony capitalism).

as to your second comment george... we could not be anymore in agreement.

might I however suggest that public hanging for some crimes might be the socially beneficial thing to do?
it might not limit our current system of nepotism and crony capitalism but it would give somefolks second thoughts about first sticking to some level of corporate ethics (which as far as I can tell now seem to be almost extinct).

[dragonfly]

Why Ron Paul didn't make it before McCain is a puzzle.

Because he's an honest politician. That's probably an oxymoron, but it appears to be true about Paul. Collectively, we don't want honest politicians because we are a country of dishonest people. I want honest politicians, you may want honest politicians, I believe George and JohnF want honest politicians, and Bodo, JPK, iddee, and several other posters here, but all in all, the country doesn't want honest politicians. We want someone who will give us what we want, da*n the consequences. We have ideals of what this country "should" be regardless of what reality is.

Why McCain made it before anyone is a puzzle.

Danged if I know.:s I think the Republicans let the MSM choose their candidate for them.


He also said McCain can't be trusted.

Who in Washington can, besides a very select few? I certainly don't think Obama can. Nor do I think the vast majority can. That's the nature of the beast.

[iddee]

I feel slighted and neglected. I didn't feel the wrath of Tec's ball bat in his post. Maybe age is slipping up on him??? :scratch: :p

[Eaglerock]

A crook is a crook. You think voting for the lesser crook is a good tactic? You think condoning the corrupt actions of the lesser crook by voting for them encourages less crooked politicians? You'd be wrong. Then when someone comes along and says they're going to vote their principles, you make fun of them. Well I got news for you. People like you are the problem with politics today. If enough people just said NO, we could vote these crooks out of office but that won't happen now will it?

Are we thinking another Tea Party...

[Eaglerock]

Because he's an honest politician. That's probably an oxymoron, but it appears to be true about Paul. Collectively, we don't want honest politicians because we are a country of dishonest people. I want honest politicians, you may want honest politicians, I believe George and JohnF want honest politicians, and Bodo, JPK, iddee, and several other posters here, but all in all, the country doesn't want honest politicians. We want someone who will give us what we want, da*n the consequences. We have ideals of what this country "should" be regardless of what reality is.



Danged if I know.:s I think the Republicans let the MSM choose their candidate for them.



Who in Washington can, besides a very select few? I certainly don't think Obama can. Nor do I think the vast majority can. That's the nature of the beast.

DragonFly must go to Washington. You don't have a pink outfit and a little dog do you? ;)

[dragonfly]

DragonFly must go to Washington.

Take my word. You wouldn't want to be around to watch what I would do to that cesspool.

[dragonfly]

I feel slighted and neglected. I didn't feel the wrath of Tec's ball bat in his post. Maybe age is slipping up on him??? :scratch: :p

Awww, don't feel bad iddee, there's always a next time.;)

[tecumseh]

iddee writes:
I feel slighted and neglected. I didn't feel the wrath of Tec's ball bat in his post. Maybe age is slipping up on him???

tecumseh:
sorry iddee... and it's a coup (koo) stick.

I don't know about you iddee, but age seems to be running up on me at the speed of light.

it does seem to me iddee that a lot of these so called corporate misdeeds (either directly or indirectly approved by OUR government) is much more about crony capitalism than anything else (it ain't what you know, but who you know that translate into success*). our current prez and vice prez seem to fit the profile quite nicely.

kevin phillips (wealth and democracy) would suggest that this current mess is neither unique nor unpredictable. I quess there are some lessons of history folks will never learn?

I would also be less than truthful iddee if I told you I BELIEVED that this so called government intervention will actuallly addressing the root cause of the problem. I do BELIEVE it just allows some to talk around the problem.

* success as is defined by common culture... a oversize pay check and stock option, bling, oversized homes or outragously expensive automobiles, etc. I should add... this is not the definition I would use myself.

[iddee]

Very good post, Tec. My father would be over a hundred if still living, and he said the saying "The rich get richer and the poor get poorer" was around when he was a boy. Nothing has changed much, has it.

[tecumseh]

and as always the best to you and your iddee...

there are some most excellent plums in 'wealth and democracy'.

1) the FACT that our tax system is now (likely has been for something like 30 years) regressive and no longer progressive in design. mr phillips analysis does not include any deductions beyond standard deductions.. so in operation our tax system is even more regressive than mr phillip suggest.

so the very rich now pay less in terms of maintaining this government than does the common working person drawing a paycheck.

furthermore he suggest that over the last 30 years the upper 1 to 2% of income earners (currently I think?? this means you need to make about $350000/yr to get into this very exclusive country clud) have acquired 75% of the income gains over this period.

2) the distribution of wealth is now approximately what it was in the era just prior to the great depression (a sobering fact...yes?).

so for about 50 years prior to this 'don't tax the rich era' (sometime with extreme income tax rates.. usually associated with a war) it now appears that all these outragous rates did was to keep the rich from getting richer and the poor from getting any poorer. this period of what appeared to be extreme income tax rates simply maintain the distribution of wealth between the extremely rich and the rest of us common folk.

3) the last detail of mr phillips book is EXTREMELY sobering since he detail how historically societies that move toward empire (spain, neatherland and england) move increasing away from product (real stuff) and become more and more dependent on financial instruments.

he also details the more recent trend here as we (us of a) move in exactly the same direction. but don't worry so much about that cliff that lies ahead iddee... for certainly the fall will not kill ya', but the sudden stop certainly will....

my take...this trend is as much about the folks that have capital loosing faith in their country men when it comes to making a buck. this does suggest that greed is a much stonger motivator that fidelity to country when you consider the behavior of certain groups of people.

ultimately in all these historical cases this 'group' behavior has lead to economic stagnation and decline.

it might be assumed that 'the smart rats' know exactly when to jump off a sinking ship.

[dragonfly]

I don't know about you iddee, but age seems to be running up on me at the speed of light.



I have noticed that the older I get, the faster time goes. I suspect there's some kind of law of physics at work here.;)


kevin phillips (wealth and democracy) would suggest that this current mess is neither unique nor unpredictable. I quess there are some lessons of history folks will never learn?



So, if you were in the driver's seat, what would you do to change things?

[randydrivesabus]

I have noticed that the older I get, the faster time goes. I suspect there's some kind of law of physics at work here.;)


there might be a government grant available to study this.

[dragonfly]

there might be a government grant available to study this.

Are you suggesting that I may be able to get a piece of the pie?;)

[AstroBee]

Very good post, Tec. My father would be over a hundred if still living, and he said the saying "The rich get richer and the poor get poorer" was around when he was a boy. Nothing has changed much, has it.

And of course the 35 year old executive from Goldman Sachs charged with running the $700B bailout will certainly reverse that trend....right??

[tecumseh]

dragonfly ask:
So, if you were in the driver's seat, what would you do to change things?

tecumseh:
I previously said predictable and this is why.....
one of the small details mr phillips reveals in 'wealth and democracy' is that the tendency for a country to rely more and more on financial instruments and speculation as the bases of an economy was studied and recognized by the british early on. much of the brit early industry had spun out of the neatherlands, so I would guess this is where they gathered most of their information for this study. I would also think that the swift and nasty decline of spain was a goodly part of the brit's motivation for the brits wanting to understand what structurally went wrong in these prior cases. oddly enough by the time the brit's empire began to decline... they had forgotten or misplaced this earlier study.

solutions... I would suspect a list could get quite long (and I really have no desire to write a book or thesis)... but here goes...

I would encourge others to add to this list (and yes feel free to criticize mine).

first off we need to recognize the difference between investment and speculation. the fed (espcially during greenspan's days) seem to totally ignore this detail. tax these two things as if they are different... which they are (ie their social cost and benefits are not identical). any person producing something or providing some socially beneficial service drawing a weekly check should not have to pay a higher marginal tax rate than a commodity trader making a 6 figure income for playing roulette with someone else's money.

secondly we need to recognize the difference between a necessity and a luxury and impose a tax system which does the same.

thirdly, we need a tax system that promotes savings (some information suggest that we have now got to the point where our collective saving rate is actually negative... this kind of mean we are slowly eating the seed corn) and discourages consumption (once again discriminating between necessities and luxurys would be essential). our current system of taxes (local, state and federal) does just the opposite.

thirdly... swiftly retreat from a federal policy that encourages 'rich folk' and business from moving production facilities and services off shore. giving 'rich folk' and business's tax break for undermining the country industrial structure (and the real bases of our security) doesn't sound to me like good public policy.

fourth... I suggest that folks need to get a collective grip on the often times nice sounding soundbite of 'tax cut' and not to be sucked into the idea that all tax cuts are good, equivalent nor beneficial to you or me individually or collectively. john kennedy pushed the earliest federal tax cut in my life... he suggested first he kind of knew how rich folks though and then added... it you give the rich something you also need to ask for something back (a small detial ignored in each and every tax cut since the time of john kennedy).

lastly... the next time someone want to take this country to war you might wish to learn a lesson george patton taught years ago... in regards to risk and casualties (cost) taking property is onething (the quicker the less cost that is incurred), holding this same property is something else (risk, casualties, and cost rise quickly). a good place to start such a question (and most especially if you describe yourself as a christian) is to remind yourself the enormous intellect of nancy ray'gun (add appropriate funny face here) is... just say no. that's a good and appropriate place to begin...

[dragonfly]

First off, thanks for the thoughtful reply to my question.:)

tecumseh:
tax these two things as if they are different... which they are (ie their social cost and benefits are not identical).

What are the marginal tax rates for these two? I ask because I don't know. I'm not involved in financial markets in any knowledgeable way. What about the premise that those who are making money in the financial markets comprise a fair number of investors in business ventures and help make jobs available for people like me who are regular wage earners? It looks to me like discouraging the "roulette" (and it looks like gambling to me;)) play a vital role in the job market, which to me, is socially beneficial.



this kind of mean we are slowly eating the seed corn) and discourages consumption (once again discriminating between necessities and luxurys would be essential). our current system of taxes (local, state and federal) does just the opposite.



To me, it appears that our entire social program system is doing just what you suggest: slowly eating the seed corn. I don't think the governmental system and the country can survive using this philosophy any more than I think individuals can. Maybe I'm not interpreting your explanation the way you intend it:s



thirdly... swiftly retreat from a federal policy that encourages 'rich folk' and business from moving production facilities and services off shore.

Which policies?


lastly... the next time someone want to take this country to war you might wish to learn a lesson george patton taught years ago... in regards to risk and casualties (cost) taking property is onething (the quicker the less cost that is incurred), holding this same property is something else (risk, casualties, and cost rise quickly).

I agree with you completely on that point. We have been practicing that for what? 60 years now?

[tecumseh]

first dragonfly ask:
What are the marginal tax rates for these two? I ask because I don't know.

tecumseh:
before the current administrations constant pushing for 'more tax cuts for the rich' a plumber was paying twice the marginal tax rate of a day trader (social security and fica also calculate quite differently). for some pushing paper is quite evidently more important than flushing paper (well at least up and until the paper don't flush anymoe).

then dragonfly writes:
What about the premise that those who are making money in the financial markets comprise a fair number of investors in business ventures and help make jobs available for people like me who are regular wage earners?

tecumseh replies:
I didn't mean to suggest that finance and finacial instrument are not important, heck I would have never devoted a couple of years of qraduate school eduation to the topic if I did. it is really (like much in life) a matter of balance. finance is now more important (as employment spots and as a proportion of gdp) than automobiles and is quickly becoming more important than the building trades. the tail is wagging the dog... imho.

then dragonfly writes:
To me, it appears that our entire social program system is doing just what you suggest: slowly eating the seed corn. I don't think the governmental system and the country can survive using this philosophy any more than I think individuals can.

tecumseh:
working backward on you statement.

quite evidently this philisophy does work for individuals. just a casual observation suggest to me that in most 'rich' folks families 75% to 90% of them are operating based upon this notion.

at the worst most social welfare progams (ALWAYS marginally funded and paid for by working folk) is a zero sum game. as a group they may provide little benefit (there are some), but they do no harm.

then dragonfly writes:
Which policies?


tecumseh:
generally but not exclusively tax policies.... both questions of: 1) how a country spends money is just as important as 2) how a country collects money.

the collapse of enron or the divorce of the GE president (can't recall his name right now) should make everyone first ask.... why are these very much american companies doing business in the bahama or the marianas* (sp?).

*the business nor the slave labor employed in the marianas pays little to no federal taxes.


logically who benefits from government spending is ALWAYS corporations.

hopefully I need not convince anyone that building a bridge doesn't create the same economic force as blowing up a bridge?

then dragonfly writes:
I agree with you completely on that point. We have been practicing that for what? 60 years now?

tecumseh replies:
as far as I can tell the time line is more like pushing 200 years now. casually up and until we built the military academies (a logically response to military screw ups during the war of 1812*) we had little tendency to wage war all over the globe. this likely conforms to the notion of... build it and they will come.

*the war of 1812 also had the side effect of convincing a lot of folks that a purely citizen militia would never be able to compete on a field of battle agaiist a professional army.

lastly... in a bit longer run time horizon what we have unintentionaly done is move expertise (how to do) off shore along with the production plants. eventually this will translate into the loss of know how (human capitol in eco speak) and doing (building physical stuff) will no longer be possible. as I have suggest previously on other thread... the fact that it has now taken us 5 years to retro fit the hummer to make them 'somewhat' bomb proof (which is approxiamately the same time required for us to build the atomic bomb... literally from scratch), and defeat two major indusrial nations 60+ years ago) should suggest where this tread will eventually lead.

[randydrivesabus]

day traders for the most part report their results for tax purposes the same as a plumber would, that is on a sched c. they mark to market their holdings at year end and treat all their trading results as ordinary income or loss.
it has been shown that reducing cap gain rates (and tax rates on dividends) has actually generated more tax revenue than the previous rates. stock traders will be more likely to take their gains when tax rates are lower. and reducing the tax rate on dividends encourages more investment.

[dragonfly]

finance is now more important (as employment spots and as a proportion of gdp) than automobiles and is quickly becoming more important than the building trades.

Is that not one of the results of doing so much business with countries that can produce and export their products to the US cheaper than we can produce them here?


lastly... in a bit longer run time horizon what we have unintentionaly done is move expertise (how to do) off shore along with the production plants. eventually this will translate into the loss of know how (human capitol in eco speak) and doing (building physical stuff) will no longer be possible.

True, but with the current American tendency to want "cheap" and "fast" and "convenient", I see no other way it could go.

[tecumseh]

randy writes:
it has been shown that reducing cap gain rates (and tax rates on dividends) has actually generated more tax revenue than the previous rates. stock traders will be more likely to take their gains when tax rates are lower. and reducing the tax rate on dividends encourages more investment.
tecumseh: since capital gain has now been shortened to a few day vs a few years why wouldn't any trader be declaring income as capital gains?

I would suggest that however much money there is to invest is invested. there is an 'economic school' equality savings equal investment. by most measures (at least those I have seen) saving continues to decline (not that long ago actually negative). this would suggest that investment monies have not increased (excepting any over seas/off shore component).

if there is any increase in tax revenue via taxing investment and dividends (once again why should some trust funder who collects a dividend check be paying half the rate of a plumber?) then I would suspect that this is a matter of churning stock more frequently. the often overlooked downside to this is that this churning adds to volitality.... a zero sum game as far as tax revenues is concerned but will overtime reduce competition and add to the end products price (ie... an added risk premium).

dragonfly writes:
Is that not one of the results of doing so much business with countries that can produce and export their products to the US cheaper than we can produce them here?

tecumseh:
other countries can produce products cheaper only because they can ignore environmental issues and employ slave labor (who will not need to worry about retirement due to the environmen in which they are working).

I guess slave labor ain't such a big deal as long as some folks can buy their cheaply made good and save a quarter in the bargain. most time the cost saving per unit is really not that significant (of course a very small number times a really large number can still be a very large number).

then dragonfly writes:
True, but with the current American tendency to want "cheap" and "fast" and "convenient", I see no other way it could go.

tecumseh: good... then perhaps the next time we desire to have a little war perhaps we can contract the war goods required out to the chinese?

[dragonfly]

tecumseh:
other countries can produce products cheaper only because they can ignore environmental issues and employ slave labor (who will not need to worry about retirement due to the environmen in which they are working).




True, and we are collectively endorsing it.



tecumseh: good... then perhaps the next time we desire to have a little war perhaps we can contract the war goods required out to the chinese?

That would not surprise me in the least.

[randydrivesabus]

randy writes:
it has been shown that reducing cap gain rates (and tax rates on dividends) has actually generated more tax revenue than the previous rates. stock traders will be more likely to take their gains when tax rates are lower. and reducing the tax rate on dividends encourages more investment.
tecumseh: since capital gain has now been shortened to a few day vs a few years why wouldn't any trader be declaring income as capital gains?

I would suggest that however much money there is to invest is invested. there is an 'economic school' equality savings equal investment. by most measures (at least those I have seen) saving continues to decline (not that long ago actually negative). this would suggest that investment monies have not increased (excepting any over seas/off shore component).

if there is any increase in tax revenue via taxing investment and dividends (once again why should some trust funder who collects a dividend check be paying half the rate of a plumber?) then I would suspect that this is a matter of churning stock more frequently. the often overlooked downside to this is that this churning adds to volitality.... a zero sum game as far as tax revenues is concerned but will overtime reduce competition and add to the end products price (ie... an added risk premium).



long term capital gains are investments held for at least one year.
the tax rate is 15%. ordinary income tax rates are graduated but generally are higher than capital gain rates.
there are anti-churning rules in the tax code so churning produces no tax benefit.
a day trader may see an advantage in declaring their results as ordinary income if they show a loss. for cap gain purposes the loss that can be claimed on a tax return is limited to $3000 per year. business losses have no such restriction. Also they can write-off investment costs as business expenses instead of investment expenses. Investment expenses can only be deducted to the extent of investment income. (yes, the unused portion may be carried forward).
there is also the double taxation to corporations situation since dividends paid are not a tax deduction therefore the corp pays tax on their profits before paying dividends and the dividend recipient also pays tax on those dividends.
yes....this tax law does favor the wealthier individuals and i'm not saying i'm in favor of its structure but am just pointing out the thought processes used to create it.