Sunday, January 12, 2003

Move Along Folks, There's Nothing to See Here In what seems to be startling evidence that there is no justice in this world, my blog and My So Called Lesbian Life have the exact same number of hits today. Listen folks, any weblog with a title like that has got to be far more interesting than this one. I'm heading over there right now (well, as soon as my wife leaves for the grocery store), and suggest that you go too. 1:43:20 PM    comment []trackback []

I'll Have What He's Having Apparently, a Vice-president has access to only the primo weed. I haven't seen such successful denial of reality since college. Cheney Returns Fire in Battle on Tax Cuts. Vice President Dick Cheney struck back at critics of President Bush's economic plan, saying the proposal was not geared to the rich, would not hurt state budgets and would not increase the federal deficit over time. By Elisabeth Bumiller. [New York Times: Politics] 1:05:30 PM    comment []trackback []

White Elephant Of the three columnists at CBSMarketWatch.com that wrote about the President's economic plan last week, none could find much good to say about it. One thinks it's stupid, one cannot fathom who on Wall Street really wants it, and the third points out that other pressures will undermine the programs short-term goals. All three have different ideas of why it's a bad plan, and none can see how it will work. Paul Erdman: There are dumb ideas, and then really dumb ideas. The Bush administration's proposal to eliminate the tax on dividends as the centerpiece of its $670 billion "stimulus" package certainly belongs in the "really dumb" category. Erdman examines the justifications given by the administration, and refutes them. He points out that the stimulus will be small and late, and that the cut in dividend taxes may cause interest rates to rise just when there is a danger of an increase in inflation due to a spike in oil prices resluting from a war in Iraq. The Fed could do very little to counter such a development since it has already used up almost all its ammunition.  This would have a lethal effect on an economic recovery that depends so heavily on interest rates remaining low for all of 2003 and beyond. In principle, eliminating double taxation is a good idea, one that should also apply where death taxes are concerned. But in a climate of rising fiscal stress, now is definitely not the time to do make these changes. Irwin Kellner: It was a no-brainer that President Bush's economic plan was not going to be loved by everyone, but who would have guessed that his proposals would upset so many different constituencies? He points out that in addition to municipalities, the bond market, and those involved with REITs (Real Estate Investment Trusts). Even corporate boards rooms aren't dancing the streets. Finally, look for some static from Corporate America in general, which was never in favor of eliminating the double taxation of dividends. Many firms don't want shareholders to pressure them either to pay dividends if they don't do so, or increase their payout, if they do. Makes you wonder just who exactly is in favor of this proposal besides the president's advisors. David Callaway: The short-term benefits to the plan are zilch, while the short-term risks to the stock market reach as far as the eye can see. They include a bad fourth-quarter earnings season, led by retailers and leisure companies; the promise of an enormous boost to the deficit because of the economic plan; and, most worrisome of all, the prospect of imminent war in Iraq. He writes that the goal of the package--a boost to stock prices--won't be achieved because of other events, primarily the uncertainty surrounding Iraq. With photos in every newspaper of our boys shipping off to war, news that the Army Reserves are about to be called up, and deployment of several B-1 bombers to the Middle East this week, can there still be any doubt that we are going in -- and going in big? ...In the meantime, investors are exposed to a daily dose of belligerence from North Korea in a nuclear scenario that has the potential to go horribly wrong horribly fast. And on top of all that, earnings season is about to begin. Not that the practice of grubbing for money should be held to the same standards of importance as a life-threatening war, but the profit warnings by Alcoa on Wednesday and Gateway on Tuesday were fine examples of the knife edge Wall Street is sitting on right now. 12:52:41 PM    comment []trackback []