This is what happens when taxes go up

I suspect that, once Obama starts raising taxes, buyer’s remorse is going to set in with incredible speed.  This article focuses on the local economy, but is a harbinger of what will happen when taxes go up on a larger, national scale:

A temporary 1.5 percentage point sales tax increase proposed Thursday by Gov. Arnold Schwarzenegger to deal with the state’s worsening fiscal crisis comes just two days after Marin voters approved a quarter-cent sales tax increase for passenger rail service.In San Rafael, it would push the sales tax to 10 percent.

“The timing is terrible,” said Lise Sonnen, owner of Sonnen BMW in San Rafael. “Chevrolet across the street is in Chapter 11. All their new cars are gone. The Ford store died. … It’s hard enough for us as it is.”

San Rafael City Manager Ken Nordhoff said San Rafael’s sales tax, up a quarter of a percent after Tuesday’s passage of the Sonoma-Marin Area Rail Transit tax, is about half a point higher than the sales tax in other Marin cities.

Schwarzenegger, who proposed the tax hike along with another $4.5 billion in spending cuts during a news briefing, said he has little choice: Just six weeks after signing an overdue state budget intended to close a $15.2 billion deficit, the state faces an $11.2 billion deficit.

[snip]

In addition to raising the sales tax, Schwarzenegger is proposing expanding its scope to include some services such as vehicle, appliance and furniture repair.

“That would be another $50 or so on our average ticket, which would definitely hurt,” said Gary Nugent, service manager at Heynneman European, a San Rafael auto repair shop. Nugent said the shop’s business is already down 50 percent due to the economic crisis.

The sales tax hike, which would continue for three years, is part of $4.4 billion in tax increases proposed by Schwarzenegger. Other revenue could come from raising the registration fee for vehicles by $12 and taxing companies that extract oil from California, which he said would generate $528 million this year.

[snip]

State Sen. George Runner, the Senate’s GOP caucus chairman, flatly said Republicans will not support a general tax increase.

“The fact is that during this time of economic challenges is not the time to go back to California taxpayers and ask for more money from them,” said Runner, of Lancaster.

Read the rest here.

I can assure you that, as Marin resident, I will do my best to leave the county for any big purchases I need to make. If I can get into a county that charges 8.5% in taxes, that’s where I’ll make my bigger purchases.  For example, if I need a new car (which I don’t right now, but will soon), I will save $450 on a $30,000 car just by driving a few extra miles.  Small drive; big savings; no-brainer.

It never seems to occur to anyone in government to stop a deficit by cutting spending.  Wouldn’t it be nice if, when I go on a spending spree and outrun my budget, I could simply go to my boss and extort more money from him?  I can’t, though, and the government shouldn’t be able to either.

To be entirely honest, the article does discuss the fact that the government is making spending cuts, most notably for schools.  With those cuts in mind, I’d like to suggest that, if the schools refined their focus to on reading, writing and arithmetic, and stopped all the environmental and community service stuff (which should emanate from the home and not the school), they’d find that they could manage with a shorter day and fewer resources.  I like my schools to educate, not attempt to take over as parents, imposing their values, not mine, on the students.

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Comments

  1. Oldflyer says

    Book, I distinctly remember during the recall hoopla and the euphoria over Schwarzenegger that he said (sic) . . . I want everything for everybody. . .

    I said: oh! oh! Big government liberal and it will become evident to all in time.

    Now the fat is in the fire.

    I use the term “spending like a drunken Sailor” from time to time. I am qualified to use that term because I have observed a number of them (for academic purposes). The big difference is that most drunken sailors spend what they have, then they stop. If they do borrow, it is short term and they generally repay their debts rather quickly. In their environment debt repayment may be enforced, or as minimum, their peers are smart enough to cut deadbeats off. Not so in government.

    Someday we may wise up, but apparently not yet.

  2. Fionnchu says

    We in L.A. County face the state adding 10.25%, atop the rise in county tax from 8.25% to 8.75 approved for mass transit Tuesday, supposedly. As a bus and train rider myself, I sympathize, but it’s so crowded already on the light rail much of the time, the fares keep rising, service is what you’d expect for a government entity, and the MTA mismanages billions under our do-nothing philandering corrupt mayor Villaraigosa already– who eyes Sacramento as his next step up towards, some say, the White House.

    I don’t think, alas, that crossing the county line for your new car will work anymore. At least where I live; time was Orange Co. with a half-cent lower tax drew business thus this way. The DMV, I bet, charges you now based on where the vehicle’s registered by residence, not by point of sale. I believe that clever dodge of thrifty buyers was shot down by our eager state legislature a few years ago. Unless Marin, as with so many other traits, proves itself above the rest of its 57 county neighbors in yet one more trend!

  3. highlander says

    I’m trying to puzzle something out … seriously.

    Where I live in Washington state the sales tax is about 8%, give or take a couple of tenths. Our sales tax, therefore, is less than what Book would leave her county for, and we have no state income tax.

    What’s the difference between Washington and California? I came to Washington from the Bay Area about five years ago and I can detect no difference in the level of government service. In fact, if anything, it’s a little better up here.

    The house I own is worth about half again as much as the one I left in Danville, but the property taxes are less. Yet the schools here are much better — they actually teach the three R’s instead of socialism and gender modification.

    So how come the taxes are so much higher in California? What are the citizens of California getting for their extra tax dollars that we’re not getting up here?

    Does having mildew as your state flower somehow make things less expensive?

  4. Danny Lemieux says

    You might want to compare, Highlander, is your State/Community’s total tax intake versus total expenditures on a per capita basis. It would give you a better indication. California has huge expenditures compared to some other states, such as benefits to illegal aliens as on example.

  5. highlander says

    True, Danny. I wonder also how much retirement benefits for state and county workers might have to do with it.

    My father-in-law, who retired from teaching at a community college in the Bay Area, was able to live pretty high on the hog with full medical benefits. And is my recollection correct that the town of Vallejo has declared bankruptcy because they cannot meet their commitments to retired police and firefighters?

    There are probably other differences as well. Washington, like California, is a pretty blue state, but I think that California may be farther down the road toward socialism than we are up here.

    I can’t help remembering the San Franciscan who complained that despite all the money put into homeless programs, the problem kept getting worse. Duh! What you’ve done with all that money is create a magnet for homeless people. What else would you expect?

  6. suek says

    This link will take you to the Board of Equalization (love that term – what do they make equal?!) with the rates for each county and/or city that has an add-on rate in addition to the state sales tax of 6% plus the standard county sales tax of 1.25%. In other words, the standard sales tax is 7.25%, with 1.25 going to the local governing body. If your local government has voted in an additional tax, it gets added on by means of the second link. You pay the tax for the county/city in which you take possession of the product

    http://www.boe.ca.gov/cgi-bin/rates.cgi

    This is the calculation page for the add on rates of local governments. You can see it’s a pdf, but it has all the local tax districts in one location with the percent add-ons in one location, so if you want to compare Marin county to Alameda county, for example, you’ve got it where you can see both at one time. Keep in mind that whatever the form says is the local district tax, it will be added on to the 6.25% that is standard. I think the new taxes(if voted in this week) will probably take effect in January. I’m guessing at that. It takes a little while for the state to gear up their corrected forms etc.

    http://www.boe.ca.gov/pdf/boe531a.pdf

  7. suek says

    I think that the State has to ask the voters to pass on a tax increase…which is why – imo – the state has increased so many user fees of various sorts. It doesn’t have to subject user fee increases to a vote. They may in fact be justified – but they might just as easily not be. I have no idea.

  8. Tiresias says

    “It never seems to occur to anyone in government to stop a deficit by cutting spending.”

    I don’t know. I hate to sound like a… well, whatever – but does it ever occur to anyone in California to stop voting for these state, county, and local legislators to whom the concept of “life within a budget” might as well be written in Urdu?

  9. Danny Lemieux says

    I think you are on to something, Tiresias. Recently, I had an acquaintance (Liberal, Left) complain to me about possibly not being able to continue in business due to taxes. Then he complained about the corrupt Illinois politicians. But, he is very proud that his son works for Rahm Emanuel, a man who exemplifies the corrupt Illinois political machine and is about to bring it to the nation writ large.

    The same people who constantly complain about the enormous cost of corruption in Illinois are some of the very people who support the system by putting these people back into power, election after election. When that system extracts its pound of flesh from them, they need to go out and point fingers of blame everywhere except into a mirror. It’s hard to take any of them seriously.

  10. Ymarsakar says

    Then he complained about the corrupt Illinois politicians. But, he is very proud that his son works for Rahm Emanuel, a man who exemplifies the corrupt Illinois political machine and is about to bring it to the nation writ large.

    They aren’t complaining about corruption. Like Arabs in Iraq, they are just complaining that the money isn’t going towards them and their family.

  11. Charles Martel says

    Highlander,

    There are probably some other advantages that Washington State has over California when it comes to getting more bang for the buck.

    Washington is much smaller geographically than California. We have to provide roads and services over an 800-mile north-to-south stretch.

    Also, counties here are larger — Los Angeles, at 10 million, is virtually its own state. The people who administer it are distant, which means they can pretty much mispend money as they want. In your neck of the woods, even though King County is pretty big, it’s still small enough that people can be heard.

    We’re virtually a one-party state, which means an incredible amount of graft, featherbedding and corruption.

    We have 36 million people; you have one-sixth that number. Our population isn’t just a simple multiple of yours, it’s yours squared.

    We have a huge influx of illegal immigrants that costs us in dozens of ways, so there are fewer dollars to devote to citizens.

    None of this is to say that Washington State doesn’t have its share of corruption or problems with people gaming the system. It’s just that California is so big that in some ways it’s like a cancer that keeps sucking sustenance from the healthy cells surrounding it. Who says it really has to give back anything in return?

  12. suek says

    >>but does it ever occur to anyone in California to stop voting for these state, county, and local legislators >>

    Sure…but the districts are drawn by the lawmakers themselves in such a way that there is rarely any real competition. Prop 11 was approved this time around. It designates that a board made up of retired judges (and others) will establish districts in a more equitable way. Whether that actually happens or not is a big question – but at least the question has been asked. Personally, I’m in favor of straight lines along the a pattern of grids. No squiggly lines, made larger or smaller as determined by the population. Populations of each district to be as equal as possible….

    I don’t think I’m going to be selected to be on the board, though.

  13. Ellie2 says

    I actually think that the current rounds of tax-raising due to “loss of revenues” caused by the economic downturn may finally wake people up.

    When ordinary folk, not working for the govt at any level, see their property values are down because of deadbeats; when they see their 401k — which was started as a hedge against Social Security going broke — down 30% due to crooks in Washington and on Wall Street; when they are notified that there will be layoffs at their employer before the end of the year because sales are down and THEN they are told they have to re-fill the coffers of a corrupt, wasteful, totally clueless government, the realization might finally dawn: WHAT IS WRONG WITH THIS PICTURE?????

    (I can dream, can’t I?)

  14. Ymarsakar says

    None of this is to say that Washington State doesn’t have its share of corruption or problems with people gaming the system. It’s just that California is so big that in some ways it’s like a cancer that keeps sucking sustenance from the healthy cells surrounding it. Who says it really has to give back anything in return?

    Prosperity tends to attract all kinds of greedy relatives and people you don’t even know.

    I believe Obama will try to turn America into California.

    YM, I stand corrected. Ubi est mea?

    No disagreement. I just wanted to say it out loud and in the clear.

  15. Charles Martel says

    Ymarsakar:

    I will put up with The One trying to turn America into California if I can get a gig making expensive movies that nobody wants to see.

  16. BobK says

    Highlander,

    Do you, by chance, live outside of the Puget Sound area? Our combined city/county/transit/state sales tax just jumped to 10% in King County. Our public schools show a 25-30% dropout rate and test scores are hardly soaring. It’s been many years since I lived in California, so my basis of comparison is flawed, but government services up here do not seem too efficient.

    Also, in WA we have the infamous B&O tax – a tax on the gross receipts of a business. Yes, that’s gross receipts, not profits. That accounts for a generally lower property tax – the state is draining revenue from the businesses. Is it any wonder Boeing moved their headquarters to Chicago?

  17. Charles Martel says

    BobK:

    This is the first I’ve heard about your state’s B&O tax. It’s also the first time I’ve heard a good explanation for why Boeing moved to Chicago. I’ve always wondered about that. Thanks!

  18. highlander says

    You’re right, BobK, I live up in Anacortes, so I’m somewhat insulated from what you guys down in King County have to put up with. You have my sympathy. And I forgot about the B&O tax. Thanks for reminding me.

    I’m beginning to think it has not so much to do with whether you live in California or Washington or any other state, but more with how dense the population is in your particular area and how long a single political party has been in power there.

    Oddly, I’d think that it would be better in metropolitan areas. There is a much higher level of taxable economic activity in cities, and you’d think that with people living more closely together you’d get some economies in the delivery of services. But obviously the reverse is true.

    And, of course, if you look at the main cesspools of corruption, they’re all places where a single party has been in control for a long time — usually Democrats, but Republicans can do it too. Remember pre-Palin Alaska.

  19. BrianE says

    2005
    California population 36 million
    Washington 6.4 million
    California per capita income $36,900
    Washington per capita income $35,400
    California GDP $1.6 trillion, per capita GDP $44,700
    Washington DDP $271 Billion, per capital GDP $43,100

    GDP= consumer spending + investment + government spending – trade deficit

    Washington taxes are lower since we don’t have an income tax and sales taxes are slightly lower.
    California pays 60 cents per gallon gas tax while Washington 49.4 cents per gallon. 18.4 cents is federal.

    California has 2.2 million illegal immigrants (25% of total in the country)
    Washington is ranked 11th with 136,000. The question is what percentage of social services do they consume?

    Washington actually has a higher percentage of illegal immigration as a total of its population.

  20. suek says

    >>The question is what percentage of social services do they consume?>>

    That _is_ the question, isn’t it! And also, given Washington’s proximity to Canada, and that Canada has a national health system, why don’t the illegals just continue on to Canada? After all, health care is supposedly a major issue…

    I assume there’s a reason – what is it? I can think of a number of possiblities, but it’s entirely possible that none of them are anywheres near to the real reason. Any conjectures?

  21. BrianE says

    The majority of illegal aliens in Washington State (I think) are in the agriculture industry, which the largest portion would be orchards. There are some row crops and general agriculture they work in, but I think the largest percentage would be orchards.
    These are jobs that are hard to fill because they are seasonal in nature. Some of these workers follow the harvest season from south to north, ending in harvests here in the fall. They stay to prune in late winter and then head south.
    I remember in 1988, talking to a large nursery manager which used illegals. INS would show up, round up the workers for deportation. He claimed they would all be back in a month or so with new id’s.
    You might be critical of his attitude, but he needed workers. These are not jobs most people can take because of the seasonality.
    My daughter and son-in-law work in a school district which is 80-90% hispanic and has a large portion of illegals. Most of them are here to work.
    As an aside, this area also has a high per capita murder rate. I think it’s part of the drug route.
    We’ve got to figure out how to weed out the bad. The good want to be productive, for the most part.

  22. says

    If we need more migrant workers, why don’t we create legal worker programs? My problem is with the illegality of it all. Having a huge illegal economy, with everyone playing the game, corrupts the system of the body politic like a giant cancer. It also leeches away a country’s control over its own borders. The US, not the immigrants themselves (along with needy, complicit employers), should be making immigrant policy.

  23. suek says

    >>If we need more migrant workers, why don’t we create legal worker programs?>>

    Basically, I agree with you, but you should also look up info on the Bracero programs. They were eliminated due to abuse – but they were operated legally. Another problem is that the laborers who are needed are low-skill workers, and immigration generally is unfavorable to them.
    We live in a fairly intensive ag area, and you’re right – many of them are honest hard working people just looking to move up to a better standard of living. For the most part, I think we should find a way to make them some kind of legal – whether they want to immigrate, or just work seasonally. On the other hand, I get really agitated about the “La Raza” people and Mecha – the ones who want to return the southwest to Mexico. I’d like to see a slow down until those who are here are assimilated, but that would mean we actually have to aculturate them, which means teaching them US history and expectations. We haven’t done so well on this with our own children – much less those from Mexico! It doesn’t help that the same “community organizers” that Obama worked with are causing the same agitation with Mexicans and Mexican-Americans that Obama’s people did with blacks. It’s a communist thing. Stir up class envy…

  24. BrianE says

    My father was a merchant, and as a kid, I remember each year he would order a pallet of hoes to sell to the migrant workers coming to weed the beet fields. As technology and market conditions changed, there wasn’t the need for these workers.
    Some of the migrants, who drove the trucks during harvest, stayed and over time, bought their own trucks and became quite successful. In the 70’s and 80’s it was their kids that became radicalized when government programs designed to help them succeed, enabled a grieveance mentality instead.
    One of the challenges in any kind of amnesty program needs to insure that the potential citizen is willing to give up allegience to their old country and form an allegience to America. The kids, some who have no contact with Mexico, would be good candidates for citizenship.
    The problem, which can’t be laid at their feet, is the victim mentality of the Democrat party, which intends to entitle an underclass of voters loyal to them.
    The area I grew up in only came into existence as a byproduct of Grand Coulee Dam. This area was loyal Democrat– no, more like radical Democrat, no one spoke ill of FDR. It was only as those whose allegience to FDR faded, did we become more Republican.

  25. Tiresias says

    Highlander – love that you live in a town some guy named after his wife. Always thought that was kind of interesting, somehow.

    Sue – my town gets swamped with Canadians coming here to take advantage of the medical services. It’s a ferry ride from Victoria (the capitol city of the province of BC) to the PET scan machine in our local hospital: where it’s Canadians out the door. This is because the magnificent Canadian health-care system has arranged it so there isn’t a single PET scanner on all of Vancouver Island, and there’s precisely one in the entire mainland city of Vancouver. (I do get real sick of hearing about how wonderful, magnificent, and just special the Canadian health-care system is, as I’m elbowing my way through Canadians while walking around my down-town, here in the benighted USA.)

    Brian – don’t forget the vino. Washington is now second to California for wine production, and harvesting the grapes is strictly a “many hands” type of job. Lots of migrant workers in the vineyards.

  26. suek says

    >>my town gets swamped with Canadians coming here to take advantage of the medical services.>>

    Yeah…my husband’s take is that the big question of the campaign should have been “which failed government health system do you want us to model ours after”…instead of just “of course we want a national health system.

  27. Mike Devx says

    Book said (#25)
    >> If we need more migrant workers, why don’t we create legal worker programs? My problem is with the illegality of it all. Having a huge illegal economy, with everyone playing the game, corrupts the system of the body politic like a giant cancer. It also leeches away a country’s control over its own borders. >>

    I believe that the powers-that-be want illegal immigrants to keep coming. For the Democrat establishment, these illegal workers are likely future Democrat voters. For the Republican establishment, these illegal workers are powerless and they keep wages low.

    I think that’s a serious problem for Republicans – and for conservatives to the extent we’re defined as Republicans. Neither George Bush nor John McCain want any serious border security. Both merely played games with issue. There’s been token work on the border only, and only enough work on the border to keep us conservatives guessing and waiting that they *might* be serious about addressing the issue. They’re not serious, and they won’t address the issue.

    Americans who are struggling know that when there are a lot of illegal immigrants in their area, it depresses their hopes for higher wages and for getting ahead. We’ve got to address this problem that conservatives are seen therefore to be exploiting “common Americans” by forcing their wages lower.

    We have the same problem with “globalization” forcing Americans down the income scale. Globalization and the decline of the wages of Americans is identified in the minds of “common Americans” as a Republican gaol and therefore a conservative goal as well.

    We’re extraordinarily vulnerable in these areas, I think, and we’ll never attract enough minority support if we can’t overcome these stigmas. “Reagan Democrats” have aged forty years; they’re gone; but newer generations of similar “Reagan Democrats” are out there for the taking, and we’re just as vulnerable on these issues with them as well. We’ve got to find a way to convince them that we are on their side.

    The Democrats will go protectionist and say that they are saving American jobs. It will likely work, at least for near-term elections. What are we prepared to say and do?

  28. BrianE says

    Mike,
    I’ve been thinking the same direction.

    Here is the challenge for our economy going forward.

    70% of our GDP is consumption. With record amounts flowing out of our economy via our trade deficit, how can an economy be sustained? I’m afraid it can’t.

    The second is the effect of free trade. Free trade has opened up markets for our goods, but our manufacturing base continues to erode, and our technology innovation was to be our export commodity (intellectual capital).
    But as our education system fails to educate how are we going to maintain our position of intellectual innovators?
    Free trade has produced lower cost goods for us to consume, but at the price of lower wage pressure.
    An additional factor in low wage pressure is the number of small businesses. They are least likely to have the resources to survive wage price spikes.
    So we have a significant portion of the population working for low wages, $10 an hour or less.
    The government in essence subsidizes these low wages through payments to these low wage earners– food stamps, housing assistance, earned income tax credits, child care credits, etc.
    Free trade benefits the investors, but how do we move workers into the investor class, so they feel they have a stake in their future. Employee owned companies are more successful. As we are seeing in the auto industries, companies that have an adversarial relationship between the company and its employees don’t fare well.

  29. BrianE says

    Democrats don’t want privatization of SS accounts because they’re afraid of the market, I’ll bet they all have trading accounts.
    They’re afraid if young people find out the power of capitalism over time, they’ll all become capitalists.
    As to the risk, that’s really a red herring, since risk can be controlled by limiting investments in the last 10 years before retirement, just like all the mutual funds do with age based investing.
    Right now, they are growing a good crop of socialists.

  30. Mike Devx says

    We conservatives are evil, evil people for even bringing up the nasty word, “taxes”. There’s no such thing as taxes! There’s only government “investments”.

    Evil, evil conservatives!

    Watch the little birdie pop up in this recent article:
    http://www.ft.com/cms/s/0/3496c848-ae91-11dd-b621-000077b07658.html

    #1 – Mr Emanuel brushed aside concerns that an Obama administration would risk taking on too much when it takes office in January. He said Mr Obama saw the financial meltdown as an historic opportunity to deliver the large-scale investments that Democrats had promised for years.

    #2 – Sunday’s comments also reinforce the impression that Mr Obama’s transition economic advisory board – which includes leading lights of the Clinton era, such as Lawrence Summers and Robert Rubin – is tilting heavily towards a “big bang” approach that would combine a short-term stimulus with large public investments to raise the longer-term US growth rate.

    #3 – n a radio address to the nation on Saturday, Mr Obama emphasised the urgency both of passing a fiscal stimulus package, which could include a middle-class tax cut, and of moving swiftly ahead on long-term public investments.

    #4 – Economists have estimated the US budget deficit could more than double next year to almost $1,000bn, raising concerns about whether Mr Obama could deliver on expensive campaign promises including $150bn in investments in alternative energy over the next decade and a $60bn-$110bn plan to provide universal health insurance for Americans.

    #5 – In contrast to 1992, when Mr Clinton postponed longer-term investments in favour of urgent budget deficit reduction, advisers to Mr Obama, including Mr Summers, who is tipped by some as his first Treasury secretary, are tilting towards investments. They emphasise that Mr Obama will stick to a medium-term goal of restoring fiscal discipline.

    In case you’re counting, that’s five of the eleven paragraphs that describe “investments” as something government does when it increases your taxes and spends the money. Another English word, profoundly perverted from its original meaning, to disguise and to mislead.

    I searched for the word, “tax” in the entire article, as well. Results:

    #1 – In a radio address to the nation on Saturday, Mr Obama emphasised the urgency both of passing a fiscal stimulus package, which could include a middle-class tax cut, and of moving swiftly ahead on long-term public investments.

    #2 – “We can’t afford to wait on moving forward on the key priorities that I identified during the campaign, including clean energy, healthcare, education and tax relief for middle-class families,” said Mr Obama. “We also need a rescue plan for the middle class that invests in immediate efforts to create jobs and provides relief to families watching their paychecks shrink and their life savings disappear.”

    Zero of the eleven paragraphs refer to taxes themselves.

    How can the government spend all this money on all of their “investments” plans? Where’s the money going to come from? Certainly not from higher taxes? I guess they’re going to provide deep cuts in spending across the board to allow for all these new investments.

    Dang, my wallet just suddenly got so light it floated out of my pocket, out the window, and disappeared into the sky.

  31. suek says

    I read somewhere that some 50-60 years ago, there were two groups – the rich investors who owned stocks and everybody else who did not. The middle class were not really among the investors. Then came various savings plans – IRAs, 401(k)s, retirement plans etc. The result is that today some 40% of Americans of all classes are stock owners. The gist of this article was that this high percentage is a problem – that it’s hard to demonize a capitalist stock market when 40% of the people benefit from their private ownership. It’s hard to get people to depend on the government for their SS if they have their own retirement savings. As a result, they have to somehow get the 40% to disinvest – and some of this Wall St crisis is the result of actions taken to disincentivize people from relying on stocks as a safe investment. It makes sense. I don’t know if it’s true, but it makes sense. Also makes sense when they start talking about taking over the 401(k)s. Nothing heard about IRAs, but if the 401s go down, I’d guess the IRAs wouldn’t be far behind.

    Nothing left but the mattress, I guess.

  32. Mike Devx says

    SueK (#34)
    >> The result is that today some 40% of Americans of all classes are stock owners. [...] it’s hard to demonize a capitalist stock market when 40% of the people benefit from their private ownership.
    [...] they have to somehow get the 40% to disinvest – and some of this Wall St crisis is the result of actions taken to disincentivize people from relying on stocks as a safe investment. >>

    I think SueK makes an important point about this potential effort to divorce the American people from the stock market. We’ll understand a lot about the current crop of liberals from the efforts they make on this over the next few years.

    We have to prove the statement “this Wall Street crisis is the result of actions taken to disincentivize people from relying on stocks”. That would be a smoking gun, if provable.

  33. suek says

    >>CHARLES MARTEL DECLARES HIMSELF A BLIGHTED NEIGHBORHOOD, ASKS FEDS TO BEGIN “INVESTMENTS” IN HIM>>

    Heh. This would be really funny except _somewhere_ (I know….another “somewhere”) I saw that Rahm Emmanuel has his own “charity” and his house is set up as belonging to the charity. He doesn’t and hasn’t paid a penny in property taxes. Maybe sort of like Reverend Wright’s house belonging to his church…

    Good gig if you can get away with it.

    I’ll try to find a link…

  34. Tiresias says

    Bob – ssh! PA – the home of the “retired” Spooks.

    Pretty place, yeah. A place where your neighbor can call at 6:30 AM to tell you not to let the dogs out for a while, because there’s a bear on your front lawn.

    Four nights ago I was standing on the deck with a good cigar watching a container ship lit up like a Christmas tree going inbound to Seattle when I heard some rustling in the trees at the east edge of the lawn. Got the outside lights flipped on in time to see a mountain lion emerge from the trees, zip across the lawn and jump the hedge into the field just beyond the west edge of the lawn.

    Pretty – and often enough interesting, with overtones of the flat-out weird, too.

  35. BobK says

    Tiresias,

    You’re talking to a Seattle urbanite about flat-out weird. Our standard for weird on the left bank of the Sound is a little more stringent than that… Now if that cougar had a waistcoat and watch and was saying, “I’m late!” I’d call that somewhat unusual.

  36. BrianE says

    Larry Kudlow, a stalwart supporter of free trade, on Free Trade:

    Ironically, since the dollar has been floating freely, the dollar-linked yuan has also floated compared to a market basket of currencies. Between 1995 and 2001 the yuan-dollar appreciated by nearly 50 percent and in recent years has fallen by about 30 percent. Both the U.S. and China adjusted internally to deflation and inflation. But the common link between the two has given the yuan global financial confidence while at the same time giving the U.S. enormous leverage over the Chinese economy. What’s wrong with that? We buy their goods and they invest in our country through the purchase of Treasury bonds and more recently through direct investment in large U.S-based corporations (like Maytag and Unocal).

    Unlike the sale of defense-related technologies there’s no national security problem here. American firms like Anheuser-Busch, the Bank of America, and numerous tech firms are all investing in China. This is free and open trade for the mutual benefit of both nations. Trade and monetary cooperation also provide the basis for national security cooperation, especially in the areas of stopping nuclear proliferation in North Korea and protecting a free Taiwan.

    Clearly China is not perfect, though it has reduced government ownership of the economy from 90 percent twenty years ago to about 30 percent today, according to Laffer. Yes, the communist government in Beijing prevents free elections and free speech, continues to persecute religious groups, and has a record of pirating music and software as well as other intellectual property. But according to a recent study by the Council on Foreign Relations, China has also changed 2,600 legal statutes to comply with World Trade Organization rules.

    http://www.nationalreview.com/kudlow/kudlow200506241442.asp

    Free trade has been a core principal of conservatives since Reagan. Is it time to revisit the subject, given the size of our trade imbalance?
    I think it’s true that free trade for the last 20 years has benefited the world at large, but there have been winners and loser in the American economy as a result. Is it time to evaluate the net benefit?
    On principal, I don’t object to China investing in America by purchasing our debt, but we do need to look at what we’re spending the debt on. We’ve been on a national shopping spree at the mall, while our roof is leaking and cracks are appearing in the foundation.

  37. Ymarsakar says

    America may want to think about putting a free trade tax on nations, for it is our Navy that protects their shipping and sea shipping is what carries most of the world’s goods in terms of bulk mass.

    Without the US Navy, other nations would have to spend their own money to recoup losses from pirates and to enforce protection of the world’s seas. China’s Navy is growing but it is not nearly enough at the moment to protect the trade lanes between China and Europe.

  38. Ymarsakar says

    As the US discovered when Clinton and Congress banked the “Peace Dividend” by eliminating 10 Army divisions and 20k Marines, it costs a heck of a lot more to recruit and build armies than it did to simply maintain them.

  39. Ymarsakar says

    If we need more migrant workers, why don’t we create legal worker programs? My problem is with the illegality of it all. Having a huge illegal economy, with everyone playing the game, corrupts the system of the body politic like a giant cancer. It also leeches away a country’s control over its own borders. The US, not the immigrants themselves (along with needy, complicit employers), should be making immigrant policy.

    Come on Book, haven’t you realized that only the elite born of the right blood, with the right connections, speaking with the right accent and educated in the right schools are worthy of making such decisions?

    If you continue on this road of apostasy, Book, your very soul will be endangered and in need of re-education.

  40. Ymarsakar says

    Oddly, I’d think that it would be better in metropolitan areas. There is a much higher level of taxable economic activity in cities, and you’d think that with people living more closely together you’d get some economies in the delivery of services. But obviously the reverse is true.

    Cities lose that sense of community that comes from knowing our neighbors by sound and sight. THe government happily steps in to fill that void: this need for community in the human condition.

    It is the same reason why crime is higher in cities, since the less people you know the less guilt you feel stealing from them, murdering them, and slaughtering them to put in your refrigerator for food. Well, maybe the last one doesn’t really depend on anything like population density.

  41. Ymarsakar says

    I will put up with The One trying to turn America into California if I can get a gig making expensive movies that nobody wants to see.

    Don’t worry, we’ll sew up their eyelids and then they won’t be able to refuse to see.

  42. BrianE says

    2005
    California population 36 million
    Washington 6.4 million
    California per capita income $36,900
    Washington per capita income $35,400
    California GDP $1.6 trillion, per capita GDP $44,700
    Washington DDP $271 Billion, per capital GDP $43,100

    More facts

    Per capital state and local government spending (2002)
    California- $8663
    Washington- $7730

    Here is a big difference

    California Exports
    2001- $106 Billion
    2002- $92 Billion
    2003- $94 Billion
    2004- $106 Billion
    2005- $116 Billion

    Washington Exports
    2005- $38 Billion
    2007- $66 Billion

    While Boeing headquarters left Washington, Boeing still has a huge assembly plant in Everett. We export a lot of agriculture products and have the second largest Port in the Western Hemisphere (Washington handles 6% of US trade flows (import and export)).

    Notice the huge decline in exports in 2002 and 2003 in California. Washington experienced a very small decline in those years, nothing like these numbers.

    I’m not sure what being a net exporter means to a state, but I think it’s a good thing. I think it would be a good thing if the US was a net exporter.

  43. pst314 says

    “CHARLES MARTEL DECLARES HIMSELF A BLIGHTED NEIGHBORHOOD, ASKS FEDS TO BEGIN “INVESTMENTS” IN HIM”

    Careful there, they might decide to tear you down and put up a luxury condominium.

  44. Tiresias says

    Sixth largest container port in the world, but Washington doesn’t really make any better sense than California does. Both states have political models closely related to banana republics, with one party rule; the usual crumbling infrastructure; political crookery plainly apparent but no one cares; etc.

    The best thing that could happen to either state would be to have a genuinely viable opposition party. Seattle has been screwing around now for ten years with what they’re going to do to clean up a damaged raised highway (which in New York, for example, would have been closed years ago because the damn thing sank eight inches in the quake, and has gone down a further five inches since then) that tens of thousands of people use every day. Seattle has done nothing for a decade – except talk about it – and is apparently waiting for the next earthquake to come along and save them the costs of demolition. A viable republican presence on the city council wouldn’t tolerate this kind of crap. (And, it should be noted that if it were a republican banana republic, then we’d need a viable democrat presence just as badly – though republicans do tend to be adults.)

    But the difference between the states is mostly that Washington is smaller. It’s run just as witlessly.

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