Thursday, April 2, 2009

Estate Taxes

This editorial pokes a little fun at the estate tax. The title "Spend It in Vegas or Die Paying Taxes: A 0% Tax on Carousing, but 55% on Thrift" is quite descriptive and drives home the point. The money quote is:
To counter the fact that economists such as I obsess about the deleterious effects of the estate tax, advocates of the estate tax note with some pride that 98% of Americans will never pay this tax. Let's make it 100%, and I'll get off my soapbox.
Something non-bailout to ponder.

Tuesday, March 31, 2009

Bailout Humor

Tobacco Tax

I suppose that if you make $250,000 or less, you are exempt from this new tax on tobacco...I guess not.  So much for the no new taxes for 95% of the population.

Should UAW President Go Too?

A Fox News story asks "With GM's Wagoner Ousted, Should Union Head Have Met the Same Fate?"

--Yes. He is as much responsible for the excesses and idiotic decisions by the UAW as Wagoner was for the company (GM). They are both culpable, although not completely responsible.

Housing Price Differentials

The folks at CalculatedRisk blog provide a useful graphic for understanding some of the dynamics of housing prices, bubbles, and the subsequent collapse. Below is the Case-Shiller house price index for three different house price "tiers."

Note that the lowest priced houses witnessed the fastest appreciation, and the fastest subsequent fall. One of the theories underlying this housing market is that the government "forced" banks to make bad loans to people with insufficient income to support the purchase. That should be reflected in demand for lower-priced housing. To the extent that the above reflects excess demand for housing in the lower tier, these data would tend to support that hypothesis. Of course, this is just San Francisco, but it does provide some interesting food for thought.

More GM and Bailouts

A Wall Street Journal editorial addresses President Obama's plan for auto. Although more skeptical than I at this point (I want to wait and see whether Obama has the guts to pull the trigger on GM), they make some valid points. It is worth a read.

Monday, March 30, 2009

GM and Bailouts

As reported here, GM's new CEO Fritz Henderson is putting bankruptcy back on the table. Keith Hennessey, President Bush's National Economic Council director, outlines on his blog that they recommended GM get the loans because they were not "ready" for Chapter 11. That makes some sense. President Obama ousted GMs CEO Wagoner today mainly because Wagoner refused to keep bankruptcy as one of GMs future options. Now that GM and Chrysler have had an opportunity to get their act together, President Obama believes they must make tough choices, which could include bankruptcy. Score one for Mr. Obama today. By keeping it on the table, it forces the unions to make tough concessions...concessions, by the way, that have already been made at Ford. Interesting stuff.