Response - A Look Back To March 2010 - Same Problems & Solutions Needed

Thanks to our Wall Street Financial VP for sending us his thoughts below re last night's subject message.  I am honored to have a person of this quality provide his thoughts for all of us to learn – a Wall Streeter of the caliber like those who worked for Cantor Fitzgerald who leaped off a 110 story building on 9/11 – what brainpower was lost for America that day.

 

---Response From Wall Street Subscriber---

 

Doug – your last blog is one of your best ever. You are on fire!  I responded and am enthusiastic about expanding upon your message as I continue to blog to IBD and The Hill.

The stats are astounding, especially the fact that lower 20% pay net -3.8% and the lower 20% to 40% pay -4.3% of all personal income tax revenues.  The stats are worse than I thought. What a great service in advertising these stats. I will now do so in my blogs.

And yet our current very progressive tax system is not enough for many. Many like the Wall Street demonstrators want the top 1% to pay even more. How much more - 50% instead of 40%? Christina Romer, before she accepted the position of Head of Council of Economic Advisors for BO (then subsequently resigned in disgrace) published an elaborate analysis of the impact of tax increases on GDP growth in the US since the end of WW2. Her conclusion was that a tax increase of 1% of GDP will subtract 2% to 3% of GDP. Are the Socialist leaning unaware of this and oblivious of what a 40% to 60% tax rate did to Europe?

But you opine what is a very likely scenario: that BO's secret plan is to destroy capitalism. He is doing this now by shifting blame for slow GDP result of his purposeful economic policies to rants of blame Wall Street, private corporations, and private entrepreneurs.

Let's look at Europe. At present, Greece, Ireland, and Portugal have no access to private financial markets. Two independent European think tanks concluded that the ECB is likely insolvent if one factors in all toxic securities they own. Paul Samuelson, by no means a conservative economist (but a very reputable one nonetheless) in IBD opined that in event of ECB insolvency a new European order may emerge: the world's major creditors such as China and Arab oil rich nations may impose their own solution on the ECB, European banks and thus Europe. This would include 'haircuts' to private creditors and mandated public expenditure cuts. Just as the US became the economic power in Europe in the 1950s subsequent to UK's financial demise, China may have that opportunity in Europe. And with the US now borrowing 43 cents on every dollar soon to be 46 cents some time in 2013, China may have another larger target – us!

Solution is for us to challenge the 'mindset' so ingrained in many Americans as you so effectively point our repeatedly. For us bloggers it is now time to challenge the assumption of perhaps as many as 70% of all Americans (some poll I read recently) that BO is a nice man but weak in economic expertise. Nice or not, this Saul Alinsky disciple, protégé of Rev Wright and Bill Ayers, and the one who hired renowned Communist Van Jones as a 'czar', is in process of destroying our economic lives. BO thinks that by destroying capitalism he will be promoted in a New World Order to share the wealth globally with his Alinsky disciples in charge. In a New World Order, those with the money and the ones who know how to grow the economy will demand BO get lost. This is BO's greatest illusion and misjudgment.

The next election will NOT be 'free' markets vs Nanny State. Why? Because worldwide and clearly on display in Europe, we are witnessing the beginning of the destruction of Nanny states. The ultimate money rich creditors will not stand for Nanny States.

The next election will be 'free' markets vs. U.S. economic collapse / loss of US identity. Bloggers and free marketers – the time to get intimately involved in local, state, and national elections 2011 and 2012 is now! And we all need to work extra hard because of a strong American mindset that is 'economically illiterate'.