Does President Obama have a secret plan to raise taxes on middle-class Americans — and,well, pretty much everybody else — with a European-style, value-added tax? Actually, it’s not such a big secret. Connect the dots:
The great Dan Clifton of Strategas Research hears the same thing I am hearing:
We continue to believe the Senate does not have 60 votes for a meaningful cap and trade bill and today’s events are largely designed to keep the process moving. With healthcare taking up so much of the calendar and financial regulation to follow, cap and trade is now squarely put into the election calendar. Should something pass next year, we expect the legislation to a be a stripped down energy bill (as opposed to cap and trade) and that will feature a Renewable Portfolio Standard and possibly easing of approval for transmission lines.
So I am at this CAP thing on the deficit where talk of higher taxes was hot and heavy. Both Robert Rubin and Roger Altman both seemed to imply that the financial markets will force action sooner rather than later on the deficit — and that means higher taxes.
I was at a Center for American Progress conference on the deficit this AM where respected political analyst Charlie Cook talked about the 2010 congressional midterms. He said he thought there was a 1-in-3 to 1-in-2 chance that the Dems could lose the House of Representatives. Among his reasons:
Ed Yardeni and mark-to-market accounting:
Do you recall “Time of the Season” sung by The Zombies in 1968? The Q3 earnings season is about to start. For the third quarter in a row, there will be fewer zombies in the S&P 500. These were the living dead companies that finally died during 2008, or they survived and are mostly coming back from the dead. Many of them are in the Financials sector. They could deliver some big positive earnings surprises during Q3 thanks to the suspension of mark-to-market accounting on April 2. … The Doomsters were quick to add up all the write-offs they projected as the financial crisis intensified largely as a result of the death spiral attributable to marking the value of assets into the oblivion of extremely illiquid or nonexistent markets. It was insane that the MTM rule wasn’t suspended sooner. Yet both Ben Bernanke and Hank Paulson insisted that it would be unwise to change the rule in the midst of a crisis. They were dead wrong as evidenced by the extraordinary rebound in the stock market ever since March 12, when Rep. Gary Ackerman, my Congressman, leaned on Robert Herz, the head of FASB, to suspend the rule, which is what he did on April 2. The grand total of all the write-offs attributable to the financial crisis is now likely to fall quickly.
First of all, thanks to my good friend Stan Collender over at the Capital Gains and Games blog who has jumped to my defense (and that of Bruce Bartlett) vs. the misguided Ron Paul supporters who interpret any criticism of the congressman’s ideas as proof of membership of some global conspiracy.
If World Bank President Robert Zoellick were running a stealth campaign to become the next Republican Treasury Secretary, he might have given a speech very much like the one he just gave at Johns Hopkins University.
Does the Obama administration care more about creating wealth or redistributing wealth? Maybe the strategy is for the WH to worry about the latter and let the Fed take care of the former. Scott Grannis, the Calfia Beach Pundit, makes an interesting observation (bold is mine):
They may not know all the stats and numbers, but people instinctively don’t seem to want to pay a lot of dough to limit carbon emissions. Not even close. In fact, you can find plenty of climate experts who doubt they ever will, particularly in India and China. Betting on mitigation and technology seems the more realistic route. A bit from Bjorn Lomborg:
If not for unprecedented actions by the Ben Bernanke-led Federal Reserve, the United States economy might be mired in a depression.