The New Image

The failure in Confidence yesterday in the Financials might serve as an Example elsewhere, if only Politicians had the Presence to integrate the information. This Post from Don Boudreaux hints at the future Problem. His contention that Americans pay $22,100 in taxes per Household coming from David Broder may need a little Work (it would be hard put to suggest that Business and Corporation represent American Households, especially in the realm of taxation). It is true that American Households are as opposed to heavy taxation as are Business and Corporation, but the manner of the taxation varies greatly; Households having almost no control over such Government finance, yet Corporate entities fund a huge Lobby system which buys the tax rates desired. What We do need is a revised Tax system within which Politicians cannot ‘farm sale’ for their own personal gain, and a sensible Control system to limit Government spending. Establishment of such systems might allow American Households a Voice in American Politics.

I agree most of the time with Dean Baker, though that is a little hard to do most of the time. This Time I must disagree. A lower Dollar is not a panacea for Trade. Dean resides with the traditional Economists in thinking a lower Dollar will lead to more American products being sold to foreigners. I find that overrated. Foreigners are looking to reduce Stock of American dollars in their purchase of American Product, rather more than looking for Bargain pricing. A lower Dollar actually places more dollars in foreign holdings as Americans pay more for Imports which they must have, and the Trade Deficit will only grow with a lower Dollar. A higher Dollar actually makes American Investments more attractive, and reduces American Dollars held by foreigners.

Doesn’t Everyone wish that this article by Michael Lewitt was the Reality providing an umbrella covering AIG, because the failure of the credit default swap markets seems like the death of Us all. The Problem I find with it consists of the sustained Creditability of the United States Treasury, the Federal Reserve, and the Federal Government as a Whole. Nothing in this Country or the World can deal successfully with Trillions of Dollars of Resource cover; they only place their own viability as Risk. Remember that AIG held Prestige, before it followed the Judas Goats into the derivative markets, and later into the over-capitalized Shelf. Now, Everyone trembles because there is no creditability left in their assurances. Will Federal indifference save the reputation of the federal agencies?–Doubtful! Congress has spent too much through the Years, and Treasury debt also seem flakey in context. So the Paper Walls fall around Us, as the Economy churns successfully on. lgl