The Future of Capitalism

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"Next thing you know, President Obama is going to try to get Reagan as his running mate for 2012. Imagine the commercials" — Ira Stoll column, "Distorting Reagan's Record," Reason.com, July 18, 2011.

Barack Obama campaign commercial featuring Ronald Reagan, April 6, 2012 (also embedded below.)

One difference, of course, is that Reagan was talking about closing loopholes in the context of an overall lowering of tax rates from the prior administration, including on the "rich." President Obama has done nothing on tax simplification or "reform," he just wants to raise rates and complicate the tax code by imposing a special Buffett Tax on some taxpayers.

Texting While Walking Ban

May 16, 2012 at 11:03 am

Fort Lee, N.J., is reportedly going to start issuing $85 tickets to pedestrians caught walking while texting on their phones. This big-government stuff is really getting out of control — next thing you know they're going to start requiring everyone to purchase health insurance. Seriously, though, the bureaucrats and politicians who dream up these policies must either be so dense that they aren't capable of walking and texting at the same time, or they must leave such relaxed lives that they never have to multitask. What's next, banning high heels because someone walking in them might trip? The real sidewalk hazard in Fort Lee isn't pedestrians walking while texting, but those parking meters that the government has erected on poles in the middle of the sidewalk. If it were pedestrian safety rather than revenue generation that the municipality had in mind, the meters would be the first to go.

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Another Toomey Data Point

May 16, 2012 at 10:20 am

Further to the report here yesterday that Senator Pat Toomey of Pennsylvania is emerging as Governor Romney's top choice as his running mate comes the news in today's Politico Playbook that Crossroads GPS, the Republican group cofounded by Karl Rove, is spending $25 million this month on a television buy that will air in "Colorado, Florida, Iowa, Michigan, North Carolina, New Hampshire, Nevada, Ohio, Pennsylvania, and Virginia." The electoral map at RealClearPolitics lists Colorado, Florida, Iowa, North Carolina, New Hampshire, Ohio and Virginia as "toss-up" states, so that is understandable, but what is Crossroads doing spending money in Pennsylvania, which RealClear lists as "leans Obama," and which President Obama carried in 2008 over Senator McCain by 54% to 44%? It makes sense if Senator Toomey is the Republican vice presidential nominee and if Mr. Romney's victory plan involves claiming those 20 Pennsylvania electoral votes, which is the most electoral votes of any of the states on the Crossroads GPS list other than Florida. It's just like Romney to be coolly analytic about the campaign, thinking about it as how does he get the electoral votes he needs to win the presidency, just like he thought about the primary as how did he get the delegates needed to win the nomination.

Pat Toomey For Vice President

May 15, 2012 at 3:40 pm

Pat Toomey, the Republican senator from Pennsylvania, is emerging as Mitt Romney's most likely running mate.

A source in the Romney campaign said that Mr. Toomey, who won a statewide election in 2010, could put Pennsylvania, with its 20 electoral votes, in Mr. Romney's column. Barack Obama has long had trouble connecting with Pennsylvania voters — he lost the 2008 presidential primary there to Hillary Clinton by a ten percentage point margin even after outspending her three-to-one and campaigning extensively in the state.

Mr. Toomey also both builds on some of Mr. Romney's strengths and could help compensate for some of his weaknesses. Like Mr. Romney, Mr. Toomey was successful in the private sector. He spent six years on Wall Street dealing in foreign currency markets, and then started a family restaurant business in Pennsylvania.

Mr. Toomey's blue-collar background — his dad was a union worker for an electrical utility company, his mom a part-time church secretary — would help counter Democratic attempts to portray Governor Romney, whose father was an auto-industry executive and governor of Michigan, as a child of privilege.

Romney's Wall Street Fundraising

May 15, 2012 at 3:08 pm

Mitt Romney's fundraising from the financial industry in the context of the JPMorgan Chase/London Whale situation is the subject of my column this week. Please read it at the New York Sun (here) or Reason.com (here).

Richard Epstein on Michael Sandel

May 15, 2012 at 9:42 am

Libertarian law professor Richard Epstein's latest column is up at the Hoover Institution web site. In it, Professor Epstein challenges what he calls the "naïve communitarianism" of Harvard professor Michael Sandel. Professor Sandel's latest book, What Money Can't Buy: The Moral Limits of Markets, is described by Professor Epstein as a "nonstop Jeremiad against modern civilization." Says Professor Epstein, "It is a strange brand of moral philosophy that reserves its greatest indignation for our most fruitful social innovations."

Rattner on Dimon

May 14, 2012 at 5:16 pm

Steven Rattner writes:

offsetting the $2bn loss (which Mr Dimon acknowledged could eventually be more) was at least $1bn of profits from other, similar activities.
More importantly, even at $2bn, the loss represents only about 20 per cent of JPM's pre-tax profit in the first quarter of 2012 alone and a bit more than 1 per cent of its equity market value.
So this loss never endangered JPM or its depositors, let alone any other banks or financial institutions. We need to accept without panicking that a bank –particularly one as large and as well capitalised as JPM – may from time to time lose $2bn in a non-systemic misstep. Far more was lost by banks from old-fashioned corporate loans turning sour during each of the last two recessions. Banking has always involved risks and always will.
Fourth, to those who say Wall Street never pays for its mistakes, please take note of JPM's shareholders (many of them employees), who saw $14bn lopped off the value of their holdings in Friday's trading.

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Spitzer on Dimon

May 14, 2012 at 4:58 pm

Former New York governor Eliot Spitzer, writing in Slate, calls on Jamie Dimon to step down from the board of the Federal Reserve Bank of New York. "Dimon should resign from the New York Fed board immediately, acknowledging that his role is incompatible with what he has been trying to do in terms of lobbying and his abject failure as a manager to control risk within his own organization," Mr. Spitzer writes. So the only bankers on the Fed board should be the ones whose trades never lose money, and who support laws that would cost their shareholders money?

Thanks to reader-participant-community member-watchdog-content co-creator N. for sending the tip.

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The Rise of the Super-Rich

May 14, 2012 at 2:10 pm

At the Atlantic, an article by Matthew O'Brien accompanied by charts purports to show that "the superrich have once again decoupled from everybody else," and that the "super-rich have left everyone behind the past 30-years." The charts show "real income," not post-tax, post-transfer income that includes the value of employer-provided health insurance, which might tell a different story. The charts also make it look as though the top 0.1 percent income earners in 1976 were the same as the top 0.1 percent income earners today, when in fact, there is plenty of mobility out of that top echelon as once-great businesses fade or as once-dominant athletes or performing artists age and retire. Finally, "everyone else" gets plenty of benefits from the super-rich that aren't necessarily measured in statistics of "real income." While Google's boom may show up in the income of its super-rich founders or early investors, for example, how do you measure the value to "everybody else" of free e-mail and the readily accessible information in Google's free search results? And while the value of a new medical treatment may show up in the income of a medical device manufacturer or pharmaceutical executive, how do you measure the value to "everybody else" of the added life-years, or higher quality life-years, that result from the medical innovation?

Times Blames Income Inequality For Dewey Collapse

May 14, 2012 at 8:58 am

Here's an example of how journalists who come at the world from different perspectives can look at the same set of facts and draw different conclusions. I wrote last week about the implosion of of the law firm Dewey and LeBoeuf and blamed the situation in part on excessive regulation. The New York Times looks at the story this morning and says the trouble was the income inequality:

a corrosive partnership culture of haves and have-nots....Mr. Davis subscribed to a "barbell" compensation system. On one end were the so-called rainmakers with big books of business who were lavished with multimillion-dollar, multiyear guarantees. Dewey's stars were paid as much as $10 million a year. (Mr. Davis himself earned about $4 million a year, but cut his 2011 salary to $300,000.)

Paul Ryan at Georgetown

May 13, 2012 at 10:48 am

Peter Ferrara has a column in Forbes praising Paul Ryan's speech at Georgetown University:

Ryan addressed the Catholic institution "as a Catholic holding public office" trying to conform his work to Catholic "social doctrine as best I can make of it." He presented a vision that would be far more effective in helping the poor than current federal policies that have prevailed for decades....Ryan was greeted by a 50 foot banner asking the illuminating question, "Were you there when they crucified the poor?"

Afflict the Comfortable

May 13, 2012 at 10:15 am

Michael Goodwin, writing in the New York Post, seems to hold out "comforting the afflicted and afflicting the comfortable" as a good old standard of journalism. It is true that mission statement has long been discussed in journalism classes and in newsrooms, but it's a standard with its own problems. As this Poynter Institute post put it:

We need journalists to get at the truth and to keep watch against abuses of power. They have a hard enough time getting that right. So let's absolve them of the responsibility of charity or iconoclasm. If journalists want to comfort the afflicted, they should send money to the Red Cross.

What If The Rich Leave

May 11, 2012 at 1:01 pm

Presidential Prep School Prank Precedent

Bloomberg News has the latest development on the "What If The Rich Leave" front: Facebook co-founder Eduardo Saverin, whose stake in the company, post-initial public offering, could be valued at about $3.8 billion, is renouncing his American citizenship and heading to Singapore.

Earlier coverage of the rich-leaving-America story on this site is here, here, and here.

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May 11, 2012 at 9:00 am

The New York Times (here) and the Washington Post (here) are making a big deal out of Mitt Romney's prep school misbehavior in 1965. I'm the last one who would defend high school bullying or pranks or misbehavior, but let it just be said that it is not unprecedented. Rose Fitzgerald Kennedy's 1974 book Times To Remember reported about John Kennedy's time at Choate:

Jamie Dimon, Obama, and the London Whale

May 11, 2012 at 12:21 am

President Obama is a potential victim of the announcement by JPMorgan Chase CEO Jamie Dimon, who earned $23 million last year, that his firm had suffered at least $2 billion in trading losses related to the so-called "London Whale" in a move that Mr. Dimon conceded was "poorly reviewed, poorly executed and poorly monitored."

White House visitor access records show at least 18 visits to the White House by Mr. Dimon during the Obama administration. The most recent disclosed visit, according to the visitor access records on the White House site, appears to have been January 21, 2012, when Mr. Dimon, accompanied by his wife Judith and daughters Julia, Kara, and Laura, attended a White House holiday open house.