tagged w/ Alan Greenspan
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GOP presidential contender Herman Cain is surging in the polls, but his support of Alan Greenspan is unlikely to win approval from his Tea Party fans.
At the Republican debate Tuesday night, Cain touted the former chairman as the best leader the Federal Reserve has had in the past 40 years, even though the controversial chairman has admitted that his decisions weren’t always right.
“The way Alan Greenspan oversaw the Fed and the way he coordinated with all of the Federal Reserve banks, I think that it worked fine back in the early 1990s,” said Cain, who served as chairman of the Federal Reserve Bank of Kansas City.
Greenspan, who retired in 2006, has admitted that he was partially wrong in putting his faith in the free market and that the economic crisis changed his ideology and view of the world.
“I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in firms,” he told a House Committee three years ago. “Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief.”
“I’ve found a flaw,” Greenspan said, when asked whether his ideology on free markets pushed him to make decisions. “I don’t know how significant or permanent it is. But I’ve been very distressed by that fact.”
Many economists blame Greenspan for pushing policies that aided the country’s downward economic spiral, specifically keeping interest rates low for too long and creating a bubble in the housing market....
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http://abcnews.go.com/blogs/politics/2011/10/herman-cain-praises-greenspan-at-risk-of-tea-party-support/GOP presidential contender Herman Cain is surging in the polls, but his support of... more
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Dagum
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4 months ago
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You’d be forgiven for believing that Christensen’s 1997 classic The Innovator’s Dilemma was the first to detail the phenomenon in all its applecart-overturning glory: in fact it was explored in 1939. Watch this incisive lecture.You’d be forgiven for believing that Christensen’s 1997 classic The... more
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Video by Under The Radar Media with narration and research by Ryan Dawson of Rys2sense
I'm seeing so many posts here on Current that are just parroting media talking points on the AAA rating and the years long "recession" which the media still won't acknowledge is actually a "depression."
As usual, the liberal wing are blaming the "Tea Party" Republicans and the GOP, and the right wing are blaming Obama, but nearly everyone off target and missing the point completely.
Here is a summary of how DC and Wall Street got us all into this mess.
by Michael Rivero of What Really Happened
The American media has been remiss (intentionally) in reporting on the mortgage-backed securities fraud, even though it is the initiating event in the economic disaster which continues to engulf the world. But while the government can pretend none of this ever happened, the civil suits will drag the scandal into the public eye, and well it should!
After the last Depression, Congress enacted a law, Glass-Steagall, which forbid banks, insurance companies, and investment houses to be in the same institution, to deter reckless speculation with depositors’ money, which was seen as a major contributor to the stock market instability of the time. Then in 1999, at the height of the “Deregulation” craze, Citigroup and Travelers merged, a clear violation of Glass-Steagall. But rather than enforce the law, Congress repealed the prohibitions of Glass-Steagall with the passage of the 1999 Financial Services Act.
That opened the floodgates for runaway financial speculation. Wall Street knew that if they made money they would be allowed to keep it, but if their investments lost money, the US Government would step in to transfer the losses to the American people, because that is what had been demonstrated during the S&L debacle of the 1980s.
Starting about in 2005, Wall Street started bundling mortgages together into investment bundles. The initial offerings were greeted with great success, and soon everybody wanted to get in this new “product.” So great was the demand for Mortgage-backed Securities (MBS, also called Collateralized Debt Obligations) that Wall Street started running out of mortgages to front-load the system! This led to the creation of the “sub-prime” mortgage; granting mortgages to people who normally would not qualify.
Congress, themselves invested in the Wall Street firms that were profiting from selling MBS, passed an $8000 first-time homebuyer tax credit (actually a loan repaid in future taxes) to lure more buyers in which helped front-load the process even faster. This sudden surge in new homebuyers increased demand and home prices skyrocketed! This made investors and homebuyers even more confident, demand for homes and MBS soared even higher and a genuine bubble was being formed.
Demand for MBS was so great that as the supply of available mortgages began to dwindle, brokers started taking 'shortcuts'. Bear Sterns was pledging the same mortgages into multiple investment bundles; a clear case of fraud. Other brokers were blending mortgages into the bundles that were already in foreclosure. As the returns from the MBS failed to materialize evidence surfaced that the earlier earnings had not been genuine, but were “ponzi” payoffs, using money collected from new investors to send dividends to older investors.
The whole scan started to unravel in 2008 and here is where things took a dark turn. Because Congress had their own fortunes invested in the companies at the heart of the fraud, Congress decided to prop up the scam with taxpayer money and block any efforts to investigate or prosecute. That is why TARP was passed by the Congress despite 90% popular opposition.
Congress were saving themselves at the expense of the taxpayers. The phrase “toxic asset” was DC-speak for the fraudulent mortgages backed securities, which were being repurchased in order to avoid investors seeking to jail the Wall Street criminals, which would have brought all of Wall Street down. Despite claims that the US taxpayer would be refunded when the “Toxic Assets” were resold at some point in the future, the reality is that none of those assets will ever see a penny of repayment, because they are all the product of the biggest financial swindle in history. Bigger than Tulip mania. Bigger than the Great South Seas Company disaster.
Together with having to cover the credit default swaps sold with those mortgage backed securities, it is estimated that the swindle has cost the nation $27 trillion, at least $16 trillion admitted to by the Federal Reserve in “loans” and “bailouts” (actually buy-backs) from foreign investors such as Credit Suisse, Deutchebank, the Bank of Libya (boy, did THEY get hosed; 98% of their sovereign wealth fund destroyed by Goldman Sachs aka Gold In My Sacks!), etc. Globalism took a major crims n the US financial system and turned it into a global cataclysm from which we are all still reeling.
But while the “Too Big To Fail” banks were being bailed out by the US Government, smaller banks caught in the mess were struggling to stay solvent as cash poured out of their coffers to buy back all that bad paper they had sold to investors. Those monthly payments made by home-owners were not sufficient to cover the losses; the whole value of those homes needed to be returned to the banks’ balance sheets to keep the banks technically solvent.
So again, starting in 2008, Washington DC sent out a private message to banks and mortgage companies that DC would look the other way if foreclosures to home loans were “short-cutted.” This kicked off the “Foreclosuregate” scandal in which phony foreclosure paper mills, bogus notaries, MERS were all used to facilitate a massive land grab from the American people. As Damon Slivers put it during Congress’ hearings into the foreclosure mess, “We can have a realistic discussion of the foreclosure mess, or we can preserve the capital structure of the banks. We cannot do both. Which shall we do?”
In hindsight, it is obvious which choice the government made. We are seeing wealth confiscation, no different than when FDR confiscated the gold from the American people to save the banks, only this time, done in a covert way to trick Americans into thinking it was their own fault they lost their homes. But again, this was the result of official US policy which gave tax credits to corporations that actually encouraged offshoring of American jobs. In short, the US Government took their jobs to make it easer for the banks to take their homes, to save themselves from going to prison over the mortgage-backed securities fraud.
Iceland had the right solution. They tossed the crooked bankers in jail and fired the government that tried to loot the people to save those bankers and Iceland’s economy is already on the rise. (Which is why you don’t see much mention of them any more in the American media)Video by Under The Radar Media with narration and research by Ryan Dawson of Rys2sense... more
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This is a video that explains in layman terms what happened to the housing market and the economy crash from the end of the Bush Administration and into the Obama Administration. Narration and research by Ryan Dawson of Rys2Sense. Please share this video with as many people as you can.This is a video that explains in layman terms what happened to the housing market and... more
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Regardless of how the economy is doing it seems the super-rich come out ahead and to prove it, Wall St. has set yet another new pay record and the wealth gap widens.Regardless of how the economy is doing it seems the super-rich come out ahead and to... more
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Peter Schiff believes Americans should return to a basic economy that grows based on savings, not consumer credit.Peter Schiff believes Americans should return to a basic economy that grows based on... more
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When even the New York Times and CNN are admitting that the United States faces not only a double-dip recession but potentially a new great depression, any alarm bells that have not been rung should now be sounding loudly.
Following in the footsteps of the New York Times’ Paul Krugman, who in June wrote that the United States had entered a third depression similar to the Long Depression of the 19th century, CNN Money carried an article yesterday brazenly entitled, Is this finally the economic collapse?.
The piece, written by Keith R. McCullough, points out that the Fed’s announcement that it will start buying Treasury debt, is a “crossing the Rubicon” moment and “could lead the country to the brink of collapse”.
“Crossing the 90% debt/GDP threshold is the equivalent of crossing the proverbial Rubicon of economic growth. It’s a point from which it’s almost impossible to return,” states the article, adding that the market has not responded to quantitative easing so to engage in more of the same would be completely futile.
“With 40.8 million Americans on food stamps (record high) and 45% of the unemployed having been seeking employment for 27 weeks or more (record high), what’s left if (or when) QE2 doesn’t kick start GDP growth? Should we start begging for QE3? Should we cancel the bomb of the National Association of Realtors’ existing home sales report, scheduled for public release on August 24th? Or should we bite the bullet and accept that current economic policy dictates 0% returns-on-savings, even as Washington continues to lever-up our future to the point of economic collapse?” writes McCullough.
The Dow Jones slipped by 265 points yesterday as both the Bank of England and the Federal Reserve indicated that, as we predicted all along, the happy clappers who blithely talked of “robust recovery” were in fact completely wrong and now that the futile and transitory life-support machine of quantitative easing has been turned off, the picture looks almost as bad as when the crisis began in 2008.
Predictions on GDP growth seem to be shrinking by the day as Ben Bernanke greases the skids for QE2 – a fresh round of printing money out of thin air, destroying the long term value of the dollar which has already had 9 consecutive down weeks since June but ensuring the central bankers that run the United States continue to reap lucrative interest payments on the spiraling national debt. The U.S. government, via the taxpayer, paid out nearly $20 billion in interest on debt last month alone, as the Federal Reserve enjoys record profits, only 20 per cent of which is returned to the Treasury....
Continued at: http://www.prisonplanet.com/fed-leads-america-to-the-brink-of-collapse.htmlWhen even the New York Times and CNN are admitting that the United States faces not... more
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Dagum
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Even before the ascension to public consciousness of a right-wing libertarian named Rand, Ayn Rand has been a hot topic of conversation. From threats from the right to "Go Galt" after Rand's "Atlas Shrugged" hero to the downfall of Alan Greenspan, the fingerprints of the novelist/philosopher/heroine of freemarketeers everywhere have been all over the last couple of years in U.S. politics. Just what was it about Ayn Rand that attracted so many followers, and what is it about her books that keeps them flying off the shelves? We ask Corey Robin, Brooklyn College professor and author of a new piece on Rand at The Nation, and Eesha Pandit, feminist philosopher and Director of Advocacy at MergerWatch, to tell us what everyone sees in Ayn Rand, and explain why we should be concerned about her influence.Even before the ascension to public consciousness of a right-wing libertarian named... more
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This is damning stuff:
As top Federal Reserve officials debated whether there was a housing bubble and what to do about it, then-Chairman Alan Greenspan argued that the dissent should be kept secret so that the Fed wouldn’t lose control of the debate to people less well-informed than themselves.
“We run the risk, by laying out the pros and cons of a particular argument, of inducing people to join in on the debate, and in this regard it is possible to lose control of a process that only we fully understand,” Greenspan said, according to the transcripts of a March 2004 meeting.
Only he now says that he was the one who didn’t fully understand:
“I have found a flaw” in free market theory, Greenspan said under intense questioning by Representative Henry Waxman, the Democratic chairman of the Government Oversight Committee of the House of Representatives. “I don’t know how significant or permanent it is,” Greenspan added. “But I have been very distressed by that fact.”
“I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms,” Greenspan said.
Waxman pushed the former Fed chief, who left office in 2006, to clarify his explanation.
“In other words, you found that your view of the world, your ideology, was not right, it was not working,” Waxman said.
“Absolutely, precisely,” Greenspan replied. “You know, that’s precisely the reason I was shocked, because I have been going for 40 years or more with very considerable evidence that it was working exceptionally well.”
After listening to the BP executives pretty much say the same thing, can we now see the pattern of elite corruption and malfeasance? How about the Catholic Church? Or the CIA?
It’s not like there aren’t, in every case, people who dissent:
At the same meeting, a Federal Reserve bank president from Atlanta, Jack Guynn, warned that “a number of folks are expressing growing concern about potential overbuilding and worrisome speculation in the real estate markets, especially in Florida. Entire condo projects and upscale residential lots are being pre-sold before any construction, with buyers freely admitting that they have no intention of occupying the units or building on the land but rather are counting on ‘flipping’ the properties–selling them quickly at higher prices.”
Had Guynn’s warning been heeded and the housing market cooled, the financial collapse of 2008 could have been avoided. But his comment was kept secret until Friday, when the central bank released the transcripts of Federal Open Market Committee meetings for 2004 and CalculatedRisk spotted it. The transcripts for 2005 to the present are still secret.
They didn’t want to spoil the party. After all a lot of people were making a lot of money. And nobody wanted the “little people” who don’t understand how the world works interference. Like the congress:
In little-noticed statements to reporters over the last few weeks, Pelosi has alleged that the Bush administration knew well in advance of its intervention that the financial crisis would hit, and that Congress would need to authorize a historic and unpopular bailout – but that top officials, including then-Treasury Secretary Henry Paulson, told her that they had been barred from briefing Congress about true extent of the crisis.If accurate, the allegation could constitute a major indictment of the Bush administration, which may have worsened the crisis and resulting economic fallout by delaying the call for congressional action. Pelosi says the admissions from Bush administration officials that they had kept Congress in the dark came in private conversations between her and those officials in person and by phone. None of the other parties to those conversations would comment for this story. Nor is it clear if the Administration’s alleged decision not to brief Congress earlier was a calculated strategy to avoid spooking the already shaky financial markets thus hastening the crisis or, as Pelosi suggests, a political calculation in advance of the 2008 presidential elections, or a combination of the two.
Read on.
But whatever we do, let’s not look in the rearview mirror and hold anyone responsible for anything. That would be counterproductive. Accountability is for the little people.This is damning stuff:
As top Federal Reserve officials debated whether there... more
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The Presidential Medal of Freedom is a decoration bestowed by the President of the United States and is – along with the equivalent Congressional Gold Medal bestowed by an act of U.S. Congress – the highest civilian award in the U.S. It recognizes those individuals who have made "an especially meritorious contribution to the security or national interests of the United States, world peace, cultural or other significant public or private endeavors." The award is not limited to U.S. citizens and, while it is a civilian award, it can also be awarded to military personnel and worn on the uniform.
So... why has this honour been bestowed on so many undeserving people? let's take a look at some of the 'lovely' deserving recipients, starting with Tony Blair, then....
Margaret Thatcher
Alan greenspan- Banker
David rockefeller- Evil incarnate
Lawrence Rockefeller- Evil incarnate descendant
Read on and you will find many bankers on this list too, wonder what amazing feats they achieved in the way of contributing to the security of the US?
http://en.wikipedia.org/wiki/List_of_Presidential_Medal_of_Freedom_recipientsThe Presidential Medal of Freedom is a decoration bestowed by the President of the... more
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“I was right 70 percent of the time, but I was wrong 30 percent of the time,” said Alan Greenspan as he testified last week on Capitol Hill. Greenspan — a k a the Oracle during his 18-year-plus tenure as Fed chairman — could not have more vividly illustrated how and why geniuses of his stature were out to lunch while Wall Street imploded. No doubt he applied his full brain power to that 70-30 calculation. But the big picture eludes him. If the captain of the Titanic followed the Greenspan model, he could claim he was on course at least 70 percent of the time too.
Greenspan was testifying to the commission trying to pry loose the still incomplete story of how the American economy was driven at full speed into its iceberg. He was eager to portray himself as an innocent bystander to forces beyond his control. In his rewriting of history, his clout in Washington was so slight that he was ineffectual at “influencing the Congress.” The “roots” of the crisis, he lectured, dated back to the fall of the Berlin Wall in 1989. In other words: Wherever the buck stops, you had better believe it’s not within several thousand miles of the Oracle. As he has previously said in defending his inability to spot the colossal bubble, “Everybody missed it — academia, the Federal Reserve, all regulators.”
That, of course, is not true. In last Sunday’s Times, one of those who predicted the bubble’s burst — Michael Burry, an investor chronicled in “The Big Short” by Michael Lewis — told in detail of how Greenspan and others in power “either willfully or ignorantly aided and abetted” the reckless boom and the ensuing bust. But Greenspan is nothing if not a representative leader of his time. We live in a culture where accountability and responsibility are forgotten values. When “mistakes are made” they are always made by someone else.
This syndrome is hardly limited to the financial sector. The Vatican hierarchy and its American apologists blame the press, anti-Catholic bigots and “petty gossip” for a decades-long failure to police the church’s widespread criminal culture of child molestation. Michael Steele, the G.O.P. chairman, has tried to duck criticism for his blunders by talking about his “slimmer margin” of error as a black man. New York’s dynamic Democratic duo of political scandal, David Paterson and Charles Rangel, have both attributed their woes to newspapers like The Times, not their own misbehavior.
Such is our current state of national fecklessness that the gold medal for prompt contrition by anyone on the public stage belongs, by default, to David Letterman. He wasted little time in telling a national audience point blank that he had done “something stupid,” hurt those he loved and had a “responsibility” to “try to fix it.” In the land of Rod Blagojevich and Tiger Woods, the candid late-night talk show star is king.“I was right 70 percent of the time, but I was wrong 30 percent of the... more
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Former Federal Reserve Chairman Alan Greenspan was a market manipulator of first order. His career evidences the major problems associated with financial high priests.Former Federal Reserve Chairman Alan Greenspan was a market manipulator of first... more
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U.S. regulators should consider breaking up large financial institutions considered “too big to fail,” former Federal Reserve Chairman Alan Greenspan said.
Those banks have an implicit subsidy allowing them to borrow at lower cost because lenders believe the government will always step in to guarantee their obligations. That squeezes out competition and creates a danger to the financial system, Greenspan told the Council on Foreign Relations in New York.
“If they’re too big to fail, they’re too big,” Greenspan said today. “In 1911 we broke up Standard Oil -- so what happened? The individual parts became more valuable than the whole. Maybe that’s what we need to do.”
At one point, no bank was considered too big to fail, Greenspan said. That changed after the Treasury Department under then-Secretary Hank Paulson effectively nationalized Fannie Mae and Freddie Mac, and the Treasury and Fed bailed out Bear Stearns Cos. and American International Group Inc.
“It’s going to be very difficult to repair their credibility on that because when push came to shove, they didn’t stand up,” Greenspan said.
more at link...U.S. regulators should consider breaking up large financial institutions considered... more
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Just when you think those that run our country have experience to do a good job, to provide for the common defense and promote the general welfare, along comes the status quo-which happens to be greed and money and power.
Nobody can overturn the money changers tables alone. Well Jesus did.
If we don't pay attention to the warnings and the warners....
October 20th, 2009 on Frontline is a chance to learn about how we got in this financial crisis. Just maybe then we can do something to avert it from happening again, if we can get experienced, conscious and conscience Americans to provide for the common defense and promote the general welfare of our country.Just when you think those that run our country have experience to do a good job, to... more
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Jeffrey Sachs, a prolific economist, author and professor at Columbia University, had unusually harsh words in a speech today at the World Business Forum directed at Alan Greenspan, former chairman of the Federal Reserve — placing him with much of the blame for the current financial crisis. (Find more World Business Forum coverage here)
“The essence of the current downturn is finance,” Mr. Sachs said. “It’s a Wall Street crisis. A crisis made down the block.” He said, and “if you look under the rubble you can figure out what happened and why.”
First, “a long bout of easy credit championed by Alan Greenspan and the Fed outside of the normal boundaries of monetary policy,” which came together with “a nearly complete deregulation of the financial sector contrary to almost everything we know about the risks of a highly leveraged financial system.”
“This is flagrant irresponsibility,” he said. “This isn’t a matter of one’s market philosophy, just profound irresponsibility.” Later, though, he said Mr. Greenspan’s ideology was possibly at fault, given his “Ayn Rand” philosophy that markets take care of themselves “until he discovered the flaw of his theory later.”
Mr. Sachs also spoke harshly of the Clinton and Bush administrations. “We arrived at this cliff through the aggressively irresponsibility of two U.S. administrations in a row,” he said, accusing them of bending to the will of the nation’s biggest lobbying group — the financial industry.
“Where were the regulators? Consciously and deliberately kept out of the scene,” he said. “This led to a bubble financially that was most notable in the housing sector…and Alan Greenspan added fuel to the fire by keeping interest rates around 1%” from 2002 through early 2005.
“You get credit for stopping a Depression but I don’t want to give too much credit because the people who stopped it were the people who started it also,” said Mr. Sachs.Jeffrey Sachs, a prolific economist, author and professor at Columbia University, had... more
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In his Saturday radio address, President Obama acknowledged the White House is exploring "additional options to promote job creation." It's about time. This is the worst job market in 70 years -- including the longest duration of steep job losses.
What should be done about unemployment?
If anyone had any doubt that something far more dramatic must be done, listen to former Federal Reserve Chairman Alan Greenspan. He warned Sunday against further stimulus because "we are in a recovery, and I think it would be a mistake to say the September numbers alter that significantly." Greenspan has turned into an inverse soothsayer. After his cataclysmic error about where the economy was headed before the meltdown, his views about the future should be carefully noted as being the exact opposite of what's likely to be in store.
The economy may be in a technical recovery, but this is not a real recovery, and the "green shoots" or "positive signs" that Wall Street cheerleaders love to shout about are phantoms of their ever-optimistic imaginations. The stimulus is working but it is far from adequate. Before the stimulus, we were losing more than 500,000 jobs a month. Now that 40 percent of the stimulus has been spent, we are losing more than 250,000 jobs a month.
What to do? With the debt ceiling approaching and the gravitational pull of the 2010 elections increasing, the White House can't go back to Congress with a formal bill to enlarge the stimulus package. Four simpler moves would be to:In his Saturday radio address, President Obama acknowledged the White House is... more
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Alan Greenspan assassinated Capitalism. Have we regulated Cronyism and Corruption to reinstate True Capitalism? Top Banking Analyst Chris Whalen shares from the inside ...Alan Greenspan assassinated Capitalism. Have we regulated Cronyism and Corruption to... more
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An editorial in today’s Wall Street Journal brings home a fact that I’ve known for a long time: Economists tend to be schizophrenic.
The article mentions Larry Summers’s double talk. Summers commented on Obama’s latest budget by saying, “There are no, no tax increases….” The article points out that there are tax increases, namely the death tax that will be returning to its 2009 parameters, instead of disappearing as it was scheduled to do in 2011. That wouldn’t be more than a fib, but the story gets worse.
In 1980, Summers co-authored a study at the National Bureau of Economic Research supporting the elimination of the estate tax.
Go figure. Schizophrenia, anyone?An editorial in today’s Wall Street Journal brings home a fact that I’ve... more
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