No, I don't even know your name,
It doesn't matter
You're my experimental game,
Just human nature
The House of Representatives voted 328-93 last week to impose a 90
percent tax on bonuses paid after December 31, 2008 by companies
that received more than $5 billion in government bailout funds. Of
course, the tax would only apply to the "rich," that is those who
receive total compensation of more than $250,000. The list of these
companies is small, to be sure, but contains some surprising names
such as Wells Fargo, Bank of America and Chrysler.
While out for my weekend run I came across five cyclists all
wearing Wells Fargo gear from head to toe. As we passed I didn't
know whether to feel vindictive or sympathetic. Surely, these five
guys were not responsible for the breakdown of our entire financial
system, but my government believes they were.
So instead, I passed them with only a bewildered look on my face
and a confused state of mind. Today, though there may be some cases
of wrongdoing, there are thousands of workers at Bank of America,
Chrysler and even AIG who have done nothing wrong, but are now
being portrayed as the villains of our current crisis.
Too many aspects of the current witch hunt seem to have arisen from
happenstance. Why the $5 billion cutoff? Why the $250,000 total
compensation limit? Why only bonus payments and not total
compensation? Why only the financial sector?
Back home, exhausted from both the run and the mental gymnastics, I
logged onto the New York Times to see if anything
interesting was happening and found this little gem: "The Obama
administration will call for increased oversight of executive pay
at all banks, Wall Street firms and possibly other
All my questions were answered. The taxing apparently won't stop
with those who received bailout money, or those making more than
$250,000, or even with those in the financial sector. So, where
does it stop?
Already, the folks at these companies who have nothing to do with
the financial side are being punished. Think of the IT or marketing
executive who just happens to work for a financial company. Why is
he or she being vilified?
Then, it struck me. What is the world's largest financial
institution? It must be the U.S. Government. Does this mean Barack
Obama's book deal signing bonus will be taxed at 90 percent? I
won't be holding my breath.
In February, producer prices rose 0.1 percent and consumer prices
rose 0.4 percent. There is little information in the data to
support increasing hyperinflationary fears, but one wouldn't expect
such results until the economy can gain traction. Once recovery is
on the way, it will be up to the Treasury and the Fed to pull in
the reigns on monetary policy in order to tame what could surely be
tremendous inflationary pressures.
Housing starts rose a surprising 22.2 percent in February to
583,000. This is still well below the estimated replacement rate of
750,000 to 1,000,000 homes, meaning the overall housing stock
continues to decline. Much of the increase in February came from
the multifamily sector as the demand for rental units is
The current account deficit for the fourth quarter fell to $133
billion from $181 billion in the third quarter. The improvement in
the trade balance for goods and services was the prime reason the
current account deficit fell to its lowest level since the first
quarter of 2001.