The strongest and toughest creature out there, and maybe the smartest one, that no one has been able to subdue yet, the inexplicable American consumer has hit a wall. It showed up in a prosaic but ugly 8-K filing by Visa—a staggering and sudden shift that pundits tried to explain away somehow by referring to recent changes in debit card regulations. I mean, come on.
Newly appointed French Minister of Economy, Finance, and Trade, Pierre Moscovici surprised the world: “A country that indebts itself is a country that impoverishes itself,” he said and proclaimed that the government would cut the deficit because “public debt is an enemy for the country.” Powerful words, reasonable and refreshing. What a difference from what we’re getting dished up in the America.
Before retiring from Congress, Rep. Ron Paul, Chairman of the House Financial Services Subcommittee on Domestic Monetary Policy and Technology, slugs at the Fed one more time: Tuesday, his committee weighs six bills to reform or abolish the Fed which “continues to reward Wall Street banks while destroying the dollar’s purchasing power and driving up the cost of living for average Americans,” he said.
Contributed by Chriss Street. Four years ago, Nobel Prize winning economist Joseph Stiglitz and the Roosevelt Institute, where he serves as Senior Fellow, enthusiastically heralded the 2008 election as the beginning of at least a decade of expansion of government intervention into the American economy. But it has come as a shock to Stiglitz and the Roosevelt Institute that voters have already turned against the values of the days of disco.
Thousands of students from all over California snarled traffic during their march on the Capitol in Sacramento. Hundreds of them then flooded the Rotunda of the Capitol, a raucous affair. Eventually, the Highway Patrol cleared them out, and 60 were thrown in the hoosegow for trespassing and resisting arrest. Their problem: tuition increases—in a system that has become dysfunctional.
Between 2002 and 2011, Boeing reported to its investors that it earned $31.8 billion. But it reported something entirely different to the IRS and didn’t pay income taxes. Instead, it received tax benefits of $2.06 billion. Other companies were similarly agile. So Geithner is ballyhooing President Obama’s latest election-year ploy: putting some fresh lipstick on that ugly tax code though it has a fundamental flaw that turns it into an absurdity.
Congress is the ideal American institution: it spends far more than it takes in and borrows the difference. We love that. To heck with the future. It means free money, services, wars, and other goodies. At least some of us get to profit from it. And then we blow it or invest it, and we lose it or make money on it. It all adds up to that glorious GDP. It’s the American dream. And yet….
The Supercommittee did what it was expected to do. They dug in their heels. Why? They didn’t have to make painful choices. Unlike Greece, the US has a miraculous money machine that takes care of the deficits. The emasculated credit markets watch nervously.
The Postal Service announced a staggering loss for fiscal 2011: $5.1 billion. Plus $5.5 billion for retiree health benefits that it should have paid in 2011 but deferred to fiscal 2012. Now it’s due. But there’s no money. Default? Nope. Congress will find a way to stick it to the taxpayer. But amazingly if run right, the Postal Service could be a decent business.
In his “enough’s-enough” speech in Hawaii, Obama castigated China for its currency peg, a perennial complaint. Congress too regularly hyperventilates about the yuan being “artificially undervalued.” If China just allowed the yuan to trade freely, they say, it would solve the U.S. economic quagmire. Cheap political posturing—and full of bitter ironies.