October 2008 Archives

You might be very disappointed by Obama. Especially if he wins.

Forget about deciding whom to vote for, the important decision is what to do with your investments:

I find it hard to believe that fears about a deep recession are suddenly dawning upon investors and thus are solely responsible for kneecapping the market. I've been hearing such dire forecasts for weeks from top Wall Street economists, and I really think they're already baked into the cake. (And credit markets actually look like they are finally picking up a bit—a plus for stocks.) So with that perception locked in, maybe the future political landscape is finally playing a greater role in the minds of investors, especially with polls showing a possible landslide Obama win and big Democratic congressional majorities. Is it really more plausible to suggest no effect whatsoever from a possible once-a-generation, political sea change, especially one that moves away from the winning economic formula of the past 25 years ? Not even a smidgen of worry? C'mon, now.

So at what point do you determine if the Obama discount is priced into the market? (if such thing exists) Will the markets rally if McCain pulls off the upset victory?

And in case you think I'm pulling hard for McCain I'll remind you of this by Radley Balko, Why the Republicans Must Be Defeated This Year. Hard for me to disagree, although I haven't yet decided how or if I'll vote in the presidential race. This the first time ever that I've remained undecided.

What would Milton Friedman say about the current economic situation?

"No matter what your point of view, you ought to be stunned by this development."

Alex Tabarrok says there's a consensus, there's a better plan.

The bailout package started in the House was a simple three page bill. The Senate has now passed a four hundred page monstrosity loaded with pork, most of it having nothing to do with the financial bailout. Andrew Leonard at Salon gives us a sampling:

The Emergency Economic Stabilization Act of 2008 now also includes the Energy Improvement and Extension Act of 2008 and a smorgasbord of other add-ons. Among the notable features of the additional provisions are tax credits for wind and solar power, an extension of relief from the Alternative Minimum Tax, a provision to ensure that healthcare plans include mental health benefits and so many other handouts to various constituencies that no blog post would be sufficient to include them all.

But here's a taste:

* Sec. 105. Energy credit for geothermal heat pump systems.
* Sec. 111. Expansion and modification of advanced coal project investment credit.
* Sec. 113. Temporary increase in coal excise tax; funding of Black Lung Disability Trust Fund.
* Sec. 115. Tax credit for carbon dioxide sequestration.
* Sec. 205. Credit for new qualified plug-in electric drive motor vehicles.
* Sec. 405. Increase and extension of Oil Spill Liability Trust Fund tax.
* Sec. 309. Extension of economic development credit for American Samoa.
* Sec. 317. Seven-year cost recovery period for motorsports racing track facility.
* Sec. 501. $8,500 income threshold used to calculate refundable portion of child tax credit.
* Sec. 503 Exemption from excise tax for certain wooden arrows designed for use by children.

And so on.

I hope this thing goes down in flames in the house. I don't suppose there's any chance of a veto from President Bush.