Taxes Shrugged

A Bailout for Big Tobacco?

Will the decline in smoking rates necessitate a bailout of Big Tobacco?  Many states have become dependent on the monies flowing in from the tobacco settlement fund.  What will happen when the cigarette manufacturers can't make their payments to the states.  How will states that borrowed against the funds in form of bonds make their debt payments?  I see an situation developing where, under the current standards, a bailout is inevitable and desirable.  A domino effect of non-payment would spiral out of control- we can't let this happen.

US smoking rate is under 20 percent for first time

Nov 13, 2008
By Will Dunham

(Reuters) - The number of U.S. adults who smoke has dropped below 20 percent for the first time on record but cigarettes still kill almost half a million people a year, health officials said on Thursday.

About 19.8 percent of U.S. adults -- 43.4 million people -- were smokers in 2007. That was a percentage point below the 2006 figure and followed three years of little progress, the U.S. Centers for Disease Control and Prevention said in a report.

Half of all long-term smokers, especially those who start as teens, die prematurely, many in middle age.

To Lighten the Mood...

Bipartisan Fun- Secret Service Code Names

From the POLITICAL DIARY

NOVEMBER 13, 2008

As government trivia goes, few tidbits are as fun to know and share as the code names the Secret Service issues to those whom it protects. Barack Obama received his handle "Renegade" back in June when he won the Democratic nomination. Now the rest of the soon-to-be First Family have received theirs. Mr. Obama's wife, Michelle, is "Renaissance"; his 10-year-old daughter, Malia, is "Radiance"; seven-year-old Sasha is "Rosebud." Meanwhile, Vice-President Elect Joe Biden is "Celtic," while his wife, Jill, is "Capri."

The Obama Bear Market- Dire Expectations Produce Dire Circumstances

A Barack Market

Fear of the unknown can cow the stock markets and consumer confidence into a retreat.  Unfortunately, the current bear market is more a result of what we do know- more specifically what we know about the President- Elect and the current crop of Congressional Democrats.  Their collectivist tendencies are causing investors and consumers to adopt a batten-down-the-hatches approach to their existing assets and future spending plans. 

"The voters may be full of hope about the looming Obama Presidency, but so far investors aren't. No President-elect in the postwar era has been greeted with a more audible hiss from Wall Street. The Dow has lost 1,342 points, or about 14%, since the election, with the S&P 500 and NASDAQ hitting similar skids. The Dow fell another 4.7% yesterday."

What the Democrats refuse to understand is that we still are working within a capitalist framework and their anti-capitalist policies are going to make people weary of participating in the market until they see a retreat from aggressive statism. 

"What markets want to see from Mr. Obama is a sense that the seriousness of this downturn is causing him to rethink the worst of his anti-growth policies."

 And which particular anti-growth Obama policies does the Wall Street Journal call-out for giving the cause-for-pause to investors and consumers:

"The substance of what Mr. Obama has promised for the economy is bearish for stocks. The threat of higher tax rates, especially on capital gains and dividends, now may be getting priced into the market. Add that to investor doubts about Democratic policies on unions, health care and trade -- and no wonder stocks are falling. Lower stock prices in turn reduce household net worth, thus slamming consumer confidence and contributing to what appears to be a consumer spending strike."

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AP Proposes Delaying Tax Cut

AP poll: Public seems willing to wait on tax cuts

AP is making news again by reporting on its own poll. Today we are informed that Americans are wiling to wait for our make-us-or-break-us tax cut?  I guess the a bail-out of the "typical" American is not a priority.

Obama is Kryptonite to New Capital

The market continues its post-election slide.  I predicted it would drop at least 1500 by November 14th and that number is now starting to sound low.

Ayn Rand Saw This Coming

Ayn Rand Saw This Coming

October 9, 2008

Washington, D.C. --“Despite overwhelming evidence that government policies caused the current financial crisis, Congress is blaming businessmen,” said Yaron Brook, executive director of the Ayn Rand Center for Individual Rights. “What’s worse, the capitalists who have been shackled with unprecedented regulatory burdens are unable to defend themselves morally. Though the events are different, this pattern of abuse and submission is straight out of Ayn Rand’s Atlas Shrugged.

“The cycle starts with government intervening into the economy and imposing regulations and controls on business. This distorts the free market, leading to economic dislocations. When the problems caused by these distortions inevitably follow, everyone blames the free market and its greedy capitalists. The proposed solution? More government controls. Over the years, conservative critics of creeping government have repeatedly exposed this illogic but have always been helpless to explain why the cycle keeps repeating, decade after decade.

“The pattern keeps recurring because businessmen are willing to take the blame. From capitalism’s inception, its defenders have been morally disarmed by the widespread view that self-interest is morally suspect, and disinterested service to others is a moral ideal. So each new spate of controls has been grudgingly accepted as a fair price to pay for society’s toleration of the selfish pursuit of profit.

In Ayn Rand's seminal novel 'Atlas Shrugged' the men (and women) of ability voluntarily withdrew themselves from the unjust collectivized society in which they lived. The result was the collapse of that society. But this is just fiction.