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An Economic Warning
President Barack Obama speaks on the economy at the Brookings Institution in Washington, Tuesday, Dec. 8, 2009. (AP)

President Barack Obama speaks on the economy at the Brookings Institution in Washington, Tuesday, Dec. 8, 2009. (AP)

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White House adviser Larry Summers says the recession’s over.  His colleague Christina Romer says OK, but not really.  Not until unemployment is back around five percent. 

My guest today, big investment adviser John Mauldin, says don’t hold your breath for that.  It could be a decade, he says – 2020 – before we get close.  And recession, double-dip style, could be back before then.  We are still in trouble, he says. 

Up next On Point:  tough talk on the real US economy with big bear John Mauldin – and a brighter take from the Wharton School’s Jeremy Siegel on what comes next.

Guests:

John Mauldin, president of Millennium Wave Securities, an investment advisory firm, and author of the investment newsletters “Thoughts from the Frontline,” “Outside the Box,” and “The Accredited Investor: Private Investing and Hedge Funds.” He’s written several books, including “Bulls-Eye Investing” and “Just One Thing.”

Read John Mauldin’s take on the challenge of getting unemployment down to previous levels.

Jeremy Siegel, professor of finance at the University of Pennsylvania’s Wharton School of Business, and author of “The Future for Investors: Why the Tried and the True Triumph Over the Bold and the New,” and “Stocks for the Long Run.”

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  • Michael

    He loss his objectivity and any belief in his thinking when he stated that the bush tax cuts helped the middle class not the ubber rich along with his Reaganomic’s thinking.

    Remember Capital gains rate is 15% on hedge funds managers far less than the middle-class.

    Any tax cuts with justed be saved by the rich 20% is normally the #

  • Brian

    Listen to this guy.

    We made bad choices. But the tax cuts for the rich that added 2.5 trillion to the national debt were great.

    The rich pay so much of the taxes without them we would be sunk.

    The rich make their money because they control the government which makes sure they are the only ones who can get ahead.

    Yes, America is waking up to the corrupt crony capitalism we have here in the country.

    I would go so far as to call it a kleptocracy.

    I’m tired of listening to the rich tell us they should be paying no taxes and that without them we wouldn’t have anything.

  • Michele

    This rich guy is a jerk! Don’t waste your time on him Tom.

  • David LaFerney

    Lower taxes probably does grow the economy, but if a growing economy fails to benefit masses of Americans doesn’t it starve the “consumer economy” of the fuel that powers it – discretionary income in the pockets of consumers?

    In all of history has there ever been a society that thrived when too much wealth migrated too far up the pyramid?

    We need to take better care of our middle class.

  • Phil Salerno

    Reworded trickle down garbage by John Mauldin. Capital is only interested in return on capital. Manufacturing used to provide that, but recent decades financial paper has only provided the desired returns. Tax the paper trades to make real production attractive again and perhaps we will listen to him….

  • Brian

    Read the comments Tom.

    People are catching on about the rich in this country.

    They tell us they deserve their immense wealth.

    Truth is, scratch the surface and 99% of the time you will find it was made off of their buddies in government taking care of them and writing the laws for them and giving them no bid government contracts, outright theft that the regular man would go to jail for.

    The law only applies to regular people in the country.

    Steal a loaf of bread, go to jail.

    Steal a billion dollars, go to your Hampton house on the weekends. Or to Aspen, or to Hawaii or to Palm Springs.

  • Edith

    John Mauldin said at the beginning of the show that the Republicans are responsible for starting this massive debt due to overspending. Does the guest believe that this was stupidity as he said or was it idealogically driven? Grover Norquist conservative is well-known for saying government should be drowned in a bath tub. What better way to do this than to bankrupt it? Was this a chance for people who don’t like government to have done something about it?

    Also, what about the productivity question? Americans have become more and more productive every year but this hasn’t been reflected in their wages, hence people taking equity out of their homes and running up their credit cards.

  • Rick Hunter

    I believe that the economy will connect in recovery to the environment and response to global warming. People will need to conserve and use wisely EXPENSIVE energy — and alternative energy, weatherization, truly economical transportation (not just cars: bikes, freight rail, commuter rail) — NEW INDUSTRIES will drive recovery now, just as in the boom after WWII and in the 90s.

  • Miken

    Thinking back to the Great Depression, I remember that in 1937 they increased taxes to fund the deficit and it plunged the economy back into recession. It took World War II to bring the economy back.

  • Simone

    John Maudlin spews more trickle down nonsense with his folksy yet authoritarian voice and Ashcrofts lets him take over the show. The rich and their friends in Congress have ruined this country and he wants to reward them with more tax cuts.

  • Todd

    Speaking of hitting the reset button…

    We just tossed $27 trillion at “too big to fail” institutions. However, for a “mere” $11 trillion, we could’ve paid-off the debts of every man, woman, and child in the U.S.

    Think of the economic “reset” we could’ve had for the people, instead of the banks, and at less than half the price! It’s time to find out where, and to whom, that $27 trillion really went.

  • http://www.filipinoboston.blogspot.com akilez

    There is a song by Kanye West about the rich people
    the name of the song is “Flashing Lights”

  • Brian

    Edith
    Republicans are responsible for starting this massive debt due to overspending. Does the guest believe that this was stupidity as he said or was it ideologically driven?

    They know what they are doing. Spend the money on their friends, cuts taxes for their friends, run the debt up so the Democratic president has to fix it and can’t spend on the people.

    Look at the pattern since Reagen. It’s clear as day.

  • Mark

    John Mauldin, your economic “ideology” IS exactly what has driven America into this recession, and is exactly what has inexorably altered our economy, and not in a positive way for the American Middle Class. I say eat the rich. There’s only so much capital in this economy, and for 30 years it has bubbled its way up to the top. This obviously was the result of careful economic planning by those who share your position.

    So for 30 years, as a result of your failed and unjust theory, because real wages and real wealth have greatly declined for the middle class, have borrowed.

    If we want to right this ship, we need to create policy that gives the middle class a living wage, that allows them/us to afford our homes, healthcare, and education for our children.

    Your criminal and greedy theory has thwarted this for the middle class. Now we borrower to live our lives and line your pockets. Shame on you. Eat the rich!

  • Putney Swope

    Tax cuts for the middle class? Oh wait was that the $300 or so we got as a tax break?

    Wow thanks a lot Bush. Meanwhile the top 10% to 1% had their wealth grow by leaps and bounds. At the same time the middle class has seen their income falling, a lot.

    John Mauldin is so full of bull dung that I can smell him through the speakers.

  • David

    Why should we even have to listen to a person who makes their wealth on legalized theft tell us that we should be happy the rich even pay what taxes they pay?

  • David

    Take a look at Mexico if you want to see your future America.

    Rich behind gated communities and the rest of the people struggling to get by.

    We are already half way there.

    No gate reaches to heaven, though.

  • Michael

    I keep hearing leading economists talking about a return to growth. Whether it be 2% or 5% annually, we are talking about exponential growth. Nobody seems to question the assumption whether exponential growth is possible in a world of finite resources. In the past, the US grew relatively unchecked because there was not much competition for 25% of the world’s resources that this country was consuming. However, the world is changing. China, India and other developing nations are now consuming a much higher percentage of energy, mineral and other resources than they had in the past, and this trend is continuing day by day. The fundamental question is whether infinite growth is even possible in the long term in a world of finite resources?

  • Mark

    Edith states – Also, what about the productivity question? Americans have become more and more productive every year but this hasn’t been reflected in their wages, hence people taking equity out of their homes and running up their credit cards.

    When Regan fired the striking airline workers, he signaled to the private sector that unions no longer had support. Poof – wage stagnation for 30 years, resulting what Edith has stated above.

    Hmmm – who made money off of stagnant wages, middle class equity drain and consumer debt?

    Accidental? I think not. By design? Yes, and by those who espouse the same economic ideology as Mr. Mauldin.

  • roger

    Dear Tom,

    clinton raised taxes and the economy in the US boomed, with growth rates faster than those during the reagan era. What does that do to Mr. Mauldin’s assertion that tax cuts lead to a decrased in GDP while tax cuts an increase in GDP? And by 3 times, yet?

    Roger Kinnard

  • Mark

    Tom, I really wish you had Krugman on to debate Mr. Mauldin.

  • Fred

    Very interesting program, as usual. (listening while trying to do work.) This guest makes some points that resonate with me.

    This is not meant to be impolite — But with such sensible ideas, why isn’t he in the halls of power?

    Fred B

  • Leslie Marrs

    Interesting conversation. I’m wondering where Jeremy Siegel is in rebutting John Mauldin’s points. Quick example: in one minute Mauldin’s lamenting the choices made in the housing bubble in selling houses to people who couldn’t really afford them. 5-10 minutes later he’s talking about the quicker ascent out of the last recession in part because we had a housing bubble. Mr. Mauldin, you can’t have it both ways! I will agree that we should come out this one one slower than the last recession. however, the choices we make are important. Coming out with bubbles in like drinking or other self medication as a solution to large problems.

    I could go on but the show’s almost over.

  • Ronald Johnson

    The WBUR fund raising is so obnoxious…thank goodness we can now switch to WGBH!

  • Brian

    The good thing is that Americas aren’t buying this B*LL anymore.

    The rich should start planning to move themselves to China.

    They won’t be welcome here with their private jets, and helicopters and limos and 10 million-50 million dollar homes for too much longer.

  • Danny Weiss

    There has been little mention about the mountains of money of debt — over $12 TRILLION now,(with a “T”!), and with projected increases of about $1.5 Trillion per year for next 10 years. This has got to lead to hyperinflation and devaluation of the dollar. The derivatives bubble, which I have read different figures ranging from $150-$300 Trillion (yes, again with a “T”), still looms with toxic assets seemingly just pushed under the carpet.

  • Gary

    Let me understand this … your guest, Mr. Mauldin, proposes to make the rich richer? They’re not rich enough? From my naive, uneducated perspective down here in the trenches as one of the unemployed, my experience tells me that “Trickle Down” does NOT work. Money from the rich does not trickle down. Their money stays in their own pockets and only leaves when it’s used to advance their own standing at the expense of us down here in the trenches. I believe in the “Trickle Up Theory.” Make us poor people rich … we’ll spend some of our disposable cash as we also pay down our debt and pay our bills and this, in turn, will drive this economy!

  • http://ncpr stillin

    I disagree that this new world that is evolving so fast, is a “better standard of living”. No, I disagree. I think that twitter and facebook and cells are a demand, and stressful. I also think with all the “new” we have definately lost our human soul, our human connection, and down the road, we will pay a bigger price for that than most people can see during the present. Also, I think our youth are suffering the most. Parents who are so distracted between cells, computers and technology that neglect is present. No, I will continue with no cell, no computer, with my master’s degree, cutting wood for heat, cooking from scratch, and embracing the older ways…a serene life.

  • Jere Stormer

    Mr. Maudlin is merely playing with the numbers by drawning the TAX line at a different point.
    The extreme wealth of the top 1% compared to every other class-strata is undeniable. Corporate Taxes? Either off-shore or passed to the shareholders (the 32% means little)… Considering the tax rate of the upper class during the Eisenhower administration compared to NOW — Fell during JFK, more with Nixon, way more with Reagan, then Clinton and W! A Disingenuous, shameful and informed position for a professor.

  • John

    I understand the need to fundraise but cutting off the end of the show is a disgrace. Your listeners are not stupid and don’t need to be begged at for the additional time cut from the show. The on air beggers don’t use that time to tell us anything that we haven’t heard before and the banter is awful. Frequent brief requests similar to the way the underwriters are mentioned would be more effective than this.

  • Putney Swope

    What a load of bunk. Increasing taxes on the rich will decrease jobs? He seems to have have conveniently forgot about the years after WW2. Between the late 40′s 60′s we saw a huge rise in the middle class and growth in just about every sector. During the Eisenhower years the wealthiest 10% were taxed at about 80 to 90% and this did not stop growth at all. Of course there were a lot of loop holes so anyone with a good accountant never paid at that rate. Mr Mauldin and the conservatives of his ilk always use the tax card to say it effects small businesses.

    The average small business in this country is about 4 to maybe 100 people and the taxes Mauldin is talking about are federal taxes we all pay. Not the taxes a business pays which is a separate thing. I don’t know what a small business person makes and I’m sure it’s a huge variable. I can look to an electrician who I think is a good example of a small business as his company has about 6 to 10 employees. This man makes a modest living, good solid one, he is busy as he’s a good electrician. I suspect most small business owners do not make over 250k a year. I think this mans economic ideology is not only faulty it’s morally bankrupt.

  • Putney Swope

    stillin apparently your using a computer to post your comments.

    I have a cell phone, although it’s an old one about 6 years or so.

    I don’t let all this stuff get in the way, and being a Luddite is not the answer in my view.

  • Phil Salerno

    Totally disingenuous guest in the form of John Mauldin, who went basically unchallenged. This show won’t get the evening replay as I have run out of item to throw at the radio. What Tom Ashbrook needs is to add a raspberry/applause button to his site so he can get a quick feedback in response to his guests.

    Thanks Tom for having him on though. It was comforting to know these guys are still going to try the tired and dis-proven economic theories they have used in the past. Loved his closing comment of accepting lower wages while you send your child to get their PhD required for employment in the exponentially increasing tuition costs of said. No irony at all in his voice.

  • Dave

    We got into this problem because of a massive shift in wealth from the poor to the rich. The poor (95% of us) have no money to spend since that money has gone to the wealthy and flown to China and India. This all started in the 70′s and has hit the peak. Tax the rich, give the money back to the poor, rebuild gov’t infrastructure, and get our economy back on a sustainable track.

  • http://www.pnart.com peter nelson

    People are catching on about the rich in this country.

    I don’t believe that’s true. In almost any other western nation it would be true. If a European country had the kinds of income disparities we have combined with the utter disregard for the low-income and unemployed represented by our lack of universal health insurance, for instance, they would have riots and barricades in the streets!

    But not in the US. US liberals and progressives consistently don’t “get” how utterly conservative Americans are. Since the 1930′s the left has been predicting that any day now the poor and downtrodden would rise up against their capitalist overlords. It hasn’t happened and it won’t happen.

    Do you think it’s a mere coincidence that we are the only major industrial democracy without universal health insurance _AND_ the only one that has NEVER managed to sustain a political party in their national legislature farther left than the US Democratic party? Name me some other major western democracies that has never had the equivalent of a social-democrat or socialist party, or even a Green party, large enough to have a voting bloc in their national legislature.

    I’m open to suggestions about why this is. Maybe it’s the fact that we’re also the most religious western industrialized democracy – perhaps Americans think that God will look after them so the government doesn’t have to. Fans of Glenn Beck and Sean Hannity and Rush lose their jobs and their health insurance, too, or have no insurance to begin with. And they get cancer or heart attacks or major trauma with a few hundred thousand dollars in medical bills, wiping out their lifelong savings just like liberals do. But it doesn’t move them to say, “maybe we should do something about this”.

    US political culture is unique, and persistently so, and the liberals don’t “get” how unique it is.

  • http://ravenatyournextevent.com Greg L

    I thought the recent failure of our system was the final word on trickledown. It should have been. But here’s a word I just learned from a 2005 Citigroup research report: Plutonomy.

    The Citigroup reports (linked below) reaffirm what most of us already know, that the rich are getting richer and vice versa. What’s strange to me is reading this as an industry report from one of the biggest contributors to the crash, and that in plain language they’re banking on the trend continuing.

    For the first time I have the slightest appreciation for why some people are calling for socialism. It’s the democratic response to plutocracy. Obama talks the talk but instead of walking the walk he’s mortgaging future generations.

    http://www.scribd.com/doc/6674234/Citigroup-Oct-16-2005-Plutonomy-Report-Part-1
    http://www.scribd.com/doc/6674229/Citigroup-Mar-5-2006-Plutonomy-Report-Part-2

  • http://www.filipinoboston.blogspot.com akilez

    You can find a lot of rich people in Barrett-Jackson car auctions. These rich people purchased car for $25,000 to a $1,000,000,00.

    That’s where their money goes plus 13 extra marital affairs.

  • http://www.pnart.com peter nelson

    I understand the need to fundraise

    Well, I do not understand the need to fundraise in this fashion.

    I’m already a WBUR member, so I’ve already paid my dues – literally – and I’ll bet most other people in this forum are also members of their local NPR station. So we should not have to listen to this insipid begging and whining.

    It is high time NPR developed a sustainable 21st century funding model that does not force their generous, dues-paying members to sit through these interruptions and truncations. Their whole concept of local-station-membership is obsolete and has about as much future as newspapers selling classified ads!

  • http://www.pnart.com Peter Nelson

    The Citigroup reports (linked below) reaffirm what most of us already know, that the rich are getting richer and vice versa. What’s strange to me is reading this as an industry report from one of the biggest contributors to the crash, and that in plain language they’re banking on the trend continuing.

    I may be prejudiced because I’m a C shareholder (I just bought it recently as speculation because it’s cheap), but I totally agree. I don’t see any trend or force in US political culture that would reverse this.

    Betting against the trend continuing may not be quite the same as betting against the sun coming up in the morning, but it’s close!

  • http://ncpr st

    putney swope, yes I am using a computer but I don’t own one, I have to use one for work. I didn’t ask to have to use one. I am grateful when I get home, I don’t feel like I am missing anything by not having a computer or cell. I use a cell too, when I travel which is about once a year. I just don’t need one. Being a Luddite is not the answer, for you. My personal choice is to let the world spin, and live an older way, which I am doing more and more.

  • mr.Independent

    Let me address your question as well to the collection of wannabes and partisan underacheivers who pack this board with their thinly-veiled hate speech day after day…Great program, Tom; I love hearing what smart rich people have to say.

    And your not a playing the partisan game by supporting this mans point of view? Please, give me a break.

    “Thinly veiled hate speech”. Really? So having an opinion that differs from your own is hate speech? Nonsense, and I might counter that your comments are thinly veiled and partisan as well.

  • http://www.lit.org/author/fritzwilliam F. William Bracy

    Is this just to show us loyal listeners that NPR can go head-to-head with Fox News? Let’s see if a quote from Senator Al Franken gets anyone’s attention.

    “People are entitled to their own opinions. They are not entitled to their own facts.”

    The first guest, John Mauldin, stated that “the rich need to get richer” in order that their tax dollars might be stretched further.

    Shall we infer, then, that making the rich richer would make them any more inclined to pay taxes than they already are?

    The second guest, Jeremy Siegel, stated that full employment returned very quickly after the big ’80s recession, and also after WWII.

    (Duh yeah.) In the 80′s there was something called the “Internet” just over the horizon. And in the 40′s and 50′s (duh) There was the little thing called the Baby Boom, plus (duh) another little thing called the Auto Industry, plus (duh) another little thing called the Housing Industry as all those returning GIs began creating lives for themselves.

    At the risk of repeating myself:

    People are entitled to their own opinions. They are not entitled to their own facts.

    What these two people need to do is step outside their own heads and pick up a newspaper, or read on the Internet, or listen to someone besides Rush Limbaugh.

    There is no emerging breakthrough industry or technology or Internet beyond the so-called “Green Revolution,” anywhere on the horizon, and what there is of even that is going to be OWNED by the Chinese thanks to the Republican Party and conservative commentators like the ones featured on today’s program.

    It’s an absolute travesty to be giving folks like these two an even bigger megaphone than the ones they already have. There’s nothing wrong with free speech, but people are entitled to their own opinions–not to their own facts.

    Here we have on display the dullest of the dull fully expecting to see America’s return to the past, with Republican greed and its ever popular, “consumerism on steroids” as the dominant theme. Well we still have election cycles in this country. Let’s see how good these two “geniuses” are at predicting the future of the Republican Party.

  • Deja

    This down turn may be the best thing that could happen to some people. as they lose the jobs that they should have quit. More people getting back to school or back to basics or back to family.

  • Leslie Rosenbaum

    What a bunch of nonsense. The relationship between taxes and growth is unclear, it depends on many other factors.
    One really has to use econometric models to know what
    MIGHT happen, with X degree of uncertainty. Further, taxes are higher in ‘Europe’, than in the USA, so I don’t understand this Mauldin character. He talks about de-leveraging, what is that? This is someone who is clearly not an economist, and speaks about the US economy as if it were a company. Absolute rubbish. He talks like Ron Paul, just throws out a lot of words, sounds good if you don’t know anything, but it is just pure dribble. He would get an F in Economics 101. Taxes in Sweden, where I live are almost 50 %, on the margin, for the upper middle class, and, further, there is no such thing as ‘Europe’ in the tax sense.
    I am a former economist.

  • Putney Swope

    F. William Bracy I agree with you, however I think 2010 is going to be a wash for the Democrats. They are going to loses a lot of seats to the Republicans due to the economy.
    I for one don’t think it matters much giving how poorly the Dems have preformed. In days when the Republicans held sway in the Senate a Joe Lieberman would have been put in his place in no uncertain terms. In the last few days the Dems and the President has let this man dictate his terms. They should have shown this man the door. Obama is a smart man, but he’s no LBJ. In times like this you need a man like LBJ to twist arms and to use every political hard ball game on the books. I would mention FDR, but that’s just plain unfair, Obama does not even come close that mans political prowess.

  • http://www.pnart.com Peter Nelson

    Via email Greg Lunberg asks

    I was wondering, how do you avoid considering it hypocritical, evil, or karmically unsound to follow the investment trend driven by this plutocracy?

    “Hypocritical” means to say or advocate one thing and do another – I’m not advocating that people do not invest in such companies, so I’m not hypocritical.

    I have no idea how to evaluate “karmically unsound”.

    And how is it evil? When you invest in a company whose stock is already on the market, you’re not buying it from them; you’re buying it from some other shareholder, so the company doesn’t get the money – they’re not benefiting from my investment. To the contrary, to the extent that such a company pays a dividend, I’m costing them money.

    Now, if you’re suggesting that they’re making money off of an evil trend (say, providing banking services to rich people who can only afford it because of huge income disparities) then the same argument would apply to anything that makes money from evil stuff. For example, I’m a shareholder in several companies that make “green” technology. “Green” technology is hot precisely because of global warming, which is evil.

    My credit card company recently sold its operations to Citigroup, so I now have a Citi credit card. My use of that profits them directly, via merchant fees, even though I never pay interest to them. So I suggest that has much more “Karmic” significance.

    And speaking of “carmic”, by far, my most profitable investment(s) in 2009 has been XOM (Exxon). I noise-trade, and I’ve made dozens of profitable trades and no losses on it since January. How much have they benefited from my constant (daily or hourly) buying or selling it? But I also drive a car so I buy gas. Buying gas directly profits them. Everytime someone asks me if I feel sullied by owning stock in an oil company I ask if they own a car. Then I ask them to explain which is worse – buying oil-company stock or buying oil-company products?

  • http://www.lit.org/author/fritzwilliam F. William Bracy

    Putney, you said: I think 2010 is going to be a wash for the Democrats. They are going to loses a lot of seats to the Republicans due to the economy.

    You could be right. I don’t know what to expect out of the upcoming general election, nor in the next several election cycles, to tell you the truth. Republicanism may not be dead altogether, but I can hear the death rattle coming from its windpipe. We are going to begin voting in big numbers in this country, and what I do know is that Republicans cannot withstand a vigorous suffrage movement, which is precisely what is in store for them. Prost! Skol! Bottom’s up! And I’ll drink to that.

  • http://OnPointRadio Kristen Olmstead

    Mr Maudlin’s perspective on the tax structure of the industrialised world is very limited. The reason that the rich are taxed at such a higher rate in the US than in any other European country is that the gap between the rich and the poor is so huge in the US. Europe can tax the middle class, because a taxable middle class exists. Citizens of European countries do not need to worry about the cost of health care or education, because those benefits are paid for, or at least subsidized significantly, by the governments of the European countries. Therefore, the poor can pull themselves out of poverty to become a middle class which has the income level to be taxed. In the US, the middle class is struggling as desperately as the poor are to survive, let alone build up any savings. The only class that has income available to tax is the rich. If these rich people own 75% of the small businesses in the US, and would be the source of any new employment in the future, then they should be paying their employees more, rather than pocketing the profits for themselves alone. If we want to have disposable income to tax, or to even spend, then we need to have the income available, and the TIME TO USE IT.

  • http://www.pnart.com Peter Nelson

    Republicanism may not be dead altogether, but I can hear the death rattle coming from its windpipe

    I think this is a redonkulously optimistic viewpoint. As I said above, the idea that plutocratic conservatism in the US is waning has been a popular bit of leftist mythology for over 70 years – - sort of like religious fundamentalists believing that Second Coming is imminent.

    The US is conservative to a degree and in ways that are unique among western industrialized democracies. I agree with “Truth and Soul” Putney Swope that the Dems will lose seats in the next election.

    That’s not a death rattle you hear – it’s the sound of lots of GOP’ers chuckling as they count their campaign contributions.

  • Putney Swope

    What is amazing is how even though the republicans have managed to do nothing, have nothing to add to improve the country other than cut taxes and this strange mantra of less government, they will win seats by default.
    The party of “no” says “yes” to more seats so they can say “no” more often.

    Personally if the republican members of congress want less government spending I think a good place to start is their own salaries, put your money were your mouth is so to speak. It does strike me as strange that they would go on so about a system that they are part and parcel of.
    Now that’s the definition of a hypocrite on some level.

  • Albert

    Somehow these wide view discussions seem to overlook foundation issues that would make the big picture possible. Jobs is the main problem… So what steps should be taken to insure that US employers hire American labor? Various workplace efficiencies put into effect over the last 40 years have realized the directive that the way to lower costs and improve production dependability is to replace human labor with sophisticated machines. The lessons of the recent past show that work can be performed anywhere in the world as long as information networks provide immediate connectivity.

    Each businessman makes an independent decision as to where to go to get the most productivity for the least cost. The cumulative effect of finding relatively inexpensive educated foreign workers is that one has to grapple with the political and social implications of asking why anyone would ever put money into hiring another American?

    Protectionism has not been a popular position in this whole debate. Too much isolationism is credited as one of the important contributing factors driving the Great Depression. But now for the first time we are seeing how it is possible to drain the money out of the economy to foreign interests. What’s left after our economic sea is empty? What can be done to keep capital in country? Without capital who can fund projects for workers to complete?

    The notion of spending on domestic projects is attractive for the short term, but important tasks, such as engineering and steel production, may still be performed overseas because companies building infrastructure have to mind their costs, too.

    I have never heard a businessman admit that by eliminating workers he also eliminated consumers. This is a recent phenomenon in my opinion because only recently has it been possible to lay off so many employees that one by one companies are finding that they cannot sell the very products they saved so much to make. Businesses by giving workers money in the form of wages scatter dollars randomly through the economy to other businesses. The ability for business to break out of this pattern to use foreign resources is a strong contributor to the current job crisis and the economic crash it brings with it. Money flows to foreign companies instead of domestic ones. Jobs will not come back to America until it makes sense for businesses to hire domestic labor again.

    One is tempted to make the point that insofar as domestic enterprise can own part or all of foreign companies themselves they can get some of their own capital outflow back in the form of profits. This will show up as income on their corporate ledgers that will please stockholders and may even reach an amount that would appear to be economic growth.

    The economy is stratified into layers like the branches on a tree. That some limbs are bigger than others has a positive effect on the statistical measure of how big the tree is, but it does not mean that all the branches are doing equally well. In the economy, just as with the tree, there is no truly effective way for the largest limbs to make smaller ones elsewhere grow too. The whole tree has to get the energy it needs grow everywhere at once.

  • http://ravenatyournextevent.com Greg L

    “Democracy is not about what government does, but what people do.”

    That oughta scare ya!

  • Cory

    The inequitable distribution of wealth and resources in this country is our greatest problem. All other problems spring from or are linked to it. I’d like to see the wealthiest 10% of Americans get HAMMERED with taxation. I mean blast ‘em. My entire life I’ve heard that doing so would be a catastrophe and destroy our economy. The rich would all pick up and head off to some friendlier country… I guess I’m willing to take that bet and see what happens.

  • http://www.pnart.com peter nelson

    Various workplace efficiencies put into effect over the last 40 years have realized the directive that the way to lower costs and improve production dependability is to replace human labor with sophisticated machines.

    The BLS reported that in Q2 productivity went up at an annualized rate of over 7%!!

    People don’t talk about this because it’s more attention-grabbing, but the fact is that in the last few decades FAR more US jobs were lost to automation and process improvements than offshoring.

    I have never heard a businessman admit that by eliminating workers he also eliminated consumers.

    It probably depends on who his consumers are. You could have massive, say, 10%, 15%, 20% unemployment as long as the people who still had jobs saw their pay go up steadily as a result of higher productivity.

    If a company laid off 5% of their workforce and distributed the salary savings among the other workers then the net “buying power” doesn’t go down, so it doesn’t affect sales. Meanwhile the company saves money because benefits are expensive so they’ve cut benefits costs by 5%, not to mention other savings from needing less office space, fewer desks, less lights, smaller HR department, etc. With steady increases in productivity they could do this every year, so the unemployment rate would climb steadily but because the remaining workers would see their pay going up steadily they could keep sales up.

    And since this is America you could have a HUGE unemployment rate before people would get mad about it.

    I could easily imagine a 20% unemployment rate as long as the other 80% are flush due to high productivity, and the unemployed people nodding in agreement as Rush or Glenn Beck tells them that their unemployment is the liberals’ fault.

  • sdf swords

    The great lesson of the last decade has been, if you’re going to steal, steal big, and contribute to the key politicians who can provide you legal and financial cover when your theft comes to light. Any veil of transparency and fairness in the financial arena, has now been lifted, and the average taxpayer can now see how the system truly works. Unfortunately, we are presently confronted with a severely toxic and corrupt political structure that is supporting the power of a sanctioned financial mafia. Your congressman, and senators, must raise vast amounts of money for every new election cycle. The financial mafia owns all of the key players, regardless of party affiliation. As long as “campaign contributions” are legal, no real change will be probable.

    In 1994, John Meriwether, along other investment “quants”, formed an innocuous, low profile hedge fund called Long Term Capital Management. They were the self described “masters of the universe”, and were trading securities using 30 to 1 leverage funded by $125 billion in loans from the banking system. The proprietary, “fool-proof” trading system, of course, blew up, creating a fiasco that nearly destroyed the entire financial system. The New York Federal Reserve, barely prevented the banking system from going over the brink into a full blown panic.

    This should have been the shot across the bow that inspired tighter regulation of highly leveraged non-bank entities (private equity and hedge funds). The exact reverse happened, as the rescue of LTCM instigated the formation of yet more unregulated investment funds, 8-10 thousand at the top of the bubble. The casino economy was now in full bloom, and lusting for complete deregulation.

    As an investment advisor the past thirty years, and great fan of a capitalist system that should reward the small business risk taker, I have looked on in horror as the politicians have systematically dismantled the legal framework that protected the integrity of our financial institutions. Both Democrats and Republicans are guilty of dismantling the essential financial firewalls that protected commercial banking from the investment banking thieves. Reagan passed the Garn-St.Germain legislation that led to the wholesale failure of the formerly sleepy and safe savings and loan industry a few short years later, at massive taxpayer expense. Clinton’s 1999 repeal of Glass-Steagal, and Bush’s subsequent ignoring of all regulatory transgressions in the entire financial marketplace, led to where we are today.

    The repeal of Glass-Steagal allowed commercial banks to engage the risky activities of investment banks and hedge funds. Suddenly, Citibank became an underwriter and trader of securities, two activities most responsible for its current huge book of non-performing assets. Yesterday, Citibank was awarded a $38 billion tax deduction to offset losses, essentially a reward for miscreant deeds. Your tax dollars at work.

    Where are we now? In essence, the banker mafia have destroyed trillions of dollars in credit availability, that will take many years to replenish. Our economy is starved for capital on the most basic main street level. Do not expect a quick recovery. The smart money is not investing in America as it has long since moved on to Brazil, China, India, or where ever the highest and quickest return can be made. Your kids are now in direct competition with vast pools of educated labor around the world, who will work long hours for modest wages and life style improvements. Your retirement will be exposed to inevitable inflation, higher taxes and low quality health care, as 76 million baby boomers begin to enter the vastly underfunded Medicare system. The banker mafia has “transferred”, or as they like to say, arbitraged, a vast amount of wealth to the top, with the financial support and political backing of your government. As Mel Brooks once said, “It’s good to be King!”

  • Traven

    How about some question about age discrimination enforcement? The usual response to this is either “yeah it exists, but stop whining” or “just act young and show your value” but it seems that the government makes no effort to substantiate and mitigate its existence. How about just sending out equally qualified resumes with different ages to get a handle on the problem?

  • Mr.Independent

    I can’t believe what I am hear today.
    The White House has come out blazing against comments made by Howard Dean, and has nothing, absolutely nothing to say about the obstructionist BS being conducted by Lieberman.

    I’m done with Obama if this was a parliamentary system he would be gone in matter of months.
    What is going on here with this administration?
    They are worse than Clinton and Bush. They seem to be a combination of the two. Ron Emanuel is turning out to be a complete idiot.

  • Mr.Independent

    I meant hearing today…

  • Traven

    If this was a parliamentary system, the number of elected representatives would have something to do with the number of people represented and a winning vote in parliament would be 51%, not the 20-25% of population represented by 41 Senators. If this was a parliamentary system, Obama would be able to accomplish much more.

  • roger

    done with you tom ashbrook for continuing to give ideologues such as mauldin airtime

    you deserve to lose your listeners…law of cause and effect…and you shall as americans wise up

  • James Logan

    While this man is overreaching when he states that the Bush tax cuts helped the middle class, if the middle class income is considered from 50k-250k, and those taxes went to, lets say, 100k-250k, then technically he’s correct. However, since I don’t know what is considered middle class income, that puts me at a disadvantage.

    On the one hand, not having this info prevents me from properly dispute his point(even though in my mind, I believe he is dead wrong). Conversely, not having the info, prevents me from restraining myself when about to jump to a conclusion.

    I use this as an example to illustrate my point:
    What got us in this mess, was strictly lack of knowledge. Specifically, lack of knowledge about a particular subject or claim…

    If we begin to TAKE responsibility(which doesn’t mean absolve the other actors of their part)…we can step back to see the full picture. Let us assume the real problem is lack of knowledge. How is this OUR fault?

    Housing? Owners not only did not understand what they were signing, they did not fully understand the resources available to them.

    CDS(Credit Default Swaps)? Had the public educated itself about these things, it might have been clear as day that there would be a problem renegotiating your mortgage when its bundled with other mortgages, instead of carried by your local bank(although I’m sure they weren’t perfect resources during this crisis either).

    Financial Discipline? Many Americans have NO idea what their credit card does, or can do, to their account. I’ve experienced this first hand, after working as a credit counselor for 5 years. Many fell for the borrow and spend Discipline, which of course only works if you are borrowing to buy an appreciating asset or an asset that has a cash flow.

    Education? The core of my argument. With education on the decline, we have not taken it upon ourselves to determine, in the information age, how we improve the curriculum, especially at the grammar school level. Its not just enough to teach kids how to measure flour, or open a bank account. They must be taught, even if they NEVER intend to use the knowledge, about things like the stock market, day trading and investing, and what the differences are. The goal is to graduate kids who are, for lack of a better term, jacks-and-jills-of-all-trades, before they move on to a decided career.

    Politics? For the last 20 years or so, all I ever hear from Republicans are stubborn corporate business protection schemes and tax cuts for ‘the rich’. But I also hear the masses of people who would be affected by such schemes and cuts supporting these themes to their own detriment, only to have them rant and rave when the services THEY use are cut? For example, the kids in California, having a sit in at the school. Wonderful that they were spurred to activism…I did the same thing in high school when budget cuts forced our high school to let go of teachers with only 1 day left to acheive tenor. When the school board had a town meeting, EVERYONE was there. We all ranted, raged, gave board members the finger. But in the end NOTHING happened. I was confused? wasn’t my voice heard? Why are they just saying, “Oh well, thanks for coming, the cuts will happen anyway.” It happened because the cuts had been approved and put into the budget… though I wasn’t old enough to vote, I realized what the problem was: I and my father had not participated in government, we did not rally our neighbors to point out, “Hey, they want to make these cuts…and that can’t happen because it will affect the education system.”

    I knew my right to vote had been secured decades earlier. I knew that men and women had died in foreign lands so that I may continue to have my freedom. But I wasn’t using it. I’ve changed that now…and I see the American people have to do it too.

    We need to watch these politicians like hawks. We need to understand their policies, and know what rhetoric is, in order to understand how a politician, like say, Liebermann? Can SOUND like they are for something, but take action against it(if you parse liebermans buy in statement, he was NEVER for a public option; but his statement was prepared because it was an election/debate..so he knew EXACTLY what he was saying and hoped it would be interpreted exactly as it was…another lesson for Jill Q. Citizen.) We have to understand that even after we vote for someone, they may turn right around and do exactly what we don’t want them to. Vet your candidates; check out their histories…intellius.com is a great resource for this…not free, but, pooling together money as a group can give access to the info, and make decision making a little easier.

    Basically, it all comes down to this:
    “We are the one’s we’ve been waiting for…”

    America, when you decide the fault is yours and not your Congresspersons, you’ll have started the first step in the greatest resurgence of the American democracy we have ever seen. But it starts with educating yourself. Not with opinion pages, but hard news with out opinion. Reading government statistics…using wikipedia…yes, I said wikipedia. The resources is well managed, despite claims to the contrary…but even so its a starting point…verify the info. This is what the computer is for…and librarys have them too.

    Yes, I’m oversimplifying…but thats what Americans want right now…still. Gimme gimme gimme.

    Until we re-learn that repairing this mess is not just with corporations; its with an apathetic populace. And that apathy, even though it was thoroughly engineered with the help of Republicans and anyone else willing to slash taxes and cut education, was the fertile playing ground for the forces at work to bring us to this point. Had we understood rhetoric, and how to parse it to properly interpret it; had we all(me included)been fiscally responsible; had we all been educated about cashflow, instead of ‘consumer spending’…we might have averted this crisis…heck, the stimulus package would have been the right size, because real Democrats and Republicans, not the neo-con right and wolves-in-sheeps clothing ‘blue-dog’ Democrats, would have fought for our interests, and not against them.

    I hope this post reaches the American people, and spurs them to action. Informed action. Voting for a candidate just to ‘send a message’ is stupid.

    Republicans are right…the proving ground is 2010. But it will NOT prove Barack Obama’s worthiness. It will show the mettle of the American people…

    …and might even determine if I want to move to Canada…

  • Kye

    At over 2 years into the recession, I thought that this economic that had finally been discredited. I do not believe that a total “redistribution of wealth” is going to save this economy, but it is ridiculous to believe that an economy based on consumption will continue to grow in perpetuity. How can we grow if we’re not producing tangible goods that add value. I’ll be the first to say that I’m not ready to exit this recession until politicians (and the American people) can prove that we truly understand the predicament in which we find ourselves. Doing more of the same will only make the next economic crisis worse.

  • James Logan

    Addendum to my previous post:
    In that post, I pointed out the students of California who did the sit in at the university; but I didn’t finish why I brought them up.

    I brought them up, because it was interesting to see them active in the sit in, but, where were they, when Gov. Schwartznegger was running for office? Where were they when their school board positions were being filled? Where were they when their Senators and Representatives were running for election. I guarantee you, that if those kids had been paying attention then, they might, just might, have understood the implications of not voting in the election, and how it would affect them. If they did vote, then I’m proud, and the blame lies with the rest of the state as well(actually, it does anyway, of course).

    But their reaction just brings to mind not a disenfranchised portion of the electorate, but a disengaged portion of the electorate…

    I hope this message gets to them, and spurs action in the direction of government, instead of at a school which has already made its decision.

    “We are the ones we’ve been waiting for.”
    NJ is the canary in the coal mine…LOWEST VOTER TURNOUT IN STATE HISTORY. The state is about 226 years by the way. When the incoming Republican claims he doesn’t know how he attained the governorship, he is flat out lying. Lowest voter turn out was key; misinformation was the other part…because I’m sure many of those voting for him, thought they were either protecting their own interests or that they were doing it on behalf of the rest of the state…the truth is, they’ve only helped out big business.

    If you think Christine Whitman was a disaster(and one of the main reasons Corzine was forced to raise taxes), wait til this clown gets hold of the reigns.

    If you want to learn about, recognize, parse and interpret rhetoric, Governor Elect Chris Christie is going to be the perfect example. The only way he could possibly get his Republican talking point agenda to work, would be to use rhetoric at its fullest.

    Of course, there’s always the chance that he’ll actually do the right thing(keep taxes at the right rate, and borrow as necessary until the state gets on its feet); but don’t hold out hope for that.

    NJ is a fairly educated state; look for Gov.Elect Chris Christie to slash taxes and gouge education…because his goal will be to dumb down the state and make it Republican for as long as possible…NOT facilitating the recovery of the state during this economic crisis.

  • Natalie

    I love the comments from the free-riders here. Let only the rich pay taxes so I can mooch more off the government. That’s the current state of the American work ethic. Envy and resentment go well with laziness and entitlement. Plenty of that here.

  • http://www.freedomwage.org Donald Scott Waller

    I am afraid if anyone has been left behind it is Mr. Mauldin. He is a nice person but he keeps reading out of an old playbook. The game has changed.

    Lower taxes, less regulation, and free trade do not ensure prosperity. After 30 years this should be obvious. We have built an economy that values greed, predation, and changes faster than humans can adapt through retraining, etc…and still called it good???

    Enough. I agree with Nassim Taleb on this. The economic experts have been exposed as clueless frauds. We need entirely new economic ideas and dump the failed religion that is the “magic of the market place”.

  • Frank

    After reading the above comments, I too realize that NPR is the haven of the left. Most of the claptrap that passes for information on NPR is watered down apparantly because these lefties cannot handle the real truth about their futures. Mauldin was right today and that smoke-blowing Jeremy Siegel was typical of the ivory-tower academic who has no notion whatsoever of economic reality.

  • mo

    i cant believe anyone is still discussing the promise of the american manufacturing sector or the promise of a healthy livelihood with only a high school education. i dont know where americans have their heads when it comes to anything. also, lets assume safely that the ‘rich’ decide the direction of our institutions then i propose that they will make choices that raise their position, wealth, and stability and they do it at a cost to the ‘public’ and majority. its a devestating cost. i mean an affluent person has to eliminate some facials and hair removal appointments and trade the mercedes for a prius a common person has to lose their home. the formula does not balance

  • http://biereyecare Frank J Bier

    John Mauldin is one of the BEST interviews I’ve heard in 25 years of listening to NPR and public radio.
    This man should be a regular commentator or even better
    he should have his own program on NPR.
    PLEASE PLEASE bring him back for more , finally an intelligent view on what has and will happen in this countries economy. Thank for having him on !

  • david

    Over the past year alone, the public debt of the United States rose sharply from 41 to 53 percent of gross domestic product (GDP). Under reasonable assumptions, the debt is projected to grow steadily, reaching 85 percent of GDP by 2018, 100 percent by 2022, and 200 percent in 2038.However, before the debt reaches such high levels, the United States will almost certainly experience a debt-driven crisis. Lets keep on blaming the rich for the problem,the ones creating the jobs, and look away at the ever increasing people wanting to hang off the the teats of the government.
    “When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that justifies it.” Frederic Bastiat

  • Putney Swope

    Natalie so if some wall street hack can lose millions and still get a bonus then by your book does that makes them “good ol’hard working Americans” who deserve every penny?

    I resent your accusation that I’m a free loader. I pay my taxes and I earn my keep. I’m also not in debt. Well I do have a 30 year fixed mortgage and about 5k left on my student loan. I have never missed a bill payment, never.

    So here you are letting lose just because you don’t agree with my opinions. Well that’s not very adult behavior now, is it.

    By the way anyone making over 100k is not really in the middle class. The average income in the US is about 50k a year before taxes. If you make 250k your in the top 20% of income in this country.

  • Cory

    To those who think NPR leans too much to the left…

    If you flip to the AM band it is a good bet you’ll find a legion of conservative voices to suite your tastes. Excercise your freedom to choose. Why gripe about the tone here? Just go elsewhere.

  • Joe, O.D.

    When will the politicians and public wake up, until we start manufacturing in this country again we are on a downward spiral. You can’t just be a service provider and consumer. Try to find a pair of jeans made in this country or a T.V.
    Until people have jobs and NOT WELFARE they are gong to sell drugs and collect government welfare. Not everyone can be a business owner , doctor or lawyer, the vast number of Americans have dumb downed or just don’t have the I.Q. to do anything more than assembly line work or labor type work. As long as everything is Mad In China and people buy import cars we’re just getting what we ask for.

  • http://www.pnart.com peter nelson

    I brought them up, because it was interesting to see them active in the sit in, but, where were they, when Gov. Schwartznegger was running for office?

    The Governator was elected in 2003 so they were probably in Junior High School.

    I hope this message gets to them, and spurs action in the direction of government, instead of at a school which has already made its decision.

    I’m sure that reading our penetrating insights on OnPointRadio.org is the high point of their day.

  • Cory

    Natalie,

    Yes indeedy, the dastardly poor are trying to secure free government cheese.

    The number of Americans who demonize the poor over the uber wealthy makes me scratch my head.

    If you are poor, it is your fault. Don’t expect help, because no one should be responsible for you but you. The well heeled must be allowed their pursuit of avaress unencumbered by the details of a social contract.

  • http://www.pnart.com peter nelson

    We need entirely new economic ideas and dump the failed religion that is the “magic of the market place”.

    China currently has an 8% GDP growth rate; India is at 7%.

    The “magic of the marketplace” works fine for countries where hard work, a fanatical devotion to education in science and technology, and a culture of savings instead of debt is in effect.

    Don’t blame capitalism and free markets for problems that Americans brought on themselves through sloth and lack of self-discipline.

  • http://www.pnart.com peter nelson

    The number of Americans who demonize the poor over the uber wealthy makes me scratch my head.

    If you are poor, it is your fault. Don’t expect help, because no one should be responsible for you but you. The well heeled must be allowed their pursuit of avaress unencumbered by the details of a social contract.

    I don’t understand why it makes you scratch your head. As I patiently explained above, the US is not like Europe – we have an inbuilt conservatism that has been persistent since the industrial revolution began.

    In the US there is no “social contract” to encumber avarice. And it’s not just the rich – all the lower-middle-class fans of Glenn Beck and Rush also think that “no one should be responsible for you but you” despite that fact that they will never achieve uber-richness.

    What makes me scratch my head is why liberals and progressives have persisted in not ‘getting’ this since the 1930′s! Natalie and her ilk “get” American political values a lot better than the liberals do.

  • Louise

    Obama is an incompetent and failed president, enough said.

  • Brett

    What? Was this supposed to have been an hour with John Mauldin? If I had known, I wouldn’t have listened to the show. He says he’s a lifelong Republican but discusses the economy in a bipartisan way? Give me a break! Maudlin says Bush cut taxes for the middle class????? I guess to a very wealthy neo-con the wealthy are middle class! Oh, wait, maybe he was talking about that laughable $300 check everybody got? [sarcasm] Maudlin just re-packaged good old trickle-down economics with an ever-so-slightly different bow on it! Trickle down economics didn’t work! Small businesses (which is 99% of all business and 80% of new jobs) can’t get lending for things like payroll and inventory, etc. Lowered tax rates for the wealthy doesn’t work for job creation, never has. No matter how much Mauldin thinks he can sell an old, tired idea as new wisdom because of his so-called credentials (is it impressive to people that the man ran an investment firm in the 1990′s?), people don’t buy it! (And Mr. Ashcroft just let this neo-con drivel spew on and on) …After the 1990′s, Mauldin sold his investment firm to focus on using his knowledge to improve his own bottom line. It’s no wonder he favors Bush’s tax rates for the wealthy.

    I run two small businesses and have no debt other than my mortgage (30-year fixed-rate, thank you). I’d like to think that someone who is wealthy will NOT get an unfair advantage break over me; is that too much like whining and “‘wanting to mooch off the government”? I don’t think so. Sounds like Natalie is just parroting some blather she’s heard on conservative talk radio. It is the rich who have a sense of entitlement, but it is that phrase that is all too often used to describe working people. Wealthy people don’t have to worry about food prices, energy costs, medical emergencies, care repairs, etc.; these are bottom-line issues for the average person, not for the wealthy. Many wealthy people make money off of money, which is fine, but how easy should it be for them as opposed to ordinary working people? Just maybe, with all of Mauldin’s “expertise,” he’s just masking his sense of entitlement and re-packaging it as wisdom. Shouldn’t it be considered just a tad disingenuous that someone with Mauldin’s wealth would favor lower tax rates for the wealthy than for average folks?

  • Donald Scott Waller

    I am pleased to know that China’s economic success is not due to slave wages and a falsely valued currency, but instead to “hard work, a fanatical devotion to education in science and technology, and a culture of savings instead of debt”.

    I think I finally get it. Thanks.

  • Brett

    “‘Don’t blame capitalism and free markets for problems that Americans brought on themselves through sloth and lack of self-discipline.’” -peter nelson

    I would have expected such a statement from Natalie or Louise, slapped on so flippantly and so grossly oversimplified, but not from you, mr. nelson; you generally have more measured and intelligent comments. (Are you trying out for a Dickensian play?) There is some truth to that so crudely worded sentiment, but a half truth is as good as a lie.

  • Tom Cantlon

    Who is this guy Mauldin? He thinks we should maintain tax cuts for the rich so they’ll save us? Did he miss the 80s and how trickle down doesn’t work? Yes we need to distinquish between high middle class and truly rich. Maintaining tax cuts for the rich just ends up with more in their investment accounts. Where does he think the money comes from to make jobs? If you don’t give the working people, the average consumers, the money to spend then even if the investors want to invest they don’t because there’s no market to sell to. Did he also miss the 50s and 60s when we had much more progressive taxes AND a booming economy? And his definition of “progressive” taxes, that the wealthy pay a large portion of the TOTAL income taxes? That’s progressive? You could have the wealthy pay a LOWER rate than the middle but if they’re just so darned rich then their total income taxes would still add up to a big chunk of the total. But that says NOTHING about how progressive it is. What’s progressive is when the INDIVIDUAL wealthy tax payer pays a higher rate than the middle. Our income taxes are only a fraction as progressive as they used to be. And if you add in that most areas have sales taxes and the low income folk have to spend all their money while the very high income folk spend only a small portion and re-invest the rest we have regressive taxes overall. We’re supposed to take this guy as an economics expert and that’s his definition of progressive? Either he’s completely inept, or he’s completely in the camp of do everything to make the rich richer and they’ll save us. He has zero credibility in either case.

  • Michael

    “I don’t understand why it makes you scratch your head. As I patiently explained above, the US is not like Europe – we have an inbuilt conservatism that has been persistent since the industrial revolution began.”

    I disagree and our american history has shown time and time again that this perception of conservatism is false. Throughout american history it has been shown this.

    This has been shown even before we became america. The trend has been more progressive than followed by a period fear and backlash to conservaitsm.Yet progressive thinking slowly inched forward

    Examples would be groups(mormans,Protestants,Quakers,ext) came to the america’s to have religious freedoms once the groups were established the backlash and fear kicked in once our conservative buddies came to power within that said group, the same went for the founding fathers came freedom of region,speech, and our conservative buddies fear and hatred of the other came Freedom of religion, speech for some. It went that way for alcohol,women rights, minority rights, child labor, fair wages(if you can call it that),gays,The interstate highway,interracial marriages medicare,education,going to the moon, fire departments,road repairs and even during the dust bowl people came together to help there neighbor’s Even Texas the big Meat eating Red state was the wild and anything goes until our conservative buddies came to power. Even our military are recognizing and trying more stay progressive ways in dealing with its service members along with socializing all active members care, housing,mental health,there families care,housing, schooling. Far more progressive than say 10yrs ago and the military was more progressive than it was 20yrs ago and so on. All this were established to be for the common good of the whole.

    Throughout American history it has moved in a progressive way, (slowly yes) but is moving. What we have seen time and time again once our conservative buddies get in office or control they seem to push there agenda in a authoritarian manner.I think people mistake most Americans as conservatives instead of fearful and uninformed.

    As for India and China it’s not that they work harder than Americans its just their governments are able to force any conditions on there people for cheaper wages than Americans who would never allow there government to do such. Along with the fact that once sweatshops were called out, protested by our people and government but now became just another way to milk the productivity of foreign workers and keep a larger chunk at the top where as in the U.S. we have progressive laws that prevent most of that. The term SWEATSHOP is almost never used instead replaced with Globalism, and Free Market.

    Even the past 30+ years of conservative thinking many progressive things has come about. As when the gap between poor and rich widens to much, revolution happens, or the government reverts to a authoritarian/totalitarian one. What has been established countries that have a social net and strong middle-class recover and still have a better quality of life than china nor india(french, Germans)and when both china and india

    The reality is that it was the Reagan years that manage to convince some Americans of being self serving is better than helping the others. Do you really believe majority Americans are like the glen beak followers view of conservatism ? I don’t.

    I think you can correct me if you disagree but majority of Americans are just uninformed, and don’t trust and fear the new and with the media the way it is it requires people to do alot of research to find a more objective more factual truth about a story or event without being bombarded by, distortion, lies, opinions, because lets face it listening to the news in a objective fact base approach is boring to the majority of Americans.

    I say progressive thinking has moved our country forward where as conservative thinking has Stipend progress in America thinking in the short-run instead of the long-run.

    The need of say the CEO, and investment bankers to maximize making even more money by outsourcing to a sweat shop overseas with a government incentive’s to do so has hampered fellow Americans in the process.

  • Putney Swope

    Natalie and her ilk “get” American political values a lot better than the liberals do.

    No I get it. You bet I get it and the events of the last year have cemented my conviction that this country is a not only conservative to a fault but that it’s also a dangerous path that can lead to a a lot of problems such as civil unrest and and other social ills.

    I get it. I get that the insurance corporations have basically told us that they own us. I get that the pharmaceutical corporations also own us. So does wall street who don’t contribute anything to anyone except themselves. Sure they make a lot of money but what do they build? Nothing they actually do more harm than good as recent events have shown.

    That the Natalie’s of the world “get it” does not mean that it’s right or that it’s a way forward for the country that is positive. I have no illusions, I never did. I only wanted decent affordable health care.
    I only wanted us to get out of wars we can’t afford.
    It’s not going to happen, why, because we live on one of the most dysfunctional countries on the planet and the real danger is we are heavily armed and are unable to come to any consensus on how to move forward.

  • Royce

    I caught part of the local rebroadcast, the part about 2010 projections and job outlook. No jobs, but GDP up for sure.

    You quoted Paul Krugman at the outset of your question, but a key point Krugman made in the lines of his discussion was that the country “has a GDP program and not a jobs program.” So what good is it when GDP grows because Wall Street bankers bonuses raise it without producing any jobs for 18 year old high school graduates? Washington policies have worked well to raise GDP, relying on the old axiom of “the rising tide raises all boats in the harbor.” That saw may have been applicable in JFK’s day 50 years ago, but it is more typical today to see– as we did this past month– that a promising jobs report provokes a negative response in the Dow. Still, the “rising tide” remains the foundation of this same GDP policy and the foundation of Reagonomics.

    However, we have yet to uncover why the GDP program has not worked, why it has led us to the crash of 2008, and what modulations it has spilled throughout our economic subsectors. We are scrambling for answers and a few are forthcoming.

    First we ought to take on the “rising tide” notion. Obviously, it is too simplistic. But if it were true in the longterm, then “trickle-down” would certainly have worked by 1988. The real harm of “rising tide” is that it regalizes and protects the investment class. Membership in the “investment class” changes constantly. If that were not true and membership were secure, the popular media would cease following Forbes annual 100 richest. The investment class can LOSE– and does–money as easily as any of us. If Forbes really wanted to help us understand the reality of market investment, they would publish the top 100 who have fallen the furthest each year.

    Second, it is a given that public policy has destroyed this country’s manufacturing base. I believe Alan Tonelson’s piece “Up From Globalism”, appearing in the current Harper’s addresses some possible changes that policymakers can address.

    Third are the social changes promulgated from “trickle-down” and “everyone will get rich” policies. One formidable change (of many) is that we have a large gypsy class of 17-35 year olds who can’t settle in life, can’t fit themselves into the American dream, because there are no jobs to match their skills and talents. They have either been promised too much, or their parents, educators, or coaches have over-rated their marketability. But the social modulations are many and complex. Obama’s campaign for “Hope” touched a raw American nerve in American social structure; he is and will remain hard-pressed to develop any program that will succeed enough to reduce cynicism.

  • http://www.pnart.com peter nelson

    kye asks:

    How can we grow if we’re not producing tangible goods that add value

    Apropos this, NPR reports that City Center in Las Vegas, a new gambling and tourist mecca funded by investors in Dubai, just opened today. According to NPR it is the largest privately funded construction project in US history.

    I think it’s interesting that “the largest privately funded construction project in US history” is a casino complex, and not a factory complex, r&d center, or university.

  • FJB

    John Mauldin is fantastic , bring him back as a regular!

    1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.

    2. What one person receives without working for, another person must work for without receiving.

    3. The government cannot give to anybody anything that the government does not first take from somebody else.

    4. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is the beginning of the end of any nation..

    5. You cannot multiply wealth by dividing it.

  • http://www.pnart.com peter nelson

    I would have expected such a statement from Natalie or Louise, slapped on so flippantly and so grossly oversimplified, but not from you, mr. nelson; you generally have more measured and intelligent comments. (Are you trying out for a Dickensian play?) There is some truth to that so crudely worded sentiment, but a half truth is as good as a lie.

    And I would have expected you to include the full context, so I’ll repeat it here . . .

    China currently has an 8% GDP growth rate; India is at 7%.

    The “magic of the marketplace” works fine for countries where hard work, a fanatical devotion to education in science and technology, and a culture of savings instead of debt is in effect.

    So I repeat: the current crisis is not a failure of capitalism:

    Western Europe have capitalist economies but they are somehow still able to provide universal health insurance, social safety nets and a more equitable distribution of income.

    China and India are capitalistic and have very strong economic growth.

    The US problems are, as I said above, a result of our peculiar culture. Our bizarrely uneven wealth distribution reflects larger societal values which are unique to America among major industrial nations. Our addiction to debt cuts across all strata from government to individuals and from poor to rich. There’s very little difference between homeowner’s buying more house they can afford, and borrowing the rest, and private equity firms doing the same when they buy companies. And the sloth I refer to is from my direct observation in 20 years of working in the high-tech industry, looking at resumes of US and foreign engineers and scientists. Today only THREE of the top 10 patent holders in the United States are US companies. (and many of those patents are actually purchased from foreign companies because Americans think they can buy whatever they want and don’t have to produce it)

  • http://www.pnart.com peter nelson

    fjb launches a bunch of platitudes -

    1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.

    … blah blah …

    5. You cannot multiply wealth by dividing it.

    Obviously fjb is not the sort of person to let empirical data stand in the way of a good demagoguery. How does he explain why, over the last 50 years, the countries with the highest standards of living and most continuous economic growth (OECD data) have been the countries that violate his alleged principles? The top 10, indeed, the top 30, countries do all the things he complains about, and even the US was doing it when we had the highest economic growth in the last 50 years.

    Inevitably whenever you ask these people where they studied economics or where they get their information they’ll say something inane like “I studied at the Austrian School” or “everything I need to know I learned from Ayn Rand”.

    Let’s invite fjb to cite some examples of some current large industrial or post-industrial nations which live by the precepts he lists so we can wee how well his libertarian magic carpet flies.

  • Cory

    Mr. Nelson,

    I wonder if the poorest of Chinese and Indian citizenry are impressed with the 7 or 8% growth rate?

    Should anything be more important than growth and profit?

  • http://www.pnart.com peter nelson

    I caught part of the local rebroadcast, the part about 2010 projections and job outlook. No jobs, but GDP up for sure.

    I know I sound like a broken record (remember those?) but at the risk of nauseating everyone with repetition -

    There is no required connection between jobs and GPD. As I said above, recent productivity data (from BLS) shows it growing faster than GDP. And as I also said, in the last 20 years more US jobs have been lost to automation and process improvements than to offshoring.

    And this trend will accelerate – as it takes fewer and fewer workers to produce the same output, the “cheap labor” countries will start to lose their advantage. Indeed we’ve already seen a few jobs that went to China trickle back to the US.

    Also, it’s a myth that high unemployment (i.e., people with no money to spend) means you can’t grow your economy. There are plenty of empirical counterexamples from Europe and even the US today. (10% unemployment, 3+% GDP growth)

  • http://www.pnart.com peter nelson

    I wonder if the poorest of Chinese and Indian citizenry are impressed with the 7 or 8% growth rate?

    Living standards in China have increased faster than almost anywhere. According to the Economist Magazine, even poor Chinese have cellphones now. According to one poll I saw in the Economist, poor people in China are more optimistic about their future than poor people in the US, even though they are way poorer than poor people in the US.

    But I’m not sure I get the gist of your question- are you suggesting they’d be more impressed if China had, say, a 3% GDP growth rate? I think they’d revolt if that happened, and the Chinese government has made it clear that this is their biggest fear.

    Should anything be more important than growth and profit?

    It costs money to bring electricity and running water to Chinese villages. Where should that money come from if not economic growth? There are millions of former Chinese peasants who now have factory and construction jobs which might be hellish by US standards but are heavenly compared to what their parents had, thanks to China’s economic growth.

  • Ellen Dibble

    If there is apathy, it is because we are confused. An easy approach is to blame Obama. This is like artwork in second grade: What do you see? Everyone sees a sun, which everyone draws the same way.
    Why? We look at how the next kid does it.
    Who is the next kid? National Public Radio. The national media.
    Have you ever seen state (or Congressional district) media sources that are equal to the national ones? The real power is with our elected representatives in the legislature, and we know they need huge money (in many cases, certainly if they are challenging an incumbent) in order to stay seated.
    This should be more prevalent on the airwaves and among the blogs than the Obama focus we have.
    So Obama’s office sent me an e-mail yesterday to call my senators about the health care bill, and they give me the phone numbers. I call. They want me to report back right away as to what they said. Now, of course the “office” doesn’t have forever, so basically I TOLD them, and so I reported to the White House what I told the senate office. But I’m thinking they are right to persistently tell us to know exactly where are representatives stand and why. Do I? No.

  • Brian

    1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.
    Posted by FJB

    FJB

    But what is happening is the wealthy have been regulated into prosperity and the middle class has been regulated into poverty by our government.

    You need to look at what is really going on and not just repeat what you read in Atlas Shrugged.

  • Brian

    I love the comments from the free-riders here. Let only the rich pay taxes so I can mooch more off the government. That’s the current state of the American work ethic. Envy and resentment go well with laziness and entitlement. Plenty of that here.
    Posted by Natalie

    Natalie,
    I’m not a free rider. But I do see that the game is fixed in America. There is much more social mobility upward in Europe than there is in America. Why is that? Because the rich have written the laws that make them much much richer while taking all the middle class has.

    Speak for yourself if you are lazy and a mooch.

  • http://www.pnart.com peter nelson

    There is much more social mobility upward in Europe than there is in America.

    It’s a little more complicated – it depends on whether you mean relative or absolute mobility, and also whether you subtract downward mobility, and also whether you mean for individuals or across generations. In terms of pure upward mobility the US is pretty good, which is why so many immigrants want to come here. But a big problem is that because we have weak social safety nets and no universal access to health insurance we also have lots of downward mobility . Millions of middle class people are one job loss or major illness away from poverty. Some European nations, e.g., France, have a tide that rises more slowly, but far fewer boats sink! So the net effect is that overall upward mobility is higher there (and in most other EU countries) than the US.

    But don’t tell this to the conservatives because they hate it when you confuse them with data!

    There’s an ongoing mobility project here . . .
    http://www.economicmobility.org/assets/pdfs/EMP%20American%20Dream%20Report.pdf

    . . . BTW, I’ve been yakking about productivity improvements as the 900-pound-gorilla in the room that no one wants to talk about, and the above study has some great charts on that!

  • http://www.pnart.com peter nelson

    If there is apathy, it is because we are confused.

    So what do you suggest?

    I’m a hard-core policy wonk – I enjoy research; I’m comfortable with highly complex topics; I have a good background in both economics and science; I like to debate policy (no, really??), and I can cite solid data and sources for virtually everything I say here.

    But most people aren’t like that! And it’s unreasonable to expect the average person to get as excited delving into, say, comparative medical procedure cost and outcome data as I do. Yet without that how are they supposed to have an informed opinion about our healthcare system compared, say, to Canada or France? And what good is an uninformed opinion?

    The issues that we’re facing on economic policy, the environment, healthcare, etc, are genuinely complex. It’s really not possible to have an intelligent conversation about them without familiarity with lots of technical detail.

    Suppose, for some reason, Congress had to pass a law regarding quantum mechanics. It’s a no-brainer that neither the average Senator nor the average voter would have a clue about it, and they wouldn’t pretend to.

    Economics is just as complex, if not more so. There is a HUGE amount of data and specialized knowledge involved, and results can depend on some pretty subtle forces – some obscure detail in the tax code might have a big effect on, say, hiring or R&D spending that’s not obvious at a first look. But the problem is that, unlike quantum mechanics, everybody thinks they understand economics because we all buy and sell things and save for retirement, and take out mortgages, etc. So the result is that everybody has an opinion but most of them wouldn’t be able to argue their way out of a paper bag with it.

    So how do you suggest people in a democracy make intelligent decisions about stuff like this? There is no acceptable alternative to democracy, but the fact is that our Founding Fathers never dreamed that common people would have to confront such highly technical and complex issues. So far the American political system shows no sign of being up to it.

  • Ellen Dibble

    Peter Nelson, you are so right. American voters are confronting complicated issues unforeseen by the founding fathers. I think American voters are manipulated into voting for things that benefit the manipulators but not necessarily the nation or the planet, and therefore something needs to be done.
    I recommend less centralization of blame. I recommend that the weight of each senator and representative be taken seriously by National Public Radio, district by district, and state by state, so that not only experts such as yourself can understand why any “representative” in Congress is taking a position, and what that position is. Clearly the presidency is not in control. Under Bush, I think his interests were pretty much in line with Big Money to begin with, so the tectonic forces didn’t threaten an earthquake. Under Obama, I feel the heat.
    I am begging the media to focus where the power is exerting itself, which is, in my opinion, more locally. Fovus not on who skidded into whom on the interstate, but what is going on where the laws are made, not a Senator 2,000 miles away from the voter’s district. Then people like you might deign to help explain.

  • Stephen

    I appreciate On Point having a republican on the show to give his opinion. While he sounds like an intelligent guy I hope to God he is wrong. We can’t take 10% unemployment for much longer.

  • zack

    Maudlin drops some good truth bombs here. The entire entrenched political establishment bears a lot of responsibility for the financial fix this country is in today – both Democrats and Republicans. They all tried to buy votes with one crazy moral hazard inducing program after another. For example – the GOP used Medicare Prescription drug coverage and the Dems the Community Reinvestment Act.

    Now you have a choice – keep buying the garbage that Jeremy Siegel, Ben Stein, Ben Bernanke and Paul Krugman are selling if you wish. These are the same guys that have been wrong every step of the way through the financial crisis; they have no credibility. Or you can start listening to the guys that have gotten it right and predicted the crisis. Go Google “Peter Schiff was right” and start getting real.

  • http://Wbur.org Gregory

    Mauldin is partly correct. One has to look at only the numbers. There is no way millions of jobs can be stimulated in the next few years. High employment will remain. Yet we are still importing people from other countries. Mauldin may be recycling his own version of “trickle down economics,” but the current Keynesian type thinking in the Fed has proven to not work during very serious recessions (ie, the mid-late 1930′s and the 1970′s).

    The basic problems remain: capitalism depends on growth; job growth is not infinite; our economy has been based on conspicuous consumption and rampant growth (Say’s Law states that supply creates its own demand); some corporations have grown too large, as has government. Banks which make bad loans should fail. As a nation we have not been saving or investing in new technologies or jobs.

    In some cases governments fail and we have revolutions and start over. Regardless, our living standards will continue to decline, as equilibrium occurs. Our growth was not sustainable. Everyone wanted the American Dream, and banks over-accommodated.

    A problem with Keynesian economics is it requires increased government spending, which requires increased taxation, which stifles growth. The problem with Say’s Law and classical economics is, when there are downturns, conspicuous consumption declines and contributes to the economic decline, and there is always an end to job growth (it is never infinite). The problem with socialism is, as Margaret Thatcher once said, “…you eventually run out of other people’s money (and I might add people get lazy and expect handouts- ie, Sweden in the 80′s).

  • Durga Truex

    LET’S TELL THE TRUTH ALREADY ABOUT TAXES.
    By that I mean let’s talk for a moment about something called the Comprehensive Annual Financial Reports, or CAFRs- ie. the second set of books that is kept of our government’s accounting that the public doesn’t get to see. The CAFRs are the set of books that tells the truth: that our government, though it may cry poor- and we all believe it because, after all, there are numbers to prove it and economists and pundits to say it- IS ANYTHING BUT BROKE. This is what really needs to be reported ANY time the subject of taxes- or our economy AT ALL- arises.

    Unfortunately, despite the fact that EVERY NEWS NETWORK, no doubt NPR included, gets a copy of states’ CAFRs annually, due to a 20-plus year media blackout on the matter (ie. networks being threatened with total shutdown) it is hard to find someone willing to talk publicly about THE ACTUAL budget of our federal, state, and local governments as opposed to THE REPORTED BUDGET. If the real numbers were made public, every American citizen would see that the argument for needing tax dollars to do anything is a total farce and we would all listen to these types of segments and laugh. Or revolt.

    According to our own law, per US Code TITLE 28 > PART VI > CHAPTER 176 > SUBCHAPTER A > § 3002 Chapter 15, the very definition of the United States is “a Federal Corporation.” And so is every municipality down to cities and townships a corporation. Corporations, by their definition, exist for profit.

    In the official annual Budget Report around which our common knowledge and media revolves, the numbers reflected are the amount of taxes supposedly needed to justify having schools, fire trucks, roads, etc. The revenue reported is merely a fraction of the actual revenue brought in by our government and does not even begin to account for the massive amounts of investment income (including profit from investing OUR tax dollars) and income not generated from tax dollars at all. It has been well documented over the last 25 years that our government operates, not at a deficit at all, but at an OBSCENE PROFIT at the expense of the American people; that the reported numbers are only used to continually justify our current tax system. The income-reporting policies (written by a private company hired by the government to oversee its income reporting- conflict of interest, anyone??) allow for the actual income to be excluded by a variety of ways and means. Without taxes we will still have roads, schools, fire trucks, and social programs. The only thing our tax dollars pay for is the interest payments we make to the Federal Reserve on our National Debt- debt none of us actually agreed to, but got saddled with and then continue to call it our own because of the criminal amount of misinformation we are fed.

    I challenge NPR to start talking about the Comprehensive Annual Financial Reports. As a public radio station, with enough public demand, you may be able to get away with it. A good place to start researching would be The Biggest Game In Town (www.video.google.com), or anything by Walter Burien (of course there are now many others) who pioneered and has extensively studied the accounting practices of all of our municipalities for more than the last two decades. Furthermore public awareness needs to be brought to the fact that a lot of the so-called “government entities” that we commonly believe are federal are also private, for-profit organizations. Here’s the short list: The Federal Reserve, the Internal Revenue Service, the Department of Homeland Security, the US Postal Service, and the Department of the Treasury.

    Time to wake up! We need a lot more reform than we think. And NONE OF IT has to cost ANY OF US in more taxes. Shame on you, NPR, for not having the courage to report what our other networks won’t. I don’t expect that you will talk about banks’ second set of books (a whole other rabbit hole to get lost in) as Bank of America is one of your major sponsors after all. But keeping us all in ignorance, running on the treadmill to pay our taxes when you know more than you are saying is not helping the American economy, its people, or your listeners whatsoever.

  • zack

    By the way – those that want to raise or maintain taxes on the rich are missing the point. Both the rich and the middle class are overtaxed, because our government is spending well beyond its means.

    We are spending $1 trillion a year maintaining a global empire. We spend billions subsidizing agricultural conglomerates. We just saw the greatest theft in history with the TARP program and Federal Reserve bailouts.

    If our government wasn’t blowing our money on such ridiculous unconstitutional lunacy we could eliminate the income tax entirely.

  • Rob L

    Disappointing show. Nothing about jobs lost to China and outsourcing. Nothing about the huge overhang of bad house debt that still hangs over banks.

    Bush tax cuts ending are the problems? LMAO. We’ve got the Bush tax cuts now. Look at where we are.

    More education, more training is Maudlin’s answer? LMAO. We have more college grads than ever. How much training does a person need? Twitter and facebook are the reason people need graduate degrees? What is this guy smoking?

  • Jeffery Draper

    I agree with Mr. Logan, apathy is the enemy even though I’m probably polar opposite politically. If you don’t like your politicians, its your fault, you elected them.

    For those who think that manufacturing has declined, the fact is that we actually make more “stuff” than ever, obviously productivity has replaced the worker. As great as we think China is they have “lost” more manufacturing jobs than anyone for the same reason.

    For those who complain about outsourcing its funny that you never complain when BMW outsources jobs to South Carolina or Toyota outsources jobs to Kentucky.

  • randy

    Abraham Lincoln
    - You cannot help the poor by destroying the rich.
    - You cannot strengthen the weak by weakening the strong.
    - You cannot bring about prosperity by discouraging thrift.
    - You cannot help men permanently by doing for them, what they could and should do for themselves.

    Winston Churchill
    - The inherent vice of capitalism is the unequal sharing of the blessings.
    - The inherent blessing of socialism is the equal sharing of misery.

  • william

    Reading these comments is like reading a socialist manifesto….where are you Americans…have you given up on free enterprise and the ability to get ahead..Have you just given up and want the government to cater to your mamby pamby needs and wants…..sure everyone has a beef….but it is not with the rich and not with the capitalists…it is with all of us.
    Wehave allowed ourselves to get into debt..yes DEBT..beyond what we are able to pay..either individually or collectively (city, state, federal),,
    This is what we need to address and fast….some have mentioned small businesses need the tax breaks to grow and employ us….I heard where the average government worker makes $30M more than the private sector…not sure I believe that….but the answer is not turning from the system that has given us so much….but correcting the debt..

  • Ron Cooper

    Listened to Tom’s interview with Jeremy Siegel and John Mauldin. I would like to believe Mr. Siegel – and yet found John Mauldin’s presentation more believable, more factual. I was disappointed in Mr. Siegel’s brief argument.

  • http://www.streetwriter.net James Street

    Professor Siegal exemplifies a certain blindness that results from perceptual optimism: There is a famous drawing that can be perceived as an ugly old hag or a beautiful girl, depending on the viewer. That is to say, depending on how the viewer organizes the visual data, she/he will see a very beautiful or ugly woman. When one one or the other is perceived it becomes very difficult to organize the data differently so the other woman becomes visible.

    A professor of finance has a very strong motive for seeing the future as a beautiful young girl and not an ugly old hag. Among other motives, he does not want to discourage his students: They would not want to get MFA’s and then walk out into an economy in shambles.

    John Mauldin doesn’t like to look at the ugliest of the ugly and so he doesn’t see the ugly old hag, but he doesn’t see the beautiful girl either. His realism makes him a reliable observer from within the traditional America economic perspective but it leaves at lot of very ugly facts about America out of the picture.

    There are several other perspectives including geopolitics, socialism, mixed socialism-capitalism, libertarianism, institutionalism and others.

    The economics profession is sailing in a very robust ship on reasonably calm seas but when that ship tries to negotiate dry land it’s going to look pretty pathetic.

    World history teaches us that the world lurches forward from one unprecedented epoch to the next but few people learn its lessons.

  • Archie

    Bloomberg reports that 12% of mortgages above $1M are 90 days past due, more than 2X the national average. 40 % are underwater. The so called rich are a house of cards about to come crashing down and they figuratively they will come crashing down on the middle and lower class in terms of the taxes that they will no longer be paying and the jobs they will no longer be providing. Perhaps maudlin is right and the rise in taxes will be the death blow to the upper middle class (because that is who we are really talking about, the real rich will be immune from the higher taxes due to their various tax avoidance strategies) but I think that the upper middle class are done for the most part anyway and the taxes will just be the coup de grace. Hopefully when there isn’t the upper middle class to beat up on anymore a flat tax will be considered with no deductions so that all pay their fair share and people are not penalized for being successful.

  • jody

    1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.

    2. What one person receives without working for, another person must work for without receiving.

    3. The government cannot give to anybody anything that the government does not first take from somebody else.

    4. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is the beginning of the end of any nation..

    5. You cannot multiply wealth by dividing it.

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