I received the following screed from a friend after commenting on my official position that Herman Cain is a grifter completely uninterested in becoming president. I have maintained all along that his sole purpose for campaigning is to sell books, increase his speaking fees and get a gig as a paid commentator on Fox News similar to what Sarah Palin and Mike Huckabee have landed. Cain is clearly lacking foreign policy credentials and more importantly, the intellectual curiosity to educate himself and be prepared to answer questions on foreign policy. I can only conclude, he is not serious about becoming president given that he revels in his lack of knowledge on the subject. The Screed follows – Edited for clarity my comments in brackets:
OMG Mark I have to say you must drink the cool aide [Kool Aid] and tune into the “butch” [nice] on the leftist MSNBC. I think her name is Maddow. Are you kidding me [?] – teleprompter boy [President Obama]- addressing the prime minister [not named] as MR. President then saying uh oh thats me. You want to talk Clueless Your boy [I will assume the use of the word "boy" has no racial intent] has never accomplished anything accept [except] success with fraud on the american people and off [of] course becoming the greates [greatest] food stamp president ever [a term coined by Rush Limbaugh to describe Pres. Obama]. I thought you were in the people business – and you can not see the magnitude of fraud and incompetence in [of] Obama. And to think any one could be so stupid to think you tax more and grow business – Sure I’ll stay right here and pay more taxes because I know them money will spent oh so wisely [unclear what he intended here...sorry]. UHHHH Vote for me and I will tax those unjustly enriched business people (piece of coal) [unclear what the coal reference is] and take care of you. ” Daahhh Oh Thank you Mr. Prethident. I’ve been waiting for thomeone like you to help me forgonna [again, unclear on forgonna] cuth I aint thmart enough to make it mythelf. [I believe he was mimicking how Rush Limbaugh often mockingly voices those who oppose him as the "new castrati" by giving them a lisp when he speaks for them] what [insert ?] WOW i [I]just thought there were more lazy low self esteem mooches who are content with getting a hand out, than there were ambitious, self respecting people – and that is how he got voted into office after fraudulently obtaining fictisous [fictitious]votes with our tax dollars spent through Acorn [laboring under the now dis proven theory that ACORN produced massive amounts of voter fraud]- But i guess I was mistaken – there are apparently some well educated self respecting clueless folks as well [assume he means me and others who are educated and voted D]. And his Jobs plan[s] old and new. [Unclear - not a full sentence] Ever look at a P&L in conjuction with a balance sheet Mark? Obviously teleprompter fraud boy [Again, use of "teleprompter" is a frequently used criticism of Hannity and Limbaugh - again allowing since I know this guy to be somewhat decent that the word "boy" is not a racial pejorative] has never seen one or understood one. This dip shit and his fellow dip shits think you can eat seed corn and have more crops next year. You either think he is that stupid oryou don’t. And if he isn’t that stupid – it is that their fans are that stupid so they sell such a plan and go on a fraudulent spending oragy [orgy], that lines their relatives pockets with wealth beyond that of a powerball winner- and you and I get to pay for it. They put lipstick on it and now try to sell it again. Mark I have to ask How do you stay upright on two wheels?
Okay…whew. Given that this was sent at about 1:00 a.m. in the senders time zone I will allow that if such writing had emanated from me, a large amount of alcohol would most surely have been involved. That said, it’s time that I address the issue which I’ve long promised to address with respect to what has gone wrong.
Since 1980 the theory of supply side economics has been part of national policy. Essentially, this theory suggests that if top income earners and so called job producers are allowed to work in an environment of minimal taxation and regulation, the effect will be economic growth that benefits the population at large as it will unleash the power of free market capitalism, resulting in job creation and an environment of corporate self regulation whereby companies recognize that if they lose sight of the long view, in lieu of short term profit making, the invisible hand of the market will ultimately penalize them. Ronald Regan and the Congress lead by Tipp O’Neill carved out a compromise to cut top marginal income tax brackets to 28% from over 70% and close many of the tax loopholes that allowed those in the over 70% tax bracket to actually pay no taxes at all. There is no question that then as today, the tax code needed simplification and this was largely in my view a good thing at the time.
Also in 1980, parts of the Glass-Stegal Banking act, which essentially separated traditional lending and deposit banking from investment banking were repealed. In the nineteenth and early twentieth centuries, bankers and brokers were sometimes indistinguishable. Then, in the Great Depression after 1929, Congress examined the mixing of the “commercial” and “investment” banking industries that occurred in the 1920s. Hearings revealed conflicts of interest and fraud in some banking institutions’ securities activities. A formidable barrier to the mixing of these activities was then set up by the Glass–Steagall Act.
Shortly after this law was partially repealed we had the collapse of the Savings and Loan industry and the Junk Bond scandal. Surprise! This collapse was largely due to simultaneous deregulation of the S&L industry, allowing S&Ls to operate as banks without being subject to the same level of regulation. This allowed S&Ls to lend against lower capital requirements, broker Certificates of Deposit (CDs) which spawned a brand new industry – packaging good and bad loan pools together, writing derivative contracts against those loan pools, and selling leveraged pieces of the loans as “insured bonds” to investors. Sound familiar? A few institutions and individuals profited greatly from this while the net effect was devastating to a larger number who depended on those new fangled “junk bonds” to back their pensions, CDs and savings accounts.
Fast forward to 1999 and the final deregulation of the banking industry the bill sponsored by Republican Senator Phil Gramm and Republican Rep. James Leach (Gramm-Leach-Bliley) signed into law by Democratic President Bill Clinton. This was back before bipartisanship was looked upon as a sign of weakness. This law effectively repealed the Glass-Stegal Banking Act of 1933 and allowed the wall between commercial, deposit and investment banking to be completely done away with. Not only that, but insurance companies could own banks, banks could create mutual funds and investment companies could sell insurance and take deposits. What a wonderful world! Of course, it only took 7 or 8 years for the unintended consequence to result in the shit storm known as the “global financial crisis”. As an aside – voting my pocket book, I supported Republicans and these pieces of legislation at the time.
That is all background – here is the crux of the matter: Since 1980 and the advent of public policy designed to deregulate and lower taxation – which were intended to spur economic growth that benefited all of society – we’ve been in a series of 5-8 year cycles of bubbles where those who create the bubbles are greatly enriched and those on whom the bubble bursts get hosed.
Take a look at the following graph 
Note the percentage of income ownership of the top 1% of in 1920 and what happened under Glass-Stegal and what has happened since 1980 when Glass-Stegal started to be dismantled.
I don’t begrudge success. I’m not opposed even to the concept that wealth attracts and engenders wealth – this is the way it should be. What I do oppose is those who own wealth, using that wealth to influence public policy in such a way that the system becomes rigged to essentially ensure their success and prevent their ultimate failure while at the same time placing road blocks in the way of their competition.
The key reason I have become a Democrat Voter (George W was the last R for whom I voted – burned badly by his humble foreign policy and compassionate conservatism bait and switch. Feel like a complete dumb ass to this day) is that I have witnessed first hand, the abject FAILURE of the low tax, low regulation, anti labor environment that the GOP insists is the road to prosperity to actually do what it is advertised to do. FACT – George H.W. Bush and Bill Clinton both raised taxes and increased regulation and the economy grew. FACT – George W lowered tax rates, loosened several key pieces of environmental legislation and job creation stalled, middle incomes stagnated and we ended up in a world wide market collapse. Want to argue that with me? Really?
Many of my right wing friends detest president Obama and cite their common complaint that he is a Socialist and wants to “redistribute wealth”. The fact is, “trickle down” economics has created the greatest mechanism for wealth redistribution in the history of our country. Over the past 30 years, top wager earners have seen their incomes increase by over 275% while real wages for those earning $75,000 or less have actually DECREASED. Listen, before I became a financial advisor, I owned a painting and decorating company. I paid my guys about $17 an hour. That was during the mid 1980s. Guess what the guys painting the house next door this summer were being paid? $15 bucks an hour. And, they were not migrant workers. This was their trade! For thirty years, real income has been flowing OUT of the middle, TOWARD the top while the bottom has stayed relatively constant. These facts are indisputable
I have many thoughts on this a related subjects that I’ll be laying out over the next few weeks. Stay tuned…
Why income disparity is dangerous
Why slightly higher taxes lead to investment while low taxes lead to hoarding of wealth
