Joe's Pipe Dreams

Joe the plumber is worried that Obama is going to tax his dreams.  Joe doesn't make the $250,000 plus a year where Obama's tax increase would kick in, and he doesn't own the plumbing business he's trying to buy that allegedly has a taxable net of $250k plus a year.  He doesn't even have a plumbers license nor is the plumbing business he aspires to buy licensed.  Yet he's worrying about a 3% tax increase on money he isn't making from a business he doesn't own.  If he's smart, he'll save the extra money he gets from Obama's tax break on his actual income now and use it towards a down payment on his dream business.    

Hamilton v. Jefferson Redux

Pardon my disappearance, work has been hectic, to say nothing of the financial markets.  My 401(k) is down 30%.  Viva la bourgeoisie!  We will survive like cockroaches.

I digress.  My only comment for the moment is that the factions in this financial crisis have split  along the historical divide of the high finance Hamiltonians versus the Central Bank Hating Jeffersonians.  The Jeffersonians are rightfully angry at the Hamiltonians for delivering a gargantuan credit crisis.  Hamiltonian play in the field of derivatives exacerbated the  inevitable cyclical credit bust that is a given with capitalism.  The fact of this cyclical credit collapse is what justifies regulation with the aim of transparency and mitigation of leverage.  The margin requirements for the purchase of equities imposed by the securities laws of the 30's have done us well.  The current crisis is not an equity market crisis.  The traditional equity markets are certainly feeling the effects, but these effects are the result of collapses in the derivative markets, particularly securitized mortgages and mortgage backed collateral debt obligations (CDOs).  As Obama aptly said in the debate last night, we have 20th century securities laws for a 21st century market.  But I digress.