By Peter Galuszka

Sometimes there are enlightened people out there.

This is point to shake up the Baconauts and Boomergeddons, but the New York Times has an editorial this morning about the enlightened rich.

Following the lead of Warren Buffett, the investment Sage of Oamaha who says he should pay more taxes: “Sixteen of France’s wealthiest individuals urged the government to raise their taxes. The Italian Formula One magnate Luca di Montezemolo publicly backed Mr. Buffett’s idea ‘for reasons of fairness and solidarity.’ About 50 of Germany’s richest people have been campaigning for a higher top tax rate since 2009.”

Now before the Chief Baconaut emerges from his cave-like basement office, and, scratching his eyes like a groundhog, starts to retort, let’s explain more from the Times editorial. These folk are motivated by “enlightened self-interest” besides true altruism.

Austerity, of the very type the Baconauts scream for, “is already economic economic growth on both sides of the Atlantic.” True Euro-Weenies, as the Chief Baconaut dubs them, are more inclined to protest than we stoic Americans, but the day could be coming with the overburdened poor and middle class start indicating they’ve had enough with cutting their kids education and their roads.

So, it’s something to think about. Policy should be taken away from the “I got mine now get away!” crowd. We should look at the good and needs of all.

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8 responses to “Thanks, Monsieur Warbucks!”

  1. If the super-rich want to share their wealth with the government, what’s stopping them? It’s an admirable sentiment. They would bask in the esteem and appreciation of their countrymen. Trouble is, they don’t want to just raise taxes for themselves, or even those in their wealth class, but upon those who are far less affluent.

  2. here’s the problem. We don’t want to pay the 14 trillion in debt – we want to argue about who owes what much like folks who bought dinner on a group ticket.

    while we argue, we are adding 1.4T more to it every year and even the most ambitious balanced budget initiatives like Ron Paul don’t even start to buy down the debt itself for 5-10 years so by the time we get to it, it will be more than 20 trillion.

    In the mean time we are having food fights over who should pay.

    You can tax the 45% who pay no income tax right now – but I’ve yet to see how much of the 1.4T gets taken down by doing that.

    even more fundamental – we are now collectively questioning the concept of progressive taxation and ironically, it’s not the rich per se who are questioning it near as much as the right wing ideologues who reject progressive taxation out of hand and advocate a flat tax.

    like I said.. we owe a pile of money and we don’t even agree on how to pay it.

    I can tell you this. Most people who don’t pay income taxes are parents and what gives them all their withheld taxes back – is their kids: exemptions, deductions and CREDITs (which you get if even you owe no taxes at all).

    that’s right KIDS are want give about 40% all their taxes back.

    that’s our policy. the problem is we refuse to recognize it. The folks who don’t like the 45% instead categorize them as scum-sucking entitlement-seeking leeches… while the scum-sucking-entitlement-seeking leeches blame the rich for not paying their “fair share”.

  3. Well heck, all we really need is a Beneficial consolidation loan. Put all those trillions on one account and pay it off a little at a time, just like people used to do way back when to keep their cash flow positive.

    The phrase of the day in Europe is “Fiscal Consolidation”. It’s being bandied about by all sorts of financial ‘experts’. But just try to find a coherent definition of that phrase. What is it? What is the ramifications? Who knows, because the experts refuse to say.

    So what, you say? Well it may be What when Canadian and US Treasury officials are using the same buzz words on this side of the Atlantic. Shouldn’t they be more clear on what they are getting us into?

  4. We have two problems. One immediate and one slightly longer term.

    The immediate problem is the current economy. Obama’s medicine isn’t making the patient any better. Obama thinks it’s because we haven’t taken enough medicine. So, he’s back with “son of stimulus”. Unfortunately, we have little choice now. Stimulus plans are like trying to steal home base in baseball. Generally, a bad idea that rarely works. However, once you start the dash from third you better keep running. Stopping midway is a guarantee of failure. I wish Obama wouldn’t have done what he did. But now he’s done it. Time to play it out.

    The longer term problem is illustrated by the shape of the last three recessions (including today’s economy – although it is technically not a recession anymore). Recessions used to almost always be “V” shaped with regards to unemployment. The last three have been “U” shaped, although, in fact, we really don’t know what shape the current recession will take because it’s ongoing.

    Why the change?

    My opinion is that the demand for American labor has been structurally altered. Prior to 1990 recessions were financial events. Business activity slowed and unemployment rose. Any increase in economic activity required an increase in American labor. Jobless recoveries were virtually impossible.

    Today, things are different. A decline in economic activity creates an increase in unemployment – just like the old days. However, an increase in economic activity can be accomplished without a corresponding increase in the use of American labor. Why? Off-shoring, technology and too little innovation in the creation of new jobs that need American labor.

    I am a regular visitor to Silicon Valley. The valley always had a classic boom and bust economy. Everything from home prices to road traffic varied in correlation to economic activity. Until about 2005. In 2005 the dot com recession had ended and economic activity was on the mend. I’d leave my office in San Jose headed for somewhere like Palo Alto with lots of time to spare. I knew traffic on 101 was going to be miserable, It’s always miserable when times are good. I ended up spending a lot of time in parking lots of technology companies having arrived very early for a meeting. While sitting in my rental car I had the time to wonder, “Where is all the traffic?”. One day I knew the answer. The traffic was in Bangalore.

  5. I’m speechless….

    but I definitively agree : ” My opinion is that the demand for American labor has been structurally altered”

    and the question is who really knows what to do about it… but I don’t think cutting payroll taxes changes it…

  6. Peter Galuszka Avatar
    Peter Galuszka

    Au contraire! Stimulus is pure Keynes and has been done every since the Great Depression.
    You are absolutely right about putting jobs anywhere but the U.S. It has been the mantra since the 1980s and Maggie Thatcher and Reagan. When I worked at BusinessWeek in the 1980s and 1990s, all the New York editors would do was apologize and justify globalization. Never forgot how one of my bosses, a true believer, was at a Columbia U conference and ran into a North Carolina editor I knew who had witnessed the loss of 6,000 textile jobs in just one afternoon. The words were flying!

  7. my question is this – if kids are the reason why 45% pay no income taxes, does that make kids scum-sucking entitlement seekers?

    I’m now convinced that Groveton is a true independent who can and does swing either way – depending….

    to see the man urging Obama…er I mean dear leader/Prez telepromter on with stimulus is indeed gratifying!!


  8. “my question is this – if kids are the reason why 45% pay no income taxes, does that make kids scum-sucking entitlement seekers?”.

    While I have never seen my kids actually suck scum, they are professionals at seeking entitlement.

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