Bizzy’s Biz-Econ Briefs (101305)
Interesting news and views from around the ‘Net:
Willisms: The “Peace Dividend” Created the Surplus
Willisms returned from vacation this week and got on a roll:
Small government conservatives often wring their hands and sigh and otherwise whine about the failure of the GOP to control spending. We had surpluses, afterall, in the 1990s. Wonderful, wonderful surpluses. Yay for surpluses. Hip, hip, hooray.
But why did we have those surpluses? Was it the wonderful fiscal discipline of President Clinton? Or was it the Republican Revolution?
Maybe it was neither.
Maybe it was just a booming dot-com economy, which lined the government coffers, and the post-Cold War peace dividend, which allowed the government to keep overall spending levels in check. Spending increased mightily in the 1990s on all sorts of things. President Clinton and the Congresses of the 1990s were just fortunate enough to have that wonderful peace dividend….
Excellent. And true.
Willisms: The Rich Pay the Taxes
I told you he was on a roll (this time with the help of “Kip”; go to the link to see a great graph):
The rich, even after Bush’s “tax cuts for the wealthy,” still pay nearly all of the federal income taxes collected by the government.
And “Kip” takes a nice shot at the liberals who don’t want to do a thing about Social Security:
Of course, most of those filers in the “tax-free” lower half of returns are only free of income tax. They are not exempt from Social Security taxes. The rich are oppressed by income taxes; the working poor are oppressed by Social Security taxes. Therefore, those who champion the working poor ought to be less interested in income tax reform and more interested in Social Security reform. Indeed, they ought to be the most ardent advocates of Social Security reform, including voluntary partial privatization. Go figure.
Elliot Spitzer is Having a Week He’d Rather Forget
The tyrant got reined in a bit in two instances:
By Scott Malone
NEW YORK, Oct 12 (Reuters) – New York State Attorney General Eliot Spitzer suffered a double defeat on Wednesday in what may be his biggest setback since turning his attention to Wall Street more than four years ago.
A U.S. District Court judge ruled that Spitzer had stepped outside his turf with a probe into home-lending practices at major banks, declaring that enforcing bank laws was a matter of federal, not state jurisdiction.
In a separate matter, Spitzer’s office dropped four remaining criminal charges against former Bank of America Corp. broker Theodore Sihpol, whom he had accused of helping a hedge fund trade mutual funds illegally.
In a separate civil case brought by the Securities and Exchange Commission, Sihpol on Wednesday agreed to pay a $200,000 fine and submit to a five-year ban from the securities industry, without admitting or denying any wrongdoing.
Spitzer’s attempt at co-opting national lending regulation was an outrage, a political abuse of his office intended to score points with the voters in his run for New York governor, and was thankfully stopped. As The Wall Street Journal (requires subscription) said in an editorial today:
Judge Stein permanently barred Mr. Spitzer from subpoenaing documents from, or bringing enforcement actions against, national banks with regard to his lending probe. This was an absolute victory for the Office of the Comptroller of the Currency — the federal body charged with regulating national banks — as well as the Clearing House Association, a commercial banking group. Both bodies had filed lawsuits arguing Mr. Spitzer was meddling in matters over which he had zero jurisdiction, and Judge Stein wholeheartedly agreed.
What makes the ruling particularly satisfying is that, in addition to upholding good law, it puts an end to one of the uglier campaigns Mr. Spitzer has waged in pursuit of political gain. The New York AG this year declared he was probing whether national banks had engaged in discriminatory lending practices to “vulnerable groups” of New Yorkers. This is code for racial minorities, whose votes Mr. Spitzer is trying to woo in his current gubernatorial bid.
The other setback in the Sihpol case may be a silver lining for Spitzer, who intended to retry a man who had been acquitted on 29 of 33 accounts in his original trial, and was one juror away from acquittal on the other four. The retrial would in all likelihood have been another embarrassing loss.
