Jeff Tuller, a 55-year-old, commercial real-estate broker in New York City, says he can't access his money. He says he placed $300,000 in auction-rate securities in an account with J.P. Morgan Chase in April 2007 and November last year. He tried to liquidate about $200,000 in February to pay down a mortgage on a house in the Hamptons on Long Island, but says he was told there were no bids for the auctions and his money was stuck.

"I was very upset," he says.

Sorry, I call bull***t on that one. Did you look at the pictures? There's one random picture of a dog, and one or two pictures of your basic fat cop standing around. To try and compare this to the pics I know you're talking about in re: the civil rights movement is ridiculous.

(And none of the cops has billy clubs.)

I'm all for keeping all these self serving idiots honest, but this seemed wrong.

...when the [capital gains] tax rate has risen over the past half century, capital gains realizations have fallen and along with them tax revenue. The most recent such episode was in the early 1990s, when Mr. Obama was old enough to be paying attention. That's one reason Jack Kennedy proposed cutting the capital gains rate. And it's one reason Bill Clinton went along with a rate cut to 20% from 28% in 1997.

Either the young Illinois Senator is ignorant of this revenue data, or he doesn't really care because he's a true income redistributionist who prefers high tax rates as a matter of ideological dogma regardless of the revenue consequences. Neither one is a recommendation for President.

For her part, Hillary Clinton said that she, too, was open to hiking the capital gains tax rate, just not by as much as her rival. "I wouldn't raise it above the 20% if I raised it at all," she said. Of course, she too promised during Wednesday's debate not to raise "a single tax on middle-class Americans, people making less than $250,000 a year."

Both candidates would have voters believe that taxes on investment income only affect the rich. But that's not what Internal Revenue Service returns show. The reality is that the Clinton and Obama rate increases would hit millions of Americans who make well under $200,000. In 2005, 47% of all tax returns reporting capital gains were from households with incomes below $50,000, and 79% came from households with incomes below $100,000.

...a higher capital gains tax rate isn't the only middle-class tax increase that Mr. Obama is proposing. He also wants to lift the cap on wages subject to the payroll tax. That cap was $97,500 in 2007 and is $102,000 this year. "Those are a heck of a lot of people between $97,000 and $200[,000] and $250,000," said Mr. Gibson. "If you raise the payroll taxes, that's going to raise taxes on them." Ignoring the no-tax pledge he had made five minutes earlier, Mr. Obama explained that such a tax increase was nevertheless necessary.

In other words he dodged the question, as he so often does with impunity. But thanks to Mr. Gibson's persistence, for 90 minutes Wednesday night Mr. Obama didn't get away with it. The voters learned a lot about Mr. Obama, who needs to learn a lot more about taxes and revenue.

The Journal piece is well done.

Yes, Senator Obama certainly appears to be for raising taxes in order to extract the money on ideological grounds. I got the impression, as he rather casually shifted his blah-blah-blah to excessive CEO pay and what some hedge fund managers make, that he is confident he can spin his way to the basket on this point.

He knows first-hand how little awareness most Americans have about finances. He's been around smart, rich people all his entire adult life -- at Harvard, in Chicago, and in the Senate. He raises millions from the very rich. He tells them catty little snippets about the bitter, gun-clinging religious nuts of Pennsylvania; they swoon and drop more money in his basket. He’s not guessing about the very rich – every day of this campaign, thousands of them are flocking to him.

But, we’re not taking about the rich, and certainly not about the very rich. We’re taking about $200,000 a year. That’s a real small business. It’s a plumber, a helper and a truck working 340-plus busy days a year.

Obama wants to take more of what they earn because, just because he thinks they are more like Henry Kravis than folks in his adopted neighborhood of Chicago. Worse yet, Obama seems to know that raising payroll and capital gains taxes on the $200K crowd will work against the forward movement of families who are the engines of our economy.

McCain is now famous for saying he doesn’t know much about the economy. Well, he knows people well and how to connect to them.

Clarion Call Time for McCain. This is the big fat sweet spot to connect with aspiring, working families – people who don’t make $200K/year but who work through generations to get there and possibly beyond.

MR. GIBSON: ...you would favor an increase in the capital gains tax. As a matter of fact, you said on CNBC, and I quote, "I certainly would not go above what existed under Bill Clinton, which was 28 percent."

It's now 15 percent. That's almost a doubling if you went to 28 percent. But actually Bill Clinton in 1997 signed legislation that dropped the capital gains tax to 20 percent.

SENATOR OBAMA: Right.

MR. GIBSON: And George Bush has taken it down to 15 percent.

SENATOR OBAMA: Right.

MR. GIBSON: And in each instance, when the rate dropped, revenues from the tax increased. The government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down. So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?

SENATOR OBAMA: Well, Charlie, what I've said is that I would look at raising the capital gains tax for purposes of fairness.

...the Times itself in mid-March recognized that, given the discontented vote of 42 percent of its shareholders at the last annual meeting (and a worsening of almost all circumstances since) and Harbinger’s and Firebrand’s significant and increasing holdings, the only way to avoid an embarrassing public defeat—and the possibility of losing all four of the seats—was to agree to give the insurgents two slots. Hence, Scott Galloway and investor James Kohlberg will join the New York Times board as avowed (and professional) malcontents.

Then, too, there is the other kind of rising discontent—more emotional than financial.

The ever growing list of its own journalistic missteps, blunders, and offenses threatens to become one of the things the Times most stands for: putting its foot in it. And the expectation, both within the Times and among those who obsessively watch it, is that there is always some further black eye, calumny, screwup, or remarkable instance of tone-deafness on the horizon.

This includes, most recently, the John McCain sex-scandal story—wherein the Times’s own agonizing internal conflicts about the story (Do we? Don’t we?), and its apparent tortured inability to deal with the most basic elements of the story (it’s about adultery, but we’ll say it’s about questionable lobbying), became close to farcical.

...And then there’s the powerful rumor mill: the misfortunes and Kremlinology—a disintegrating Kremlin—at the Times have become a minor entertainment genre in the New York media.

Here’s the latest gossip: The Times editorial board was, apparently, planning to endorse Barack Obama in the New York primary; the Clinton campaign, getting wind of this, called upon one of its major financial supporters (and eager-beaver prospective Treasury secretary), the private-equity manager Steven Rattner, the best friend and principal adviser of Arthur Sulzberger Jr. Rattner is thought to have petitioned Sulzberger, and Sulzberger thereupon overruled his editorial board, which then backed Clinton. Among the messages here: Sulzberger is a weak link, and if one Wall Street guy has his hooks into the Times like this, why not others whose money is just as good as Rattner’s—or better?

...the boom can be traced to raging testosterone levels of traders on Wall Street and the City of London, according to the results of a new study. And the current bust may be the result of swings in another hormone, cortisol, which is associated with stress.

Those are the findings of a study of hormone levels of City traders by John Coates and Joe Herman of Cambridge University and published in the prestigious Proceedings of the National Academy of Sciences Monday...

"Steroids such as testosterone and cortisol affect our moods, memories and behavior," Coates wrote in the FT. Testosterone levels rise when males prepare to compete, and increase further in the winner, but fall in the loser. Higher testosterone levels are associated with greater risk-taking and confidence; winners experience a positive feedback loop of higher testosterone begetting more confidence, Coates explains.

The Cambridge researchers monitored hormone levels in 17 London traders and found those with the higher testosterone levels in the morning made more money that day. Indeed, testosterone "is likely to rise in a bubble and, by increasing risk-taking, exaggerate the market's upward movement," they posit. But, not surprisingly, that can go too far, as the last year or so has amply demonstrated. "Effective risk taking turns into dangerous behavior," other studies show, they add.

Thanks to Mike Angelides for the link.

Posted by Donald L. Luskin at 11:49 PM | link  

Posted by Donald L. Luskin at 11:35 PM | link  

Posted by Donald L. Luskin at 12:16 PM | link