I was doing my regular Saturday morning television show "Bulls & Bears" on Fox. The topic was taxes, and I was trying to explain why I disliked presidential candidate Sen. Barack Obama's "spread the wealth around" comment to Joe the Plumber. A friend and professor at Temple University, Marc Lamont Hill, joined us to defend the Democrat's side of the issue.
The discussion came back around to me and an analogy popped into my mind. I said, "Marc, let me see if I can put this in terms you can relate to. Being a professor, how would your students feel if you decided to implement the following -- all the hard-working, late-night studying, social-life sacrificing 'A' students had to give the bottom dwelling 'D' students some of their high scores? The 'D's' would come up to 'C's' and the 'A's' would come down to 'C's.' You would be removing the incentive to work hard, succeed and get rewarded."
"I strongly disagree," is all Marc could say. No follow-up or defense. I really respect Marc, but there is little defense of "spreading the wealth" in a financial conversation.
In essence, the Obama tax plan does just this. It takes from the hardest-working and, no coincidence, highest-earning Americans and gives to the people who earn less.The Killer C's There is a crisis of credit, confidence and competence. The current distress seen in the financial markets is a result of a series of bubbles bursting in consecutive pops. The housing, stock market and credit market bubbles breaking at the same time is the reason for this current turmoil. One bubble bursting would be difficult to navigate. Trying to handle three simultaneously has proven to be near disastrous. Bankers as Bakers The Federal Reserve, along with the Treasury Department, Congress, the Bush administration and our hard-earned tax dollars are being put to the test. Monetary stimulus added to fiscal stimulus, with a generous helping of foreign stimulus tossed in, and cooked at 450 degrees for the near future may prove to be the right recipe. But be careful not to remove from the heat too early or risk deflation.