Just as options decay exponentially the closer they get to expiration, the Democrats' support for the president's intention to let the Bush tax cuts expire for the wealthiest Americans is decaying the closer it gets to Election Day.
With RINOs (Republicans In Name Only) like Mike Castle being ditched in Delaware to Democrats like James Webb supporting the extension of tax cuts, the political VIX hasn't seen this much movement since Bill Clinton got red in the face and wagged his finger at us.
The speaker in waiting, John Boehner, slipped slightly last week when he said he'd vote for raising taxes on those making over $250,000 "if that was the only way it would get through." After waking up and getting off the mat, he quickly corrected himself, as some Democrats outflanked him to the right.
No one with any common sense thinks it's wise to raise taxes in the middle of the most severe recession in generations, especially after nearly a trillion dollars in what was formerly called "stimulus" failed to stimulate and actually increased unemployment.
Anyone who has spent any time in the real world, away from college campuses and Washington, D.C., knows that when people expect more money to leave their pockets, the tend to keep their pockets closed. It's the same for small businesses.
According to Deloitte, a family of four making $50,000 will see their taxes go up $2,900. Bump that up to a family making $100,000 and the bill comes to $4,500. Ouch. A small business owner with an LLC that pulls down $1 million would see a bill of $53,200. There goes a full time job or physical materials that will not be purchased to grow the business.
There was a poll this week that showed the country is evenly split over whether it's a good idea to raise taxes on "the rich," which is in and of itself an interesting definition. And since this income level represents a tiny fraction of the nation (who pay the majority of the taxes), the Democrats and the president can be forgiven for being stunned at why their class warfare rhetoric is falling flat.
Government will not save us.
Business is what makes this country run, not government; and when government pulls more money from the engine it sputters and dies. And in the "ready, fire, aim" atmosphere that engulfs our elected leaders, "reform" ends up costing us more money in the long run.
Actually, not even the long run. Insurance companies have already announced premium increases and banks along with credit card companies are raising rates, even though we were promised that "reform" would reduce rates.
Businesses don't "eat" higher fees; they pass them on to the consumer. Duh. Someone missed that class at Harvard.
At the risk of being called a partisan hack again by a couple of my regular readers who you would think would agree with me but have more money than God so really don't care about the "little people," some of the policies of George Bush are at fault as well.
But in looking at the past 10 years these people also seem to forget a couple little known events like 9/11 that resulted in a war against people who hate us that rages to this day. That wasn't free and cost us more in human capital than can fit on a balance sheet.
But on his watch there was no other terrorist attack and that's literally priceless. We kept goons in their caves or in cells in Cuba where they couldn't hurt us. Fast forward to the current commanding officer, where we have seen several attempts to blow up airliners and Times Square by a few "no-gooders" and the government has celebrated our success because of their terrorists stupidity.
For all the blaming of Bush, there's been very little discussion of why the housing market bubble popped and who helped fill it with air from Alan Greenspan to Barney Frank. "Affordable housing" was made available to folks that couldn't afford it. How's that for good policy?
Firing Line: It is refreshing to the nation and our elected officials finally wake up to the reality of where we are. It's just sad that it's happening because 500+ board members are afraid of losing their jobs.
Matthew "Whiz" Buckley is a partner at
a provider of options education and practical applications for options traders of all levels. He is also the founder of Strike Fighter Financial LLC, a business-consulting firm specializing in leadership development, risk management and strategic planning for Fortune 500 companies and related organizations. Buckley flew the F/A-18 Hornet for the U.S. Navy. He's a graduate of TOPGUN, has close to 400 carrier landings and flew 44 combat sorties over southern Iraq. After leaving active duty, he served as a managing director at a Wall Street volatility arbitrage options firm and was a founder and the CEO of a financial media company. He is an internationally recognized speaker and combined his experiences in the military and corporate America in his book "From Sea Level to C Level."