finances
Businesses don't pay taxes
"The most dangerous myth is the demagoguery that business can be made to pay a larger share, thus relieving the individual. Politicians preaching this are either deliberately dishonest, or economically illiterate, and either one should scare us. Business doesn't pay taxes, and who better than business to make this message known? "Only people pay taxes, and people pay as consumers every tax that is assessed against a business. Begin with the food and fiber raised in the farm, to the ore drilled in a mine, to the oil and gas from out of the ground, whatever it may be--through the processing, through the manufacturing, on out to the retailer's license. If the tax cannot be included in the price of the product, no one along that line can stay in business." [Emphasis added. --R]
Healthcare shouldn't be linked to employment
An end to employer-based health insurance is exactly what the American healthcare market needs. Far from being a calamity, it would represent a giant step toward ending the current system's worst distortions: skyrocketing premiums, lack of insurance portability, widespread ignorance of medical prices, and overconsumption of health services.
With more than 90 percent of private healthcare plans in the United States obtained through employers, it might seem unnatural to get health insurance any other way. But what's unnatural is the link between healthcare and employment. After all, we don't rely on employers for auto, homeowners, or life insurance. Those policies we buy in an open market, where numerous insurers and agents compete for our business. Health insurance is different only because of an idiosyncrasy in the tax code dating back 60 years - a good example, to quote Milton Friedman, of how one bad government policy leads to another.
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Americans who would never think of using auto insurance to cover tune-ups and oil changes grew accustomed to having their medical insurer pay for yearly physicals, prescriptions, and other routine expenses.
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When patients think someone else is paying most of their healthcare costs, they feel little pressure to learn what those costs actually are - and providers feel little pressure to compete on price. So prices keep rising, which makes insurance more expensive, which makes Americans ever-more worried about losing their insurance - and ever-more dependent on the benefits provided by their employer.
De-linking medical insurance from employment is the key to reforming healthcare in the United States. [Emphasis added. --R]
The only constant is change
When asked what the market would do, J. Pierpont Morgan is supposed to have replied, "It will fluctuate." And so it has always done. For the time being, capital will be tighter than before, restricting credit--which is not always a bad thing--and businessmen will be reminded (as legislators, state and federal, seem never to learn) that neither bull markets nor recessions last indefinitely.
This is a fundamental reality of capitalism that seems never to penetrate the minds of journalists or politicians: Markets expand, contract a bit, and expand again, revenue streams are not always smooth, and for economic enterprise, the cost of overconfidence can be the same as the price of inertia: swift self-immolation. What appears to be huge, venerable, and financially indestructible today can be gone tomorrow.
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The financial markets are unsteady at the moment, and Wall Street is undergoing elective surgery. But change, not stasis, is the hallmark of the free market [...]
Guess which way we're going to go
One of the reasons that house prices got so high here is that people could get crazy financing for huge amounts without adequate resources to pay it back. So “dumb money” bid the price too high, and now no one can buy or sell because they can’t finance their homes.
So there are two ways to fix this - the healthy way would be to let the market forces bring the prices down to what people can reasonably pay. This is the best for everyone long term as it levels out who can live in California.
The second way would be to use the government backed entities, Fannie and Freddie, to prop up these insane prices. This is akin to providing an alcoholic with discount coupons for the corner liquor store.
A thought on taxes and wages
There's a movement afoot by the Democrats to get the minimum wage raised again. Despite historical financial evidence to the contrary, raising the minimum wage does not help those at the low end of the wage spectrum, as our nation's leftists would like us to think. Raising the minimum wage means businesses are less likely to hire more workers, due to their increased costs with the raise in the minimum wage. Contrast this with the fact that, according to today's Political Diary, Germany is set to cut its corporate tax rate to thirty percent, down from thirty-nine percent. Once it does so, the United States will have the highest corporate tax rate of the industrialized world. How does this affect the minimum wage? I'm glad you asked. It seems high corporate tax rates, according to a "new study by American Enterprise Institute scholars Kevin Hassett and Aparna Mathur...is for the most part paid by workers in the form of lower wages." Ergo: cut the corporate tax rate, workers' wages will rise. You can not get even odds in Vegas that the Democrats would sign on to such a policy.
More miscellany
Liechtenstein is 200. The total population of the nation is a little over half of that of my town.
In the market for a new mortgage? Be sure to check out the Mortgage Professor, who has a list of "Upfront Mortgage Brokers". These brokers promise the transparency of disclosing "the loan's wholesale price (the interest rate and points), plus the markup, in writing and in advance." [Via Newsweek, June 26, 2006.]
A thought on why Honda rocks: Last week, during swim lessons, I had a moron moment and forgot to take my Pilot's key and fob out of my swimsuit pocket. An hour later, after drying off the tyke (the lessons were for him, in case you were wondering), I went to change in to some dry clothes and had one of those Seinfeldian "Oooohhhhhh" moments. Just out of curiosity, I hit the lock button on the fob. Twice. I heard the Pilot's horn blast a single note. And I smiled. It's still working, with apparently no ill effects. So is the little keychain LED light my sister-in-law got as a stocking stuffer for me two Christmases ago.