American Shareholders Association

AP Totally Misses the Point on Social Security

In an article in search of a purpose, David Lieb of the AP accuses McCain of being a hypocrite for taking Social Security benefits while pointing out that the system is a "disgrace" for younger workers.

Huh?

McCain says that younger workers won't get their benefits (which is true).  So why does that mean he can't collect his?  It's not his fault that younger workers are getting screwed.

Hell in a Handbasket: Life Under a Democrat Congress

Democrats running for office this year complain a lot about  America and the cost of living. What might surprise you is that most of the backsliding in the American way of life has happened while Democrats control the  U.S. Congress. Below are a few key examples:

	Inauguration Day 2001 (01-20-2001)	Election Night 2006 (11-07-2006)	New Dem Congress (01-04-2007)	Latest Figure ( July 2008)
Gallon of Gas[1]	$1.46	$2.22	$2.30	$4.11
Loaf of Bread[2]	$0.98	$1.14	$1.15	$1.37
Gallon of Milk[3]	$2.85	$2.99	$3.07	$3.77
Dozen Eggs[4]	$1.01	$1.35	$1.55	$1.92
Cong. Approval[5]	50%	26%	35%	14%
Dow Jones Average[6]	10,588	12,157	12,481	11,239
Stock Market Wealth[7]	$15.401 trillion	$16.919 trillion	$16.919 trillion	$16.866 trillion
Net Worth[8]	$39.551 tril	$55.626 tril	$56.532 tril	$55.970 tril
Per Capita GDP[9]	$33,403	$44,640	$45,173	$47,337
Inflation Rate[10]	3.7%	2.0%	2.1%	5.0%
Unemployment Rate[11]	4.2%	4.5%	4.6%	5.5%
Real GDP Growth[12]	-0.5%	2.1%	0.6%	1.0%
Average Wage[13]	$28,700	$33,980	$34,320	$35.960
Dollar vs. Euro[14]	0.95	0.85	0.83	0.63

---

[1] Department of Energy

[2] Department of Labor, Bureau of Labor Statistics

[3] Ibid.

[4] Ibid.

[5] Gallup.com

[6] Yahoo Finance

[7] Federal Reserve Flow of Funds

[8] Ibid.  Figures are in 2008 dollars.

[9] Department of Commerce, Bureau of Economic Analysis

[10] Department of Labor, Bureau of Labor Statistics

[11] Ibid.

[12] Department of Commerce, Bureau of Economic Analysis

[13] Department of Labor, Bureau of Labor Statistics

[14] Yahoo Finance

Healthcare Benefits: Here Today, Gone Tomorrow

The WSJ ran an article today noting the decline in healthcare benefits offered by various industries. The auto industry is a notable example:

But GM's announcement Tuesday that it would cease medical coverage for its salaried retirees age 65 and above signals that a new era of ever-shrinking benefits has arrived. Beginning in January, even former employees who are already in retirement will lose their benefits, which most of the company's retirees use to supplement gaps in their traditional Medicare coverage. The auto maker will boost monthly pension payouts to help offset the cuts. The company's unionized workers aren't affected by the cut to retiree health benefits.

Note the last sentence. Union workers will retain their healthcare benefits at the expense of other workers. This underscores the frequently asked question: Are unions aiding workers as a whole or simply hurting the majority of laborers to protect their own members?

Big Labor Continues Its Anti-Shareholder Campaigns

A couple of good articles today related to the SEIU "Take Back Our Economy" sham.

The first is a piece by Brian Johnson of the Alliance for Worker Freedom on how SEIU is underfunding these "great" defined benefit pensions--at least if you're a rank-and-file worker.

The second describes how the UAW is slowly killing General Motors.  As they say on Battlestar Galactica, "all of this has happened before, and all of this will happen again."  Sad.

ASA Presents at Pension Conference

Continuing the lecture circuit today, ASA presented at a pension conference at the Hudson Institute. 

I presented on how defined contribution pensions can be augmented by defined benefit features.  The "auto" recommendations of the Pension Protection Act of 2006 are the key here.  The link above will bring you to my full Power Point presentation.

Update: The Wall Street Journal has a piece today on the topic of the conference.

ASA Participates at Cost of Government Day

Today is Cost of Government Day, the day when Americans stop paying for the total Cost of Government--spending and regulations.  It's four days later than last year, and hasn't been this late in the year since 1992.  The full report is on the Americans for Tax Reform website.

ASA was represented as a presenter.  I spoke about two things:

1. McCain wants to hold back the cost of government, which will allow the capital gains and dividends tax rate to remain at 15%.  Obama, because he wants to expand the cost of government, is for hiking the capital gains tax to 28%, and the dividends tax to 40%
2. The best way to restrain the cost of government is through personal accounts.  Defined contribution pension plans can reduce the burden of Social Security and government employee pensions.  Health savings accounts can really cut the cost of Medicare, Medicaid, Veterans Health, and state employee plans

Moral Hazard In The Fannie/Freddie Bailout

Larry Kudlow has a good article in NRO today pointing out the longer-term problems associated with bailing out Fannie and Freddie.  Here's a snippett:

Mr. Paulson’s dramatic Sunday-evening announcement raises as many questions as it answers. Most important, will a new regulatory plan expected to be passed swiftly by Congress allow the two housing-finance giants to continue on their merry way? Or will there be serious changes in their conduct?...There’s another key point to this bailout. The proposal to open the Federal Reserve discount window to Fannie and Freddie may essentially put the Fed in charge of yet another part of our financial system. The central bank is already becoming the lender of last resort and regulator of Wall Street investment banks. The New York Sun’s Seth Lipsky calls this a power-grab. But Fannie and Freddie jurisdiction would have the Fed grabbing even more power.

Obama and Small Business

Two things of interest here.  First, Grover Norquist of ATR had a piece run in Politico on Friday.  The thesis is that the Obama tax plan would result in a small business marginal tax rate of almost 55%, while the McCain plan would result in a top rate of only about 28%.  That's quite a difference.

For his part, Obama has released a plan to give small businesses a tax credit if they offer health insurance to their employees--but only if it's his kind of insurance (the expensive kind that probably don't let you have HSAs).

More on Fannie and Freddie Watch: Making Sure the Bailout Doesn't Hike Taxes on Investors

A couple of items of interest on this today.  First, there's the Treasury proposal which may serve as the basis for an eventual compromise.  Meanwhile, Barney Frank thinks that markets are overreacting.

The big thing to keep an eye on here is the revenue title.  It's entirely possible the final product will contain a tax cut for homeowners "paid for" with a tax increase on investors.