P. J. O'Rourke explains why trouble making the mortgage, plundering a retirement account and buying stuff he can't afford all qualify Marco Rubio to be president

Here:

"Rubio owns houses that he has trouble paying for. We, the American people, own two houses (of Congress) and the White House that we have trouble paying for.

"Rubio emptied his retirement account to meet current expenses. This is exactly the way Social Security works.

"Rubio bought a boat he couldn’t afford. The U.S. Navy does so all the time.

"When it comes to dealing with the federal budget, Rubio has the kind of experience that counts."

Whenever the insane left (but I repeat myself) sees something big, it wants to take it, including your HOME

Here in The Nation:

'Let's get rid of private housing. ... [R]eal estate is the most valuable asset form in the United States, and the majority of that value is not that of the building itself, which depreciates until it requires renovation, but of the “unimproved” land it sits on—the location.'

Young "journalist" recently making $5,600 a month actually believes it's cheaper to eat out

Seen here:

'Technology has had a hand in widening the wealth gap and eliminating much of the middle-class since this industry shift began decades ago. But with the other hand, tech scoops up and delivers old promises of middle-class life and delivers them to the new poor. It’s cheaper to eat out, to shop, to entertain yourself, and to obtain consumer technology that makes all those things even more convenient, even on just $21,000 a year. A knowledge economy is sometimes referred to as “an economics of abundance, not scarcity.” It’s really an economics of scarcity with the appearance of abundance.'

Uh huh. She spends more time tweeting (14x/day) than researching, thinking or cooking, otherwise she'd know a single person can eat like a king three times a day for less than $3,500 a year simply by shunning food prepared in restaurants, fast food eateries and delicatessens and cooking entirely for oneself at home. Alcohol and toilet paper included. At $12.75 twice a day it costs $9,300 a year to eat out, once a day over $4,600. And you have to use the public sandpaper.

Spending a minimum of 22% of income on food for just one meal a day is crazy, and way too close to the housing component which should never exceed 28-32% of income.

Kids these days.

Trump's tax plan released to the public today is ambitious and pro-growth

The Trump tax plan can be reviewed here.

Notable features include exemption from federal income taxation entirely for up to about 73 million households who make up to either $25,000 individually or $50,000 jointly.

This is in the spirit of the original income tax law, which for its first few years, that is until the demands of World War I and the bureaucratic state came into play, taxed the incomes of no one except the very wealthiest.

It is unclear whether the plan retains the child tax credit or the earned income tax credit, two programs which effectively transfer welfare to lower income families who pay no income tax anyway and who receive through these two vehicles what is effectively a rebate of Social Security taxes they pay as employees, eliminating its regressivity.

For the rest there are just three tax brackets of 10%, 20% and 25%, kicking in at joint incomes up to $100K, up to $300K and beyond $300K. Presumably, but not stated, short term capital gains are taxed at these ordinary rates. Long term capital gains tax rates are 0% up to $100K of joint income, then 15% and 20% up to $300K and beyond $300K of joint income.

Business taxes are slashed to 15% no matter the size, which is YUGE for American competitiveness.

The AMT is eliminated entirely, along with the marriage penalty and . . . the death tax. It's going to be unbelievable!

Deductions are capped for the richest Americans, but deductions for charity and mortgage interest are retained.

We'll see what the dynamic scorers will have to say about it for revenues, as time goes by.

The endorsement of Ted Cruz by so-called values voters means little, except for Ben Carson and Donald Trump

From the story at The Hill, here:

Sen. Ted Cruz won the Values Voter Summit straw poll for the third year in a row on Saturday, a strong showing of support from evangelical voters for his 2016 presidential bid. The firebrand Texas senator won a whopping 35 percent in the poll of summit-goers, ahead of runner-up Ben Carson’s 18 percent. That margin is significantly wider than last year, where he edged out Carson by just 5 percentage points. Former Gov. Mike Huckabee (Ark.) took third with 14 percent, followed by Sen. Marco Rubio (Fla.) with 13 percent. Real estate magnate Donald Trump finished a distant fifth with 5 percent.

So "values voters" have finally figured out one thing: Ben Carson's values may be traditional, but they are rooted in a crackpot religion which was born of a failed prediction of the end of the world in 1844.

Now if they could only figure that out about their own religion.

What's happening here is that the evangelical base is clearly choosing a Southern Baptist over a Seventh-day Adventist, and distancing itself dramatically from the mainline Protestant in the race, Donald Trump.

Meanwhile Ted Cruz isn't going to be the nominee, not as long as he garners just 27% of the support enjoyed by the frontrunner.

Trump's critics of his investment success need to get a new calculator, and some brains

This morning on the Chris Plante Show on WMAL a caller complained that Trump inherited $200 million and that anyone could have $10 billion after 30 years, too, just by investing in a CD.

Chris Plante said "that's some CD"!

This meme is now ubiquitous in the media critical of Trump, and while not as obviously silly as this morning's example the critics nevertheless display remarkable investment ignorance.

Grant for a moment that Trump inherited $200 million, and keep in mind that that is the upper end of the estimates, which go as low as $40 million. Also keep in mind it's mostly real estate, not cash, not stocks, not bonds, a completely different business.

$200 million invested in the S&P 500 for 30 years from 1985 to 2015 yielded $4.2 billion, or just 42% of the net worth Trump claims to have accumulated over the period. The actual average nominal rate of return for the S&P 500 was 10.75% per annum, dividends fully reinvested. The $10 billion net worth claim, on the other hand, represents an annual net rate of return of 13.93%, again assuming the investment of $200 million, almost 30% better every year than what the S&P 500 actually yielded. But again, the S&P 500 return is not net. You still have to deduct taxes, inflation and expenses from that, which is an individual calculation and highly variable, and in New York can be quite onerous. 

On the other end of the scale, the investment of $40 million becoming $10 billion is the equivalent of a net return of 20.21% per annum, 88% better than the S&P 500 nominal return every year on average.

The truth probably lies somewhere in between, but no matter how you cut it, Donald Trump capitalized on what he was given in a way which has been exceptionally more successful than what most people ever experience.

He's Yuge.

Jeb Bush the snake: omitted plan to cap itemized deductions in Wall Street Journal tax op-ed

Reported here:

"But the full plan includes one very significant change not mentioned in the Wall Street Journal op-ed where Bush announced his plan—one that would likely raise more than a trillion dollars in revenue over a decade, and secretly accomplish a policy goal sought by everyone from President Obama to Paul Ryan. The change: Bush wants to limit itemized deductions sharply, capping them at 2 percent of aggregate gross income, and eliminate the deduction for state and local taxes entirely. (The exception would be the deduction for charitable giving, which is politically toxic to attack, and would still be unlimited.) ...

"But it’s the politics of the cap that make it really interesting. If you look at who would actually be affected, it appears that the cap is a very benign-sounding way to do something politically difficult: limit the mortgage-interest deduction. Of the $54 billion a year the cap would raise according to the Feldstein estimate, $46 billion comes out of the mortgage interest deduction."

Hillary's latest whopper: "I called for cracking down on subprime mortgages"

Yea, the ones who under her husband exploded in number by over 800% between 1993 and 1998.

From the story here:

"I was alarmed by this gathering storm and called for addressing the risks of derivatives, cracking down on subprime mortgages and improving financial oversight," she added.

Completed foreclosures in April 2015 reported by Corelogic still running 90% above normal

The level has not budged much from October 2014 when there were 41,000 completed foreclosures.

Seen here:

There were 40,000 completed foreclosures nationwide in April 2015, down from 50,000 in April 2014. ... 

Completed foreclosures are an indication of the total number of homes actually lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 5.7 million completed foreclosures across the country, and since homeownership rates peaked in the second quarter of 2004, there have been approximately 7.8 million homes lost to foreclosure. ...

As a basis of comparison, before the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month nationwide between 2000 and 2006.

A healthy housing market would have 1-2% underwater, but we still have 15% with negative equity

Mostly in the lowest third of valuation.

From the Bloomberg story, here:

"A decade after U.S. home sales peaked, 15.4 percent of owners in the first quarter owed more on their mortgages than their properties were worth, according to a report Friday by Zillow Inc. While that’s down from a high of 31.4 percent in 2012, it’s still alarmingly above the 1 or 2 percent that marks a healthy market, said [Stan] Humphries, the chief economist at the Seattle-based real-estate data provider. Worse yet: The pace of healing is losing steam. ... While 25.5 percent of homes valued in the lowest third are underwater, just 14.1 percent of those in the middle have negative equity. For the top group, the figure is even lower -- 8.3 percent."

Underwater mortgages still number 8 million, down from 25.5 million in 2011

From the story here:

"Nearly eight million borrowers, or 15.4 percent of homeowners with a mortgage, still owe more than their homes are worth, according to Zillow. While the numbers continue to improve, about half of those borrowers owe the bank at least 20 percent more than their homes are worth."

Ted Cruz is showing his true colors supporting the secretive Trans Pacific Partnership trade deal

From the story here:

"The issue is shaping up as a major 2016 presidential campaign issue, and Sens. Cruz and Rubio join former Florida Gov. Jeb Bush and former Texas Gov. Rick Perry, alongside Democratic Party frontrunner former Secretary of State Hillary Clinton, as supportive of the deal. Graham, Paul, Dr. Ben Carson, New Jersey Gov. Chris Christie, and Wisconsin Gov. Scott Walker haven’t taken positions on the matter yet.

"Lousiana Gov. Bobby Jindal, former Arkansas Gov. Mike Huckabee, real estate magnate Donald Trump, and former Hewlett-Packard CEO Carly Fiorina are all publicly against the deal." 

A pretty good litany of the grievances so far, with 21 months to go

From Michael Goodwin, here:

'First he comes for the banks and health care, uses the IRS to go after critics, politicizes the Justice Department, spies on journalists, tries to curb religious freedom, slashes the military, throws open the borders, doubles the debt and nationalizes the Internet.

'He lies to the public, ignores the Constitution, inflames race relations and urges Latinos to punish Republican “enemies.” He abandons our ­allies, appeases tyrants, coddles ­adversaries and uses the Crusades as an excuse for inaction as Islamist terrorists slaughter their way across the Mideast.'

-------------------------------------------------------------------------------

Nothing much in there, though, about the housing catastrophe, the jobs debacle, the worst economic growth in the post-war, loss of travel freedoms, the capture of the two political parties by big business, and spying on the public in general, but hey, no one's perfect.

Gretchen Morgenson smells a rat: Fannie/Freddie bailout cost us nearly $188 billion, but Treasury rakes in the profits

Gretchen Morgenson for The New York Times, here:

For decades, the companies had maintained that their mortgage operations posed no risk to taxpayers; their pals in Congress echoed this refrain. But then came the mortgage debacle, and taxpayers had to shore up the companies with $187.5 billion. Initially, Fannie and Freddie had to pay interest on the loan. But in August 2012, the Treasury and F.H.F.A. abruptly changed the agreement; under the so-called third amendment, the government began sweeping all the companies’ profits into the Treasury. Since then, Fannie and Freddie have been immensely profitable. As of last December, the Treasury had received a total of $225.4 billion from the companies. ... 

The initial $187.5 billion loan remains outstanding, however, because of the deal’s structure. ...

But recall what was going on in mid-2012. The presidential election was in full swing, and Democrats and Republicans were clashing over the debt ceiling. That May, in a shock to many, Fannie and Freddie reported profits from their operations for the first time since the mortgage crisis. The amount: $4.5 billion. And plenty more was to come. Certainly, giving the Treasury access to billions of dollars in the companies’ profits during this time provided financial flexibility to the executive branch that Congress might not otherwise have approved.

Surprise: Lefty Michael Tomasky wants to punish the middle class with an increase in the regressive gasoline tax

Here in "Pony Up, Middle Class, for a Gas Tax", recommending Hillary do it in 2017 like her husband did with income taxes in 1993, by lying about it:

"And the rich, even though they’re rich, only have so much to contribute. The top marginal tax rate just isn’t going to get much higher, and the corporate tax rate if anything should be lowered (although as loopholes are simultaneously closed). So you’re going to have to pay a little.

"I wouldn’t necessarily recommend this for a campaign. But let us not forget that the husband of the putative Democratic nominee in 2016 got into office in 1993 and promptly raised taxes, and fairly substantially, on just about everybody."

----------------------------------------------------------------

Of course, Tomasky doesn't mention Bill Clinton specifically promising in October 1992 NOT TO RAISE TAXES on the middle class, period.

Americans were forced in the aftermath of those tax increases to plunder home equity to maintain their standard of living. Owners' equity as a percentage of the value of household real estate subsequently plunged from 60.88% when Clinton was elected to 57.43% in the autumn of 1997 even as those housing values began to soar in the gestating housing bubble. We won't digress about how Clinton then threw gasoline on the housing fire in the Taxpayer Relief Act of 1997 just as the percentage of owners' equity had hit that new low.

What's noteworthy is how enthusiastic the left is to punish the middle class, now as then. They haven't changed a wit, and neither have their methods. Everyone is paying higher taxes now in the form of healthcare premiums (hello HillaryCare), and if they get their way they'll raise federal gasoline taxes, too.

Of all the taxes which hurt working and middle class people more it's gasoline taxes, euphemistically referred to as user taxes by libertarians. The current federal gasoline tax of 18.4 cents per gallon generates about $131 of federal revenue for every vehicle driven 15,000 miles annually getting 21mpg. While that's hardly noticeable to your person making $50,000 per year, a mere quarter percentage point, it's like adding almost one percentage point to the taxes of a minimum wage earner making $15,000.

The problem is then greatly magnified by the states, which add on another 29.89 cents per gallon on average, also in the name of transportation funding. Suddenly your 1% tax on the poorest drivers becomes a 2.3% tax.

Any addition at the federal level will only exacerbate this regressiveness. It's not that liberals don't know any of this. They do. It's just that they don't care.

Everyone benefits from roads, not just the users. Everyone should pay for them.

The housing bubble was mainly a middle class and higher phenomenon, not of the poor

From Robert Samuelson, here:

". . . in poorer neighborhoods . . . the actual borrowers . . . were much richer than average residents. In 2002, home buyers in these poor neighborhoods had average incomes of $63,000, double the neighborhoods' average of $31,000. ...

"In 2002, the mortgage-debt-to-income ratio of the poorest borrowers was 2; in 2006, it was still 2. ... 

"[T]he bulk of mortgage lending and losses [during the housing bubble] - measured by dollar volume - occurred among middle-class and high-income borrowers. In 2006, the wealthiest 40 percent of borrowers represented 55 percent of new loans and nearly 60 percent of delinquencies (defined as payments at least 90 days overdue) in the next three years."

Kevin Drum admits ObamaCare is a cost to the middle class, not a benefit

Here in Mother Jones last November:

[N]early all [ObamaCare's] benefits flow to the poor. ... winners are those with household incomes below $25,000 or so, and losers are those with incomes above $25,000. ... If you think of Obamacare as something that benefits the working and middle classes, you're probably wrong. It may benefit a few of them, but overall it's a cost to them ... the bottom line is simple: like most of the social welfare programs championed by Democrats, Obamacare is primarily aimed at the poor. Once again, the working and middle classes are left on the outside looking in.

--------------------------------------------------------

First Obama did nothing about housing, the sine qua non of the middle class: Over five million completed foreclosures eliminated millions from the middle class without firing a shot.

Then he did nothing about jobs, without which no one buys a house: 18 million have been added to the potential workforce but haven't actually joined it.

Then he rammed through healthcare reform, which was designed to raise costs on the middle class.

And people wonder how Obama could even think of taxing their 529 plans?

The middle class is the enemy of the revolution, the object of the transformation, the source for the redistribution.

Obama's $500 tax relief is so George W. Bush 2.0

Obama is to announce tonight not even inflation-adjusted George W. Bush-type tax relief to middle class families, as reported here, but just another gimmick:

"Among the highlights of President Obama’s State of the Union address plans to pull the American family out of economic plight is a $500 tax credit for two-earner families."

George W. Bush bookended his administration with similar gimmicks.

OK, the first one wasn't exactly a gimmick. The first was part of the then-temporary tax reduction passed by the Congress. You know the one. The check in the mail was a result of the implementation of the tax rate schedule which existed for the rest of Bush's presidency but was set to expire by the time of Obama. Obama finally agreed to make that schedule permanent, something George W. Bush wasn't able to make happen but Speaker John Boehner was. (Why is that? And how come no one except maybe two people on the planet recognize and applaud that? I am one of them. A Forbes columnist, Ralph Benko, is the other. But I digress.)

Flashback to the San Francisco Chronicle in June 2001, here, just six months after Bush assumed office after the narrowest presidential election victory in living memory:

Bush signed the $1.35 trillion tax cut -- which includes soon-to-be-mailed rebate checks of up to $600 -- amid the kind of presidential pomp he usually disdains: a formal ceremony in the East Room, with a Marine band playing "Hail to the Chief." ... In Congress yesterday, a few Republicans talked about making the current bill permanent. One of its odd features is that it expires on Dec. 31, 2010, a sunset provision put in because of congressional rules governing spending more than a decade into the future.

Bush's second and real gimmick came at the end of his presidency in 2008, just before all hell broke loose in the economy with massive bank failures, massive bankruptcies, massive foreclosures, massive job losses, and massive stock market declines. It was a minor echo of Herbert Hoover trying to stop the Great Depression, double, triple, and quadruple-downed on by his successor FDR but to no avail.

Market Watch had the story here in February 2008, detailing the very liberal character of the Republican stimulus plan, which at the time met with no criticism from candidate Obama (why? because it was Obama's brand of liberalism also):

President Bush signed a $168 billion economic stimulus package on Wednesday that will extend rebates to U.S. taxpayers, give tax breaks to businesses and make more-expensive mortgages available through the government and government-sponsored mortgage-finance companies. ... Bush said the U.S. economy has clearly slowed but that the package is "a booster shot for our economy." Approved by lawmakers last week, the package provides a tax rebate of up to $1,200 per working couple, plus $300 per child. ... Taxpayers will not have to apply for the rebate; it would come automatically based on their 2007 tax return. ... Democratic presidential candidate Barack Obama wove the stimulus package into a speech in Janesville, Wisc., on Wednesday, touting a plan he offered a few weeks ago. He proposed sending each working family a $500 tax cut and each senior a $250 supplement to their Social Security check. "Neither George Bush nor Hillary Clinton had that kind of immediate, broad-based relief in their original stimulus proposals, but I'm glad that the stimulus package that was recently passed by Congress does," Obama said.

-------------------------------------------------------------------------------

These crumbs from the Master's table aren't going to help Americans do anything except survive as dependents, maybe for a week. What Americans need is jobs, decent jobs, and the decent wages which go with them, and liberals know nothing about how to provide them with those.

The UK's Jeremy Warner joins the cognoscenti: high asset prices are going bye-bye

Here:

"It is as if all the inflation that used to go into consumer prices has been diverted into financial assets and real estate instead. ... Static or falling prices, on the other hand, are always extremely bad for corporate profits in the long term. ... In a deflationary environment, equities and property will inevitably perform badly: only fixed-interest sovereign bonds, the least risky form of investment, do well."

TARP ends, but conservatives still don't realize it was just a sideshow

Existing crisis loans 1st of the month in billion$

That TARP was just a sideshow was not known at the time in 2008, but it should be known by now.

Too bad conservatives haven't paid attention.

TARP assumed the role of the main actor on the stage of the financial panic as the liberal government of George W. Bush tried to show that it was capable of doing something to bring the panic of 2008 to an end. Bush at length signed the TARP legislation on October 3, 2008, at which point the stock markets promptly rewarded him by caving over the next three weeks, setting the stage for the final denouement by March 2009. Only Securities and Exchange Commission changes to mark-to-market accounting rules at that point stopped the cratering and put a floor under stock prices. Meanwhile behind the scenes the liberal government of Woodrow Wilson in the form of the Federal Reserve had already been hard at work for months frantically doing the real rescue.

Now that TARP is over, liberal political operatives are wont to characterize TARP as a success because it supposedly made a profit accruing to the government, and hence to The People, who are ever almighty in liberalism. They also say this to keep our eyes off the ball. "Conservatives" continue to take that bait and argue there was a loss to TARP, never examining themselves to see if they are in the larger truth. National Review's Matt Palumbo is just the latest example, here, quibbling over a few measly billions of dollar based on an argument from inflation to substantiate a loss to TARP.

It doesn't get much more pathetic than that.

TARP became the sideshow it always was once and for all when Bloomberg News, using the Freedom of Information Act, forced the Fed long after the fact in late 2010 and early 2011 to reveal the true scope of its bailout of the world in 2008-2009. Behind the scenes the rest of us had groped in the dark trying to fathom TARP's $700 billion bailout, when that turned out to be just a decimal point in the real bailout, the Fed's $7.7 trillion lending authority through the discount window and other programs.

"Conservatives" still haven't grasped this.

Over five million Americans lost their homes in the wake of the panic, almost 30 million ended up filing first time claims for unemployment in 2009 (85% more than did just last year), and almost eight years after the employment peak of 2007 full-time jobs still have not recovered, the most disgraceful record in the post-war.

The Federal Reserve bailed out hundreds upon hundreds of large banks and corporations not just in the United States but all across the globe by backstopping them with promises of huge sums if needed while regular Americans were simply left to fend for themselves:

$7.77 trillion -- The amount the Fed pledged to rescue the financial industry, according to Bloomberg research that examined announced, implied or actual upper limits on lending and guarantees. This number, which represents potential commitments, not money out the door, was first published in March 2009, when it peaked.

“One of the keys to understanding why we’ve avoided another Great Depression, so far, is to see how bold the Fed was in 2008 and 2009,” said Niall Ferguson, a Harvard University history professor. “That boldness consisted of a range of contingency commitments that backstopped the banking system. Just because they weren’t used doesn’t mean they weren’t important.”

---------------------------------------------------------------------------------------------

Actual loans at rock bottom prices over time amounted to about half that, at $3.3 trillion, as can be appreciated here in just one of the lending programs of the Fed, the famous discount window. The low interest rates charged there, a sideshow in themselves, are thought to have benefited the banks at the same time by about $13 billion, according to Bloomberg, over what they would have had to pay at market rates.

That was simply the cherry on the gargantuan crony capitalism cake, an object, I am sure, of singular fascination for the likes of the Matt Palumbos of the world.

That spike in the graph is the discount window lending in the 2008 panic