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Economic News, Data and Analysis

Lewis’ Taxing Lessons

I was sent a link to this today. Unfortunately, the language is not that far off the rhetoric one often hears here in DC.

A Wall Street Trader Learns Some Taxing Lessons: by Michael Lewis
…Over the past few weeks I’ve wasted a lot of time trying to explain to senators who want to raise taxes on private-equity firms and hedge funds how much damage the government is doing — not just to the global economy but also to the very idea of economic justice. I’m writing this in hopes of speaking directly to poor people (those whose assets don’t meet the Securities and Exchange Commission minimum for hedge-fund investing). Maybe they can pass along my message to their elected representatives in their preferred language….
1) Democracy is due for an upgrade.
…In a properly functioning economy these rich people should have a lot more political power than ordinary people. It’s crazy that they have only the same measly vote as, say, one of the workers they might have to lay off in a restructuring. Giving workers this sort of equal time is counterproductive, especially for financial markets…
2) Most people — even highly educated congressional staffers — still don’t get it: Private-equity deals create jobs.
…By borrowing a lot of money to buy entire companies, and then cutting out fat to pay off the loans, private-equity firms give the people who work for those companies a chance to find something more productive to do with their lives…
3) A lot of people — even U.S. senators — seem to have gotten the idea that the behavior of the top guys in private equity and hedge funds is somehow “excessive.”
…Great men require great diversion from their great troubles…
4) The working rich are already way too heavily taxed.
…Rich people know how to invest extra money. Poor people just squander it on necessities. That’s why capitalism works so well: it keeps money out of the hands of people who don’t know how to use it and directs it to people who know how to make it grow…
5) Darwin was onto something.
…One way to look at Wall Street is as evolution, speeded up. It’s all about the survival of the fittest. Well, the fittest have been identified, and it’s important, for the greater good, to help them to survive.

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