I am continuing to wile away the days in the sun and the surf for a little while longer. It makes me think I could get used to retirement. The three of us -- we are traveling with our son -- spend the evenings playing full contact Scrabble. There is definitely a collective killer instinct in the family.
- I remain really confused about what to think about the fiscal cliff deal. I have read all kinds of contradictory analysis by people I respect -- it suggests, I guess, that ultimately the wisdom of the deal will be part of a play in multiple acts, as suggested by l-t c below. I see at least a couple of pretty positive things -- first, the tax increase itself, even if it is not enough for the long haul. Second, the fact that the increase was not accompanied by any agreement to cut spending or reform entitlements. I know we are not out of the woods on either front yet, but still, getting the Republicans to agree to tax increases without any concessions on spending or entitlements has to be viewed as at least a sort term victory.
- The other thing that occurs to me is that President Obama really did not want to go off the cliff despite the urging of many on the left. It seems to me that this reflects the President's sense that such a move would be detrimental to both market confidence and the overall economy and that it genuinely would exacerbate the likelihood of a recession. My guess is that Obama believes that future Democratic success is going to have to be built on successful economic stewardship and that the record of his administration to date is not positive enough to assure continued public confidence. Whatever the outcome of these discrete battles, I think the President values the overall perception of his economic legacy and the likelihood that it will be perpetuated --both for the sake of his place in history and to prevent the Republicans from taking power, something any sane person has to view with grave trepidation.
- I actually agree with several commentators -- Drum, Brooks, and Douthat come to mind (and it is rare that I ever agree with the latter two) -- who have noted that the Democrats are still afraid of the broad based across the board tax increases that are almost certainly going to be required over the next decade or two in order to maintain the existing social safety net and do some other worthwhile things. I think that is why many of us felt that simply going over the cliff might have been the best move. Taxes would have been raised across the board once and for all and the world would not have come to an end. (Of course, it might well have meant a recession that would have done grave harm to both Obama and the congressional Democrats -- it's hard to evaluate the likelihood of such a scenario, but as I mentioned above, I get the sense that the WHite House was quite concerned about it.)
- The final tally for the 2012 election is in and Obama feel just short of beating Romney by 5 million votes. The final margin was 4,967,598, with Obama garnering 65,899.557 votes to Romney's 60,931,959. It's a very solid win. Obama got 51.06% of the vote to Romney's 47.21%, a nearly 4% margin. The total vote was down only 1.71% from the vote in 2008, so notions of greatly diminished enthusiasm really proved to be illusory.
- With those final figures in, I went back and looked at the results of the last six presidential elections and found that since the election of 1992, Democratic presidential candidates have received 26,058,492 more votes than the Republicans, meaning a margin in the average election of over 4.3 million votes. In that 20 year period, the Republicans took the popular vote only once, in 2004, when Bush got 3 million more votes than Kerry. Clinton and Obama both won twice by substantial margins, with each of them totaling more than 14 million votes more than their two opponents. Al Gore, of course, beat Bush by about 500,000 votes in the bitter 2000 contest. One wonders when the moment finally occurs that people realize that the center-right nation bullshit is just that.
- In the wake of the President's compromise placing the higher tax rates on family income above 450,000 rather than 250,000 there was a lot of complaining in the lefty blogosphere about the failure by many in the media to characterize people who fall in that range as rich. I think that this has a lot to do with media people being surrounded by a lot of couples in the DC and NYC areas who fall into this range -- two successful professionals who are wage earners and vastly better off than, well, 98% of their countryman, but are nevertheless pretty much wage earners. In other words, people who can't and don't rely on investment income and who if they lost their jobs would be in some considerable degree of difficulty. Another thing that may prevent such people from being objective about their own wealth -- I often hear peers characterize themselves as "upper middle class" when in fact, they are in the top 2 to 5% of wage earners in the country -- is something I am seeing on this vacation trip of mine. Now we are ludicrously privileged to be able to take such a trip, I truly understand this. But one of the things you see when traveling in places like this is the incredible way in which the elite rich travel and it is mind boggling. This part of the Caribbean is just filled with private jets and super yachts, each seemingly more lavish than the next. So a couple of days ago at lunch in St. Maarten, I saw this 205 foot yacht (which you can charter for a mere $350,000 per week) and then this 317 foot yacht. The latter struck me as about as lavish as one could imagine, but then tonight driving back from the beach, I saw this 557 foot behemouth (complete with two helicopters, anti-missile defense system, and mini sub -- you think I kid, but no really) owned by Russian tycoon Roman Abramovich (who is best known for owning the English football team Chelsea FC). You see enough of this sort of thing and you think you're roughing it in your rented Hyundai and your crowded seat in coach.
[Update: I wanted to make the point, lost in my boyish enthusiasm for the large toys, that although I think that the $250,000 to $450,000 in income would ideally be subject to higher tax rates, I also believe that it is absurd that this should be the highest rate. I would like to see both a 44% and a 49% rate for income over $1 million and $2.5 million respectively and for capital gains and dividends to go up to at least 28% for those with more than $250,000 of that kind of income. And for the carried interest fiction to be eliminated entirely.
P.S. Went out to the beach early this morning and Eclipse was offshore and Abramovitch's minions were setting up chairs and umbrellas on the shore -- and raking the already pristine Anguilla sand around the chairs. An Italian beach goer advised me that yesterday said mionions were building the sand castles for the children "just like Russian Czar." I believe that feudalism has a beautiful future ahead of it.
I fear my return to January weather in a few days is going to be a deep shock to the system.
What's on your minds?