Tuesday, August 9, 2011

Luxury Car Maybach May Need Tax Cuts for the Wealthy, Stocks Do Not React Well to Mr. Geithner, Scientists are Worried About the Moon's Maria . .

And Other News Begging for Comments

The most expensive car that Mercedes makes is called a Maybach.  It comes in at about $375,000 but you can get a more expensive version if you need to.  It turns out that even with the massive increases in income and wealth for the most wealthy of citizens, the Maybach is not selling all that well.

$375,000 Mercedes Maybach
Where Tax Cuts for the Wealthy Go to Buy

The Mercedes-Benz car maker resuscitated the Maybach brand nearly a decade ago in the hopes of profiting from a renaissance in super-luxury sedans. But almost from the start, the über-luxury division's sales have faltered, dwindling to fewer than 200 Maybachs sold world-wide last year.

The solution is obviously more tax cuts for the wealthy, in the hope that such a policy would save the Maybach.  Republicans are said to be considering this as part of their deficit reduction plans for the new deficit reduction panel. 

It would be wrong to blame the Monday decline in the stock market on the decision by Treasury Secretary Geithner to stay in his job, wouldn’t it.  Yes it would, but it would be fair to say that the announcement didn’t exactly bring calm to the markets either.  After Mr. Geithner's boss, Mr. Obama went public with a statement on the credit rating and markets issues the stock market, which had briefly stabilized resumed its downward plunge.  Any lessons there?

An example of what is wrong with the press is their continued effort to blame the various economic and political crises in Washington on both parties.  Typical is this statement in an opinion piece by Gillian Tett in the Financial Times

On one side of the spectrum, Tea Party activists have been brandishing the constitution and declaring “no surrender” on fiscal issues, even at the risk of sparking an American default. On the other side, leftwing parts of the Democratic party have been equally intransigent. 

No Ms. Tett, the problem is that only one side has been intransigent.  When this happens and the other side is not willing to stand up to the intransigence you get the “so-called” compromises like the debt ceiling fiasco.  Remember, S&P’s downgrade came after, not before the agreement.

This attitude of the press that “both sides are at fault” is a terrible distortion of the actual situation, and by partially excusing the Conservatives who would bring economic and financial chaos in order to impose their will, the Press destabilizes the situation.  One side was willing to impose economic and financial chaos to get a Balanced Budget Amendment passed that otherwise did not have the votes to pass.  The other side was not.  This is not equal "intransigence", is it?

In fact what is needed is more intransigence on the part of Democrats.  If there is intransigence on one side, the only way to get a good compromise if for intrangsigence on the other side.  Mr. Obama has yet to learn this lesson, and may never do so.

The Economist Magazine, which is a great magazine reports this week on the issue of how to explain the different nature of the moon's surface.  The question is why on the side of the moon that faces Earth the surface is different from the side that does not face Earth. Of course, one benefit from not having a space program would have been that no one knew about this difference, and hence no one would have wasted time, effort and money trying to figure it out.

EARTH’S moon has a split personality.
 One half of its surface—the half which, thanks to the
vagaries of orbital mechanics, always faces Earth—
is dominated by dark, smooth expanses of ancient,
frozen lava known as Maria

What is unknown is who exactly is asking that question, and who, if anyone, benefits from the answer.    The Dismal Political Economist did talk with Delia Halston, of Bowes Creek, Nebraska who has had a terrible experience being unemployed for over a year. 

 She said she was grateful scientists were finally finding an answer as it would be one less thing she would have to worry about standing in line at the local Food Bank.

She also said she was sorry to hear bout Mercededs' problems with the Maybach, and that she hoped extending tax cuts for the wealthy would help them out.  When asked if she watched Fox News regularly she said yes, but wondered how we knew.

1 comment:

  1. As usual, right on target, The DPE. If there is anything or anyone that I have less appreciation or respect for than economists, except for the respected and much beloved, The DPE, (and you may be aware of one from my area of the planet that is a laughing stock), it is the media. Thanks for calling them out and please keep it up. I fear they are the core of our demise.