Capitalism has a huge problem. When a bubble pops, irrational investment converts to irrational debt. The Keynsian response works, but it basically validates the bubble's valuation. In Greece, a sovereign nation is breaking itself to make good on irrational exuberance. If popping bubbles was richly rewarded, we might have something worthwhile.
- What I appreciate most is the fact that what follows is an irrational government that makes things much worse. That is the way of things.
We were just having this same chat yesterday. That is the direction we're headed. Inequality of income/wealth is probably the biggest immediate problem facing the US and the world at large. The question is what to do about it. We can't just take money away from people and give it to others; that would be chaos. Somehow, someday Congress will have to start making compromises. Just the other day Senator Graham admitted that more revenue needs to be raised (which Grover Norquist immediately went on the offensive about, saying the the senator was mistaken, and that he had a conversation in which Graham admitted as much; so much for rule by the people). It was a baby step in the right direction. It seems to me that higher marginal tax rates are the only orderly way to reduce inequality. Anyone have any other ideas? (Serious question; not rhetorical.) I would be satisfied if what it took to raise tax rates to historic levels was to gut some social programs. It would be difficult for a lot of people, but perhaps better in the end. But only if the tax hikes we're Clinton era taxes; I mean Reagan era taxes, where top earners were on the hook for ~70% minus deductions, which were, to be fair, much more generous. I don't know how I feel about eliminating or capping charitable giving; that could be disastrous for a lot of non-profits who get a huge bang for their buck. Anyway, the 30 plan the GOP has perpetrated on us is finally coming to a head, and we're all getting to see what kind of Utopia they can deliver. The question is whether we're collectively smart enough to figure out how to stop them.