Wall Street protesters: We're in for the long haul

[dps]

I think corporate governance rules should be changed so that stock owners can have more influence on compensation.

I don't understand the point of this. There is an argument that shareholder votes are terrible because practically speaking they are up or down votes, and can not be regularly held. If shareholders reject a compensation package for a CEO of $20 million, what happens next? The board presents a package of $15 million that gets voted up or down? Are you going to have another shareholders meeting over $5 million?

That aside, the reality is that the bulk of shares as actually voted by shareholders in advisory votes do not seem to be so concerned with executive pay. All the evidence indicates that however much you want to empower shareholders: they simply approve the executive pay packages already in place. I don't think that this is a change that would have any practical effect.

The vast majority of shareholders care about 1 of 2 things:  "Do I get a regular dividend check?" and/or "Can I sell my shares at a profit?".  Beyond that, they don't really give a damn about corporate policies, including how much the exectutives make.  The shareholders already have the power to change how a company is run if they want to use it--they just don't want to use it for the most part.  You don't need to "empower" shareholders if you want them to change corporate polices--you need to get them to care.

Simply taking away the tax deduction now would be a real kick in the arse to homeowners who have put the bulk of their wealth into homes valued with an assumption of a continued interest deduction. Especially now that the economy is strained in part due to the already depressed value of homes and a wave of foreclosures.

I don't think that very many people are going to default on their mortgages if the mortgage tax deduction was eliminated.  (I'm not sure that you meant to imply that there would be, but I did infer it the way you worded your post.)  I don't buy the notion that the value of homes is depressed (at least not nationwide, though it certainly is in certain localities)--I think that there's still a housing bubble to a great extent.

OTOH, while I feel that the mortgage tax deduction should be done away with, it's not a panacea--it really needs to be done as part of an (highly unlikely) overall income tax reform.

[Martinus]

One way of fighting housing bubble while keeping the tax deduction in place is to do it the way it was done in Poland - you only qualify for the tax deduction if the price is below a certain level (on a per square metre basis). Not sure if it is a good solution, but that's one thing to consider.

[dps]

One way of fighting housing bubble while keeping the tax deduction in place is to do it the way it was done in Poland - you only qualify for the tax deduction if the price is below a certain level (on a per square metre basis). Not sure if it is a good solution, but that's one thing to consider.

That's not unreasonable, but what I'd like to see is a comprehensive income tax reform that basically did away with all deductions (which, as I said, is highly unlikely).  I don't see the mortgage tax deduction as that big a deal, in-and-of itself.  I don't know how much extra revenue would be raised if it were eliminated, but I suspect that it would be a extremely tiny sum in relation to the overall federal budget.  It's also my belief that the impact of the deduction is hugely overrated by those who argue for its continued existance.  Unless you expect to move frequently, or simply can't come up with the money for a downpayment, owning a home would still be better than renting for the vast majority of people.

[Grey Fox]

It would slow down the flippers alot. Altho I guess the bubble burst kind of eliminated that.

[DGuller]

I don't see the mortgage tax deduction as that big a deal, in-and-of itself.  I don't know how much extra revenue would be raised if it were eliminated, but I suspect that it would be a extremely tiny sum in relation to the overall federal budget.

It would actually be an extremely sizable amount, to the order of a hundred billion or so.

[dps]

I don't see the mortgage tax deduction as that big a deal, in-and-of itself.  I don't know how much extra revenue would be raised if it were eliminated, but I suspect that it would be a extremely tiny sum in relation to the overall federal budget.

It would actually be an extremely sizable amount, to the order of a hundred billion or so.

Are you sure about that?  It's a deduction, not a credit.

[DGuller]

I don't see the mortgage tax deduction as that big a deal, in-and-of itself.  I don't know how much extra revenue would be raised if it were eliminated, but I suspect that it would be a extremely tiny sum in relation to the overall federal budget.

It would actually be an extremely sizable amount, to the order of a hundred billion or so.

Are you sure about that?  It's a deduction, not a credit.

http://www.dailyfinance.com/2011/04/20/eliminate-mortgage-interest-tax-deduction/

[garbon]

Is Tiffany's not sacrosanct?

http://www.nydailynews.com/ny_local/2011/10/13/2011-10-13_wealthy_new_yorkers_join_protest_outisde_tiffanys_fifth_ave_store_over_end_of_ny.html

A pair of wealthy New Yorkers stood outside Tiffany's on Fifth Ave. Thursday and demanded to pay higher taxes.

The Manhattanites joined members of the 99 New York Coalition to protest Gov. Cuomo's plans to end the so-called "millionaires tax" on Dec. 31.

"New Yorkers who make over $1 million are fine with the taxes," said Bill Samuels, an entrepreneur businessman and one of the founders of the Council on Economic Priorities.

"Gov. Cuomo is on the wrong path.

"Most of us aren't for it, we'd rather have good schools. It's a total lack of leadership."

The Austerity Breakfast at Tiffany's attracted about 20 protesters and a small crowd of onlookers.

The group say Cuomo should extend the state-wide tax increase for top earners, which was implemented in 2009.

It saw taxes for those earning more than $200,000 a year rise from 6.85% to 8.97%. It expires at the end of the year.

"I believe as a wealthy individual, I can afford to pay a little more," said Sarah Stranahan, a working mother of three and board member of the Needmor Fund, which campaigns for social justice.

"We need to get through these hard times together.

"This tax will not hurt the wealthy - please extend the personal income tax."

Analysts say keeping the tax rates at their current levels, instead of reducing them, will generate $1 billion of revenue for the budget and $5 billion in the following fiscal year, according to the Fiscal Policy Institute.

[The Minsky Moment]

Is Tiffany's not sacrosanct?

Your claim to non-bourgeois status is looking more and more questionable.

[garbon]

Is Tiffany's not sacrosanct?

Your claim to non-bourgeois status is looking more and more questionable.

Actually, I recall you revoking my membership card.

[The Minsky Moment]

Actually, I recall you revoking my membership card.

You are on probation but your resignation is not accepted.

[Zanza]

http://online.wsj.com/article/SB10001424052970204774604576628981208827422.html

U.S. Incomes Seen Stagnant Through 2021

Americans' incomes have dropped since 2000 and they aren't expected to make up the lost ground before 2021, according to economists in the latest Wall Street Journal forecasting survey.

From 2000 to 2010, median income in the U.S. declined 7% after adjusting for inflation, according to Census data. That marks the worst 10-year performance in records going back to 1967. On average, the economists expect inflation-adjusted incomes to rise over the next decade, but the 5% projected gain isn't enough to reach prerecession levels.

"Standards of living in the U.S. will continue to decline as we deleverage and emerging markets take over as the growth engine of the global economy," says Julia Coronado of BNP Paribas.

Though the majority of the 50 economists surveyed-not all of whom answer every question-say the current generation of college graduates will have a higher standard of living than their parents, a third of respondents think it will be lower. College graduates have generally fared better in the U.S., and they currently have a 4.2% unemployment rate compared to 9.1% for the entire work force. But a college degree hasn't been enough to ensure wage gains from 2000 through 2010. According to Census Bureau data, only advanced degree holders managed to record increases in earnings over that period.

The current generation of college graduates will only see a higher standard of living if "they get graduate degrees and are willing to give up a lot of free time," says Diane Swonk of Mesirow Financial. She says that while falling incomes may make up lost ground, the issue will be the distribution of those gains.

Incomes are being held down by persistently high unemployment and tepid economic growth, and the situation isn't expected to improve much in the foreseeable future. "What might be the locomotive?" asks Edward Leamer of UCLA Anderson Forecast. Typical drivers of economic recovery haven't been robust. Housing remains stuck at recessionary levels with home prices expected to be nearly flat next year while construction is stuck at recessionary levels. Manufacturing and consumer spending have improved over the course of the recovery but haven't been rising at levels that would lead to vigorous expansion. Meanwhile, growing global concerns could depress export markets.

Economic growth for 2011 is expected to be just 1.5%, accelerating to 2.3% next year and 2.7% for 2013. But that slow pace won't be enough to bring down the unemployment rate quickly. On average, the economists expect the economy to add just 1.5 million jobs over the next 12 months, barely enough to keep up with population growth. They forecast the jobless rate will be at 8.2% at the end of 2013, a decline of less than one percentage point over more than two years.

Those numbers could look even worse if the U.S. falls into a recession. The economists, on average, put nearly 1-in-3 odds of another downturn hitting the U.S. economy in the next 12 months.

[The Brain]

WSJ? LOL

[Ideologue]

Man, I hope my income isn't the same in 2021 as today.

[Zanza]

The idea of two lost decades for the USA is pretty sobering.