Economics from a people first point-of-view

This week there are a number of stories that relate to recent posts on Brucenomics.

Corporate taxes

My latest post Corporate Taxes: No More Simplistic Solutions!” talked about President Obama’s proposal to raise the tax on dividends. My opinion is that raising the tax on capital gains make more sense. This week a special feature article in the Financial Times, “Tax treatment of private equity: Questions over a quirk” delves into the issue of taxes paid, or rather not paid, by hedge fund managers. Continue reading →

I was one of those kids who walked around head bent and looking at the ground – even after they discovered I was totally near-sighted and gave me glasses. The reason? I didn’t start out with a lot of self-esteem, and my peers didn’t help the situation any.

Once I was walking downtown and a couple of older girls passed me on the sidewalk. On called back over her shoulder with a laugh, “You look like a simpleton.”

Now, I had no idea what a simpleton was, but I knew enough about tones of voice to know it wasn’t something good. At home I asked my mother. Knowing I was a bright little girl she told me to look it up in the dictionary. So I did:

“A person who is felt to be deficient in judgment, good sense, or intelligence; a fool.” (The American Heritage® Dictionary of the English Language)

An alternative definition is “a foolish or ignorant person”. OK, now you too know what simpleton means. So, how can we not be the simpletons politicians and pundits seem to take us for? Continue reading →

Are you perhaps thinking the biggest financial crisis in the world is the Greek crisis? Well, think again! While Greece is being treated like the “identified patient” of the Eurozone and assaulted with slings and arrows from outraged Germany, France and others, an even bigger tsunami is looming over the world’s banks from Asia to America.

This week more than a dozen investment bank traders have been fired, suspended, or put on leave for possibly colluding in “rigging” the  Libor.

“The what?” you ask. The Libor (London interbank offering rate) is the main global inter-banking loan rate used by big banks here and in the UK. As mind-boggling as this may seem, the Libor rate, used for setting interest rates on over $350 trillion of financial products such as mortgages, car loans, loans to corporations, futures and options contracts, and structured investment bank products and derivatives, is not based on actual trades: it is merely based on daily estimates, estimates sent in by traders and brokers to a committee of global bankers. Continue reading →