Monday Musings: John McCain and "Don’t Ask, Don’t Tell"; Investing in Lawsuits; Is Wall Street Useful?; More Fiscal Irresponsibility

Is there anything sadder, or more indicative of the decline in American politics, than John McCain? Here’s a man I used to admire for sticking to his principles (even though I often disagreed with him) and not kowtowing to the party line. Watching his embrace of the conservative wing of his party has been sad, particularly as it’s really done him no good. (Of course, he was always more conservative than most people realized so the slide isn’t quite as dramatic as most liberals think.) And now we have the sight of him dismissing a Pentagon study of “Don’t ask, don’t tell” (the woeful, embarrassing and just plain wrong U.S. policy toward gays in the military) after saying that he would change his mind on his opposition to the policy if the troops had no issues with it. Here was a chance for him to take the kind of principled “maverick” stand he used to…and he blew it.

Apparently you can now invest in lawsuits, including divorces. Just what we need. Am I the only one who finds this slightly creepy? The folks doing the investing like to position it as helping people who don’t have the funds to seek legal recourse, and to a certain extent I sympathize (especially with spouses in the divorce situations described), but puhlease!!! Surely there’s a better way? (Nod to Leslie Nielsen: “There must be, but don’t call me Shirley.”) If we just had a proper regulatory framework (i.e. one not distorted by interest groups, leading to too much and/or the wrong kind of regulation in some cases, and little or no regulation in others), would people really need to rely on the civil courts? 

A lot of talk last week about John Cassidy’s article on Wall Street in The New Yorker, provocatively titled “What Good Is Wall Street?” I haven’t read it yet, although I do hear Cassidy on On Point on WBUR, but it seems he’s covered a lot of things I’ve been pondering and planning to write about on this blog, namely what is the proper role of the finance sector, has it grown too large as a proportion of our economy, and is there any real value created by some of its activities, or does it in fact actually destroy value? Stay tuned!

So the Democrats and Republicans are working on a deal to extend all the Bush-era tax cuts while also extending unemployment insurance for the long-term unemployed. According to Fed Chairman Ben Bernanke, this could add $4 trillion to the debt over the next ten years. This is fiscal responsibility? Now I am absolutely for the unemployment insurance extension. Anyone who thinks it’s an incentive to sit on your butt doing nothing has never had to live on unemployment benefits (which I have), and a recent Labor Department study (commissioned under the Bush White House) found that taxpayers get a $2 benefit for every $1 in unemployment benefits (given that these folks absolutely will spend the funds). On the other hand, continuing the tax cuts for those with incomes above $250K (couples) or $200K (individuals) will cost about $700 billion, and will not return the same amount to the economy, as any look at the attempted “trickle down” economics back to Reagan will show.

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