Re: James J. Cramer

[Ray Evans Harrell]

This is a letter from one of our Elders and Clan Mother.    She shared a thought or two on Mr. Cramer of Kudlow and Cramer on the cable MSNBC.    Her home is ten miles from the reservation where I grew up and was the wealthy area when I was in school.    Obviously that is all changed or maybe not.    My father made 3,500 a year as Superintendent of Schools which would be under $25,000 in today's wages.   Well here is Teresa's "post".   REH     Ray & All: It is very difficult to even read and evaluate the situation governmentally when the mean income here for a family of 4 is around or about $20,000 per year.  That's right folks.  I invite you to check the stats for this area in Northeastern Oklahoma.  Can you imagine raising your children on that amount of money.  Or better yet, how about feeding yourself solely?  Maybe you can do without an extra pair of shoes for the week or that spiffy new jacket or even that coffee latte that is several dollars per cup.  But, when you live in an area of abject poverty, the harsh realities of life are evident with each breath.  Come visit me and see the children with pants far to short and the folks are having a rough time affording replacements out the local resale shops.  The Dollar Store does real well here -- that is, the store that everything costs a dollar.  The almighty buck.  And young parents struggling to survive and feed their babies.  And keep their sanity.  High incidents of spousal abuse and child abuse.  Tsk, Tsk -- while most of us sit back and judge.  Maybe that will not be so unfamiliar if the economy continues on the declining path and we lose our business and corporate ownership controls to invidivuals who live outside this country or in a very insulated "ivory tower" of sorts here in this country. I have a skewed sense of Dubya's priorities when I look around.  Folks are living real well here on $30,000 or so a year.  Dang guys, big money!  You mean you're makin' $7.50 an hour?  Hot dog -- let's party!  Better yet - you got a job!!!  For sure let's party!!  Somehow folks from places like Miami, Oklahoma (other than a very fortunate few) don't relate well to capital gains tax reductions or deferrals, etc.  When keeping a $125 per month house payment current is a struggle, life's challenges seem slightly different. Oh, and of course there is lead poisoning.  Welcome to the real world Dubya. Come on over and sit a spell. Teresa -----Original Message----- Date: Tuesday, December 17, 2002 8:47 PM Subject: James J. Cramer >To the list: > >So what do you think of this guys and gals? > >REH > > > > >MONEY FOR NOTHING > >Bush's big idea for rescueing the economy is to make the rich richer.   But >guess what: Our financial malaise has nothing to do with inadequate spending >by the wealthy. > >By James J. Cramer >New York Magazine December 23-30 > >NOW THAT HE'S AXED THE HEADS OF THE SEC, the economic council, and Treasury, >President Bush has a rare opportunity to redefine economic policy and not a >moment too soon; Just as his International team developed the Preemption >doctrine in stark contrast to containment and deterrence, Bush's new >domestic team can break with the 'past and get the u.s. economy growing >again in a way that will allow all Americans to benefit. > >But first, the administration has to admit that there are problems in the >economy, something that Paul O'Neill, the brittle but sunshiney Treasury >secretary, refused to do but his replacement, John Snow, a more suave exec, >can do with elan. And the administration has to recognize that simply >cutting taxes for the wealthiest isn't a policy at all. It's just a >statement that says the rich should have it even easier and cushier than we >do now.    I say that as someone who stands to make a couple hundred >thousand dollars pronto if the Bushies accelerate the current tax cuts and >make them permanent. As much as I like money, there are a lot of more >productive and fairer ways to tinker with the tax system. > >More important, it won't work. Making the rich richer won't address the >fundamental weaknesses of the economy, because the economy's problems have >nothing to do with inadequate consumption by the wealthy. They have to do >with too much capacity and not enough demand on the corporate side. Or to >put it in the language of the stock market, the housing, auto, and retail >sales markets-all of which would be goosed by cutting the taxes of the >wealthy-are already operating at full tilt.   If you look at home prices, >for instance, you could argue that they are operating in overdrive. Simply >making the rich richer would amount to turning the oven from 500 degrees to >600 degrees, effectively burning what's broiling already. > >I don't know if the tax cutters truly don't understand that they are simply >overstimulating the hottest part of the economy or if they're just out to >starve the government-make it smaller and less effective-because they >fundamentally distrust government.        (I think this is probably the sad >truth of it all   REH) > > >Regardless, it's just plain stupid to focus on the take-home pay of those >who make $300,000 or more when we are trying to get companies to build and >reinvest, not individuals.    For that, we have to ask, How did we get to >the point where corporations are so strapped, anyway?  The simple answer is >debt: Companies took on too much debt and built too much capacity without >having the ability to pay for it. > >To get back on track, any new economic team has to break with tradition and >recognize that we need intervention, positive intervention, from the >government, because the weak portion of the corporate side right now is >incapable of stimulating itself. > >First, the team has to radically change the tax code so it favors equity >over debt. > >Right now, companies can deduct interest from earnings, but they can't >deduct dividends. So what companies do is borrow money like mad and buy back >stock to prop up their stocks so the executives can exercise and sell the >options they've been given. You couldn't come up with a stupider way to >reward dumb behavior and accentuate the difference between the executives >and the rank and file if you tried. > >What should happen? We should eliminate the deduction for interest for >corporations and let them deduct the dividends they payout. Then they would >create long-term income streams that would make the stock market a simple, >more rational place for investors. We would all be in the hunt for stocks >that pay the most dividends, and we would want to become long-term >shareholders of those enterprises. If we went a step further and eliminated >the tax on dividends at the individual level, buying stock  would become the >best tax advantaged way to get rich. We would also be, by nature, much less >suspicious of equities-a quick way to restore investor trust-because >dividends don't lie. If companies don't make any money, they can't pay >dividends. If they stumble, they can cut the dividend. Right now, if they >stumble, they have to file for bankruptcy because they can't cut out >interest payments without surrendering to the lenders. > > >