Harvey Gulob’s Response to Buffett and Obama

Interesting op-ed piece in today’s WSJ by Harvey Golub, former chairman and CEO of American Express. Golub is not in favor of Buffett’s and Obama’s view that taxes should be raised on the wealthy. He believes he pays enough as it is. One thing he says, doesn’t make sense to me (bold mine):

Now that I’m 72 years old, I can look forward to paying a significant portion of my accumulated wealth in estate taxes to the federal government and, depending on the state I live in at the time, to that state government as well. Of my current income this year, I expect to pay 80%-90% in federal income taxes, state income taxes, Social Security and Medicare taxes, and federal and state estate taxes. Isn’t that enough?

I’m not sure how he came up with 80% – 90%. Seems pretty high to me.

Regardless, I can understand his anger, which is two-fold. First of all, he thinks the rates are high enough (and don’t need to go any higher) and secondly, he thinks the government should spend the tax revenues more prudently:

Governments have an obligation to spend our tax money on programs that work. They fail at this fundamental task. Do we really need dozens of retraining programs with no measure of performance or results? Do we really need to spend money on solar panels, windmills and battery-operated cars when we have ample energy supplies in this country? Do we really need all the regulations that put an estimated $2 trillion burden on our economy by raising the price of things we buy? Do we really need subsidies for domestic sugar farmers and ethanol producers?

I know a lot of you are going to disagree with this. I just think there has to be a better way to tax and spend. It’s the reason why I like the flat tax (even though it would probably mean a bigger tax burden for my family).

Larry Winget Needs Your Help

My friend, Larry Winget, posted this on his facebook fan page:

I have a favor to ask of all of you, I have some exciting opportunities pending but my producers would love to see me have more than 10,000 fans on this page. Big numbers build credibility with studios. If you can ask your friends to join my fan page, it would be helpful as I’m building a case for future “offerrings.” I need some more fans. Help me if you enjoy this page! About 3,000 to start with would be great. Invite your friends! Thank you!

So, if you’re on facebook please consider…

1. Going to Larry’s facebook fan page and “liking” it.


2. Sharing it with your friends (http://facebook.com/LarryWingetFanPage)

Let’s see if we can get Larry to 10,000 fans by the weekend…

Thanks for your help.


Saw this and wondered what you guys thought about it.

It might stimulate demand (might) but there are better ways to create jobs. I suggest Mr. Carney read this article from several years ago: Unemployment Insurance Does Not Stimulate the Economy.


“…extending UI benefits would do the following:

• Encourage unemployed workers to stay out of work longer to collect benefits;
• Encourage employers to wait longer to rehire laid-off workers; and
• Do relatively little to increase consumption.”

NOTE: this is not an anti-Obama issue. The report that is sighted in the Heritage article was authored during the Bush administration.

The Day After the 50 Biggest Percentage Drops in the Dow’s History

AFM reader, Tom, left the following comment on this morning’s post:

Hey JLP,

Do you happen to have day-after numbers on all of these drops?

My question is, if you buy the S&P or DOW index on those days, and sell the next… what will your returns be?

I did a little research in which I took the 50 biggest percentage drops and then looked at what happened the following trading day. Here are the results:

Of the 50 biggest one-day drops, 34 of them were followed by an up day. The average follow-up return for all 50 days was 1.28%.

Interesting stuff (at least I think so).

How Yesterday’s Market Drop Ranks in History

Points-wise, yesterday’s 634.76 point drop in the Dow Jones Industrial Average ranked in the top six.

Percentage-wise (which is also a much better guage as to the severity of the drop), it’s a much different story (I highlighted yesterday’s percentage drop in yellow):

Yesterday’s drop barely made it into the top 50 based on percentage change. Last Thursday’s 4.31% decline didn’t make the list.