Universal Healthcare means government controlled health care rationing. Rationing means that you do not get as much of something as you would like. Rationing means that some get more than they otherwise would and some would get less. Call it what what you would like- it is rationing.

Raising the capital gains tax rates means increasing the tax on investment.

A tax on dividends is a tax on capital investment.

Raising the upper end tax rate means a tax on investment.

If you raise the tax on investment you will get…. follow me here…… less investment. Jobs are created by….. stay with me……. investment. So a tax on investment is a tax on creating new jobs.Now this is the part that redistributionists just simply refuse to believe. The wealthy can only wear one shirt at a time. They can only buy so many homes, so many watches. But most rich people do not live like the Lifestyles of the Rich and Famous. They live well, but well below their means. What do they do with the money they do not spend? They either A- give it away to charity or B- invest it.

Again when they invest it – it buys equipment that requires new workers to run it thus creating jobs.This is where the parties differ: The Democrats believe the way to stimulate the economy is to take money away from the rich and then give it to poor people. The poor will spend the money…. this gets tricky so pay close attention…… on something sold to them by the rich. And thus the economy will grow.But with higher taxes the rich may decide to clip coupons instead of risking it. Hence no job growth.

The Republicans believe that you grow an economy by expanding production which requires investment. Low capital gains frees up capital to go to its most productive use. One noted business economist (Kudlow) estimated that 70% of new job growth came from production spending as opposed to consumer spending.

I remember asking a local wealthy real estate tycoon why he drove an 8 year old Buick when he could afford any car. His response, “I don’t like to put my money in things that depreciate.”

Finally – get real specific what rich is. If a middle income couple sells the home they have lived in for 40 years and realizes a $300,000 gain are they now rich? Will Obama now tax them like they are?

One of the critical functions of any sales incentive system is pay for performance. But performance is often hard to measure depending on the industry.

Your sales may be up 50% but are you selling 50% more units or has the cost just inflated 50%? Even if you are paid on margin or profit, is your profit inflated by selling older cheap inventory at prices dictated by higher replacement costs?

Is activity in your market place influenced by monetary stimulation? Has housing inflation help your commissions as a real estate sales person? Has a new tax law stimulated life insurance sales?

Are your commissions as a trader influenced by the new tax stimulus package? Has your success rate been due more to probability than you would care to admit?

While you want to pay for performance, what you really want to do is pay for performance you can control. That is a more challenging proposition.

Likewise we often credit presidents with success and failures without consideration as to what degree they actually controlled the outcome.

Was Clinton’s economic boom due to his policies such as his initial tax increase on income, or was the surplus due to his tax cuts on capital gains and dividends? How was his financial performance influenced by the decline in the Soviet Union and our huge military cut back? How was it influenced by the growth of junk bond financing, the high tech boom, or the resolution of the S&L crisis under George H. Bush?

How has the War in Iraq affected the value of the dollar? How effective were the Bush Tax cuts in the post 911 economic recovery? How much has the price of food and oil been affected by economic policy in China and Russia?

Presidential decisions clearly have a major impact, but it is often challenging to separate the impact from their decisions from the randomness and impacts from less controllable factors.

We often are quick to bestow credit and blame more based on our partisan biases than on any intelligent analysis. We are reluctant to distinguish between the results the president controlled and the consequence of randomness.

Barbarians for Palin

Just thinking:

Obama has selected a 32 year veteran from the Senate who could hardly place as a Democratic presidential candidate, who outdoes Obama on gaffes and has a bad history on foreign policy decisions and…

McCain picks a young mother of five who has been a mayor and a Governor of Alaska with an impressive record.

Now tell me which one is the candidate of change?

Last week before I took my daughter to college at Indiana, Romney was the favored VP pick for McCain with 75% odds at Intrade. When I returned yesterday, Tim Pawlenty had risen to the likely pick with 75% odds.

At 10:00 AM this morning, an hour before the announcement Sarah Palin was the favored pick with 92% odds. She was not even on the list on Intrade the night before.

The McCain camp did an incredible job keeping the selection confidential. Unlike most, I knew a little about her, and I was very impressed. She is a great choice.

To my readers I confess that I was very wrong in my blind assumption of Intrade’s infallibility. I could not be more happy that I was wrong.

I am also happy that McCain has undone Intrade. I hope their presidential favorite also proves equally wrong.