I heard this same rosy interpretation – I think it was nearly word-for-word identical – on NPR. So the WaPo and NPR are getting talking points from somewhere. The “it’s really good news“ spin they are trying to put on the sharp rise in long term interest rates is pretty much exposed as such by the rest of the story they are telling:
The abrupt rise in rates has removed that key stimulant for the economy.
The rise has many causes, some of which reflect good news. As investors have grown more confident about the future, for example, they have become more inclined to put money in risky investments, such as the stock market, rather than lending it to the U.S. government and to government-backed mortgage companies.
How bad is this? How about a 62% drop in refinancing since Early April? That is a massive hit on a real estate market already in a very bad spot. The sharp rise in interest the Fed has to pay out to entice investors into buying American debt is causing serious damage to an already deeply wounded economy. This is going to strangle a recovery, folks.
And the Democrats have not even begun to reveal the vicious tax increases that will be needed to fund their grandiose health care boondoggle.
Speaking of the health care tax hikes that are coming, the WSJ reports that the Democrats, desperate for revenue, are planning to shaft unions (along with the rest of us).
In each case, Democrats have confronted the bitter reality that the proposed tax is too puny (Dr. Pepper tariffs), too doomed (cap-and-trade revenue), or too politically ugly (a sales tax). Contrast this with the tantalizing reality that requiring Americans to pay taxes on some part of the company health-care benefits they now receive for free could easily raise a half-trillion dollars over a decade. In a choice between a dozen niggling tax fights that could yield uncertain revenue, or a bigger fight over benefits taxes that could yield oodles, Mr. Baucus will take the oodles.
…….
Mr. Baucus intends to tax the health-care benefits only of those who didn’t spend a fortune electing Democrats to office. Sen. Ted Kennedy, who is circulating his own health-care reform, has also included provisions that will exempt unions from certain provisions.
The union carve-out is designed to allay the fears of many Democrats who remain outright hostile to a tax on health-care benefits, whether out of principle, political fear or union solidarity. Much will depend on the union reaction, which might remain ugly. Manufacturing unions in particular view their health-care benefits as sacrosanct, and even a delayed tax is still a tax.
That’s the real key: the one-time exemption that is being proposed will screw non-union members immediately, but really screw the unions later, after their exemptions expire.
Whatever they tax, the taxes will have to be repressive and will have to apply across the economic spectrum. Everything is about to go up. That economic left hook to the economy will complete a one-two punch with the interest rate hikes and put the economy down for the count.
This is part of the realization that socialism doesn’t work for the people; it only works for the powers that be.It is “conflict model”. It provides the perverse incentives for the people to engage in barter, black market, and the barrel of the gun.
The “commerce model” is, of course, free market capitalism, with regulation done in a rational way.
Let me tell you something about Max Baucus. At an event at Havre High School in the mid nineties, where I had kids attending, he was asked why he went into politics. His answer was……he couldn’t figure out what to do with his life. He is heir to one of the largest cattle ranches in the State, The Sieben Ranch, just north of Helena. It has it’s own exit on I-15 below a formation known as “The Sleeping Giant.”
I guess he just couldn’t handle being a working cowboy.