Rosen, Tancredo Take Financial Losses
Both the Rocky Mountain News and the Denver Post report that Mike Rosen, former Congressman Tom Tancredo, and other clients of the Boulder-based Agile Group took big financial losses. Apparently the company had some of its investments tied up with Bernard Madoff and Tom Petters, both of whom have been accused of fraud. As Westword notes, Al Lewis broke the story.
Rosen mentioned on his radio show this morning that some people called him to blast conservatives and capitalism. Well, the current financial crisis is partly the fault of conservatives, to the extent that they sanctioned or endorsed the federal economic interventions that encouraged risky loans and real-estate spending and promoted an easy-money policy by the Federal Reserve. But certainly this is not a failure of capitalism.
To the extent that the losses are the result of fraud, that’s properly a crime, and the government’s legitimate role is to root out fraud. To the extent that the losses are the result of legal risk, well, that’s the market, though the market has become a lot more capricious due to political controls. People who think they can outperform the market routinely lose money, though of course sometimes they make a lot of money. My wife and I have already decided that we’re going to first focus on paying off our mortgage, then invest a portion of our earnings in a straight S&P 500 fund. I’m smart enough to realize that I’m not smart enough to beat the market.
If somebody is asking to take your money, your first reaction should be deep skepticism, followed by a request for complete information. Returns that sound too good to be true probably are, at least in the long run.
Democratic Tax Problems
The Rocky reminds us that Democrats such as Tom Daschle have trouble figuring out and paying their taxes. The worst “punishment” they face is the possibility of not getting appointed to a high-paying cabinet job where they get help spend the tax dollars of everyone else. Meanwhile, the rest of us face fines and potential criminal penalties. The income tax should not be simplified, it should not be replaced, it should be scrapped.
Long Live Henry Hazlitt
Alice Madden, our new “climate change coordinator,” said, “One of the most exciting aspects to this challenge is that almost every solution has the added benefit of creating jobs. In these tough economic times, I can’t think of a better win-win for us all.” Would it be too much to ask that a single Democrat bother to learn basic economics? I guess Madden’s new middle name is “In Wonderland.” Look, robbing Peter to pay Paul does not create jobs; it just replaces a market job with a politically-favored one.
At the federal level, Democrats are trying to increase welfare spending on mental health.
“The state Senate president on Monday cautiously threw his support behind a Republican plan to phase out the widely loathed business personal-property…”
Some legislators want to remove state spending cap: “And they have found new hope in a legal opinion that says their target, known as the Arves-choug-Bird limit, is not protected by the state constitution… [T]he provision limits growth in spending from the state’s general fund… to no more than 6 percent a year.” Or we could try, you know, letting people use their own money as they see fit.