Harvesting the “Grapes of Our Own Wrath”

Here I am in the midst of rehab moaning and groaning about the market. It was a sour time for everyone, not just me.

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August 3, 2011

It’s August 3rd and it’s a sour and agonizingly difficult time. I’ve been doing this for almost 40 years, and I can’t recall as tough an environment. There were plenty of terrifying moments of panic and crisis in the past, but at least they were analyzable and you could assess the risks in making your bets. This time I’m losing faith in the ability of America and Europe to make and implement the very hard but absolutely necessary decisions we are faced with. We are truly harvesting the grapes of our own wrath.

I’ve been too optimistic about America’s politicians eventually doing the right thing and also about the health of the economy. The U.S. inevitably must reduce entitlements and defense spending and raise tax rates on the rich. I’m a long-time supply-sider, but we have become an unfair, unbalanced society. It’s just plain wrong that GE doesn’t pay any taxes. It’s not fair that hedge fund and private equity guys get a tax break on their carried interest earnings. The tax code has been distorted by the lobbyists. President Obama at one point proposed raising the Social Security retirement and Medicare ages but then scurried for cover when the screams sounded. In the final debates and sound bites, everyone, ...

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