You'd better believe we pay careful attention to capital gains here. Friday, the Congressional Budget Office released an analysis of the rise and fall of federal individual income tax revenues from 1994 through 2004. It showed that capital gains accounted for half of the non-legislative changes to individual income tax revenues over the period. Ironically, capital gains revenues increased 0.7% of GDP from 1994 through 2000 under President Clinton, and they fell 0.6% of GDP from 2000 to 2004 under President Bush.
Bill M., a devoted CG&G reader, wrote that this commercial (click through to the full post to watch) may have been one of the reasons the Democratic candidate won the Louisiana special election over the weekend. As a former campaign manager who has had candidates with tough names, I can tell you that while this brilliant ad may not have been the difference-maker, it sure didn’t hurt.
That we are not in a recession, based on weak GDP growth and a host of other macroeconomic indicators that have been flat since last summer, is quite remarkable. Here's the path of quarterly investment as a share of GDP:
Note that the fall in residential investment has been just as large and even steeper than the decline in equipment and software investment that was the driver of the last recession. Equipment and software investment fell to and has hovered around the share of GDP that it was in 1993. Residential investment has fallen to that level. It's not clear when the fall will stop.
My undergraduate senior thesis was on realigning elections. It's been a long, long time since it was written, but my research from that admittedly simpler time in American politics has always made me look closely when election results seem to show that something is changing.
The results of yesterday's special election in Louisiana, where the Democrat won in a district that not only has been solidly GOP for more than three decades and would have been easily retained by the incumbent Republican had he not resigned from Congress, are such a sign.
This is especially the case because it follows the Democratic takeover in March of another previously solid Republican House district that absolutely would have remained in GOP hands had the incumbent --former Speaker Dennis Hastert --run for reelection.
Yes, this can and will be spun by Republicans. Poorly funded candidates, special local circumstances that don't translate nationally, bad campaigners, etc. will all be mentioned in the days to come.
There I was, sitting at the kitchen table, sifting through the goodies left by the mailman earlier that day, when I happened upon the following solicitation from Chase:
Take a look at the box highlighting how much the monthly payment is on a $10,000 loan with a stated APR of 5.74%. If I could make loans like that, I'd bail out Bear Stearns myself. Is there no one working at that bank who could figure out that the $10k should have been $50k?
Or are they all doing market research leading them to the conclusion that co-branding with US Airways is the best way to improve their business model?