The House came up with the brilliant idea of linking the partial repeal of the estate tax with raising the minimum wage. In the words of West Virginia Representative Shelley Moore Capito, this linkage made sense because, "the sustaining of small businesses by keeping their vital assets will allow those making the minimum wage to continue working. This is a jobs bill."
I'm sorry, this is nuts. Only a tiny percentage of small businesses will ever be liable for the estate tax and it is paid out after they are dead. It has no obvious effect on how they would operate their business. It is hard to see how cutting the estate tax will save even a single minimum wage job.
The weak second quarter GDP numbers were driven in part by the housing sector as noted in the NYT. See also the separate piece on the housing market. In addition to the GDP data, the Commerce Department also released data on vacancy rates for the second quarter. The vacancy rate for ownership units hit a new record.
Remember the inverted yield curve and the hoola hoop? A few months back, the prospect of an inverted yield curve was seen as an ominous warning sign of bad times ahead. An inverted yield curve was supposed to signal an upcoming recession. This seems worth mentioning now because the yield curve is becoming seriously inverted as long-term rates have edged downward, even as short-term rates remain relatively high.
LEBANESE DEMOCRACY? I often had cause to wonder whether or not people understood this during the Cedar Revolution, and in light of the president's repeated insistence that Hezbollah is afraid of democracy during today's press conference, it's clear that the White House doesn't. Democracy, simply put, isn't what's at issue in Lebanese politics.
TRICKY, TRICKY. Oh, those Republicans. Tired of being such grinches on the minimum wage, they flipped on the bill, crafting a proposal to raise the wage and rollback the estate tax. The Democrats, it seems to me, have precisely the right response to this gambit:
Its political blackmail to say the only way that minimum wage workers can get a raise is to give a tax giveaways to the wealthiest Americans," said Sen. Edward Kennedy, D-Mass. "Members of Congress raised their own pay � no strings attached. Surely, common decency suggests that minimum wage workers deserve the same respect."
THE CONEHEAD ECONOMY. Among the best of the new Times Select features are their "Talking Points," long backgrounders penned by the editorial writers on all manner of major issues, from inequality to global warming. This week, Teresa Tritchpublished one on "The Rise of the Super-Rich," explaining that "[i]ncome inequality used to be about rich versus poor, but now it�s increasingly a matter of the ultra rich and everyone else." Few stories are as important, or as poorly understood. From 2003 to 2004, real average income for the top 1 percent of households shot up by 17 percent. For the remaining 99 percent, the average gain was under three percent.
JUST POSTED ON TAP ONLINE: GENERAL HOSPITAL. Remember the SEC's investigation into Bill Frist's conveniently-timed sale of stock from his family's hospital chain, HCA? This week's news that the for-profit hospital behemoth is selling to a group of private equity investors has reminded people of that ongoing investigation. Maggie Mahar, author of the new book Money-Driven Medicine, tells the story of the Frist family empire and contemplates the larger saga of for-profit hospitals in America -- a history marked by cycles of boom, bust, and scandal.
GOOD NEWS FOR PEOPLE WHO LIKE BAD NEWS.The New York Times has a perceptive article today documenting the shift in support towards Hezbollah in the Arab world. After an early moment of hope, when a variety of Arab governments condemned Hezbollah�s extra-state provocations, the sustained brutality of the Israeli response has warmed the Arab world to Hezbollah's side.