CEOs of GM, Ford and Chrysler begged Congress for federal aid, a Detroit radio talk-show host asked whether Michigan, as well as the car companies, should get assistance. The state is being hit by an economic hurricane, he said, just as New Orleans was hit by a natural hurricane.

Huh? Will the victimology myth never end? Hurricane Katrina was an act of God. The car crisis is an act of man. For the difference, consult the Bible. Any version will do.

Symbols are important here, which is why the spectacle of the Detroit CEOs swooping into Washington on corporate jets to ask for money was so jarring.

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For a real middle-class tax cut, we should cut the 25% income tax rate that now applies to single workers earning $32,550 to $78,850, and married couples earning $65,100 to $131,450. We should reduce that rate down to the 15% rate paid by workers below these income levels. That would, in effect, establish a flat-rate tax of 15% for close to 90% of American workers.

Marginal tax rates for middle-income families in the 25% tax bracket are too high. Add in effective payroll tax rates of 15% and state income taxes, and these workers are laboring under marginal tax rates of close to 50%. No wonder middle-income wage growth has slowed sharply. Reducing the marginal tax rates for these middle-income earners would lead to income increases for middle-income workers, just as reducing excessive marginal tax rates for higher-income workers did, going all the way back to the Kennedy tax cuts of the 1960s.

This 40% cut in middle-class income tax rates would provide a powerful boost to the economy, greatly expanding incentives for savings, investment and work. This would be much more effective than Mr. Obama’s tax plan with it’s $1.3 trillion in redistributive tax credits, as well as yet another so-called stimulus package based on another $300 billion or more in increased government spending.

We could add to this alternative tax proposal an increase in the personal exemption from $3,500 to $7,000. The package would then cut taxes for all taxpayers, including those in the lower tax brackets. Of course, reducing the top income tax rates of 28%, 33% and 35%, capital gains tax rates, and the excessive 35% corporate tax rate, would boost the economy even more. But these are the “hate” rates imposed on those who liberals think are too productive, work too hard, and earn too much. Liberals deride these taxpayers as corporate fat cats and “the rich.”

Fine. Leave those rates for a future initiative. For now we should focus on the middle-income tax rates that are attractive to cut in the current political climate. This would continue the tax cuts for low- and moderate-income workers Republicans have been adopting for 30 years now.

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Moments after the closing of the polls on November 04 2008, I have announced the beginning of my 2010 campaign for Connecticut’s 3rd Congressional District.

Although the official results are not in yet – we know that as of now – over 55,000 (approximately 21%) people voted for me, not enough to win but a very good start!

My team and I are humbled by your nod of approval, and would like to extend our thanks to each and every one of you for your grand support. We are asking for your continuous support.

We need your help.

Please do not hesitate to contact us with any question that you may have. We are committed to respond to all calls and emails.

Please visit our web site regularly as we will continue to inform you about the latest news and recent developments.

Respectfully,

Boaz “Bo” ItsHaky

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Bo, my wife and I voted for you this morning. She’s a new U.S. citizen and was excited to cast her first vote. And I just read a comment on the Daily Paul website that two others voted against Rosa (e.g., for you) as well. So that’s four for Bo in my little corner of Rosa-land!

Let’s get Bo to Washington!!

Good Morning Bo,

I just got back and I did select you, for my vote.We need to get her out and someone new in. I believe you would be that person. I wish you luck today and I will be watching the news later one.

Take Care,

B.

Bo, Good Luck tomorrow. My wife is an immigrant from the Czech Republic and she shares your views on America. People who immigrate here definitely know how great this country is!
We’ll both be rooting for you tomorrow.

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Among the state’s five incumbents, Rep. Rosa DeLauro, D-3rd District, raised the most cash from outside her district, at 88 percent.

This is not new, and Connecticut members of Congress are not exceptions to what happens nationwide, but the phenomenon is a stark example of what the head of a campaign-finance research group calls our “broken” system of government.

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Poll	Date	Approve	Disapprove	Spread
RCP Average	10/09 - 10/20	14.0	75.7	-61.7
NBC News/Wall St. Jrnl	10/17 - 10/20	12	79	-67
GW/Battleground	10/09 - 10/15	18	74	-56
CBS News/NY Times	10/10 - 10/13	12	74	-62

See All Congressional Job Approval Polling Data

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Since then, the Federal Reserve and the Treasury have taken a series of increasingly drastic emergency actions to get lending flowing again. The central bank has lent out hundreds of billions of dollars, accepted collateral that in the past it would never have touched, and opened direct lending to institutions that have never had that privilege. The Treasury has deployed billions more. And yet, “Nothing,” Anna Schwartz says, “seems to have quieted the fears of either the investors in the securities markets or the lenders and would-be borrowers in the credit market.”

This is not due to a lack of money available to lend, Ms. Schwartz says, but to a lack of faith in the ability of borrowers to repay their debts. “The Fed,” she argues, “has gone about as if the problem is a shortage of liquidity. That is not the basic problem. The basic problem for the markets is that [uncertainty] that the balance sheets of financial firms are credible.”

So even though the Fed has flooded the credit markets with cash, spreads haven’t budged because banks don’t know who is still solvent and who is not. This uncertainty, says Ms. Schwartz, is “the basic problem in the credit market. Lending freezes up when lenders are uncertain that would-be borrowers have the resources to repay them. So to assume that the whole problem is inadequate liquidity bypasses the real issue.”

In the 1930s, as Ms. Schwartz and Mr. Friedman argued in “A Monetary History,” the country and the Federal Reserve were faced with a liquidity crisis in the banking sector. As banks failed, depositors became alarmed that they’d lose their money if their bank, too, failed. So bank runs began, and these became self-reinforcing: “If the borrowers hadn’t withdrawn cash, they [the banks] would have been in good shape. But the Fed just sat by and did nothing, so bank after bank failed. And that only motivated depositors to withdraw funds from banks that were not in distress,” deepening the crisis and causing still more failures.

But “that’s not what’s going on in the market now,” Ms. Schwartz says. Today, the banks have a problem on the asset side of their ledgers — “all these exotic securities that the market does not know how to value.”

“Why are they ‘toxic’?” Ms. Schwartz asks. “They’re toxic because you cannot sell them, you don’t know what they’re worth, your balance sheet is not credible and the whole market freezes up. We don’t know whom to lend to because we don’t know who is sound. So if you could get rid of them, that would be an improvement.” The only way to “get rid of them” is to sell them, which is why Ms. Schwartz thought that Treasury Secretary Hank Paulson’s original proposal to buy these assets from the banks was “a step in the right direction.”

Rather, “firms that made wrong decisions should fail,” she says bluntly. “You shouldn’t rescue them. And once that’s established as a principle, I think the market recognizes that it makes sense. Everything works much better when wrong decisions are punished and good decisions make you rich.” The trouble is, “that’s not the way the world has been going in recent years.”

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Polling Data

Poll	Date	Approve	Disapprove	Spread
RCP Average	10/08 - 10/15	14.3	75.0	-60.7
GW/Battleground	10/09 - 10/15	18	74	-56
CBS News/NY Times	10/10 - 10/13	12	74	-62
FOX News	10/08 - 10/09	13	77	-64

See All Congressional Job Approval Polling Data

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