Yes, and maybe in some cases they should do better. Maybe, they worked harder, were a wee bit smarter, and did not depend on other people.

I'd say that's the case more often than not. Don't take my statements to mean I think the way the market works is bad, it's just that is the way it works. For the most part, it's the way we should let it work, because most people will win some, a few will win big, and a few will lose big, that's all around a good solution. But don't think that means that what is good for the market is always good for the people, because there is no reason why that will always be so.

Yeah, and you can bet your ass, the smart, industrious, and non-dependent people on government will recover.

Well of course, once the people losing form a large enough portion of the voting constituency, the "will of the people" moves towards having the government help. Democracy is like that.

In my younger days, an ignorant, uneducated, dumb asshole has never offered me a job....Hold on...I did get some offers for government employment.

Nor me, but plenty of "educated" ones have, and none of them worked for the government.

but in an optimal market, some portion of the people do better than others

Yes, and maybe in some cases they should do better. Maybe, they worked harder, were a wee bit smarter, and did not depend on other people.

Sometimes for a sub-optimal market to get back to being an optimal market, a lot of people have to lose.

Yeah, and you can bet your ass, the smart, industrious, and non-dependent people on government will recover.

In my younger days, an ignorant, uneducated, dumb asshole has never offered me a job....Hold on...I did get some offers for government employment.

Lets make this slightly more accurate. You can, of course, blame the previous administration for as long as you like. Whether or not the voters believe you is another matter entirely

Probably 90% of the people that voted for the previous administration will not believe you, and 90% of the people that voted for your administration will. Smart politicians can swing another 10% in their favor.

Ahhh the root mentality that is behind much of today's Nanny-ism. I got upside down on my mortgage because I'm an idiot...bail me out, bail me out. I mis-managed a financial corporation...bail me out, bail me out. I stubbed my toe...bail me out, bail me out. Never mind the perverse incentives this kind of thining leads too.

I think you misunderstood my position, Steve. I don't mean "protect" as in "protect them from themselves", I was always against the bailout. I meant that a government's decisions should be based on how it helps or hurts it's citizens, not on how it helps or hurts the markets. Usually they are one and the same, but sometimes the diverge, and in those cases the government should always favor the citizens.

The market is comprised of people, thus your reasoning is flawed.

A government is comprised of people too, would you extend your statement to claim that what is good for the government is good for the people?

Yes, a market is comprised of people, but in an optimal market, some portion of the people do better than others. In an optimal market, some people lose. Sometimes for a sub-optimal market to get back to being an optimal market, a lot of people have to lose.

You would think so, but the Republicans have proven that a party can blame the previous administration for as long as 8 years. I have every confidence in the Democratic party being willing and able to do the same.

Lets make this slightly more accurate. You can, of course, blame the previous administration for as long as you like. Whether or not the voters believe you is another matter entirely and one of the problems McCain ran into. Many of the problems we have today, rightly or wrongly, have been laid at Bush's feet as well as the Republican Party.

The government's job is to protect it's citizens, not the market.

Ahhh the root mentality that is behind much of today's Nanny-ism. I got upside down on my mortgage because I'm an idiot...bail me out, bail me out. I mis-managed a financial corporation...bail me out, bail me out. I stubbed my toe...bail me out, bail me out. Never mind the perverse incentives this kind of thining leads too.

As I've said before, what is good for the market is not always good for the people.

The market is comprised of people, thus your reasoning is flawed.

Well the democrats can only blame Bush for so long.

They have owned the house and senate for two years and are about to own the white house. At some point they have to stop playing the hate/blame game and start leading.

You would think so, but the Republicans have proven that a party can blame the previous administration for as long as 8 years. I have every confidence in the Democratic party being willing and able to do the same.

I think one step is to stop looking to the government to protect risk. The government shouldn't be bailing out businesses that took risks and loss. Sure it might hurt a lot in the mean time, but in the end the market will be better for it.

The government's job is to protect it's citizens, not the market. As I've said before, what is good for the market is not always good for the people.

I suspect the democrats will end up giving us some more bailouts-especially an auto industry one (like they deserve another-but then the UAW is a powerful union). The sad thing is the democrats will do it but probably find enough useful idiot republicans to go along with it.

The auto industry bailout is already being worked out, so you get no points to being able to predict that one.

Well the democrats can only blame Bush for so long.

Yep. For so long as it works. They're still beating up Hoover and that's almost 80 years ago.

They have owned the house and senate for two years and are about to own the white house. At some point they have to stop playing the hate/blame game and start leading. The problem is that their ideas are as likely to make things worse.

I think one step is to stop looking to the government to protect risk. The government shouldn't be bailing out businesses that took risks and loss. Sure it might hurt a lot in the mean time, but in the end the market will be better for it.

I suspect the democrats will end up giving us some more bailouts-especially an auto industry one (like they deserve another-but then the UAW is a powerful union). The sad thing is the democrats will do it but probably find enough useful idiot republicans to go along with it.

But I do think one small part of the problem is that too many companies think they can take great risk because the taxpayer will protect them from any real losses.

We need stronger bank regulation that will lead to stronger banks. We need a curb on short term speculation that will leave room for long term investments. We need to higher wages for American workers for American business to sell products and services to. In short we need to return to the liberal progressive policies we once had in the past when we were growing our economy.

That ended with the recession of 2001.

This idea that government policies can beat the business cycle is a eidolon that has been pursued for decades.

It seems short term thinking has created volatility in the markets yet how do you curb it? One possible way, and I throw it out for criticism, is a total rethinking of capital gains tax rates and holding periods. As it is investors are afforded favorable cap gain rates if the assets are held for more than a year. But what incentives are there to hold assets for two years or five years? Would a system of cap gains tax rates that moves lower the longer an asset is held restore stability and reward investors that invest in such a way to stimulate the economy? Why is one year the magic number for cap gains treatment? Do money managers and traders needlessly buy and sell in a volatile market and would this treatment discourage such behavior?

Trading stocks does not stimulate the economy. Stock offerings by a corporation creates investment capital but once a stock is out there it really doesn't create anything but traders commissions. That said, the price of a stock already issued does have an effect on any new stock to be offered. Long term investors provide stability to that stock price and perhaps they could even remove the incentive for CEOs to pump stock prices in the short term to reap big bonuses.

What might be the downsides to restructuring the cap gains formulas in such a way?

Look, the financial crisis and future economic prospects have been factored in for awhile. The Obama victory is not new news.

If you want to make a political point, please correctly point out that the mortgage mess is a produst of: CRA, Clinton era PUSH of CRA, and failure of regulatory response See: Barney Frank et al.

Second, yes. Higher personal and capital gains taxes are not a prescription for economic vitality. But that's been priced into the market for a while.

We need stronger bank regulation that will lead to stronger banks. We need a curb on short term speculation that will leave room for long term investments. We need to higher wages for American workers for American business to sell products and services to. In short we need to return to the liberal progressive policies we once had in the past when we were growing our economy.

To the extent Obama can accomplish any of this we will see the stock market respond favorably. The more he can accomplish the better the market will react.