Back to the Hertz Lady tomorrow, but today, three more important things:


So just how well did you do last year if you followed the strategy outlined in The Little Book That Beats the Market?

Dan Galbraith: ‘I’ve been following the program for about 9 months, and although Quicken tells me I’m doing better than all the indexes (Russell 2000, NASDAQ, DJIA, S&P 500) I’m not getting the returns some of the other folks say they are getting.’

☞ Ah. Well, this, from Ivan, may help explain it:

Ivan Maltz: ‘I was wondering why Dan and Don had such differing results, until I realized that their returns were really about the same, and paralleled my own results. After following the program all year, my magic formula portfolio is also up 16.7%. As recommended in the book, I staggered my investment throughout the year, buying five stocks every two months. So on average, my portfolio was only invested for half the year. The 16.7% return translates into an annualized return of better than 33%. The book warns that returns can be quite variable from one year to the next, but with a start like this, the long term performance should be quite satisfactory.’

☞ Yeah, 33% annualized beats a whack in the head with a skillet. (A new Boston Legal airs tomorrow night.)


Did you see ‘The McLaughlin Group’ on PBS a week ago Sunday? I didn’t either, but my Tivo did. It was the New Year’s Eve show organized around the ‘best and worst’ of 2006.

McLaughlin teed it up for his panelists, who range from Pat Buchanan on the right to Eleanor Clift on the left:

Who was the MOST UNDER-RATED person of 2006?

PAT BUCHANAN answered: ‘Howard Dean really hasn’t gotten credit for his 50-state strategy which quite frankly WORKED.’

To which ELEANOR CLIFT immediately responded – perhaps the only time all year she has agreed with Pat Buchanan – ‘Right. That’s exactly my nomination. Kudos to Howard Dean.’

Nice to hear.


From the Washington Post, Saturday:

PRESIDENT BUSH wrote in a Wall Street Journal op-ed Wednesday that “it is also a fact that our tax cuts have fueled robust economic growth and record revenues.” The claim about fueling record revenue is flat wrong, and it is shocking that the president should persist in making such errors. After all, tax cuts are the central plank of his domestic policy. How can he fail to understand the basic facts about them? . . .

. . . In a period when it was run by Douglas Holtz-Eakin, another economic conservative who worked in Mr. Bush’s White House, the CBO estimated the extent to which a 10 percent reduction in personal taxes might pay for itself. On the most optimistic assumptions it could muster, the CBO found that tax cuts would stimulate enough economic growth to replace 22 percent of lost revenue in the first five years and 32 percent in the second five. On pessimistic assumptions, the growth effects of tax cuts did nothing to offset revenue loss.

It’s evident to almost all that on matters of foreign and military policy the Republican strategy has been a disaster. This is mostly the fault of Bush/Cheney and their team, but it was certainly not challenged by the Republican Congress.

It’s less evident – but I think equally true – that in its economic priorities, primarily to lower taxes on the rich at the expense of everyone else, the Republican agenda has dramatically weakened the country as well.

No, no, they argue – there is no piper ever to be paid; tax cuts lead to more tax revenue. Well, they did when Kennedy cut Eisenhower’s top marginal rate from 90% to 70% (which was still wildly too high). But after a point, obviously, lowering tax rates lowers tax revenues, thus plunging us ever deeper into debt.

The Bush years have been a positively grand time to be rich and powerful in America. But we will have amassed $10 trillion of National Debt by the time the White House changes hands – of which $8 trillion, accumulated since 1776, will have been racked up under just three presidents: Reagan, Bush, and Bush. The annual interest on that debt already consumes 40% of all the personal income taxes we pay. And that’s with the forbearance of our foreign creditors, who thus far have not demanded higher rates to compensate for the falling dollar.

The Washington Post editorial cites two other sets of data (one from President Bush’s own Treasury Department) that put the lie to the notion that Bush’s tax cuts pay for themselves in economic growth.

It concludes:

Mr. Bush’s op-ed included nice statements about bipartisan cooperation. But the Democrats would be more likely to cooperate with the president if he stopped making things up.


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