Tuesday Reads

Good Morning!

The Republicans continue to tear each other apart as the 2012 elections get closer.  Karl Rove considers Herman Cain “not up to the job”.   Bachmann’s former NH staff have released a letter that puts the candidate in a bad light.

“Team members were repeatedly ignored regarding simple requests, sometimes going weeks with little or no contact with the national team,” they wrote.

The former New Hampshire staffers said they maintained a sense of loyalty to Bachmann as a candidate and were willing to continue helping her despite lingering uncertainty about payment of wages.

“Sadly, they were deceived, constantly left out of the loop regarding key decisions, and relegated to second-class citizens within a campaign in which they were the original members,” the group said.

The ex-staffers laid out a timeline very different from the one put forth by the Bachmann campaign, claiming that the New Hampshire campaign manager, Jeff Chidester, resigned in an email 10 days ago. When nobody reached out to the other staffers to address their concerns, they called it quits.

Meanwhile, Cain and Gingrich are going rogue by trying to have their own debate in Texas with Tea Party activists.

Presidential rivals Herman Cain and Newt Gingrich (R-Ga.) will participate in a “Lincoln-Douglas” influenced debate hosted by Tea Party activists in Texas next month, National Review is reporting.

The debate will focus on fiscal issues and the economy, and will be moderated by Rep. Steve King (R-Iowa).

“We initially wanted a forum with all of the candidates,” Bill O’Sullivan, treasurer for the Texas Tea Party Patriots, told National Review. “But when we heard Gingrich say he wanted a more serious debate, like the Lincoln–Douglas debates, we wanted to do that, especially since watching the recent superficial debates has been frustrating.”

Rick Perry has introduced his tax plan which is a flat tax plan of 20%.  As expected, it will give a huge tax break to the wealthy and to corporations.  It also would eliminate inheritance  and capital gains taxes.  Perry seems to think that middle class tax payers will  be able to appreciate those things too!  What a moron!  Here’s some of the plan’s major points.

  • “The plan starts with giving Americans a choice between a new, flat tax rate of 20% or their current income tax rate. The new flat tax preserves mortgage interest, charitable and state and local tax exemptions for families earning less than $500,000 annually, and it increases the standard deduction to $12,500 for individuals and dependents.”
  • Elimination of the estate tax
  • Cut the corporate tax rate to 20 percent.
  • Temporarily lower corporate tax rate to 5.25 percent to encourage repatriation.
  • Transition to “territorial” tax system that only taxes in-country income.
  • Eliminates the tax on Social Security benefits
  • Eliminates the capital gains tax

I wanted to share the first of this Bloomberg series on bias and blindness by one of the father’s of behavioral finance Daniel Kahneman.  He explains some of the frames folks use that some times leads them to make bad decisions in the face of risk.  Optimism evidently leads to excessive risk taking.

The evidence suggests that an optimistic bias plays a role — sometimes the dominant role — whenever people or institutions voluntarily take on significant risks. More often than not, risk-takers underestimate the odds they face and, because they misread the risks, optimistic entrepreneurs often believe they are prudent, even when they are not. Their confidence sustains a positive mood that helps them obtain resources from others, raise the morale of their employees and enhance their prospects of prevailing. When action is needed, optimism, even of the mildly delusional variety, may be a good thing.

An optimistic temperament encourages persistence in the face of obstacles. But this persistence can be costly. A series of studies by Thomas Astebro shed light on what happens when optimists get bad news. (His data came from Canada’s Inventor’s Assistance Program — which provides inventors with objective assessments of the commercial prospects of their ideas. The forecasts of failure in this program are remarkably accurate.)

In Astebro’s studies, discouraging news led about half of the inventors to quit after receiving a grade that unequivocally predicted failure. However, 47 percent of them continued development efforts even after being told that their project was hopeless, and on average these individuals doubled their initial losses before giving up.

Many House Democrats don’t think the Obama plan to help homeowner’s with underwater mortgages goes far enough.

“It’s far too little, it’s just baby steps,” Rep. Dennis Cardoza (D-Calif.), a longtime critic of the administration’s housing policies, said in a phone interview. “They’re still not getting it.”

Cardoza, who announced last week he’ll retire at the end of 2012, noted that the housing collapse was a leading cause of the recession but among the last to be addressed.

“We need to excise the cancer that caused the illness before the patient can recover,” he said.

Rep. Lois Capps, another California Democrat critical of the administration’s foreclosure-prevention efforts, echoed that concern Monday, saying “much more is needed” to stabilize the struggling housing market.

“Today’s announcement is an encouraging step forward, but it is only one of a number of steps needed to fully address the growing foreclosure crisis,” Capps said in an email.

Here’s some common sense from Bernie Sanders speaking on the Ed Show and a few comments on the President’s program.  Senator Sanders also thinks the plan does not go far enough

So, that should get us started today. What’s on your reading and blogging list today?