The Shell Game

Well the fiscal cliff ended in the usual way – bipartisanship – which means that The Party screwed over the oblivious citizenry, which once more found the pea under the wrong shell. The legislation provides $205 billion in corporate tax breaks for the usual suspects who have paid the necessary bribes, such as Goldman Sachs ($1.6 billion in tax-free financing for a new headquarters building), Hollywood moguls, NASCAR, GE, Caterpillar and JP Morgan. To partially pay for these breaks, individual payroll taxes were raised by about $155 billion. Tax rates were also raised on high income individuals – who generally manage to sidestep such increases. But it makes good propaganda in the class struggle. President Obama returned to Hawaii (another $3 million).

Happy New Year! (same as the old year).

Lost in the bipartisan shuffle was another fall in European PMIs and a barely positive Chinese PMI. It’s all good, I guess. One pundit attributed today’s market rally to “a sigh of relief that the world’s largest economy would avoid recession.” Fat chance, chum.

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