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Buffett Rule Didn't Go Far Enough: Seven And A Half Things To Know

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In this Nov. 14, 2011 photo, Billionaire investor Warren Buffett speaks in Omaha, Neb. As expected, the Buffett Rule died in the Senate.
In this Nov. 14, 2011 photo, Billionaire investor Warren Buffett speaks in Omaha, Neb. As expected, the Buffett Rule died in the Senate.

Scientists still aren't sure if they accidentally found evidence of life on Mars 36 years ago, but they are sure you need to know seven and a half things each day. Here they are:

Thing One: Mind The Gap: Millionaire readers can rest easy: Your money is safe today. Everybody else might need to worry.

As expected, the Senate yesterday killed the Buffett Rule, which would have raised taxes on millionaires. An alternative bill by Eric Cantor (R-Wis.), which would cut taxes for some small businesses, is also expected to die in the Senate. The net result is that both parties have been forced to make unpopular votes so that they can say nanny-nanny-boo-boo to each other for the next six months. This is your democracy.

Meanwhile, left untouched will be the yawning income gap the Buffett Rule was meant to address, the worst since the Great Depression, according to economists Emmanuel Saez and Thomas Piketty, profiled in The New York Times. In fact, they say the Buffett Rule wouldn't have gone nearly far enough to address income inequality: "As much as Mr. Piketty’s and Mr. Saez’s work has informed the national debate over earnings and fairness, their proposed corrective remains far outside the bounds of polite political conversation: much, much higher top marginal tax rates on the rich, up to 50 percent, or 70 percent or even 90 percent, from the current top rate of 35 percent."

The U.S. economy once had even higher tax rates on the wealthy than that, and did just fine. Meanwhile, too-low tax rates on the wealthy, according to Piketty and Saez, are a drain on government finances, which eventually hurts the whole economy. Ezra Klein, in the Washington Post, quotes economist Peter Diamond: “So instead of the current Washington fight between Bush and Clinton tax rates, let’s think of the fight being between the Johnson/Ford/Carter tax rates and the tax rate we had after Reagan’s initial cut."

Thing Two: Less Pain In Spain: Spain this morning had little problem selling a bunch of new debt. Though Spain had to pay higher rates to borrow than it did a month ago, always-optimistic marketeers see the demand for Spanish debt as a good sign and are driving European stocks and the euro higher this morning. But Spain's finances are still a huge mess, and Spain may try to take charge of its regional budgets, which are in even worse shape than that of the central government, the Wall Street Journal writes. And the European Central Bank has little appetite for another rescue any time soon, writes The New York Times. It had better hurry up and get hungrier.

Thing Three: Argentina Turning Venezuelan: Argentina's President Cristina Fernandez wants to take control of that country's biggest energy company, YPF, Reuters writes, "drawing swift warnings from key trade partners and risking the country's further economic isolation." Fernandez has been angry that YPF, currently controlled by Repsol, hasn't been producing enough oil and natural gas. She has nationalized other industries before, moves popular at home but not so popular in the U.S.

Thing Four: Apple Loses Shine: Apple is the biggest public company in the U.S. and has become the giant braying canary in America's stock market coal mine. So we all suffer when its stock price pretty much collapses in the space of a week, as it has done recently, for no apparent reason other than that it just got way too far ahead of itself, write Steven Russolillo and Jonathan Cheng of the Wall Street Journal's MarketBeat blog, slumming on the WSJ's front page.

Thing Five: Transparent As Mud: The Federal Reserve, faced with a Freedom of Information Act request from The Huffington Post and Dylan Ratigan, has reluctantly handed over minutes of its policy meetings during the crisis. Funny thing is, though, it redacted pretty much everything of interest from those minutes. Fortunately, it at least left the names of meting participants in the documents, and Ryan Grim and Ariel Edwards-Levy of HuffPost helpfully track how many of those people have taken their top-secret Fed information into the private sector with them. More than a few, it turns out.

Thing Six: Post Office, Rescue Thyself: Mail carriers are not content to watch the U.S. Postal Service just roll over and die. The mail carriers' union will today propose measures to bolster the post office's finances, reports the Wall Street Journal: "In a report to be released Tuesday, it sharply criticizes the agency's own rescue plan and argues the Postal Service will become profitable only if it restructures itself like a business."

Thing Seven: Kim To World Bank: Shocking few, the World Bank board chose President Obama's nominee, Dartmouth President Jim Yong Kim, to be the bank's next president. Critics bemoaned the clandestine, predictable selection process, but the process has already changed for the better, if only slightly: Kim is the first World Bank president not to come from politics or finance, and there was actual competition for the job from developing nations for the first time.

Thing Seven And One Half: Now This Is Happening: The "hologram" (really a 2D projected image) of Tupac Shakur that performed at Coachella was such a huge hit, there are plans afoot to take the Living-Dead Tupac act on the road with other, presumably living, rappers, the Wall Street Journal writes. "Representatives for Dr. Dre and Snoop Dogg plan to discuss logistics for a tour involving the two performers and the virtual Tupac, according to a person familiar with the discussions."

Calendar Du Jour:

Economic Data Releases:

8:30 a.m. ET: Housing starts and building permits for March

9:15 a.m. ET: Industrial Production for March

Corporate Earnings Reports:

All before 9:30 a.m.:

Comerica

Goldman Sachs

Johnson & Johnson

Coca-Cola

After 4:00 p.m.:

Intel

CSX

Heard On The Tweets:

@dashb0t: Yet another job interview I totally botched. RT @clusterstock: World Bank Selects Jim Yong Kim As New President

@ObsoleteDogma: "Got GDP?" RT @jimtankersley: Wait. Waiiiiiiiiiiiiiit. They make FRED hoodies??? http://bit.ly/HHVXgc

@ReformedBroker: Dow at the day's high, buyers coming in with cash like Secret Service agents on a "scouting trip" $DIA

@JBFlint: I will not rest until there is a Pulitzer for tweeting!

@sethdmichaels: No Pulitzer awarded for editorial writing. A cabbie in Bangalore will later explain to Thomas Friedman how that's a metaphor for deficits.

@viewfromamerica: @LaMonicaBuzz They might as well call the NASDAQ the '$AAPL index'.

@sarsathome: I saw mortgage backed securities at a loft in Brooklyn in 2004. I thought they were overrated. #econohipsters

@moorehn: I used to consume regular Fed data, but now I look for vegan-friendly, soy-based locally grown alternatives. #econohipsters

@felixsalmon: Yes, I advise a hedge fund. But only ironically. #econohipster


justinwolfers
: And there you have it: #EconoHipster (or is it #EconoHipsters?) is officially trending in the US. Time to jump off this bandwagon.

-- Calendar and tweets rounded up by Khadeeja Safdar.

And you can follow us on Twitter, too: @markgongloff and @byKhadeeja

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