Financial Types

This is a serendipitous happy moment.

Not because yesterday was April 15, because April 15 is merely a speed bump on the way to the real filing deadlines in September and October, after which we’ll start on odd year end returns, tax projections, etc., etc. In a real cpa firm, there’s no “off season”. And as a background, accounting and advisory work goes on ad infinitum … We don’t even bother to work hours and hours of overtime. We are trying to have a life here.

But because I’m presented with an unusual opportunity.

I don’t think much of Keynesian economist Paul Krugman, a Nobel Laureate and columnist for the NY Times. But Krugman took a swing at financial types in a recent article that caught my attention. A one time fan (he still is, I believe) of Quantitative Easing, Krugman’s been a big fan of the government’s bungling of the economy since the 2008 meltdown. Plus he’s been highly supportive of quantitative easing, another fiasco that’s digging our hole deeper and deeper, as well as the big government bank bail out that was the impetus for much of the borrowing we’ve done to push the national debt above $17 trillion. To further irritate me, he’s been a constant critic of the Austrian school (which seems to be the only school that has their head on straight) and he’s been on the wrong side of every economic issue since 2008.  All of which contributes to my disdain.

Financial types and equity bankers get a lot of bad press, much of it well deserved, For one thing, as I already mentioned, it was overreaching by this group that caused much of the misery we went through in 2008 and 2009.  And every time I hear Jon Corzine’s name I get a little edgy over all the money that mysteriously went missing when MF Global collapsed, This group obviously gets special treatment from authorities, including in my opinion, the U.S. Congress. From which inadvertently comes the good they’ve done the public welfare.

This is probably the only opportunity I will ever get to say anything good about financial types, giving them credit for something nobody gives them credit for, without it coming completely out of left field and giving you the impression I have a secret affection for equity bankers, which I don’t. (No need to come out of the closet.)  But I do recognize they have inadvertently done some good for the public welfare, which today I will give them credit for, even though it was done inadvertent and ancillary to satisfying their own interests. But so what? Good is good. No need to look any deeper. So here goes. I’m jumping on this opportunity, coming as it does with the opportunity to dis on Krugman at the same time. 

There is one good thing about financial types. This one good thing comes because they and trial lawyers, having a lot of excess cash and having a lot of taxable income (millions and millions) gives them the ’cause de celebre’ and the means to defend the loopholes that save them a tons of money in tax. Which inadvertently improves the public welfare, at least for the public that happens to be our clients.  Because these groups contribute more money to political causes than any other groups in America, when they talk, Congress listens. And for that, we can thank them that many of the tax preferences and tax savings devices that Congress embedded in the tax code in search of votes for the last 50 years still haven’t been expunged. I can think of specific tax preferences and tax savings devices that are routinely targeted every time tax reform comes up. But when the dust clears, they’re still with us.

One thing you can say about the U.S. Congress, they’re not stupid enough to bite the hand that feeds them.  In my regular emails to clients,I often give thanks for equity bankers and trial lawyers. They may be scabs on the butt end of a rhinoceros, but for this one thing, I applaud them.

Thank you.