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Republicans vs Whom?

12/23/2011

The media hyped a contest over the payroll tax extension as a Herculean battle between Republicans and the President.  I saw it more as a struggle between the Republicans and the Tea Party.

And, did it really matter anyway?  This two-month extension is trivial in comparison to the battle this summer over the debt ceiling, which caused a loss of our AAA, a thousand point drop in the Dow, and the Fed to more actively manage interest rates.

Would the economy have been hurt without this extension?  Yes, but not much, and the Social Security Trust Fund would have actually been better off.

The market seems to have the same ho-hum attitude about it, as futures indicate the Dow will gain about 30 points this morning, no big deal.  (Could it be the Dow will have four consecutive positive days?)

The only lingering annoyance about this battle was the role uncertainty played.  Both sides argued the economy was crippled because of high uncertainty.  They make it sound like uncertainty is something we are not familiar with.  Business and individuals deal with uncertainty everyday.  That is part of life.  Of course, any modest increase in uncertainty is not good, but it is also not that crippling . . . or new.

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