Some 2006 data. The lowest 50% of earners paid only 3% of total income taxes (although they have 12% of total income). This is why people vote for more spending and big government. Half of them are not paying anything, for all practical purposes. This is the argument for a flat tax, and why it is so strongly resisted by government. It gives voters an incentive to keep government spending under control.

Jim Grant writes in the WSJ - Why No Outrage? Good question.

Huey Long, who rhetorically picked up where Lease left off, once compared John D. Rockefeller to the fat guy who ruins a good barbecue by taking too much. Wall Street habitually takes too much. It would not be so bad if the inevitable bout of indigestion were its alone to bear. The trouble is that, in a world so heavily leveraged as this one, we all get a stomach ache. Not that anyone seems to be complaining this election season.

In an interesting side note, the SEC has issued an exemption to the naked shorting prohibition it recently promulgated. Who, you might ask, is exempted? Well, just the boyz whose stock everybody else is prohibited from shorting. The SEC once more fulfills its role of protecting the industry’s compensation at the expense of the investing public.

Jim Grant asks, why no outrage? Well, there is a plentiful supply right here. And elsewhere. But so long as the “two-party” oligarchy runs the country, outrage is futile. Vote Libertarian. Vote for real change, not just rearranging the office allocation on Capitol Hill amongst a mostly hereditary clique of permanent professional politicians.

Speaking of outrage, how about the spending on the President’s personal helicopter fleet, “Marine One” ? Mostly just 10-minute shuttle flights to and from Andrews AFB. The price tag, for 28 helicopters, get this - $11.2 billion. Talk about the imperial presidency, even Caligula or Commodus would blush at this kind of expenditure. That’s roughly $100 per U.S. household, to say nothing of personnel and operating costs. Just for occasional personal transportation.

The Soviet experiment showed beyond reasonable doubt that, even with no restriction on authority and compulsion, one could not successfully control an economy. Today, the Soviets are mocked. How could anyone think that you could control an entire economy?

Today people expect the Fed, with limited authority over the monetary base, bank regulations and interest rates, to succeed where Gosplan failed. And they see no contradiction in doing so. Amazing. What is especially amazing is that even Mr Bernanke, who is an economic historian, appears to believe that he can steer the economy. Yet the evidence is clear that government attempts at economic management always increase entropy.

The stock market thrashes around under the control of the program traders; it is expiration week, after all. The economic news is poor - producer prices up 9.2% year-over-year, nominal retail sales up 0.1%, which means a fall in real terms. The SEC is restricting short-selling of shares of the GSEs and the brokers, which is another sign of panic - and by the way, shows the SEC’s real mission of protecting the industry from its customers. Financial stocks are up a bit, but the real energy continues to be focused on the over-loved and over-priced technology stocks, which are still well above their March lows (as represented by the Nasdaq 100, anyway). Oil fell today, although it needs to fall a lot more to make any economic difference.

The market is still ludicrously overpriced. Must be that dark energy holding it up, countering the force of gravity. Do dark pools contain dark energy?

Edit: And for a chuckle. Well half a chuckle, half a sigh. Recession-Plagued Nation Demands New Bubble To Invest In. A little too close to the truth, I fear.

I must say, watching the market action this morning, that it is remarkable (which would be why I’m remarking on it) how little concern people have about the ongoing disintegration of the financial system. Over the weekend, the second largest mortgage lender (Indymac) was taken over by the FDIC, and the government nationalized mortgage lending for all practical purposes. Somehow, this is seen as a good thing for investors. I suppose it is a de jure recognition of a situation that has existed de facto ever since the collapse of the mortgage securitization market, but even so I hardly think that it is a cause for optimism. I could understand a buying spree if the market had priced in a collapse of mortgage lending, but that it clearly not the case.

Apple did good business with the 3G iPhone, apparently, so people still have money for toys. One wonders for how much longer.

In another sad echo of the past, the SEC is starting a witch-hunt in order to eliminate bearish rumors. Any and all bullish false statements are OK, of course.