The Economy is Job One

Warren Buffet, billionaire investor, says tending to the economic crisis is job one.

That it is, and for the most part, that is where taking advice from billionaires should end.

If we are to prioritize the action to be taken by the new administration and congress, with the economy being job one, progressing the tax code is the very first step to take in priority. Instead, however, action was immediately taken to finance healthcare with a regressive tax burden. The leadership was so concerned with winning a political game that the very measure to nourish economic health was abandoned to win it.

This kind of political gaming, to win at any cost, is not the model of pragmatism, but a self-satisfaction that is characteristic of a detached elite. The cost is that we do not have the benefit of a more progressive tax code any time soon to, for example, regain the multi-million dollar AIG executive compensation with at least some good measure of being both legal and properly equitable. Instead, it appears everything we are doing is frought with a good measure of inequity.

If the Obama administration is looking for advice, here it is: progress the tax code and do it now! Utilize the gamers and the gaming in the administration and congress to achieve the priority. Doing this will be Strong Pareto Optimal as opposed to what we have now being all of a sub-optimal benefit.

We need to recapitalize the economy from the accumulated benefit. That is accomplished through progressive taxation. The cyclical squeeze of illiquidity (deflation) is putting small businesses out of business and it is more difficult for start ups. The data is there to support the hypothesis that the classical effect of the cyclical trend is consolidating the capital and markets.

The capital needs to be deconsolidated and made available through the small business administration to provide a competitive multiplicity of the marketplace, and all of the Strong Pareto Optimality that comes with it. It can't be anymore expensive, certainly no more an onus, than bailing out what is "too big to fail." Quit alluding to it, gaming with those that are too big to fail, and just do it!

Pluralizing the marketplace with a progressive tax code, with no exemptions, renders the business model of "too big to fail" the model of inefficiency that it really is by providing an empirical comparison--an empirical measure of efficiency, continuous improvement and accountability, both micro and macro, that being too big to fail cannot, by definition, provide.

Everybody benefits (Strong Pareto Optimality), even a billionaire looking for accurate valuations and strong economic fundamentals, like Warren Buffet.

There it is, all the advice you need but are not likely to fully get.