Some months back, a baseball player appeared before a Congressional panel for a hearing on drug abuse and his alleged participation. Later, there were perjury charges. At the conclusion of the hearing, some Congressmen were seeking his autograph.
This week the CEO of J.P. Morgan, Jamie Dimon, made an appearance before the Senate Banking Committee. The hearing, part of the aftermath of the recent publicized losses by the investment bank. Of course, it was a farce. Although, I did not watch the hearing; I read about it. Nothing of substance, that I recall, emerged from the sort of one-way conversation. Mr. Dimon, suffered through much ego build-up, by the fawning Senators. After all, you are one of the best CEO’s in the country, etc.
Why wasn’t the discussion about breaking up J.P. Morgan and the restoration of Glass-Steagall ? Maybe then, Mr. Dimon would have broken sweat.
30 U.S. Senators, both new and old, are trying to explore ways to extricate ourselves from the current economic malaise and debt. These 30 Senators, headed up by Sen. Alexander of Tennessee and Sen. Warner of Virginia agree, as reported, on reducing corporate taxes. Apparently, this is an informal gathering of llke-minded Senators. Other solutions, I assume, are still open for debate and resolution.
What is the rationale for cutting corporate taxes ? American corporations, particularly the formidable ones, are sitting on cash with good balance sheets. At the same time, the corporate world is highly concentrated, and becoming more concentrated each day. We are less and less of a free market economy. Corporate CFO’s have become like investment bankers. Would not corporate tax relief accelerate this behavior and resistance to risk in the board rooms ?
High marginal corporate rate is 35%, and accompanied by numerous tax gratuities, usually referred to as loopholes. Historically, corporate tax in America has been higher, with a higher share of GDP. Currently, it is about 1.3 % of GDP and tax revenues on corporations is near 9 %. In the 1950’s corporate tax was 6 % of GDP. But, you don’t have to go back to the 1950’s for comparison. Just go to the 1980’s to get a historical perspective of corporate tax rates.
When you compare our corporate tax rate with all the deductions, credits, and deferrals; it brings our top-heavy economy into focus.
No doubt, some of these Senators thinking has been polluted by two fantastic myths : (1) that tax cuts will produce commensurate economic growth and (2) growth alone will solve our debt condition.
We do know, and, these Senators know quite well, that wealth is polarizing every day. I hope we don’t have to remind the Senators what this will ultimately mean for America.
Maybe these 30 Senators that want to cut corporate taxes are 30 reasons we are in the mess we are in.
Sunday, the Washington Post published an article titled, ” Why Dan Quayle was right about Murphy Brown.” It reported of findings from a study done by Isabel Sawhill of the Brookings Institute, on the values of traditional marriage.
I remember well Vice-President Quayle making his criticisms against a television program presenting an out of wedlock birth. The episode was taken, by many, as an effort to change the mores, and adapt a degenerate lifestyle, practiced by too many in the entertainment business. But mostly, I remember the media and political reaction to Quayle’s position. He was ridiculed and given guffaws from the news and entertainment establishment on a regular basis for days.
The study by Ms. Sawhill, shows the broad advantages of children who are fortunate to be reared in a home by a married father and mother. Also, the disaster, generally, that has resulted in all the alternative arrangements.
But, you can count on the media establishment to be a day late and step behind. Yet, they think they are out front and leading us forward to a great new day. After current Vice-President Biden’s coming out for same-sex marriage their cry was; if only the country will catch up and become enlightened, like us. Especially, those backward and pitiful people down in North Carolina.
Wait until the data comes flying through the door on child-rearing results of two homosexual males that adopt a baby ! If that data reveals what I expect, we will once again see the unreliability of the group-think media establishment.