Some people are writing about the difference in policies between former president George W. Bush and current Texas governor Perry. It seems, they say, that they just don’t see eye to eye on a lot of things. I am more concerned about their likeness in leadership style. Both, as I understand, suffer from cronyism. Unabashedly, taking care of old or well-off friends, maybe at the expense of everyone else. Therefore, denying Texas and the country of first-rate people. If Perry were elected president, we might have “heck of a job Brownie’s”, running around all over the place up there.
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Some people are writing about the difference in policies between former president George W. Bush and current Texas governor Perry. It seems, they say, that they just don’t see eye to eye on a lot of things. I am more concerned about their likeness in leadership style. Both, as I understand, suffer from cronyism. Unabashedly, taking care of old or well-off friends, maybe at the expense of everyone else. Therefore, denying Texas and the country of first-rate people. If Perry were elected president, we might have “heck of a job Brownie’s”, running around all over the place up there.
Wall St. thinking has made a visit all the way to the Tennessee hills. Sen. Bob Corker of the Baker Machine came to the area a few days ago talking the economy and answering questions.
Corker says we need to lower the corporate tax structure from 35% to 23-29%. If you’re Wall St., every little bit helps ! Furthermore, Corker says we should not penalize companies with overseas operations, when they brought money earned overseas back to the United States. I don’t know if anyone asked Corker what the effective tax rate was for corporations. But, that would certainly be a good question. Our tax code is filled with “goodies” for the corporate world. That is why General Electric has no taxes to pay. I expect all this talk about eliminating loop holes in the tax code in exchange for a lower corporate rate will be met with resistance. Corporations don’t want you to mess with their tax advantages. They might just prefer to keep the higher rate. As for taxing overseas corporate earnings, the American government has written or implied legal and moral obligations. I don’t recall seeing where Coca Cola, Emerson Electric, or Wal-Mart had a floating navy or a State Dept. to support. It is a bad world out there and we have many advantages for American corporations. Of course, corporations can always do like Halliburton and change their residence. You have to watch the corporations for tax angles. They spend a lot of money for good accountants and tax attorneys. It seems, you can always count on Wall St. to have their hand stuck out. The next time Corker comes to the area, I need to ask him some economic questions ! Pimco’s Bill Gross wrote an article in the Washington Post today that has some good, well-said points. He wants increased demand. This is what is lacking, according to Gross.
If you want a consumer economy, then you have to establish capital formation at the most personal level. That means a steady, viable, and sustained saving rate. But, at the height of the consumer bubble, we had a basically zero saving rate. Even tipping into a negative rate at times. The American people(consumers) were running wide open. In retrospect, the fiscal and monetary polices, were effectively anti-consumer. This was vividly revealed in the lackadaisical attitude toward debt. The jubilant VIce President Cheney declared, “debt don’t matter anymore”. Wall St., the bankers, financiers, etc. developed such an insatiable taste for more revenue. It is like they had blinders on. And, if you leverage a lot, you have to patiently deleverage a lot. Demand very well may have receded, but it had powerful motivators. Gross mentions some of those, such as demographics and globalization. Why not let demand naturally heal ? Why not set long term goals ? Why not support a moderating lifestyle ? A little breathing room. If debt is a symptom, as Gross says, it has bigger implications than just economic policy. The Federal Reserve is helpless to try to improve the economy in an overall way. They can barely help equity dealers. WSJ did an editorial this morning about the Fed’s helplessness. The article also mentioned the threat of contrived inflation, and how the middle class, what is left of it, would get the short end of the stick. No surprise ! Surely, the Fed can figure out “trickle-down” is faulty policy; the American consumer age is passing; and the Federal Reserve can only marginally assist our debt and fiscal dilemma in an efficacious way. This should be a humbling experience for the Fed.
S&P may have downgraded our credit rating, but don’t look for a political downgrade. Depending on whose study you follow the approval score for our elected Congress drifts from 18% to single digits. How low can you go ? Soon Congress will have to look up to see the bottom.
Sound bites, catch phrases, cliche’s, and platitudes are the language of re-election.
When you hear a politician say, ” no cuts in Social Security and Medicare ” , this is what they have been programmed to say to enhance their re-election. This is usually the Democrats doing the talking. These are sound bites that reap dividends. Likewise, when you hear Republican politicians say, “no tax increases”, they are playing sweet music to their constituency and hoping for converts. Ah, the language of re-election. Politicians must avoid, at all cost, a rational discussion, considering the history and purpose of the policies and values they yell about over the air waves. There can by no meaningful debates or exploration of the truths of what we espouse. Goodness, we might end up with a consensus. Political discourse must be reduced to the most simple language. The language of re-election. Having an opponent and a dogma is safest for re-election. What confusion would be brought to bare if the public were told, in a consensus mode, that Social Security and Medicare were “suppliants”. Meaning, that all your life, you must also make financial preparation for your final years. We simply cannot leave it all to the government. What if the public knew that our revenue(taxes) as a per cent of GDP were at historically low levels. Also, what if they were told, the tax code manipulations, for the past 30 years, have indisputably favored the very wealthiest citizens. And, when the right-wing radio announcers declare that the wealthiest 10% of citizens already pay 50% of the taxes now ! So, why should we pick on them ? They are just trying to be successful and make an honest dollar. The pundits are looking at this data wrong-eyed. Maybe, just maybe, the top 10% are making more money than they should and thereby have to pay more taxes. Is a medical doctor of today worth 3 or 4 times more money than the doctor in 1975. I doubt it. When we correct our debt mess we will cut entitlements and raise revenues. Every serious look at the nations balance sheet has come up with the same answer. A benefit of the debt crisis has been all the focus on Congress and the President. The wider pubic are now talking about public policy and public affairs. Something that has been left to the elites and the wealthy. The lengthy debate has given light to incredible ineptness.
The current class of national politicians, both left and right, must operate in the dark, like rats. It don’t take much illumination to blow their cover. |
AuthorBill Bays Archives
April 2016
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