Sunday, September 4, 2011

Deconstructing Jon Huntsman: An analysis of his Time to Compete: An American Jobs Plan

I hope this critique of the Presidential nominee’s economic plan demonstrates that is possible to disagree with a man’s policies without having to question his patriotism or love of America.  I am also not naïve to believe that suddenly attacks on President Obama’s character will come to an end.
Firstly, let me say that I think Jon Huntsman is a good man who served his country admirably and his constituents in Utah.  I do not question is patriotism or his love for America.  That being said, I do not agree with considerable parts of his economic plan.  In general, Huntsman is a devout Reaganite who sees growth solely through the supply side lens ground from the silicon of tax cuts, deregulation, and free trade with a smattering of gas and oil exploration.  Let’s begin:

Tax Reform
Let’s be clear that when a Republican says tax reform, he really means tax cuts.  In Huntsman case, his tax ‘reform’ pillars are marginal rate cuts and elimination of the Alternative Minimum Tax (AMT) and Capital Gains Tax.  Huntsman’s plan is based on his success as governor of Utah.  The problem is governing Utah and governing the USA are not quite the same.  Nonetheless, a Huntsman plan will flatten tax rates to 8%, 14%, and 23% and eliminate ALL deductions: mortgage interest, child deduction, earned income tax credit, and would likely require veterans and social security recipients to now be taxed on their income.  Eliminating the AMT and Capital Gains Taxes are bones thrown to the rich to help them swallow the medicine of other tax changes.  These two eliminations will not increase jobs, they will allow the wealthy to save more and purchase their yachts and jets, which are not stimulative.  Huntsman wants to lower marginal tax rates for business; that’s fine as long as you eliminate ALL subsidies, rebates, and loopholes.  Good luck fighting those special interests.  But I save the biggest criticism of his plan to allow repatriation of the $billions of foreign earned profits via a tax holiday.  This is a crock that was tried before as the American Jos Creation Act of 2004/2005 (I can hear Dick Cheney laughing at the thumb in the eye title of the provision). 
In summary, Huntsman’s Tax Reform Plan will not generate job growth but only increase the coffers of the rich and businesses; two entities that have been booking profits and earnings at record levels.  Sorry Jon, there is nothing here to help the middle class, the true economic engine of this country.

Regulatory Reform
In essence, Huntsman wants to repeal all regulations passed in the last ten years from Sarbanes-Oxley to the Affordable Care Act and Dodd-Frank bank regulation.  In other words, Huntsman wants to eliminate all oversight on big business and finance; has he completely lost all memory of recent debacles in this country.  As for the ACA, apparently Huntsman doesn’t think that our citizens should be denied health care coverage due to pre-existing conditions and that parents shouldn’t be able to keep their kids on their insurance until they are 26.  Worse, Huntsman offers no real alternatives.  Huntsman other bullet points include gutting the NLRB, EPA, and other agencies so that businesses will be further unencumbered from any sort of compliance.  On one subject Huntsman came in a day late and a dollar short, President Obama has already backed off on the new ozone mandate from the EPA.  I do agree with Huntsman’s desires to reform the patent office and process and the FDA and the drug and device approval process.  What Huntsman fails to realize is that you can eliminate waste in the transactional process, but to truly cut the approval process and enhance safety will require major reforms and money.  Finally, want to know why the German, Canadian, and Australian financial sectors survived the finance community induced Great Recession:  Regulations.

Energy Independence
Huntsman will lead you to believe if we unbind the gas and oil companies to drill and frack at will we will gain energy independence and produce jobs.   Well at least he didn’t pull a Bachmann and say he could get gas prices below $2.  Fact is we do need a short/mid/long term plan that maximizes domestic production SAFELY, cuts our consumption of fossil fuels, and promotes alternative energy sources.  Ultimately, Huntsman will have to reconcile the opposing forces of approving safe environmentally sound energy projects.  At least Huntsman appears to understand that science is good and perhaps he will understand the science of fracking isn’t as safe he pronounces.  Also, I agree with his position to promote alternative energy sources, but he in unclear if he will eliminate subsidies for conventional sources such as gas and oil drilling. 

Trade
Clearly Huntsman is a big proponent of Free Trade agreements, though these agreements only work if you have something in your country that someone else wants.  And on the global scale, what exactly are we producing that the rest of the world wants other than corn and pharmaceuticals?  We can’t sell our beef, no one wants our cars, military equipment is tightly regulated, and anything else with an American company name on it is produced elsewhere.   Free trade agreements will not get American workers back on the job.  On a side note, Huntsman blames Obama for the unapproved South Korean trade agreement, when in fact it is stuck in Congress and in the South Korean parliament.

In conclusion, I like Jon Huntsman and I think is about the only credible candidate from the Republican side.  That being said, he clearly drank the Reaganomic Kool-Aid but his plan lacks credibility as his reforms will do nothing for the middle class.  And the last time I checked our economy is still driven by consumer spending to the tune of 70%.  Sorry Jon, I give you  a C-.

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