Tuesday, March 19, 2013

Washington DC: Arrested Development

Sometimes I feel like Moe because every now and then Larry and Curly need to get smacked upside the head.  I watch the complete political dysfunction in Washington DC, and I come away with the following impressions:

1)      Our economy is growing IN SPITE of the federal government

2)      The only jobs politicians are interested are their own

3)      Courage comes not from proposing drastic social cuts (Republicans) or proposing no change to the Big Three (Democrats), but from giving up something near and dear to get something big done.

4)      Both sides are afraid being labeled a ‘loser’ by the media should a deal actually get done

5)      The political process is being held hostage by the extreme wings on both sides

My criticism of the right has long been established and communicate, but my criticism of the left is growing and my dissatisfaction for the political process is an indictment of all parties.  The demagoguery is prevalent on both sides, but the hypocrisy and obstruction from the right have set new lows in civics and governance.  There are times I wish the President would do more, but I soon realize that for every step he would take towards a deal, the other side would take one step back.   The GOP have vilified President Obama and the Democrats since the 2009 inauguration, claiming they have caused the tepid recovery because they have created uncertainty for businesses, created runaway spending, and have passed onerous regulations.  None of which are true. 

So here is some data, opinions, and analyses.  You may disagree, you may concur, your call.

·         Obamacare and Dodd-Frank contain some unnecessary bureaucratic elements but the GOP method of do nothing was NOT the solution.

·         For all the complaining about regulations and taxes, the number one reason why firms don’t hire: lack of qualified candidates

·         States with low or no income tax rates add jobs quicker than high tax states.  But that may be confounded with rate of population growth.  In truth, states with higher tax rates have higher median incomes and the same unemployment rate as low tax states.

·         Tax reform cannot happen unless ALL lawmakers are willing to say no to special interests.  Which means the mortgage industry, oil & gas companies, energy, technology, banks, and others will need to accept, amongst other things, loss of the mortgage interest tax deduction (for many), carbon tax, consumption tax, R&D tax credit, etc.  Of course these new taxes will come into being when income tax rates are lowered for all Americans who will have to realize that a consumption or VAT is neither socialist nor regressive.

·         We need to stop taxing positive outcomes like income and profit which deters growth and begin taxing negative outcomes such as energy consumption.

·         Government should promote investment in R&D and the creation of intellectual property.

·         Social Security and Medicare may not have contributed significantly to today’s deficits, but to ignore that coming mandatory spending associated with these programs is reckless.  Maintaining the status quo is untenable.

·         Increasing minimum wage will not stifle growth, it will stimulate growth as millions of Americans will have increased disposable income.

·         The White House using the sequester as an excuse to shut down White House tours, the People’s House, was petulant and counterproductive.  Threatening to do so for the Easter Egg Hunt is below the office.

·         Programs like Race to the Top may not be perfect, but creating grants for states to reform and generate educational results is a good idea.  Teachers’ unions should not resist reform, but instead join the results-based movement.  Education results are critical to filling the millions of jobs that go unfilled.

·         The key to economic recovery is via growth, not austerity.  Once the economic engine gets revved up, automatic stabilizers will phase out and the government can apply some brake to its spending.

·         The White House should approve the Keystone XL Pipeline in return for getting the $2Billion investment fund for alternative renewable energy sources.  Fracking and horizontal drilling are critical to our economic recovery, but it should be done with safety and environment 1st and profits 2nd

·         Republicans should stop promoting Trickle Down Theory, when economic data is available.  According to the University of Massachusetts – Amherst: for every $1billion invested in infrastructure, 18,000 jobs are created, a 30% increase if the same $1billion was spent on tax cuts.

·         Want to know why most American companies aren’t screaming for tax reform even though the U.S. has the highest corporate tax rate in the developed world?  Because effective tax rates are lower than most countries in the developed world thanks to loopholes and credits.

I expect many on the left will not be happy about my stance on Keystone, fracking, Big Three reform, education, and sequester hijinks.  Those on the right will oppose tax reforms, carbon and value added taxes, the need to fund infrastructure and education, and the call for regulation when it is necessary.
Bottom line is both sides need to give in and take a step towards the other party.  Using budgets for political platforms instead of legitimate proposals is a waste of time and just gets the dander up.

So come here knuckleheads and get your shit together and give us a long term plan.  What about Shemp, you ask?  I save him for the Supreme Court critique.


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