Tuesday, 1 November 2011

Slouching towards DC

As we slouch towards another presidential election the common wisdom is that we are undeserving of the current crop of Washington politicians, as if they were foisted upon us by some divine hand.

This is probably inevitable since many of the elected feel that the much-saluted deity who provides home runs to baseball sluggers has also had a hand in guiding their footsteps into congress.

Still the sad fact is – we voted for this posse of political procrastinators, grandstanders and poll watchers.

So, what to do in 2012? Well, a rule of thumb would be to vote for some person, idea or course of action rather than against.

Cutting spending in the midst of an economic downturn is like closing the stable door long after the nag has wandered off. The time to do that was when we were cutting taxes and fighting two wars on a Chinese credit card.

And you’re quite right, that is water under the bridge, besides which the current occupant of the White House is indeed still fighting a war without end in Afghanistan and has as yet been unable to turn the economy around.

You’d also be right in saying that, just like President Bush after 9/11, President Obama blew a great watershed moment after his election by a reluctance to go for the political jugular coupled with a lofty desire to rule by consensus.

And yet, let’s consider the alternatives. I seem to hear just two major ideas from the Republican Party – cut taxes and regulations. Am I mistaken or were those not the two domestic policies at the core of the Bush presidency?

I beg your pardon I have not mentioned Herman Cain’s 9-9-9 tax policy - all credit to a candidate who has at least offered a concrete suggestion. His proposal would certainly bring change – an even greater handover of wealth to the top 10% earners and a further flaying of the working and middle classes.

And all hail Michele Bachman for reminding us that if you turn Mr. Cain’s figures on their heads you will be confronted with the mark of the devil – who would have suspected that she was a closet Black Sabbath fan!

There is no doubting that either Mr. Cain or Rep. Bachman would provide more exciting presidencies than the present ho-hum and steady-as-we-go office-holder. But I’m still flummoxed that an electorate so badly burned by the recent financial crises would be willing to jump straight out of the frying pan and back into the fire of tax and regulation cuts.

How anyone can be for eviscerating the anemic Dodd-Frank Wall Street Reform and Consumer Protection Act baffles me? But I suppose credit card companies, mortgage brokers and banks have mothers that love them too and should be protected from a rapacious public sick of being overcharged and taken advantage of.

Even more troubling - neither the SEC nor the Treasury has a finger upon the almost daily dizzying lurches on various stock exchanges. Has anyone even suggested regulating high frequency program trading on super-computers? But that will come too – after a seismic crash.

Less regulation, you say, Governors Romney and Perry? You obviously haven’t got your 401(k) shekels invested in mutual funds like many regular Americans.

Tax cuts should work to some degree but of late that hasn’t been the case; probably because of the double-whammy housing bubble-burst and the reluctance of banks to give credit. Tax cut recipients are wisely paying down debt rather than rushing out to buy new flat-screens or Manolo stilettos.

Now is the hour for investment in American infrastructure; the cost of labor, capital and equipment will never again be as inexpensive – and it better be done soon or the joint will come crashing down around our ears.

Sure, it will raise the deficit in the short term but a resurgent economy will inevitably reduce it as happened in the Clinton years.

Tax and regulation cuts are yesterday’s solutions. In fact they caused today’s problems.

So come on you nattering nabobs of negativity, time to reboot and come up with a couple of decent new ideas.

1 comment:

  1. Just because "tax and regulation cuts are yesterday's solutions", doesn't mean they wouldn't work again (You DID call them "solutions", right?). What I think is necessary is the cutting, in the healthcare as well as other industries, of some of the artificial structures that come between the consumer and the provider. Get insurance companies and plans out of healthcare, and allow physicians to compete. With the web nowadays, it can only be better than when I was young (1950s), when doctors made house calls (Talk about SERVICE!).
    And I suggest that options and futures trading- and perhaps even arbitrage- ought to be banned. This artificial infrastructure that goes beyond the buying and selling of stocks themselves, short-circuits the real capitalistic model of that process. Folks rarely invest in a company that they believe in anymore, due to all the smoke and mirrors created around the brokerage system.
    Perhaps, though, as you said in your subsequent post, it's the way of the world.


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