Politics Who's Gonna Win?

Much like the argument that tax cuts for the rich create jobs, the argument that Obama's excessive (?) regulatory actions have hurt the recovery are baseless.

In fact, Obama has imposed fewer regulations than Bush over the same period of time.

Corporate earnings are up, profits are up, other economic measures are up. The only measure not on the rise is demand, where the "skittishness" exists - not among employers, but among consumers.

One example. A closer look at the cause of large scale layoffs since the recession (from BLS):


Caused by regulations -- less than one percent. Go figure.

ace, again like the lower taxes and/or flat tax debate, you regurgitate all the "right" talking points, but never provide any supporting data.

 

I think they need to look at consumer confidence and business confidence as the two biggest things that impact spending and the flow of money (i.e. tax generating flow). To fix consumer confidence, you have to expect that you can find a job, that your neighborhood is ok, home prices are reasonable, you aren't working to pay for people who don't work, and that you have enough saved that retirement is possible. Also healthcare costs won't bankrupt you when you have a heart attack at 61.

Business confidence is that the stock market is doing well, there is demand for your products or services, there is innovation and a stream of new ideas, that credit is cheap and easy to get, that regulations are fair and easy to meet (and the government will help do the right thing), and you can be protected from major lawsuits for minor things.

 

My positions have some clarity, yours do not. When faced with simple core belief questions, diversion is what we get. My views on economic policy was formed prior to my current political views and I do not use my views on economic policy to justify political views.

At its core there are some circumstances when Keynesian type stimulus can be effective in stimulating economic activity, and there are examples when supply side economic policy will not have a stimulative affect on economic activity. I can say this because it is true. I can also say that there are circumstances when Keynesian type stimulus can be ineffective and Supply Side economics can be. I can also, explain when these conditions would be true. Your view on this is not clear.
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This is interesting, one illustrates ease of doing business, the other ease of starting a business. The darker the better. In terms of starting a business, they rank the US 8. - here is the link: http://www.gfmag.com/tools/global-d...es-for-doing-business-2010.html#axzz1lXWObbZW





However, in the US the ease of starting a business is very different depending on the State and City. It is very difficult to start a legal, fully licensed business in New York, NY. When unemployment is high, you would think it is obvious that we do whatever we can do to make starting a business easier. Should be a no brainier.
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I do not discount facts. However, realizing one will never have perfect information, "feel" becomes very important. Isn't "feel", or timing the key difference between those who make it big and those who don't? There is an art involved. I would also argue that there is an art involved in politics, military action, and many other activities involving judgement with less than perfect information.
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The Laffer Curve is specific to the calculus of tax rates and tax collection. This may or may not translate to increased GDP or economic activity. Laffer argues one and then the other. Some seem to conflate the two. Laffer argues that lower than the "optimum rate" makes the economic pie bigger. There are two issues involved in the discussion and I am not clear on what you and some others are arguing.

When Obama argues to tax the rich, what is the basis of his argument? Is it to maximize taxes collected? Maximize economic activity? Redistribute wealth? I think we need to be honest on this.

 

I think Ace made it quite clear that "feelings" and beliefs trump facts.

Seriously, he will ignore data showing the minimal/negligible impact of regulations on recent large scale layoffs and will post maps with data from a World Bank study showing the US as having one of the best regulatory environments in the world (ranked #4) for existing businesses as well as start-ups and will just ignore it or find a way to dismiss it all.

Now, back to who's gonna win.

Romney won the Tea Party vote in both Florida and Nevada, according to exit polls. He will probably win primaries in Texas and the Southwest, along with the Midwest and Northeast. Gingrich can win GA and a few southern states if his Vegas sugar daddy keeps throwing good money after bad. The possibility of a brokered convention is become less and less.

The Tea Party has been marginalized. Their initial candidates of choice were knocked out in the first or second round. Their influence in Congress is waning as is their support among the public. The only influence they have left is if they bolt the party, along with the Paul crowd, and hand the election to Obama on a silver platter.

 

Not what I said. If you don't understand, ask for clarification.
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Excessive regulation. In some cases regulations are put in place to restrict open and fair competition. If I own a Taxi service in New York it is in my interest, to make it as difficult as possible for others to compete with me, so you get a weird relationship with existing business and government in support of regulation that serves no productive service to the public.

I agree that give or take a few percentage points at the high end does not have much short/medium term impact on economic activity. The bigger issue is government spending. As this relates to Laffer's theory, if you listen close to what he said in the clip you provided, he clearly states that government spending is not all bad. The problem is when the government wastes money. And the core question, we repeatedly come to this, who is best able to allocate capital for economic growth? There are occasions when government spending is needed and when this spending gives a better result compared to the private sector, however, I and Laffer would argue that these occasions are rare, and that the greater good is served when taxpayers keep more of their own money/capital to allocate as they see fit as opposed to a top down government approach.

Why did he support extending the Bush tax cuts? I can not reconcile this with any of his stated goals and beliefs.

Do you realize there has to be a point where the above logic fails (again see the Laffer Curve). You would seem to support a 100% tax rate given 1 and 2 above. There is a reason why most don't support a 100% tax rate. The key question is what is the "best" tax rate. Laffer believes it is about 35%, what do you believe the rate is? I would not tax work,savings, investment - I would tax consumption and I would cap government spending as a percent of GDP.

 

My first hand knowledge is zero. I found this interesting:

http://www.schallerconsult.com/taxi/taxi2.htm

From my point of view as a Conservative and from the point of view of a Liberal, I think we would agree the system in NY is in need of improvement, I argue the industry is heavily regulated and controlled. Those who control the medallions, restrict competition with the help of government - the public is being served, but is it being served as well as it could be. My ultimate response is different than the authors but I think we agree there is a problem. I think this to some degrees represents many other industries in this country with over-regulation - or perhaps a better way to say it is regulation that is not in the best interest of the general good of society.

I see the two as virtually the same. I do realize that others do not, but when I talk about the flow of capital I am really talking about the flow of money. If the people of the US made the choice of spending disposable income on beer, and a tax cut allowed for more beer consumption, to me that is a flow of capital into the beer industry. So, on the other-hand, if the government taxed people, lowering beer consumption, and invested the money in schools - this could be an example when a tax increase could have a net good long-term impact on economic activity. I do not argue that all private sector spending is good or would have a good long-term impact on economic growth. I simply argue that the private sector is less wasteful than government, on a net basis.

What do you support? I support 0% on capital gains. 0% on interest/dividend income. 0% on income. I do support usage taxes and fees. I support a flat consumption tax. And I support flat property taxes on real-estate. Those rates would depend on the level of spending society agrees on. So if I lived in Canada with single payer healthcare, the tax would be higher than if I lived in a country with true free market healthcare.

Those were good times. I do have a problem with those who say go back to those tax rates without wanting to go back to those spending rates. And I repeat for the record, Bush failed in regard to spending control. His failure gave birth to the Tea Party.

Again, the conditions today are far worse than they were under Clinton, so there are a number of things that need to be taken into consideration; however, the idea that taxes on the top bracket 35% and above is somehow ruinous is poppycock.

Here is the answer to my question above.

The corporate tax rate is priced into goods and services, you could make it what you want - corporate profits will stabilize in time.
The top individual rate give or take a few points in the mid-30's is not going to make a difference.
The capital gains rate will shift how people realize long-term capital profits and potentially hurt new capital investment. A capital gains tax increase will not give a linear result, and could result in less tax collected although the rate is higher.

I have managed and been responsible for some big budgets. There is nothing wrong with connecting components of spending with a percentage of income. In fact I think it is effective. If income drops 50%, spending is assumed to drop 50%, or an explanation/justification/support is required - then adjustments are made. How would you do it, realizing I summed up a lengthy/thought provoking process in a sentence?

P.s. I found this regarding the Taxi medallion system in NY:



http://www.washingtonpost.com/blogs...ent-than-gold/2011/09/01/gIQA2XuUuJ_blog.html

Government approved monopoly is good for a few selected people.

 

What sort of regulations would those be? Maybe I've been thinking along the lines of regulations to protect consumers, investors, employees and the economy as a whole from financial and corporate greed and anarchy. Imposing these sorts of regulations, which all must adhere to, would advantage or disadvantage no one, at least not within the US. If you're talking about regulations which might hamper US attempts to compete in the global manufacturing market, I have thought about this at length and see no sense in even trying to compete with the likes of China and Asia if competing requires the US to lower product or environmental standards, wages or benefits. The US needs to find a niche for itself which allows us to maintain a standard of living above that of third world countries. The idea would be to maintain this higher standard, and over time, watch as emerging nations rose to meet it - not the other way around - which as far as I can see - is the Republican plan. A quick google of the legislative activities of any one of the recently elected Republican governors will show you just how this plan gets implemented.

I am however, against over-regulating small business start-ups. If they stay beneath a certain threshold, some regulations which would apply to much larger companies should be waived. In fact, a good deal of them are already.

I'm interested to know what area of regulation is concerning you, Ace.

Who will win? I'd like to believe it would be the candidate with this vision. Unfortunately, I don't see one running. Maybe Obama, if he were given the freedom to pursue some of his initiatives which appear to be in line with this vision.

Where is the waste, in your opinion, Ace? What area (s) would benefit from a private takeover ? Medicare, SSI? Would you suggest we turn the accounts over to private financial investors who less than 4 years ago were unable to protect the 401K's of millions of Americans? Would you suggest we just forget about all that and TRUST them again? When Wall St gets it's shit together, it might be an option but they show no signs of being able to provide anyone with a "better result" right now than the current system (despite its obvious problems). I can see an opportunity for opting out of the government pay-in but then again, not now.

Would you suggest we contract student loans through private agencies ? Oh wait, we tried that. Within 2 years, unregulated interest rates rose to 9% and above.

And who exactly would take over the allocation of funds for services to the poor, indigent, mentally and physically disabled, veterans, etc. in country? Or does your Utopia imagine this aspect of society will simply disappear when the federally funded government services do?

And please don't insult me by suggesting that the private sector and individuals in a comfortable wage bracket will pick up the slack. The very notion of private companies providing free or sliding scale services is virtually unheard of. Isn't it? And all you poor souls crying over your government stolen payroll dollars? Well it's difficult to see the potential generosity through your pitiful tears.

I expect your Utopian dreamscape will deal with the problem by building more privately owned prisons and mental facilities in which to incarcerate the less fortunate. Can't have them on the streets, can't employee them. What to do? Do you guys ever consider these things when you're lamenting over the fact you have to pay taxes to the federal government? Do you fail to see that you're going to have pay them one way or another, be it to the federal government or the state? If you gouge out the Federal government, states will have to pick up the tab. The only reason states are able to keep social programs going now is due to federal funding - that's right - the SPENDING you hate so much. The social problems will not go away or somehow cease to be a factor in our lives. Even if you choose to lock every single one of the less fortunate away, someone has to pay for that. That's the logical scenario. I won't even get into the moral one.

You love your data and charts and your cavalier ideas but you fail to realize that there are actual people involved.

Who's going to win? Whoever it is, I hope he can see beyond his own interests.

 

Here's my take on this and I could be wrong. I don't have the economic background or knowledge of either you or Baraka.

In my household, if my income drops 50%, I would indeed look to decrease spending by that much. Unfortunately, a portion of that 50% may eat into an absolute necessity such as my rent.

I could do a few things at this point

1) borrow in the short term
2) take on a second job to increase my income
3) lose the roof over my head

Is 3 an option? No. I need an influx of cash.

Connecting components of spending with percentage of income and decreasing spending as a response to a decrease in income only works until we get to the necessities.

Agreeing on what those are appears to be the nut of the debate. A number of Republican candidates don't believe the EPA is necessary. Ron Paul would do away with Department of Education and the public school system altogether. On the other hand, Democrats are less than willing to regard anything as unnecessary. There's a happy medium somewhere once it can be determined what we all consider as necessary and essential services which are best provided by the government. Essential, in my opinion, includes a comprehensive safety net for all citizens regardless of status, which some may consider unreasonable and bordering on socialism but which I consider within the capability of a country as wealthy as we are.

Once we determine what the necessities are and what they'll cost us, we don't squabble over where to get the revenue to pay for it. A resumption of the 20% tax or higher on capital gains? a 2- 5% increase in payroll taxes? Whatever it takes. Then we demand the government set it aside for "our rent and utilities" and insist it not be used elsewhere. We will then know what is deemed as non-essential spending and can slice it and dice it on the floor of congress to our heart's content.

This is what businesses do. The don't say to their customers "we don't need your money right now - go ahead and invest it - we'll get buy - we'll just borrow what we need to stay afloat or lay off a few employees or cut production by 60% or maybe we'll shut down altogether. No, they provide a service or deliver a product and they want to get paid. We should all be willing to pay our fair share to live here and be willing to chip in for the rent and to keep the lights on. I don't care if it's me and my couple thousand a year in income taxes or a financial investor making $10,000 with a mere click on a keyboard. The lights are getting shut off next week. Who's going to pay?.

0% on capital gains? I would enjoy looking at any evidence which shows that those untaxed earnings are contributing to anything other the greater wealth of those who are profiting? I think it's bullshit - a shell game. It's nothing more than theory and it's flawed.

 

http://money.cnn.com/2012/02/06/pf/romney_kids_trust/index.htm?hpt=hp_bn3

I'd be smiling too if I never had to work a day in my life, and had girls throwing themselves at me because my Dad knows how to dodge a lot of taxes and lobby the lawmakers to write rules to get rid of estate taxes and gifting limits... I wonder how much of the Swiss and Cayman accounts got transferred to them? Do they own a few cars and boats they bought for $1?

This shouldn't even be close, and it hasn't even started yet.

 

The unfortunate aspect of this? They probably won't blow it all on drugs and hos. But we can hope.

 

looks like ron is moving into 2nd with romney and gingrich sliding.

 

Romney slipped one percentage point in that Reuters poll, hardly sliding. Most polls have Romney comfortably ahead and Paul still forth.
http://www.realclearpolitics.com/ep.../republican_presidential_nomination-1452.html

If there will be any momentum after tonight's caucuses in CO, MN and MO (non-binding), it will be with Santorum who could win two of these. Paul has yet to even finish second in any primary/caucus to date and that wont change tonight.

But keep hope alive!

 

A big win by Santorum in MN tonight would certainly shake up the field again. But then MI comes up later this month and that is Romney's home state (his daddy was governor) and that will keep momentum on his side.

The big delegate day will be Super Tuesday (March 6) and the real test will be OH, a swing state that can ultimately decide the election. If Romney has a strong win here, its over.

 

Considering Romney's decrease is within the margin of error, I don't see any issues for him. If Paul is running for second place, he's got a good shot. I don't see a way for him to take the lead.

 

I predict Paul will get his first second place finish in VA on Super Tuseday -- only because Gingrigh and Santorum arent on the ballot.

And on the lighter side, Rosanne Barr is now an official candidate for the Green Party nomination.
http://www.gp.org/press/pr-national.php?ID=476
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On a more serious note again, Ron Paul today called for the elimination of all public lands - that federal lands should be turned over to the states and then sold to off to private owners.

So much for a vibrant national park service.