Bill Kristol, Fox News Pundit, Questions Tax Cut for the Wealthy

Back in 2001 and 2003 President George W. Bush pushed his income tax reduction laws through Congress. The theory behind those tax reductions was the government was running a surplus and the economy needed a boost. What was the result? Higher net income for business and the loss of American jobs to China, India, and other nations. The result is that business leaders tell the American people we are no longer a manufacturing society, we are now a service society. Those services translate to lower paying jobs for the middle class. What middle class? Those jobs are the jobs of the poor!

Even Bill Kristol is now questioning the idea of even lower taxes for business.

By Igor Volsky of Think Progress on Aug 11, 2012 at 3:42 pm

Bill Kristol, who had predicted that Mitt Romney would name Paul Ryan as his vice presidential running-mate, expressed some concern Saturday morning that Republicans may have a hard time defending the GOP budget, which disproportionately cuts taxes for the rich.

“It’s the tax cuts for the wealthy, where Republicans have not done a particularly good job of defending it and I think you’ll see Democratic attacks focus on that side of the equation,” he said. The Wall Street Journal’s Stephen Moore agreed, but noted, “who’s better to defend those policies that Paul is, I mean he knows this stuff better than anyone.”

Paul Ryan’s infamous budget — which Romney embraced — replaces “the current tax structure with two brackets — 25 percent and 10 percent — and cut the top rate from 35 percent.” Federal tax collections would fall “by about $4.5 trillion over the next decade” as a result. To avoid increasing the national debt, the budget proposes massive cuts in social programs and “special-interest loopholes and tax shelters that litter the code.”

But 62 percent of the savings would come from programs that benefit the lower- and middle-classes, who would also experience a tax increase. That’s because while Ryan “would extend the Bush tax cuts, which are due to expire at the end of this year, he would not extend President Obama’s tax cuts for those with the lowest incomes, which will expire at the same time.” Households “earning more than $1 million a year, meanwhile, could see a net tax cut of about $300,000 annually.”

Can Anyone Fix This Economy?

Read Mitt’s plan then read Barack’s plan. If it’s “the economy stupid” then where is the plan to set the nation on a course to recovery?

The number of new employees added to the job payrolls has been less than breathtaking. With 5 million long term unemployed is anything other than low pay service sector jobs going to be created in the coming years? The number of new June jobs is 80,000. The unemployment rate remains at 8.2% for a second straight month. That is less than the number required to keep pace with our growing population according to most economists. Perhaps the better question to ask is what are the plans of the two candidates for president?

From Mitt Romney’s campaign web site.

Mitt’s Plan

Mitt Romney sees two important objectives that America can pursue immediately to build on the extraordinary traditional strengths of its workforce. The first is to retrain American workers to ensure that they have the education and skills to match the jobs of today’s economy. The second is to attract the best and the brightest from around the world.

Retraining Workers

Mitt Romney will approach retraining policy with a conservative mindset that recognizes it as an area where the federal government is particularly ill-equipped to succeed. Retraining efforts must be founded upon a partnership that brings together the states and the private sector. The sprawling federal network of redundant bureaucracies should be dismantled and the funds used for better purposes. One particularly promising approach that Romney supports and believes states should be encouraged to pursue is a system of Personal Reemployment Accounts for unemployed individuals. These accounts would facilitate programs that place individuals directly into companies that provide on-the-job training—as governor of Massachusetts, Romney helped create just such a program.

Eliminate redundancy in federal retraining programs by consolidating programs and funding streams, centering as much activity as possible in a single agency
Give states authority to manage retraining programs by block granting federal funds
Facilitate the creation of Personal Reemployment Accounts
Encourage greater private sector involvement in retraining programs

Attracting the Best and the Brightest

To ensure that America continues to lead the world in innovation and economic dynamism, a Romney administration would press for an immigration policy designed to maximize America’s economic potential. The United States needs to attract and retain job creators from wherever they come. Foreign-born residents with advanced degrees start companies, create jobs, and drive innovation at an especially high rate. While lawful immigrants comprise about 8 percent of the population, immigrants start 16 percent of our top-performing, high-technology companies, hold the position of CEO or lead engineer in 25 percent of high-tech firms, and produce over 25 percent of all patent applications filed from the United States.

Raise visa caps for highly skilled workers
Grant permanent residency to eligible graduates with advanced degrees in math, science, and engineering

Barack Obama jobs plan is not posted on his campaign web site. Instead his site points to the growth of jobs and offers these successes and plans.

Barack’s Plan

 489,000: Jobs added in the manufacturing sector since January 2010

 233,000: Jobs added in the auto industry since June 2009—the most growth in a decade

 100%: The percent of investment in plants and equipment that businesses could expense under a tax cut extension President Obama proposed, which would spur investment in the United States

 18%: Tax deduction President Obama has proposed for domestic advanced manufacturing technologies—which would double the current 9 percent deduction

 20%: Income tax credit the President has proposed providing to companies on expenses related to moving operations back to the United States

Neither candidate offers any idea to re-employ those middle class wage earners that have faced a devastatingly long unemployment period. As matter of fact no one has offered one sensible plan. If Mitt Romney believes that the independent voters will elect him to office by just saying Obama has failed to re-invigorate the economy he is not likely to gain my support. He should not gain your support either. Vague references to re-training programs when the there are no growing industries are not enough.

If my choice is between just another face and no plan then I will vote for Obama. At least he has the experience that no other job in the world can provide. Then again why should I vote for a leader who has not been able to change our course?

A Perfect Example of Economic Darwinism

Do you remember the Helms Bakery delivery trucks in Los Angeles? Almost everyone had started going to super markets. That change in behavior ended one of the largest bakery businesses in the country.

From The Wall Street Journal

Eastman Kodak Co.’s effort to draw interest in the sale of its digital patent portfolio is flagging, people familiar with the matter said, complicating the 132-year-old photography pioneer’s chances of emerging from bankruptcy court.

The people said the company hasn’t been able to attract what’s known as a stalking-horse bidder, one who agrees ahead of time to purchase the assets for a certain price, a tactic that can push prices higher. As a result, those people said, Kodak is preparing to hold a “naked” auction for the patents, one in which no suitor makes an opening bid before the auction begins. More of this article here.

It is truly sad to watch a once proud vibrant company collapse. This is not the first American company to dissolve before our eyes. I can think of a few others without any research. MGM(Metro Goldwyn Mayer), Bethlehem Steel, United States Steel, Douglas Aircraft, and Zenith Electronics are the ones I remember. The list is much longer than this. Remember Polaroid Camera? How about Nash and Hudson that morphed into American Motors?

No one can change this reality. No president, no congress, and no buy out specialist.

Kodak simply doesn’t have a product that substitutes for the income stream provided by the sale of millions of rolls of film.

The milk man is part of our past and so is Good Humor Ice Cream and Helms Bakery.

American Exceptionalism and the Reality of a Competitive World Economy

American exceptionalism is the theory that the United States is different from other countries.

Working class Americans (that is most of us) are in a perpetual struggle to live a comfortable life. However, we are on the brink of a new reality. We must compete with every other country in the world. Will American exceptionalism prevail?

The Washington Post reports that American median income fell nearly 8 percent, to $45,800, in 2010. This is no surprise. It is simply a validation of what we already knew. It is not going to get better any time soon. In that same article the Post said our wealth has declined by 40%. That too is no surprise since home have values have dropped by 40% to 50% in most areas of the country.

Many will try to blame one of the two political parties. That would be a mistake. If you look at the laws passed and the trends of American business you will quickly realize that this state of affairs has been going on for decades but was accelerated by the Great Recession.

The painful reality is that Americans must become more ingenious in their struggle to earn the kinds of livings that has become part of the culture. Our politicians keep telling us that Americans are unique, creative, and exceptional.

Today that all seem like a lot of baloney.

Capitalism is the Dominant force in the U.S.A.

Why Barack Obama Cannot Re-Make America

The American system of free enterprise is designed for people to make money. Those that are smartest find every way to earn money, as long as it is legal, no matter who it hurts.

Bain Capital is an asset management and financial services company that provides venture money for new and struggling companies. Like any privately held company it is in business to earn the highest possible return for its investors. There are many other companies like Bain Capital. The Blackstone Group and the Carlyle Group to name just another two. Sam Zell, a wealthy real estate investor in Chicago, bought the Tribune Company without investing a single dime of his own money (thanks to some ingenious financing) but the company is now bankrupt (you thought he bought it to prop up that company?).

The system has always functioned that way. The founding of the nation was all about free enterprise. Those leaders in Philadelphia were mostly rich men who objected to taxation by the crown. They invented the expression “taxation without representation” to rally the general public. The best example is John Hancock. Before the American Revolution, Hancock was one of the wealthiest men in the Thirteen Colonies, having inherited a profitable shipping business from his uncle. John Adams was a well to do lawyer living in the Boston area. Thomas Jefferson and George Washington were both wealthy land owners in Virginia.

If you do not agree with this form of economics you will have to live elsewhere. You will not be successful in changing 200 plus years of a system that has built the wealthiest nation in the world.

Alternative countries that you ought to consider are Italy, France, Germany, Canada, UK, Australia, and New Zealand. You might notice that many of these countries are part of the British Commonwealth that Americans hated in 1776. They do have capitalism but also make a greater effort at providing more social programs.

The choice is yours. Just stop complaining about our system. It is what it is!

GDP and Unemployment Performing Poorly – Welcome President Romney

The Gross Domestic Product (GDP) in the United States expanded 1.9 percent in the first quarter of 2012 over the previous quarter. That is a revision from a preliminary 2.2% estimate. Historically, from 1947 until 2012, the United States GDP Growth Rate averaged 3.3 Percent reaching an all time high of 17.2 Percent in March of 1950 and a record low of -10.4 Percent in March of 1958.

During the great recession GDP fell to -8.9%.

At the present time the economy appears to be back sliding.

Can the government really impact the growth of the economy? Most of us seem to believe the answer is yes. Barack Obama will be blamed for the situation.

Unless Mr. Obama can convince a majority that things will be worse if Romney is elected he will be a one term president.

Jobs or Political Party – What’s Your Priority?

“Huge trade deficits cost millions of jobs, lower wages and place a massive debt burden on future generations.” –Brad Sherman, United States Congressman

Democratic Party member are not unified in many ways. The question of abortion rights is simply the most well known issue. Gay marriage rights is also another party dividing issue. However, in this era of job growth, job creation ought to be the focus. It isn’t.

In my own new California 30^th district, redistricting has resulted in two long time Democratic congressman vying for the same seat. Howard Berman versus Brad Sherman. On most issues they agree. Sherman has taken positions that have been contrary to Democratic Party leadership. He opposed TARP as it was initially proposed and, I believe, only voted in favor of the final bill when he saw the stock market decline. Sherman has also taken an unusual view of free trade agreements. He opposes them.

Brad Sherman opposes NAFTA and CAFTA because they are shipping our jobs overseas. “For too long the United States has been exporting jobs rather than products.” The latest free trade agreements are with Columbia and South Korea. His take is supportable when you look at the American trade deficit. It’s has been at or near the highest level since 2004. The amount has been in excess of $800 Billion Dollars. This is a number supplied by the U.S. Bureau of Economic Analysis.

His concern for jobs is justified. It’s not just the high unemployment rate. The employment to population ratio of Americans age 16-54 has barely begun to recover from levels last seen in 1983. That number was 68.5% in April of this year. This is a BLS statistic. Meanwhile Berman is a supporter of free trade agreements.

I have not heard or read any positions taken by Republicans on the issue of free trade. It should be a deciding factor when voting for a congressman or the president.

Barack Obama’s Failed Recovery

It seems the president’s likeability has remained high even though his success leading the country leaves a lot to be desired. The number one issue facing him at his inauguration was the growing number of unemployed Americans.

It is accurate to say that the continuing increase in the number of unemployed has been stopped. The worst of the unemployment crises has passed. However, the number of unemployed Americans has remained basically unchanged. The apparent improved unemployment picture is the result of people giving up in searching for a job. Those giving up aren’t counted. It takes 150,000 new jobs a month to keep up with our growing population. (The number of new jobs added in April was a horribly disappointing 115,000.) Once you deduct that leveling number of 150,000 you see that real job growth has been small.

The one significant exception to this situation is the re-employment of people in the manufacture of automobiles.

Every country has something to sell to its own people and the rest of the world. The United States has one major export, agricultural products. Brazil has five. Oil, iron ore, soybeans, coffee, and steel. Brazil now holds 45% of the world’s steel production.

Meanwhile the U.S.A.has a $15 trillion economy but only has $1.5 trillion in exports. Worse we import $2.4 trillion in goods.

Thanks to the ever growing number of free trade agreements most of the things we buy were manufactured in another country. The auto industry and agricultural products are the only major industries that have not been entirely exported. Here in Southern California Costco now has a variety of fruits and vegetables imported from Latin America.

Not only are there no plans to change this situation, but Obama has signed free trade agreements with Columbia and South Korea.

Retraining programs for the unemployed? To do what?

You notice that Barack Obama never talks about the unemployed. No wonder, his “hope and change” have brought hope there is enough food stamps to buy next week’s food and his change never happened at all unless adding to the federal debt is counted as change.

As bad a Mitt Romney may be is he as bad as four more years of Obama? Isn’t it time for a change? Democrats and independents hold your nose.

Economy is Job One!

May 4, 2012 Addendum. The April jobs report confirmed my worst fears. The U.S. economy added just 115,000 jobs and yet the unemployment rate is down another tenth of a percent to 8.1%. In other words more people have given up the search. This is another great day for Mitt Romney. Everything I wrote on April 28 remains valid. The difference is it has just been reinforced.

Is the recession over? Not if you are unemployed. Over 12 million Americans are in that status. Most of those people have families that have been impacted. The impact is more likely on three to four times that number. Worse is that the number is not the real number because many more people are no longer counted as unemployed. Most economists add about 50% to the official numbers to reach that real number.

The Obama administration failed to address the primary issue facing the nation. That is the condition of our economy.

Where is the plan to change our course of outsourced jobs? It does not exist.

The latest pieces of economic data support the feeling that the economy is struggling to recover from the Great Recession. New claims for unemployment benefits dropped to 351,000 in the week ending February 11 of this year but have been increasing every week since then with one exception. Gross Domestic Product (GDP) for the first quarter of 2012 grew 2.2% versus a growth of 3% in the last quarter of 2011. The president can’t be held responsible for everything in our economy but there is little he has done or proposed to improve the situation.

The problem is that Mitt Romney has not enunciated any actions he would take that would change our desperate employment situation. The number of unemployed reached over 14 million people and has now dropped to under 13 million. However the number of long term unemployed has not been significantly reduced and still remains over 5 million people. Obama’s policies did save the country’s auto manufacturers but too many products and services are now provided in other countries.

Americans are the employer of the president. We have the right to expect results. Barack Obama’s four year contract is almost up. Unfortunately the alternate candidate for the job has not told us what he would do to change our economic situation.

Decline of Manufacturing Jobs in America

The Long Goodbye: Number of U.S. Manufacturing Jobs

The graph was in Businessweek April 16-April 22, 2012. It tells the story of the continuing loss of manufacturing jobs in the United States. Those that believe that America will become a “service society” are in a dream world. No nation thrives on services alone. Actually we are already outsourcing many services to Asian countries. Dell Computer, Citi Bank, Hewlett Packard, and the Los Angeles Times are just FOUR of the many companies that have out sourced their customer service.

Notice that this graph reflects what many of us already knew. Decline in manufacturing has been a decades old event.