Mitt Romney and many conservatives have criticized the president for not doing “enough” to create an environment where the economy can thrive. (This post is a continuation of yesterday’s post.) Basically, their main complaint is that taxes are simply too high. They’ve even suggested that corporate taxes are too high, even though we know several corporations are paying nothing in taxes in spite of making billions of dollars in profits. In my mind, the real question is why the economy is so sluggish. (more…)
Over the last 30 years, we’ve been told that we needed to “unleash the beast.” What that was holding back Wall Street were all these regulations. Once we broke down those barriers capital will be free to flow. So we slashed taxes. We cut regulations. We cut import and export taxes. We broke down the barriers between insurance companies and investment companies and banks. We allowed banks to take on more and more leverage. As promised, Wall Street took off. The Dow Jones Industrial Average rose to heights never dreamed of before. Huge corporations were raking in record profits quarter after quarter, year after year. But there was a price for all of this Wall Street prosperity. The moral contract between American companies and the American worker was broken. American companies used to have some sort of loyalty to the American citizen. Don’t laugh. They did. Frank Abrams,Chairman of Standard Oil of New Jersey said in 1951, “The job of management is to maintain an equitable and working balance among the claims of the various directly affected interest groups… Stockholders, employees, customers, and the public at large.” This would lead us believe whatever was good for business was good for America and vice versa.
Over the last 30 years, we’ve noticed that this is no longer the case. Now, because of rules and regulations, companies have incentives to ship jobs overseas. Companies have the ability to make millions of dollars by opening manufacturing plants, not here in the US, but overseas in Malaysia, China or Mexico. Billionaire Ross Perot, while running for president, addressed this topic head-on.
The question is, how do we fix this trend? How do we make the American economy and big business work for the American people again? On one hand, we’ve been told that all the changes that have gone on over the last 30 years have been good, that they simply haven’t gone far enough. We need to lower taxes even more for big business. We need to cut corporate taxes. We need to remove payroll taxes. We need to unleash the beast… even more.
This seems to be completely nonsense. Corporations are sitting on billions of dollars right now. I don’t understand why giving them more money will give them incentive to invest here in the United States. It seems to me that unless we change the rules, giving them more money will encourage them to invest more money overseas. Labor will always be cheaper in Malaysia and other developing countries. Big business has told us that they’re willing to play labor arbitrage with the American workforce. So, giving big business more money will be simply that – giving them more money. More money will not equal better behavior or more American jobs. Until we understand that throwing more money at Wall Street will simply be throwing more money at Wall Street, the American people will not get ahead. We need to train Wall Street. We need to enact rules and regulations that help the American worker.
President Obama’s visit to the Chamber of Commerce always seemed bizarre. Reaching out to the US Chamber isn’t like reaching out to business. Under the guidance of Tom Donohue, the Chamber has become less a business association than a right-wing lobby operation that makes its money selling its services to entrenched corporate interests (the health insurance companies, Big Oil, the drug companies) that prey on taxpayers and pay dearly to protect their privileges. The Chamber is shedding board members and local affiliates because of its zealotry — most notably in joining the no-nothings on global warming in return for Big Oil contributions. The president was warmly received by a grateful Donohue eager to revive the threadbare myth that the Chamber represents US business. The president said he was being neighborly and wished he had brought a fruitcake over earlier. That led wags to say, “No worry, the Chamber is already chock full of fruitcakes.”
Progressives panned the president for making the visit; the press reported it as a “charm offensive,” part of his calibrated “move to the center.” And no doubt, the president ladled out the pander, promising to reduce burdensome regulation, reform and lower corporate taxes, pass corporate trade accords, and do whatever is needed to help business compete. (more…)