Tag Archives: press conference

Confidence, Schmonfidence

18 Monday Jul 2011

Posted by in economy, Unemployment

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Whenever I see a discussion about the real crisis this country faces—that would be unemployment, not the manufactured one over the deficit– a couple of words keep coming up from the alleged smartest guys in the room, confidence and certainty. Businesses would hire, so it’s said, if they had either or both.

President Obama referred to it in a recent press conference:

“What we need to do is to restore business confidence and the confidence of the American people that we’re on track — that we’re not going to get there right away, that this is a tough slog, but that we still are moving forward.”

It came up again yesterday in a roundtable discussion about jobs on Meet the Press. Just as an aside, two members of this roundtable were Ohio Governor John Kasich and Honeywell CEO David Cote. It has been estimated that Kasich’s budget cuts in Ohio could lead to over 50, 000 layoffs. Mr. Cote’s history at Honeywell, where his 2010 compensation topped $20 million, has been one of outsourcing and union-busting. Just the two opinions you want on what to do about unemployment, right?

Mr. Kasich and Mr. Cote, who also sits on the board at JP Morgan Chase, spoke about the need for businesses to have certainty. Certainty about taxes and regulation. Certainty meaning lower taxes and less regulation, naturally.

In August of 1934, President Franklin Roosevelt addressed the same issues we face today. Here’s what FDR had to say about confidence:

“In one year and five months, the people of the United States have received at least a partial answer to their demands for action; and neither the demand nor the action has reached the end of the road.

But, my friends, action may be delayed by two types of individuals. Let me cite examples: First, there is the man whose objectives are wholly right and wholly progressive but who declines to cooperate or even to discuss methods of arriving at the objectives because he insists on his own methods and nobody’s else.

The other type to which I refer is the kind of individual who demands some message to the people of the United States that will restore what he calls “confidence.” When I hear this I cannot help but remember the pleas that were made by government and certain types of so-called “big business” all through the years 1930, 1931 and 1932, that the only thing lacking in the United States was confidence.

Before I left on my trip on the first of July, I received two letters from important men, both of them pleading that I say something to restore confidence. To both of them I wrote identical answers: “What would you like to have me say?” From one of them I have received no reply at all in six weeks. I take it that he is still wondering how to answer. The other man wrote me frankly that in his judgment the way to restore confidence was for me to tell the people of the United States that all supervision by all forms of Government, Federal and State, over all forms of human activity called business should be forthwith abolished.

Now, my friends, in other words, that man was frank enough to imply that he would repeal all laws, State or national, which regulate business—that a utility could henceforth charge any rate, unreasonable or otherwise; that the railroads could go back to rebates and other secret agreements; that the processors of food stuffs could disregard all rules of health and of good faith; that the unregulated wild-cat banking of a century ago could be restored; that fraudulent securities and watered stock could be palmed off on the public; that stock manipulation which caused panics and enriched insiders could go unchecked. In fact, my friends, if we were to listen to him and his type, the old law of the tooth and the claw would reign in our Nation once more.

The people of the United States will not restore that ancient order. There is no lack of confidence on the part of those business men, farmers and workers who clearly read the signs of the times. Sound economic improvement comes from the improved conditions of the whole population and not a small fraction thereof.

Those who would measure confidence in this country in the future must look first to the average citizen.”

Confidence, schmonfidence. Businesses don’t need either confidence or certainty, they need customers. Those would-be customers need jobs. We’ve had 30+ years of low taxes and less regulation. If those were the engines of job creation we’d have more jobs than we do people.

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The Deficit Reduction Dog and Pony Show, Cont’d

05 Tuesday Jul 2011

Posted by in Deficit, economy, Obama, Politics, Taxes

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Further proof that the deficit reduction talk in DC is just a dog and pony show:

“In a Wednesday news conference, the president especially pounded a depreciation provision for corporate jets, mentioning it six times.

“I think it’s only fair to ask an oil company or a corporate jet owner that has done so well to give up that tax break that no other business enjoys,” Obama said. “I don’t think that’s real radical. I think the majority of Americans agree with that.”

But as it turns out, ending the jet tax break would only save around $3 billion over a decade, while rolling back tax expenditures for oil-and-gas would bring in roughly $21 billion and a proposal aimed at hedge fund managers would collect some $15 billion over that same time span.

According to estimates from last year, ending the Bush tax cuts for income over $250,000 for couples would have brought an extra $700 billion into the Treasury.”

If they were serous about reducing the deficit they would, as Willie Sutton once said, go where the money is. But where the money is is also where the large campaign contributions is, so that ends that.

The President’s Press Conference

30 Thursday Jun 2011

Posted by in budget, economy, Obama, Politics

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A review of President Obama’s press conference yesterday from one W. Shakespeare: “Sound and fury signifying nothing.” Meaningless rhetoric and duplicity, with a dose of class warfare red meat to stir up the base for the 2012 election thrown in for good measure. And by my reading of the reactions from the Obama faithful in the blogosphere this morning, it worked.

The president mentions “taxing the rich” and his supporters voice their approval with a hearty, “Yeah, it’s about time, go get ‘em.” But he’s not talking about what they’re thinking about. He’s already refused to been forced to not let the Obama Bush income tax cuts expire—twice. If he was serious about deficit reduction, as Willie Sutton once said, that’s where the money is.

The “revenue increases” Obama is referring to are trivial amounts like his oft-repeated slam at the tax break for corporate jet owners. By my count he mentioned this one in particular 4 times yesterday. Eliminating this break will bring in about $300 million in additional revenue–that’s million—a year. I’m not defending the owners of corporate jets by any stretch, but $300 million out of a $1.5 trillion deficit? Talk about a drop in the proverbial bucket.

A couple of the other “revenue raisers” that the White House is floating are an adjustment in the taxation of inventory and an increase in the tax rate on carried interest. The first would bring in about $7 billion a year, the second about two. Add those to the corporate jet tax break and the total comes to around $9.3 billion a year. By comparison, the tab for the war in Afghanistan is somewhere in the neighborhood of $10 billion—-a month.

How many college scholarships would that pay for, Mr. President?

Today on Let’s Make a Deal

09 Thursday Dec 2010

Posted by in budget, Congress, economy, Obama, Politics, Taxes

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The latest on “The Deal”:

President Obama at Tuesday’s press conference: [I]t’s a big, diverse country, and people have a lot of complicated positions, it means that in order to get stuff done we’re gonna compromise…This country was founded on compromise.”

Yesterday:

“Vice President Biden told House Democrats on Wednesday that the tax agreement the White House struck with Republicans was essentially final, forcing the divided caucus to decide whether to press its fight for changes in the package. “It’s up or down,” Biden told the caucus in a closed-door meeting, according to Rep. Yvette Clarke (D-N.Y.).

“So far as the administration is concerned, it’s take it or leave it,” Rep. Peter DeFazio (D-Ore.), one of the most vocal critics of the tax deal, told The Hill after the meeting. “I would say [Biden] was pretty specific about that.”

[…]

“It’s fair to say that he said, ‘We’ve negotiated with the Republicans, but we’re not going to negotiate with the Democrats,” Rep. Anthony Weiner (D-N.Y.) said in paraphrasing the vice president.

Larry Summers is saying, ‘One wrong move and the economy gets it.’

“One of President Obama’s top economic advisers warned on Wednesday that the nation could slip back into recession if Congress did not pass the administration’s tax cut deal with Republicans, as the White House sought to press Democrats into backing the plan.

“Failure to pass this bill in the next couple weeks would materially increase the risk that the economy would stall out and we would have a double-dip” recession, Mr. Summers told reporters at a briefing.”

But in September:

“Maintaining tax cuts for top wage-earners should take a back seat to other more pressing measures, White House economic advisor Larry Summers said…”With deficits looming as seriously as they are, why is now the right moment to lock in several hundred billion dollars of tax cuts for 2 percent of the population when we could be using those revenues to strengthen incentives for investment in the country’s future?”

What a difference 3 months makes.

President Obama’s Republican “friends” are making clear their intentions on the so-called “temporary” reduction in Social Security payroll taxes:

“Republicans acknowledged that the expiration of the tax holiday will be treated as a tax increase. “Once something like this goes into place, a year from now, when it expires, it’ll be portrayed as a tax increase,” said Sen. Bob Corker (R-Tenn.). So in a body like Congress, precedents matter and this is setting a precedent. I think that certainly is going to create some problems down the road if it passes.”

“Once you bring a rate down, if it goes back up, people will feel that. They’ll feel their paycheck being less and that argument” — that letting it expire amounts to a tax hike — “eventually is bound to be made,” said Sen. Mike Johanns (R-Neb.).

[…]

Lamar Alexander, the Senate’s number-three Republican, also said that reform of Social Security should be tied to moving that tax rate back up. “My personal hope is that it doesn’t become permanent unless we deal with a way to make Social Security solvent over the long term,” he told HuffPost. “You have to remember, the payroll tax funds Social Security and I like the idea of a lower payroll tax contribution, but we’ve got to make sure Social Security is solvent, which we should be doing this next year as the first order of business.” The way to make the program “solvent” and keep taxes low, of course, is to reduce benefits.

On a related note, this is what happens when you go down the road of giving in to the demands of “hostage takers.” The line starts to form:

“Here’s what Sen. Susan Collins (R-ME) told Senate Majority Leader Harry Reid that she needs to support a full Senate debate on the defense authorization bill (the vehicle for Don’t Ask, Don’t Tell repeal): 15 guaranteed votes on amendments (10 for Republicans, and 5 for Democrats), and somewhere around four days to debate the bill.

Senate Majority Leader Harry Reid already promised her the 15 amendments, but his initial offer was for a day or two of debate. Here’s her response to reporters tonight, after a Senate vote.

“The majority leader’s allotment of time for to debate those amendments was extremely short, so I have suggested doubling the amount of time, assuring that there would be votes, and making sure that the Republicans get to pick our own amendments as opposed to the Majority Leader.”

“If he does that I will do all that I can to help him proceed to the bill. But if he does not do that, then I will not,” she added.”

Reaction of a Sanctimonious Purist

09 Thursday Dec 2010

Posted by in budget, Congress, economy, Obama, Politics, Taxes

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In response to President Obama’s Tuesday hissy fit press conference:

Mr. President,

At the risk of going all sanctimonious and purist here, and not wanting to sound like an ungrateful pie-in-the-sky idealist who fails to recognize your greatness and the magnitude of your accomplishments, excuse me for being so bold as to assume I have even a smidgen of your knowledge and grasp of the issues and humbly offer a few points of “hope”fully constructive criticism.

The overall problem with your Grand Compromise is not so much the parts but the sum of the whole. You have surrendered to (oops, I mean compromised on) the Republican notion that tax cuts somehow equals economic stimulus. If that were true….well, no need to beat that long-dead supply-side horse.

You say that you were forced into this “deal” because Republicans pretty much had you backed into a corner and were holding middle-class tax cuts “hostage.” Maybe if you hadn’t waited until the last 2 weeks of this session of Congress to do something about the expiring Bush tax cuts (you were aware of the expiration date prior to this month, I assume) that wouldn’t have happened.

You said that your Republican “friends” (those “friends” who have stated their top priority as doing everything in their power to make you a one-termer) had to “swallow some things they didn’t like” in this deal. What would that be? The goal of most Republican policy in oh, say the last 30 years or so, has been two-fold—look out for the rich and….look out for the rich. Seems to me with the permanent temporary extension of the Bush tax rates on income, capital gains, dividends, and the unexpected gift of lower estate taxes thrown into the pot, they just about achieved their nirvana.

The overall numbers might look like you got the best of your “friends,” but on closer examination, not so much. The tax cut measures you wanted total out to $216 billion as opposed to the $125 billion in cuts the Republicans got. But that $125 billion goes to 1% of the people and the $216 billion gets divided among the other 99%. We get a few hundred, they get a few hundred thousand, if not more.

Obviously, you’re still not over the public option debate, and how your sellout of compromise on that aspect of health care reform was somehow misinterpreted by the “purists” as a sign of weakness and not an accurate measure of your “core principles.” Maybe if you hadn’t continued to voice your support for it months after cutting a secret deal with hospitals and insurance companies to not include it in the final legislation, we might have had a better idea of what those “principles” were and taken that into account in the search for “purity.”

Speaking of that, sir. You seem to not miss an opportunity and take great pleasure in browbeating and chastising members of your own party and those who supported you in 2008. I guess it gives you a warm, fuzzy, bi-partisany feeling all over. Good luck with that strategy paying off in 2012.