To Hell With the Economy

Reading the newspapers online this fine Wednesday morning and there are numerous stories on how the President will change his “tone” on the economy. Sigh. Come on folks its campaign season. We all now after Labor Day traditionally the President gets out there to help his party. I’m an enormous fan of action speaking louder than words. While the President will try and grab some heart strings this morning on his family’s struggles while growing up in Hawaii there are significant actions that will cloud those “words”:

Biden travels to New York City to appear on “The Colbert Report” today. Nothing says economic stimulus than using more taxpayer money flying our VP to NYC for a stint on tv.

The O-ministration slamming down their former budget director’s debut op-ed in the NYT on the Bush Tax cuts being extended for the rich for two years.

I tweeted out weeks ago when one of my close contacts had lunch with the President and he told me the President has no intention what so ever of extending the tax cuts for the rich because it is not part of his social agenda. My contact even told the President he should extend them because when you are looking at the enormous size of the deficit, the tax cuts will hardly make a dent. He also urged the President even “the rich” 250k a year need some assistance in this economic recovery. My contact told me something that sent chills up my spine. He said the President will not waver from his social agenda even if it is detrimental to the economy because he strongly believes in what he is doing. I think we are all seeing that.

Flowery language is great if you are a speech writer. But we need action. We have true unemployment in the mid to high teens. You can’t say to hell with the economy and everyone else in this great nation to just do what you want. After all, quoting the country’s preamble to the Constitution: “We the people of the United States, in Order to form a more perfect Union…” It doesn’t say I or me does it?

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12 Comments

Filed under Business, congressional spending, deficit, Jobs, Leadership, Main Street, personal finance, politics

12 responses to “To Hell With the Economy

  1. Al

    Absolutely true. He’s not trying to fix the economy and failing…He’s trying to ruin it and succeeding with alarming precision. A failed economy will necessitate even more government intervention, which is his point. Watch the states which receive the most “stimulus” funding…are they safe Democratic? Are they battleground? FDR did the same thing…No better campaign ad than a fat infusion of taxpayer cash.

    The problem this time around is that the same slick internet-savvy marketing that got Obama elected is fueling his opposition now. The rise of the Tea Party Movement has been shockingly swift in the 18 mos. or so since inauguration. The once unthinkable is now a reality—Conservative-infused Republicans can retake the House and stand a fighting chance at the Senate. Why? Because Obama is repellent. Look at all the Democrats fleeing his legislation…his policies….his endorsements.

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  2. That is very disturbing to me. The idea of being so locked in on a social agenda that you don’t care about doing harm to the economy. It’s scary even. I want to hope that it isn’t true.

    I’m glad I found your blog. Jame Rickards tweeted it. Adding you to me RSS feed.

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  3. Raising taxes on high earning households is a terrible idea. It is an economic de-motivator. Many people will ask themselves why they should bother to make more money if the government is going to take it away from them through taxation? That’s the nature of humanity. Capitalism has worked so well because it is aligned with human nature. This was a theme that Adam Smith touched upon in his writings.

    Also, it seems like there’s a lack of attention to the meaning of what 250k is. In certain areas of the country (most specifically, Northeast and West Coast), costs of living are tremendously higher than in a place like Dallas. That seems pretty obvious to me.

    Taxation doesn’t work the same for everyone. Those who make more pay more taxes. The economic impact of a tax raise on a household that pays a higher percentage of taxes is greater than in lower income households. Raising taxes on the people that pay the most amount of taxes doesn’t appear to me to be an effective way to spur economic growth.

    It is my understanding that the expiration of the Bush Tax Cuts will increase taxation levels of individuals at all income levels. An increase in taxation for individuals reduces their ability to spend. Consumer spending is a key to a healthy economy. A reduction in purchasing power amongst consumers is the last thing that the economy at large needs right now.

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  4. John Treichler

    Haven’t heard a plan to cut Gov’t spending…. just cut fraud, Freeze spending, everyone takes a 10% cut across the board.

    Another approach: Send the big social programs back to the States with the associated revenue stream from payroll taxes. Let the States decide how to care for their Citizens.
    Examples:
    1. Send healthcare back and let the States decide on their programs. Mass has one with warts but shows it can be done.
    2. Send Medicare back to the States. Let States keep payroll tax revenue stream.
    3. Send Education back to the States.
    4. Send Welfare programs back to the States. States can decide locally how to care for their people. Lots of examples how local people work for “hours” for credit in grocery stores or even the hospitals for healthcare. Google “Japan Healthcare Hours”.
    5. We could even send Social Security back to the States with the payroll tax revenue stream. Since the Fed just spends the excess, the States may as well have the use of the funds.
    6. Get rid of the Fed Dept of Health, Education & Welfare and the est. 10,000 civil servant payroll.

    Who else has a definitive approach? Any thoughts?

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    • John,

      Thanks for the post! I like your idea of putting the responsibiity back on the states. What it will highlight is the failure and bureaucracy of its system. Much of the stimulus from the $800b that went to states either went to payroll or still being used. Case in point- last May my town finally started paving a road using stimulus cash. States need to get their act together.

      The one thing I do have to respectfully disagree on is getting rid of the 10k civil servant payroll. These departments if run correctly (I know laugh now!) do have a purpose. Problem with them is that they need the proper organization and leadership to have them run efficiently. Government needs to be run like a business. If we had companies that were so reactionary to a problem instead of inventive, slow to take action and ran massive deficits many would be out of business. Its the system DC created that has made thesee departments what they are.

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  5. John Treichler

    Problem with lack of Jobs is that [after we exported our industry] our domestic small companies don’t see markets here in the USA where they won’t be undercut by pegging in the currency markets.
    Tax policy only works if there are profits in an industry to be taxed.
    And, consumer and business consumption of goods from US producers keeps the $US here to be recycled, not exported.

    Policy: Build it here to sell it here – America First. It’s OK for foreign companies to build plants here to sell here and take the profits home, but the jobs stay here.
    Only method that occurs to me to make this happen is that we return to “a flat tariff” on all imports based only on the inappropriate pegging by foreign governments in the currency markets. For example, China devalued its currency by 40% when they pegged 8 Yuan = 1$US [Clinton says thank you for the $$ contribution]. So, we look at the current appropriate undervaluation and, for example, add a 40% tariff to all goods manufactured in China. USGov keeps the tariff revenue.
    Protectionism of course, but we base it only on aggressive foreign currency pegging, not by industry, on currency.

    Result: Small US companies see will markets for all types of essential products that they can manufacture and profit if the currency costs are leveled. They will expand to fill the market and in doing so, hire new workers and buy new “American High Tech Tooling”.

    At some point it’s America First. Tariffs can be used or abused. Use to level the economic-cost playing field is a fair use of tariff tool, gives the Feds a revenue stream, and American industry a market into which they can expand.

    ps. I went to Home Depot to get some copper pipe fittings: guess where they were made – China. Egads!

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  6. Greg

    Lori Ann, great insight, but seeing how you’re a senior producer for CNBC’s Squawk Box, are these your true feelings, or are you gathering emails of folks unwilling to drink the economic recovery Kool-Aid? Okay, I’ll remove my tin foil hat now…

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    • LOL Greg!! These are my feelings as well as the feelings from my contacts that I mention. I believe in the free capital markets and a government that would incentivize business. I believe government should help foster polices that would enable innovation, investment and also employment πŸ™‚ Thanks for including me to your blogs list πŸ™‚

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  7. John Treichler

    Appreciate your professionalism in responding to the postings here – mine and others. Shows you actually read the commentary. Atypical on the web blogs. ~Best.

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    • Thanks John πŸ™‚ I try to respond back in a timely manner. Between this blog, writing for cnbc.com now, producing and booking CNBC intvs and being a mom of three its amazing I can juggle it all! πŸ™‚ Keep the conversation going. Your insights are great. Thought provoking πŸ™‚

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