Hillarysworld

Sanders · Diamond

"Last Night's Big Loser" (11/3/10)

jdona · Platinum

I wonder what the opinions will be in 2 years when the American people see nothing but 2 years of gridlock, no accomplishments, no improvements, and constant bickering between people who still have no idea how to create jobs or improve the economy? Are we going to throw all the bums out then and elect a new crew of bums who still don't know how to do anything?

Sanders · Diamond

jdona, Great questions there.

It is the good old "Whose gonna bell the cat?" because no one likes the messenger of bad message.

I hope the current set of electees are brave enough to speak in realistic terms and not obfuscate to serve their corporate masters.

Here is the real issue.

- Money needs to move for job to be generated.
- Whether supply side or demand side, the theories are about moving money

When there is low demand in an economy, businesses do not invest in that economy.
When labor rate is high businesses flee that economy in favor of lower wage-base with comparable (if not equal) skillset.

As income of corporations increase, if they are taxed, the public sector can sustain jobs for a LITTLE while. Then, the private sector needs to take over. The private sector job growth has begun. This is good. Public sector has lost a few jobs. This is good also.

But that trend needs to be hugely better. Especially, a lot more jobs need to be created in the private sector. And, I hesitate to say cut jobs in the public sector -- that will only very rapidly further dampen the labor market and lower wage base in the country and hasten the global leveling.

Instead, the riches that the corporations have earned with the benefit of the government-funded Internet projects and historic tax shelters for investing outside the U.S.... (that has contributed to the current situation) needs to begin to PAY into the coffers for Public Funds to be then ploughed back into the economy, to fix the ailments that are causing the jobs to leave by the boatloads.

Meanwhile, the HENRY's (High Earners, Not Rich Yet) are the class that has the biggest stake in the tax expiration. Read: The Tax Plight of the $250,000 to $500,000 Crowd (HBR Blog by Justin Fox) That is the one group to be considered more favorably. The rest honestly will need to pay their fair share into the coffers.

If you think tax-rebate need to continue with no change, consider that the entire time of tax rebates, the country has had jobs leave by the proverbial boatloads, and we did not even know as our jobs left the country.

A beauty of free enterprise is it knows no borders. As an entrepreneur, my interest is that of the shareholder and the owner. THAT is the American dream. So, we have to redefine what that dream needs to be if it is going to consider the neighbor who has degrees but no job, and children graduating but no internship in sight.

The government needs to spend on those kids to up their skills mega big.

Kids in India and China start 1st grade now at age 5, and already know alphabets, basic math (+, -, some even know some multiplication), can read some English and know native language and the 2 language early exposure makes your head think differently - in concept and connectivity terms that helps with analytical skills. We have known this is coming, yet we are unprepared, and we think it is all hype.

Perhaps we have to start believing the hype Do Believe the Hype - Thomas Friedman - Published: November 2, 2010 and look at the future in our homes that comes back home on school bus every day, with just a few pages of homework, no real reading assignment, and complains of too much homework, goes for the TV remote.

As our country slides -- or stagnates (at best) -- when other countries plant their satellites on their mountaintops and invent very low cost alternatives such as the solar lantern just invented by a celebrated CNN Hero in Africa -- we have the challenge of re-skilling to new industries to stay on the "still relevant core competency" "still competitive" treadmill.

There is nothing constitutionally wrong that has created the current situation. Shouting slogans of "back to the Constitution" will do nothing significant to solve this situation.

So, jdona, you pose excellent question. Pendulum shift in the Congress is simply lopping the issue over the wall that cures nothing. Tough choices are what the Congress is going to have to make -- tough for the corporations that have won in the current situation, tough for parents who have never seen the kind of homework that our kids will bring home/need to be bringing home.

As long as the Congress as a whole thinks the solution can be left to the corporations to fix without government intervention, it is not happening without major pain and disillusionment as we will continue to languish without taking responsibility. The focus of the government seriously needs to be on
- creating conditions necessary for the HUMANS (children in particular) to excel WITHIN the country, thereby creating greater competencies for the future
- recognizing that the government has created the conditions for the businesses to thrive already and further thriving will require them to plough in more of their income as good corporate citizens... either directly or because the government incentivizes it, or demands it. It is healthy for the ECONOMY for corporations to do so, but it may not be to the taste of individual companies in the short- to intermediate-term.

The question is, having missed the opportunity to focus on that in the past two years, how will the POTUS bell the catty congress in the next two years.

=====
Edit: Added article link to HENRYs tax plight The Tax Plight of the $250,000 to $500,000 Crowd (HBR Blog by Justin Fox) . Justin Fox is editorial director of the Harvard Business Review Group and author of The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street.

-- Edited by Sanders on Wednesday 3rd of November 2010 05:05:38 PM

typo - kids

-- Edited by Sanders on Thursday 4th of November 2010 10:02:00 AM

Sanders · Diamond

I went to post this a separate thread and thought this fits here better.

"Midterm election results: the fight Obama now faces" (11/3/10)

Read @ Guardian UK - Michael Tomasky's Blog

Midterm election results: the fight Obama now faces

With an uncompromising Republican party back in the game after strong election results, the president has to play hardball

- Michael Tomasky
11.3.2010

[SNIP]

The big question in Washington now is how Barack Obama handles this adversity. He first needs to tell Americans that he heard what they had to say Tuesday. But next on the agenda will be a major test: an upcoming lame-duck session of the outgoing Congress will convene to consider whether to extend Bush-era tax cuts on the wealthiest households (earning more than $250,000 a year). Obama has opposed it. Republicans, with the wind now at their backs, are gung-ho for it. It will be a tense showdown.

Come next year, Obama will need to do two opposite things simultaneously. He will have to move to the middle on some issues. Independents, who backed him in 2008, left his party in massive numbers this year. If he can't get a big chunk of them back, he will not be re-elected in 2012.

But he also has to fight. Republicans will pick fights, and they'll think they can roll him. And they will hold a constant parade of hearings investigating the administration, trying to snare some big administration fish (maybe Obama himself?) in a perjury or obstruction of justice trap.

Republicans play for keeps. And now, Obama is going to have to, too. It's a long and grim way from 2008.

Full article @ Guardian UK - Michael Tomasky's Blog

=========================

You may have noticed, the tax cut extension proposal has already been brought up today first thing in the morning by House Rep / new Speaker John Boehner. He is representing his national-level stakeholder constituency very well.

I understand him wanting to end that tax favor to rich. The ONLY place to get the money needed to invest in our children's education and to rebuild infrastructure will need to come from letting that tax cut expire...

But to be obstinate about $250k as the start point [Read: "Obama admits he got a ’shellacking,’ but shows no sign of budging on core agenda" (Jon Ward, Daily Caller 11/3/10)] may not help his cause with getting to the goal. In re-instituting the Clinton taxes, perhaps HENRYs could be spared, recognizing that not all "rich" are the same weightage of richness... that there are gradations. HENRYs are actually loosing ground faster than most of the rest of the economy, and also do not have inherited assets for the most part which is something not recognized in most articles on HENRYs.

So, a compromise on the tax plan may be in order.

And, some government spending is absolutely necessary if we are going to restore any competitveness in the U.S. Otherwise, we will necessarily see our children move out of the country to pursue that American dream [outside the country of course].

-- Edited by Sanders on Wednesday 3rd of November 2010 05:57:35 PM

reddirtgirl · Platinum

Sanders, I read your link "Obama admits he got a shellaking...", and he still doesn't get it. He thinks he's doing a great job, the people just haven't seen it yet. What an idiot. That's ok, keep doing what you're doing and be a 1-term president.

Sanders · Diamond

reddirtgirl wrote:

Sanders, I read your link "Obama admits he got a shellaking...", and he still doesn't get it. He thinks he's doing a great job, the people just haven't seen it yet. What an idiot. That's ok, keep doing what you're doing and be a 1-term president.

reddirtgirl, that just may have become easier.

One big driver of campaign money pouring to candidates this year has been the tax break thing. For all the talk about budget deficit reduction, the TEA party is happy to let the rich have the big tax break... I am not even sure that most people really know how bad the tax distribution is at present.

On the Bush tax cut.. he has three choices now

Let the tax break expire. Theoretically, this is easy. He does not have to sign it. He vetoes any proposals from the Congress. He earns the wrath of businesses and gets no campaign finance from the businesses. He gets kudos from the civil rights activists but not anyone else. May be Unions would like it - unclear -- but even they may have members with income in the $250-500k range, and Union leaders are heavily influenced by corporate profit motive (incentive plan drivers)
Revise the tax rebate to a new plan with the involvemnet of this new Congress giving a break to $250k-$500k but not to 500k+ -- but wouldnt that involve having the Repub House to agree to taxing the rich (defined $500k+ in income)? I think so -- VH could clarify the legislative process. If it does, it's unlikely to happen.
Extend the tax break for all. This is technically easy also. Both the House and the Senate will agree - all are in Corporate pockets now. But at what cost will they do this? Continuing to starve the national income stream => force huge job cuts in the public sector; no money for investing in education and infrastructure to make U.S. competitive. Do the corporations care? Timbuctoo is just as easy to do businiess in as Cherry Hill, NJ.

So, that's about Income tax in the U.S. Given who got elected and whose got them elected... Which of the above three do you think will happen?

Is there a way to influence this? Can public be educated enough that the congress picks one that is more favorable to the people and national competitiveness (1 or 3)?

Then we come to Corporate Income Tax.. which is already very favorable with many loopholes.

Once these U.S. corporations make their profit outside the U.S., they are not bringing the cash back to the country. They are keeping the money outside the country and investing in other countries (not necessarily where the money is made) because to bring the money into the U.S., they have to pay tax. They are saying let us bring the profits back to the U.S. tax-free profit . Do you think that tax-exempt repatriated profits will generate new jobs in the U.S.?

Meanwhile, this morning, the first news item I saw was "MANGOES FOR MOTORCYCLE" - deal with India. Except, it as not really MANGOES FOR MOTORCYLCE export... It is MANGOES FOR MOTORCYCLE MARKET. Here's the difference. The product will be made in India [India levies big customs duty fees at the border]. Harley Davidson is opening its second non-U.S. factory in India. So, it is really, "MANGOES FOR PROFIT from selling motorcycles made in India". That's just this morning's example. How long do you think before we start importing motorcycles made in India?

jdona · Platinum

I don't like Eric Cantor, I can't stand him. But I will give him credos for one thing. He does understand that if this Congress doesn't act in the interests of the American people, they will be in his words "wandering in the desert for eternity" in two more years.

Sanders · Diamond

jdona wrote:
I don't like Eric Cantor, I can't stand him. But I will give him credos for one thing. He does understand that if this Congress doesn't act in the interests of the American people, they will be in his words "wandering in the desert for eternity" in two more years.

jdona,

Yes, but did the American people know that they elected companies that want to send jobs outside the country to beef up their profits?

There is really no hope of corporations bringing cash into the U.S. economy for the near future.

I am glad to see the Fed resort to Quantitative measures (despite likely impact on inflation) - it will ease credit for a little while for the small businesses (hopefully). They needed to do this last year in January. Now, what would be really bad is if this quantitative measure did not ease credit for small businesses, but instead does the favor for big corporations...

Let us hope the corporations do not borrow in the U.S. to invest outside the country to ship out more jobs outside the country (even as I write that I raise my eyebrows and say, what are the chances of that!)... You know, like the motorcycle company's new upcoming plant in India - soon they will manufacture the same product now made in the US for LESS (and same ISO and other global standards) in India and then soon after they will import them here, and then close the U.S. plans ==> jobs shifted from the U.S. -- it has happened to many manufacturing plants - typewriters to airconditioners to computers.

Monetary policy cannot stop global dynamics. Fiscal policy coupled with penalties and incentives (taxes) is necessary to stop the bleed.

-- Edited by Sanders on Thursday 4th of November 2010 02:36:00 PM