Posted on 04/09/2013 9:43:38 AM PDT by lbryce
One story has dominated the economic news this past weekend. The story is that job creation has slowed to a “trickle,” in the words of a Wall Street Journal headline. Only 88,000 new jobs were created in the month of March. That feeble rate was accompanied by the “good” news that the jobless rate, which only counts those actively seeking work as unemployed, had dropped from 7.7 to 7.6 percent.
The real news was that the decline in the unemployment rate was explained by the separation of nearly half a million people from the workforce, so that labor-force participation shrunk from about 67.3 percent in early 2000 to about 63.3 percent today. A crude first approximation of the real unemployment rate would add back at least 4 lost percentage points. A more accurate estimation of the actual unemployment rate would account for those individuals who were out of the market by 2000 in part because of the impediments to market performance that were already in place.
With these weak numbers, the political discussion has continued to focus on job creation and economic growth: How should these goals be accomplished? On “All Things Considered,” I heard E.J. Dionne advise that the Federal Reserve should keep its foot on the accelerator, by opening the cash spigot and keeping interest rates at their historic lows. At the same time, the rest of the government should put worries about the deficit aside—or so the argument goes—by increasing public expenditures funded in part through higher taxes on the top one percent. David Brooks rightly disparaged that prescription, but still was unable to identify that “big structural change” he hoped would turn the economy around.
Obama’s Misshapen Tax Policy
President Obama had, of course, no doubts on what should be done. In his view, we should double down on the same policies that he has championed since coming into office. His new proposed budget modestly chips away at the cost-of-living increases in Social Security spending, which has drawn fierce resistance from his party’s incorrigible left wing.
But his preferred long-term changes all cut in the opposite direction. The President has renewed his call for capping the charitable deduction at 28 percent—a dreadful idea—even as he tries to steepen the level of progressivity of the income tax. In addition, the President unveiled a proposal to slash the amount of money that individuals can keep in their tax-deferred retirement accounts to $3 million per person. Putting aside the transitional problems that dog this proposal, the simple point is that additional taxation is likely to further retard the creation of jobs and wealth, by shrinking the size of the largest pool of private investment funds in the United States.
Handing Out Political Favors
That isn’t all. The tax system’s high progressivity drives endless political efforts by well-heeled interest groups to exempt themselves from this bold new order. Businesses that are chafing under their heavy tax burden are directing their attention to the people in Congress who pull the levers of power. High on that list is Montana’s Max Baucus (D), the longtime head of the Senate Finance Committee, which has a lot to say on both the revenue and spending side of the budget. The New York Times reports that some 28 of his former Congressional aides are now registered tax lobbyists, as are many former staffers of such influential operatives as Senators Charles Grassley (R-IA) and Charles Schumer (D-NY).
But have no fear, says Sean Neary, a spokesman for Senator Baucus. Neary assures a wary public that Mr. Baucus often “rejects” proposals from his well-connected supplicants, and that all of his decisions “are based on the merits.”
Just what merits decide which set of special benefits should be granted and which denied? Neary is never at a loss for words. “Every vote has to answer one question for him and that is: How is it impacting Montanans?” It is harder to know where the greater corruption lies: Is it in Baucus’ explicit decision to put the welfare of the tiny number of Montanans ahead of that of the other 99 percent of this nation’s citizens? Or does it lie in the delusive confidence that so benighted a senator can figure out just which of the endless special deals is worthy of his support?
Baucus has it all backwards. The essence of a sound tax policy is to make it unremunerative for tax lobbyists to skulk around Washington to obtain preserve special tax benefits for hiring veterans. But as the tax policy becomes more progressive, the more it starts to resemble Swiss cheese, which incentivizes lobbying for still other loopholes.
The next generation of special carve-outs and exceptions will be of short duration, just like the rate structure itself. The tax cliff of January 2013 was no cliff at all. It was just one of the large array of tax hills, valleys, and detours, all of which reduce or postpone investments from businesses that don’t have the foggiest idea of what the tax picture will look like once a deal surfaces. The concealed costs of the current tax uncertainty are very large. The only antidote is to flatten the rates and broaden the base, which is antithetical to the Obama mantra of “redistribution first.”
Communism/Socialism extend only as far as how it effects society in a philosophical sense. There is no need to study, learn anything about the dynamics, underlying mechanisms of modern economic phenomena because Communists, Socialists having eliminated the need to understand what makes a modern economic system tick replaced with central planning being the be all and end all of all of everything economic-related. So of course, you won't know the first thing about the way economics is practiced in the West if you're BHO.
We're a bit past that now. What would Michael Collins do?
Poor zer0. Maybe he could consult Maggie.
Obama’s ignorance about all things economics was readily illustrated by his “jobs” initiative that sought to stimulate hiring by giving small cuts in the Social Security tax. The White House web site touted the thousands of dollars in tax cuts given employers by reducing the Social Security tax and how this would cause new hiring. Obama was clueless that employers do not hire people just because they get a few thousand dollars of Social Security tax reduction, but that the new employees will be able to generate enough new revenue to pay their wages, additional overhead and make a profit.
I object.
Obama is not stupid, nor does he lack access to zillions of smart advisors.
AND
people usually intend the obvious consequences or outcomes of their actions,
especially when they persist in pursuing consistent courses of conduct over long periods of time...
The downward spiral in the American economy, and the increasingly severe lack of jobs, and the growing dependance of millions and more millions on the dole, are all perfectly predictable consequences of O’s monetary, fiscal, regulatory, environmental, tax, trade, and open borders policies.
As such, these consequences are intended.
I]m tired of reading how stupid O supposedly is.
He may have lots of shortcomings, but stupidity is not one of them.
Economic? Where the rest of the list?
0 dosen’t have to be proficient in anythig!
But he does need the competency to appoint team members that do. Goin on 5 years and there is no one in the Country that can rectify the mess of a failed Administration!
I would start with the Press Sec. the rest of the liars fall into place!
hussein isn’t ignorant of economics, he’s well educated and well versed in economic theory. The problem is, what he knows is all wrong.
Obama ignores personal attacks. His eye is always on the main prize. Nothing will keep him from his appointed rounds. When he's out of office, another marxist will grasp the baton....and carry on with the race for the next four-year lap....and so on and so forth into the future.
When Stalin took over during the post-tsarist era, did he deviate from his goals? Did he let the disapproval of the free world impede his agenda to impose communism on the beknighted Russian people? Was Stalin still the ignorant peasant or was he an economic wizard? Makes no difference. You can be both with a quick, cunning mind plus the proper advisors, indoctrination and speech writers.
Obama is the case in point....he's ghetto trash, but he's clever, an easy learner, a smooth talker, he has given himself a splendid veneer of sophistication and "cool", and above all, he's dedicated to his ideology.
When even conservative talkers on TV shake their heads and opine on how "ignorant" Obama is I just shake MY head at how ignorant the talkers are.
Leni
He may be clever, or not stupid, in a sinister Machiavellian way ,brilliant in the characteristics that makes one an effective sociopath, liar, manipulator, smart the way Hitler was smart but when it comes to Economics, as inferred by his Harvard grades being sealed, I would wholly disagree with you that in fact he is utterly, hopelessly ignorant.
Obama knows exactly what he is doing and things are going pretty much according to plan
Every time he proposing more burdens on taxpayers and employers he always says, “Is it too much to ask that they chip in JUST A LITTLT BIT MORE?” When he says that it drives me crazy! I think the only thing he ever learned in life was about boiling frogs, they don’t realize the water temp is killing them until it’s too late.
Following Obama’s prescriptions for generating growth is like digging for gold in your turnip patch. You can dig as long as you want, but the end result will be no gold.
He’s a politician, so he has better political skills than you or me, and his people have experience playing the rough Chicago political game, but among other politicians, he’s not the most skilled or the most capable. He has some tricks and he uses them, but brilliant he isn’t.
I’m glad somebody “gets it”.
I gave up on listening to Hannity because he kept asking “Doesn’t 0bama realize what effect his policies are having”?
Of course he knew what effect his policies were having; that’s why they were his policies.
0bama was raised from his mother’s knee to hate Western Civilization, to hate freedom, and most of all to hate this country in particular.
Keep that in mind, and everything he does makes perfect sense.
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