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For a long time Republicans (and some Democrats) have talked about tax reform. The basic idea is to lower rates by eliminating deductions. Now the focus is on tax cuts. I’m not opposed to them per se but both parties need to remember that any decrease in revenue or increase in spending means more borrowing, likely into perpetuity. Right now interest rates are low but I remember the days of 16% mortgages. We are already putting a huge burden on future generations.
It is an article of faith among many Republicans that tax cuts will actually increase revenue because of increased economic growth. Carrying that argument to its logical conclusion means that we can maximize revenue by eliminating all taxes. Even if the theory did work, a general tax cut is a very inefficient way of spurring the economy. Struggling businesses won’t be helped since they don’t pay taxes. Many large companies have plenty of cash already (Google has over $80 billion) so the tax reduction won’t be spent. Since the vast majority of personal income taxes are paid by the higher middle and upper classes, they will get most of the reductions and will likely just put it into savings. Many poorer people will use them to pay off debt. This approach is like scattering seeds randomly. Some will end up in fields but most of it will fall on forests, lakes, highways etc. A much better approach is to focus on the activities that directly lead to economic expansion. These could include increased deductions for business expansion or credits for new hires. There are also ways to incentivize individuals as well. If everyone in Washington would develop solutions rather than relying on tired old beliefs that don’t work, it’s amazing what they could accomplish.
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Even his detractors must admit that President Trump is making some headway toward acting presidential. He has cut back on idiotic tweets and now recognizes that we need to be concerned about what happens in the rest of the world. However, he still has a long way to go.
He created a crisis that was totally unnecessary. Congress needs to produce a budget extension by tomorrow or the government will shut down. This has happened in the past when there was divided government. The idea that this could happen when Republicans are totally in control is unbelievable. There were two problems, both created by Trump. He threatened to potentially force a shutdown if he didn’t get money for his beloved wall. His justification was that he should get what he wanted since he won the election. That’s not how it works in a democracy. He also didn’t want to make payments required under Obamacare. Laws are laws and not just suggestions. We had enough of that in the Obama administration. Fortunately, cooler heads have prevailed and we have averted a crisis for the time being. The man has spent decades as an absolute ruler in his company. By now he should have learned that the government doesn’t work that way.
Last November Donald Trump was elected to a presidential term of 1,461 days. Right now it is hard to listen to a news program without hearing someone prattle on about the first 100 days of the Trump administration. He has complained about it but has mentioned it himself many times. This goes back to Franklin Roosevelt. He became president at a time of unparalleled economic disaster. He also had overwhelming congressional majorities. It was possible to go from an idea to a billed to signed legislation in a matter of weeks. Legislation is very complicated and can have many unintended consequences. It took fourteen months to pass Obamacare and we have seen all the problems it created. Congress should take its time and make sure that laws are carefully written. Unlike in FDR’s time, we have a great divide, even within parties. It takes time to build a consensus. There are many ways to judge the effectiveness of a president. Looking at how much legislation he can push through Congress in his first 100 days has got to be one of the dumbest. Recently there was a well-organized series of demonstrations demanding that President Trump release his tax returns. I am a little surprised that not releasing his returns seems to be their biggest complaint. I also wonder if any of them have filed a return. They don’t list every business deal or investment. One woman wanted to know if he was a billionaire. That also doesn’t show up. I have gone through one of the Clintons returns. Frankly, it wasn’t very interesting.
While every president since Carter has released their returns, I don’t think it’s a big deal. A medical statement is much more important. Let’s start with a little quiz. There are two companies. Last year Company A had $166 billion in sales and over $9 billion in profit. Meanwhile Company B had $7 billion in sales and lost $675 million. So which company is worth more? As of yesterday the answer was company B.
The companies are General Motors and Tesla. Both are in the auto business. Both make cars that run on hydrocarbons (you may not see the coal burning power plant when you charge up a Tesla but that is where the electricity comes from). A majority of households can buy a GM car while very few can afford a Tesla. I’m not knocking Tesla. It’s an innovative company that will likely do very well. However, it is worth a tiny fraction of GM. News reports hail this as a new age in the auto industry. That is ridiculous. Unless the government hobbles GM, it will outsell Tesla for a long, long time. Ridiculous valuations are nothing new. Four hundred years ago, people paid a fortune for a few tulip bulbs. When making an investment, focus on the near future. The pie in the shy is too costly. When Barack Obama was swept into power, the Democratic Party was the strong as it had been since the Sixties. Just eight years later, they are at a low point they haven’t reached since the Twenties. It could get worse before it gets better. Next year they have to defend ten Senate seats in states that Trump won.
Given such a setback, you would think they would roll up their sleeves and go to work. Instead, many are focused on nursing old grudges. Some seem to believe that their only real problem was the release of some hacked emails. The one person who should be most concerned is DNC Chair Tom Perez. Instead, he is whining about the past. Recently he declared that Trump didn’t win the election. Apparently he favors overturning the Constitution and having the Democratic Party pick the winner. Senate Democrats have been in an uproar ever since the Republicans refused to consider Obama’s appointment to the Supreme Court. Nobody should really expect a party to change the balance of the Court against them in an election year. Their anger led Democrats into the most idiotic filibuster in our history. They claimed Neil Gorsuch was a dangerous radical. If that is true, then why was he unanimously confirmed by the Senate for his previous position? They knew he would be confirmed one way or another. They could vote against him but not start a filibuster. That would give them a say on future appointments. Now the GOP could put a trained monkey on the Court and there is nothing Democrats can do about it. If Democrats want to make a comeback, they need to end the temper tantrums and give people a compelling reason to vote for them. Right now Washington is facing two scandals. What is really interesting is the level of coverage each story gets.
The first one involves possible spying by the Obama administration on the Trump campaign staff. Trump accused Obama of wiretapping Trump Tower. So far there is not a scintilla of evidence that it actually happened. However, there has been a breaching of the rules. If conversations by American citizens who are not under criminal investigation are intercepted, their names are hidden. We now know that Susan Rice had the names of Trump officials unmasked. Previously she said she knew nothing about it; now she says she did nothing wrong. Apparently the White House was gathering whatever intelligence it could on Trump officials before Obama left office. Far more serious was the leaking of classified data relating to a conversation by Michael Flynn. While the seriousness of White House actions is unclear, leaking is certainly a crime. The second story involves collusion between Trump campaign officials and Russia. We do know there were some contacts but so far there has been absolutely no evidence that it actually happened. What is interesting is the difference in coverage of the two stories. Until Rice was linked to the unmasking, there was very little coverage by the mainstream media. Meanwhile the second story has been in the headlines day after day. Reportser breathlessly announce it is about to break. It has been compared to Watergate and there has been talk of impeachment. A Democratic congressman said people will go to jail. All this with no evidence whatsoever. In these partisan times each party minimizes actions by their party while maximizing actions of the other. If someone committed a crime, they should be prosecuted. It doesn’t matter what party they belong to. Meanwhile, the press ought to have at least some factual basis for their stories. We live in a country where the majority rules but the minority has rights. The same applies to the Senate. A sizable minority can block a bill by filibustering. It takes sixty votes to end debate, known as cloture.
This system worked well for many years. Until the 1970’s there had never been more than ten cloture motions in a year. As the divide between the parties grew, filibusters became much more common. Now we have reached a state of gridlock in which the minority party opposes almost everything the majority wants to do. The first real crisis appeared in 2005 when Democrats began to filibuster Bush judicial appointees. Republicans threatened to end the filibuster (the nuclear option). A group of senators from both parties reached a compromise. In 2013 Harry Reid used the nuclear option to end filibusters on all presidential appointments, except for the Supreme Court. This was obviously shortsighted since Democrats now have no say on Trump’s appointments. Now we have reached another crisis point. President Trump nominated Neil Gorsuch for the Supreme Court. Democrats are livid because Republicans didn’t act on President Obama’s appointment last year. Senate Minority Leader Chuck Schumer has threatened a filibuster. In response, Republicans are threatening to use the nuclear option. Judge Gorsuch is certainly qualified to sit on the Court. He has served on the Court of Appeals since 2006. The Senate approved his nomination unanimously. Since he is replacing Judge Scalia, there is no change in the balance of the court. It makes sense to me for the Democrats to let the vote go through. If they don’t, they will have no influence at all on future appointments. Partisans on both sides hate the filibuster. However, it provides some continuity in government. Otherwise, we will have 180 degree shifts every few years when parties change power. The minority should have some power in the world’s greatest deliberative body. With power comes responsibility. Blocking Gorsuch’s appointment would be irresponsible. |
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