Could the management at WCTR ask Captain Kirby to use his time on “Kent’s Most Wanted” to put out an APB on leadership in our Federal government? It’s gone. It left no note, but we should have seen the clues. They promised to change if we could find it and return it to them. The debt ceiling debate was their rock bottom, and they promised to get clean once we got past this rough patch. We looked the other way just for a moment, and now it’s gone again. Now I’m worried that they’re out on another bender. If I could say just one thing to our leadership, it would be, “Please come back. We won’t be mad. We’ll clear out those Occupy Congress kids. It’ll be different next time.”
Each time we take these people back, we do it on the condition that they will learn to compromise. Here’s the dirty little secret to the “compromise” so heavily sought by the middle of the political spectrum: when the dots aren’t properly connected, the resulting compromise is a bloated mess that takes on the worst elements of each side’s policy.
You may recall that at this time last year, the Democrat-controlled Congress passed a package that extended the income tax rates from the Bush administration, as well as extending unemployment benefits to 99 weeks. The cherry on top was a roughly one-third cut to the FICA tax rate levied upon employees.
This package was pushed through when the writing was on the wall regarding the Recovery Act – it benefitted sign makers and functioned as a mere public sector bail-out. It was clear that something more needed to be done. While a system of unemployment insurance is necessary and fair to preserve one’s economic viability during trying times, calling an extension of benefits “action” on the unemployment rate is like fixing a torn ligament with codeine. Sure it will help with the pain, but it does nothing for the problem.
The same could be said for lowering employee FICA taxes. Lowering the employee rate is an artificial raise for the employed, but leaving the employer rate untouched means that no extra money shakes loose in the HR budget. If anything, this arrangement hurts payrolls in frequency and magnitude. But the dots were connected between taxes and unemployment, so here we stand.
Over the summer, the geniuses in DC looked to address the public debt problem by raising the debt ceiling. And why not? It’s been done so many times before! A quick glance at debt versus GDP should have shown the proponents why it was such a bad idea to raise the ceiling without conditions. The task was so daunting that Congress had to ditch the hot potato while saving face. The solution was the super committee. This solution provided for the requisite hike in the debt ceiling to prevent default, while allowing a designed-to-fail committee to negotiate ways to offset the new debt. In other words, 191 million Americans saw their Congressperson (yours not one of them) cede their responsibility to a virtual politburo, allowing 269 Congressmen to declare they solved the debt ceiling problem while getting to blame partisan politics for the committee’s failure.
Without tax reform or entitlement reengineering addressed, the President was free to pitch another jobs plan. One would say “free” because every time the President has wanted to “meet the moment,” “do something big,” or demands Congress return his bill (pronto!), the idea turns out to be a Trojan Horse for tax increases. In this instance, Harry Reid (with a five year wait until his next election) did the dirty work by insisting the bill be attached to a millionaire surtax. That was unfortunate. In a normal vacuum, some ideas in the American Jobs Act had potential. In the DC black hole, they had no shot.
The idea that has had the most traction is a cut in payroll taxes. Your columnist has been barking up this tree for some time. Halving the rate and eliminating the employee income cap would place a fair share of the Social Security burden on high income earners, provide an artificial raise for those in other economic quintile, and free payroll-related capital for new hiring. Seeing as Social Security is such a major piece of the Federal pie, this change should satisfy the desire for higher taxes on the top quintile.
Now it’s a new December, and a gridlocked Congress is competing to create ways to muddle a simple concept. The Democrats would “pay for the tax cut” (my favorite Washingtonism) by resurrecting the surtax idea. Do these folks actually believe that if the net savings on job creators is zero, that they will say, “Sure I’ll hire since you cut my payroll tax.” I have stopped short of using the politically-charged Ponzi scheme language that the Bachmann and Perry types like to utilize. However, if the left considers the payroll tax not to be revenue assigned to a specific expenditure, but rather just another rate to play with for political purposes, what should someone call it?
Not to be outdone, the Republicans have pulled a few rabbits out of their hat in an effort to deflect an income tax hike. One proposal would freeze federal pay and benefits. Another proposal would tie the tax cut to the Keystone pipeline, which would be a job creator in itself. In an ironic twist, the President, he of “do something big” fame, now wants to stay focused. When Eric Cantor said that the payroll tax cut was a negotiable idea, David Axelrod and Jay Carney were on the Sunday shows talking about how this was not feasible, and that the ideas in the AJA were connected. In any event, bringing up non-starters is noise when clarity is critical.
Speaker Boehner should be taking advantage of this rare opportunity to deal with a focused President. The payroll tax cut should be done to spur hiring, encourage a bump in wages, and encourage reengineering of a Social Security system that is about to realize an influx of beneficiaries. Talk of connecting the dots between this issue and irrelevant projects, or this issue and the income tax, just leads us down the road to more “compromise.” Appeasement is not leadership.
Keith Thompson says
Quite frankly, the problem is that our political system has jumped the shark. Both current liberal and conservative thought has sunk to the level of sticking with inane talking points and therefore both sides are too paralyzed to act. I feel that with the rise of the Tea Party movement and the rise of the Occupy Wall Street movement, we’re beginning to see a change in our political paradigm. No matter your view of the Tea Party or OWS, if you strip away the political rhetoric and the talking points and actually pay attention to what the two sides are saying, you’ll find that they are concerned about a lot of the same things. The two groups are traveling by different routes, but they are arriving at the same intersection. What the two sides have in common is that they are both protesting against the status quo and the status quo is Washington politics. Right now the status quo is geared around how best we pay for this large government we want which leads to this budget mess we have. Big government is big government regardless of whether the focus is on social welfare or corporate welfare. I think the new political paradigm will be re-shaped by the Tea Party and OWS and once we realize that we can only afford to pay for a finite amount of government, the debate will shift to re-defining the proper role and function of that government.
Warrior Bob Kramer says
Max profits are acheived when Marginal Expense equals Marginal Profit from Econ 101’s still universal formula for success. It’s all about incremental economics when it comes to job creation… and businesses will add additional hirees when they think that they can earn additional profits… and not before.
Ever heard of the ‘inertia of uncertainty’ syndrome? 🙂 And what you continue to describe with your eloquent words is proof positive that there is massive ‘uncertainty’ within our federal government as to how our capitalistic business model actully works.
Thanks again… as it’s like being in college again.
Michael Troup says
There’s a grain of truth in each argument. What hurts each is branding. Both are seen as extremes within their broader camps. The third group are those politically savvy folks who are complicit in this series of compromises. “Well it’s not perfect, but do you want us to govern like THOSE PEOPLE would?” (think McCain’s “hobbits” speech). I know people will read this and say “Troup hates compromise. Typical ideologue.” I would retort that what we get at each of these critical junctures isn’t compromise in the sense of the definition that we know. Compromise involves some sacrifice. In each case, everyone gets what they want and no one has to pay for it.
So you’re on it. Nothing happens until someone can articulate the kind of government they would construct and affix a price tag to it. Until then we’ll just keep feeding this Leviathan – price tag TBD. But who cares? In the long run, we’re dead, right Mr Keynes?
Stephan Sonn says
First of all thanks to Mr. Troup for an articulate, well reasoned commentary..
Second It is time to get out of this high stakes poker game
that passes for serious management of the domestic economy.
With that in mind. God bless America because
the guys who are playing this game have lost all reason.
I think it has gone this far because the one per cent
are in a mind-set of premeditated disconnect from
the fate of the United States of America as a useful vessel.
As for the collectivists, there are too many of them
who can’t negotiate in the vacuum they started.
Even if there were a hypothetical deal on the table
Atlas has already shrugged.
Class war is poison and scorched earth the result.
So who started it anyway?
Stephan Sonn says
As for the merger of Tea Party and OWS
that would be as viable as Stalin and Hitler.
These two groups are in direct conflict.
One stands for individualism the other for collectivism.
The only thing they agree on is
the demise of the present confabulation
but for different reasons.
Stephan Sonn says
@ Mr Kramer
Perhaps a more precise way t o make your point
is that it is easier and more profitable
to negotiate with the formally Red Chinese
than our domestic unions’ standards and objectives.
Michael Troup says
WBK SEZ: “Max profits are acheived when Marginal Expense equals Marginal Profit from Econ 101′s still universal formula for success.”
It is foolish to hitch employment to the tax wagon and be done with it. That’s the primary flaw of the last lame duck deal we got. If I were mapping this as a database, it would be a one to many relationship, but the payroll tax belongs in the query view. Think about this: If one has a labor intensive business with a few dozen employees, that cut to 3.1% is margin points for you. Now you wouldn’t hire just to hire, but you do add flexibility (do I add frequency or magnitude or retire debt?). Now one just needs some of these well capitalized firms to have a reason to invest, and we can start joining these databases (analogy gone awry).
Stephan: “Who started it?” Aren’t the seeds of the current war sown in the peace of the last? How far back could you peel that onion!?
Keith Thompson says
Stephan Sonn writes…”as for the merger of Tea Party and OWS
that would be as viable as Stalin and Hitler.
These two groups are in direct conflict.
One stands for individualism the other for collectivism.
The only thing they agree on is
the demise of the present confabulation
but for different reasons.”
Actually, a supposed merger of the Tea Party and OWS is not at all the point I made. I’m actually making the opposite point. I think the future political paradigm is going to revolve around the differing philosophical views of the Tea Party and OWS and largely because there is a substantial difference between the two. Right now, the two major political parties basically consists of two different factions of the Status Quo Party. The two factions of the Status Quo Party don’t see eye to eye on the specifics, but they are similar in that they support protecting their own slice of the big government they support. Compromise between the two factions of the Status Quo Party only increases the debt problem because they are not offering any new ideas. You see the Tea Party as representing individualism and OWS as representing collectivism and you’re right. Where you go wrong is assuming that currently conservatives and liberals also represent individualism or collectivism…but they don’t. They both represent the failure of big government. If you take a two party view of politics…no the Tea Party and OWS isn’t going to merge and fight the status quo, the Tea Party and OWS will be the two parties and the status quo will be irrelevant.
Stephan Sonn says
Drawing partly on what has been said by all participants thus far.. Both the European and US economic engines are essentially capitalism.Socialism does add to the mix, more so in Europe. Each model rose and fell by growth and demand or lack of same.
So some of the more benefit spoiled countries mostly seem to be faring worse than the giants like Britain, France and Germany who seem able to cope better with sacrifice.
For all the whining in Europe I don’t fathom that the basics of life will be deprived.
Even before the present crisis American workers were priced out by world trade and American investors using cheaper labor to compete better and profit more. Other countries compete better simply because they are not burdened with a failing healthcare system however impaired the successor might be, it is a step toward efficiency. The underclass here is growing but payday lenders are the main beneficiaries of that.
So internationally we are all in the same profit based economic system and rise and fall together. Now that the pacific rim rim are the manufacturers, The US has to develop another export…unses the powers at be think not.
Green industry seems the candidate., unless the powers at be think not.
Entitlements are not the problem. The costs of delivery are. When and if we get out of this black hole
we, if there is still a a we, can meet minimum social needs.
There is a fork in the road. Corporate taxes need to be trimmed as should loopholes. And the both the groupies for both unabridged capitalism and glutton entitlements need to come to an understanding or this country will split and fail.
Stephan Sonn says
Addressing Keith is a chore for me.
Keith not only do you look like Grover Noquest you sound like him in the sense that you do not offer constructive solutions but wallow in abstracts in an attempt to oversimplify complex issues to johnny one-note absolutism.
Tea Party and OWS have no commonality of goals and in acting mirror images of the present congress that supports them. Wheat we have is governance by peanut gallery. That is not any way near democracy but shares a lot with anarchy.
Nothing personal you understand.
Warrior Bob Kramer says
Mr Sonn says: it is easier and more profitable
to negotiate with the formally Red Chinese
than our domestic unions’ standards and objectives.
I’m not sure that’s the context I was referring to, but it does highlight that as dysfunctional as our (federal) governance is… they seem to be better off dealing with the enemy as a friend rather than a friend as an enemy. Kinda an interesting juxtaposition.
Steve Payne says
I’m a “Go Big”, Simpson Bowles advocate.
I also signed up for this the other day:
https://nolabels.org/press-releases/breaking-gridlock-national-grassroots-movement-no-labels-unveils-sweeping-action-plan.
Michael Troup says
Steve: From a Ryan man to a S/B man, what was the point of S/B if the President is just going to let it collect dust? Was he hoping they would just tell him what he wanted to hear? Kind of reminds me of Glendening’s blue ribbon panel (who didn’t work pro bono IIRC) on water supply. They told him we had enough water to last through November (five months) if it never rained another drop. He imposed restrictions/fines anyway.
Michael Troup says
Stephan: “Tea Party and OWS have no commonality of goals and in acting mirror images of the present congress that supports them.”
I think on some level, Keith is referring to President Obama’s “…their institutions have failed them” observation. TP would rather strengthen the private sector. OWS hasn’t really said, but if the desired result is income equality, I suppose they seek some compulsory means of achieving that. I suppose tyranny is fine if you get to choose the tyrant (insert rolling eye emoticon).
Stephan Sonn says
Mr Kramer:
Fast forward.. two steps backwards
There are skilled workers and
a newly enlightened union philosophy
that could play their part in launching
a high tech industrial initiative
but the people in charge
don’t like Big Green.
Better to sell or farm out old mousetraps
than break new ground.
More profitable to hang back,
not exactly Ayn Rand thinking is it?
Impostors in the Temple, I think.
Keith Thompson says
@Stephan
Nothing personal here either, just two non-compatible views of politics I guess. You seem to be adverse to small government philosophy and object to it being a part of the debate. I contend that in order to have a debate over the size of the government as I suggest, you need to have a side that actually advocates small government. Right now our two party system doesn’t have an advocate for small government.
So you need specifics rather than abstracts…O.K., here goes…
Where do the Tea Party and OWS intersect? Well one example is over corporate bailouts. The Tea Party will ask if the government should be bailing out corporations while OWS will want to get their own bailout if the corporations are getting them. One side has a small government argument here. In the current status quo, one side advocated corporate bailouts while the other side advocated stimulus packages. We got both, so where was the compromise?
So if we shift the nature of the debate to the proper role and function of government, what sorts of constructive solutions (or suggestions or debate starters) come to the fore?
…can you link the concept of tax cuts to cuts in government spending rather than as an economic stimulus, or as a corrollary can you link specific government programs with specific methods of funding them?
…do you wage a war or a military action without properly funding it?
…if education is deemed a state and local concern, do you need a program like “No Child Left Behind” or do you even need a Federal Education Department?
…if healthcare is a universal right to be provided and even required by the government, then why would healthcare be linked to employment and paid for via the insurance industry?
…if healthcare is not a universal right guaranteed by the government then why can’t an individual choose a healthcare plan that best suits their needs without required mandates?
…if you believe that the government has the authority to ban drugs that may be dangerous, does that also mean it should have the authority to ban foods that may be unhealthy?
I can go on, but I think you may have noticed that I like to ask questions rather than offer definitive statements. The reason is simple: definitive statements lead to Johnny One-Note absolutism. Questions lead to dialogue. The status quo from our federal leaders right now is all about Johnny One-Note definitive statements. I’d rather hear them asking questions to challenge the definitive statements than plugging in the appropriate counter talking point..
…
Stephan Sonn says
And then you have the GE Microsoft guys
that likes the present tax code just fine
. They take chances and assume initiatives.
So maybe they deserve a tax free ride
for services rendered
What a cast of characters
Where else but in America is life
just one overgrown Fellini movie
Keith Thompson says
Michael Troup writes…”I think on some level, Keith is referring to President Obama’s “…their institutions have failed them” observation. TP would rather strengthen the private sector. OWS hasn’t really said, but if the desired result is income equality, I suppose they seek some compulsory means of achieving that. I suppose tyranny is fine if you get to choose the tyrant (insert rolling eye emoticon).”
Obama’s observation isn’t what I had in mind, but the analogy works. My observation is closer to that of Michael Palin (no relation to Sarah) and John Cleese in Monty Python’s “Argument Clinic” sketch in that an argument is an intellectual exercise and not simple contradiction…
“Palin: An argument is a connected series of statements intended to establish a proposition.
Cleese: No it isn’t!
Palin: Yes it is! ’tisn’t just contradiction.
Cleese: Look, if I *argue* with you, I must take up a contrary position!
Palin: Yes but it isn’t just saying ‘no it isn’t’.
Cleese: Yes it is!
Palin: No it isn’t!
Cleese: Yes it is!
Palin: No it isn’t!
Cleese: Yes it is!
Palin: No it ISN’T! Argument is an intellectual process. Contradiction is just the automatic gainsaying of anything the other person says.
Cleese: It is NOT!
Palin: It is!
Cleese: Not at all!
Palin: It is!”
Stephan Sonn says
What you did here Keith is
power point your abstractions .
You need to start at the roots
beneath the surface
not just labeling exhibits CSI style
only to support conjecture.
Keith , when you learned about
the Birds and the Bees
You missed the flickering shadows
on the walls of Plato’s cave.
.
The only thing that bothers me
about the current system at this stage
is that they started showing reruns
before the story line matured
.
and that has to do with forced abortion
We were still a work in progress
but somebody started picking off
scenarios and characters
by pulling the hook far too soon..
The guys controlling the hook
uses the Tea Party
as deftly as a hustler’ pool cue.
As for OWS, to me It is getting a bit too brittle..
The beginning cure is
an unadulterated election result.
So the work can continue
Stephan Sonn says
By the way that Palin v Cheese loop has some sparkle.
Stephan Sonn says
OOOOPPPS!!! Cleese
Just couldn.t get the picture of S. Palin debating a block of Wisconsin Swiss.(:~)
Keith Thompson says
Actually, Stephen you’re weren’t exactly wrong as John Cleese’s family name is actually “Cheese”. You do paint a funny picture of Sarah Palin debating a block of Wisconsin swiss, though…you betcha! 🙂
Michael Troup says
You can bet on anything in London. Early lines show the Palin/Cheese debate is a pick’em. Sarah shouldn’t be too upset. The block of cheese was a three point home favorite against James Stockdale.
Anyhow…Keith asks “can you link the concept of tax cuts to cuts in government spending rather than as an economic stimulus, or as a corrollary can you link specific government programs with specific methods of funding them?”
And this is where people should be angry with the Democrat payroll tax proposal. The Social Security tax is designed to collect revenue for the Social Security program. Demanding income tax increases as an offset just lends evidence to the notion that DC thinks its “their money” and they need it (presumably for non SS purposes which takes us into scary Rick Perry territory). If the debate continues to be “which party can craft the better populist pitch” instead of “how do we encourage employment, so as to afford the influx of beneficiaries that are about to come through the SS system” then we’ll get another lump of coal for Christmas.
Stephan Sonn says
What exactly is the meaning of “vast right wind conspiracy “circa 2012.
Is there ant factual evidence that it exists now or ever did in recent decades?
Steve Payne says
Michael Troup says:
“Steve: From a Ryan man to a S/B man, what was the point of S/B if the President is just going to let it collect dust? ”
I agree!! Do it is what I advocate.
The only thing better than the Ryan Plan was getting all those Rs to get up there to vote for it. That’s going to cost them big time come Nov. 2012
Stephan Sonn says
Michael
They should be lancing the infection
not beheading the patient.
The same people that tout the right to life
promote marginal living after birth.
I am not sure if the issue of our time
is overpopulation or greed or both
Either way what is happening now
is culling by social engineering
Gene Roddenberry has his Ferengee and we have ours,
Stephan Sonn says
IN OVERTIME!!!:
The underdog S Palin is in a sudden power play that is really grilling Ole Wis.
That’s it folks
Sara wins by a her lip and quip trademark strategy.
The favorite is cheese balls, deep fried.