2012 Presidential Election Thread......

[EasyEd]

The President also said we built the intercontinental railroad. Didn't say which other continent he was referring to.

[Boz]

Sept 26, 2011 12:46:46 GMT -5 EasyEd said:

The President also said we built the intercontinental railroad. Didn't say which other continent he was referring to.

Things like that are only funny and/or sad when Republicans say them, Ed.

[Elvado]

It probably connected us to the other 7 states he visited while running for office...

[TBird41]

I think I'll just leave this here: www.tedstake.com/2011/09/25/class-warfare-yuck/

[TC]

Sept 27, 2011 7:54:29 GMT -5 TBird41 said:

I think I'll just leave this here: www.tedstake.com/2011/09/25/class-warfare-yuck/

Counterpoint, Mark Cuban:

blogmaverick.com/2011/09/19/the-most-patriotic-thing-you-can-do-2/

I'm sure many will find fault with Mark Cuban's article, but the point of Leonsis' article seemed to be that he wanted his other-word-for-a-donkey kissed. He didn't disagree with paying more in taxes, he still apparently supports Obama - although from this blog entry it isn't clear whether he supports Democratic ideas or supports them for politics/influence sake, he just apparently disagrees with a talking point - which you can either disagree with on a political level (is it a winning point?) or on an ego-level. With Leonsis it seems like the latter.

[SFHoya99]

While Ted's not wrong (except the comparisons to the White House - I mean, really, that's kind of silly), I'd like him to examine the current trend of wildly increasing executive compensation even for poor and failing top executives while companies lay off workers and cut benefits, mostly able to do that because of the buddy-buddy system of board appointments.

I have no problem with success, but he's ignoring some legit imbalances and some troubling trends in terms of income disparities that aren't healthy for an economy. The money isn't flowing to small business owners right now or entrepreneurs with new technologies or creating new industries -- it's flowing to CEOs, many of whom don't actually earn it.

I'm all for encouraging innovation and small businesses, but that's not produced by coddling Wall Street -- which really does very little at this point to create jobs -- or large, established industries just looking for a way to increase profits, not grow. For example, the obsession with destroying regulation isn't something that will create jobs -- it will conceivably destroy jobs depending on the regulation -- but in the current climate it would increase profits and line the pockets of the CEOs and large shareholders.

Here's how you stimulate the economy: get money to people who will spend it. That means first people without any money (i.e. the unemployed). They are most likely to increase spending with extra money. Then it means getting it to the lower income employed, as they have less discretionary cash and are actually not spending now on things they want/need because of lack of income. Keep on moving up until you reach the ultra-rich, who don't generally spend that extra million on goods or services but rather toss it into a market of existing companies where increases in stock price do nothing to create growth, just marks on a balance sheet. Oh, sure, higher valuations do help sometimes with IPOs, etc, and some wealthy folks put it into venture capital and we need capital markets, etc., but the existing stock market isn't driving the economy better than actually buying something that was produced here.

Trickle down has never really made sense and it's never really worked. No one is saying return to the days of a 90% marginal tax rate on the ultra rich, but I find it funny that those days weren't that long ago and people still tried to get rich, build businesses, etc, despite people claiming that minor increases to say, the capital gains tax would crush investment.

[TBird41]

Where does Cuban disagree with Leonsis? (Putting aside the fact that on this board, everyone should automatically side with the Georgetown grad over Cuban ;D)

Both say that demonizing business leaders is a bad thing (Cuban doesn't complain about Obama specifically, though I'm unsure who else he would be talking about). Both think making money / being a business leader / being an entrepreneur is good and patriotic. Both seem to think that gov't does a poor job spending the money it takes in.

Leonsis expands on the idea that demonizing business is bad and that he thinks Obama is doing it, while Cuban just says getting rich is good and that paying taxes is patriotic. And unlike Leonsis, Cuban doesn't agree that anyone should be taxed at a higher rate, just that they should go make money so that they have to pay more taxes.

[TC]

Sept 27, 2011 10:08:49 GMT -5 TBird41 said:

Cuban doesn't agree that anyone should be taxed at a higher rate, just that they should go make money so that they have to pay more taxes.

I take his reposting of that article on September 19th (originally posted years ago) - during the taxation argument - to mean that he favors the wealthy paying more - not necessarily through income tax, but through some means. Other entries on his blog favor different tax structures - lower taxation of dividends, no capital gains on long term holdings, additional taxes on transactions and trades.

I don't see Leonsis argue that the wealthy should pay a higher rate. He said he'd be willing to pay more, but he puts all sorts of caveats on his statement.

Whatever their politics, Cuban's blog is 10x better than Leonsis'.

[hoyawatcher]

We have already employed a massive government stimulus and "trickle up" approach to jump starting the economy with no discernible effect. Nothing we have seen gives any reason to believe tripling down on massive infusions of money to achieve social justice will have any different effect. Nor is there any economic theory I know of that says increasing tax rates on wealthy or others is by itself the pathway to economic growth and nirvana.

But the tax issue is really just a small part of the attack on business confidence which is really at the heart of this malaise we find ourselves in. There is a massive assault on jobs through cap and trade regulations/EPA carbon regulation, health care costs/Obamacare, FDA risk aversion and on and on - plus out of control spending which is seen as huge tax increases and inflation by business. Hell of a lot easier to just go put your jobs in China or elsewhere and import the product back into the US.

If spending were under control long term and business believed there was a favorable stable tax and regulatory environment here you would see growth and the ability to handle a small tax increase. Absent that - and especially seeing the nonsense money is being spent on - it is no wonder business and the wealthy are not really eager to just throw more money at the government.

[Boz]

Sept 26, 2011 12:57:03 GMT -5 Elvado said:

It probably connected us to the other 7 states he visited while running for office...

Republicans are so stupid:

whitehouse.blogs.cnn.com/2011/09/27/oops-white-house-fails-basic-geography-test/

;D

At least they didn't use crosshairs anywhere. I'll give them that.

[SFHoya99]

Sept 27, 2011 11:55:08 GMT -5 hoyawatcher said:

We have already employed a massive government stimulus and "trickle up" approach to jump starting the economy with no discernible effect. Nothing we have seen gives any reason to believe tripling down on massive infusions of money to achieve social justice will have any different effect. Nor is there any economic theory I know of that says increasing tax rates on wealthy or others is by itself the pathway to economic growth and nirvana.

But the tax issue is really just a small part of the attack on business confidence which is really at the heart of this malaise we find ourselves in. There is a massive assault on jobs through cap and trade regulations/EPA carbon regulation, health care costs/Obamacare, FDA risk aversion and on and on - plus out of control spending which is seen as huge tax increases and inflation by business. Hell of a lot easier to just go put your jobs in China or elsewhere and import the product back into the US.

If spending were under control long term and business believed there was a favorable stable tax and regulatory environment here you would see growth and the ability to handle a small tax increase. Absent that - and especially seeing the nonsense money is being spent on - it is no wonder business and the wealthy are not really eager to just throw more money at the government.

I completely disagree. I work in a large manufacturer that makes these choices all the time and in no situation have I ever seen environmental or FDA (we make food products) regulations cost jobs. It's so far from the consideration set it's not funny. I'm an input into these decisions constantly.

I get frustrated when I see arguments that sound like they are coming from economics position papers, but not actually understanding what drives jobs.

Efficiency and profits don't drive job growth. Innovation and growth potential drive job growth.

I'm with you that spending is not a panacea, either, though I'm all for specified tax breaks in new industries or even investment in some areas. I'm for spending on infrastructure that businesses rely on such as communications, roads and education for our labor force. I'm even for the bailouts we've had -- TARP is apparently paying out, for example, but even if it didn't, there's a value to not letting everything snowball. And both Bush and Obama made the right decisions.

We've kept most of our labor force in the US for two key reasons: educated labor and efficient, automated manufacturing. Most things that are heavy on cheap labor get outsourced no matter what -- environmental regulations are not a tipping point and any CEO who says so is either lazy or can't run his business or both. Other jobs can stay if the business is run well - I work in a manufacturing business and I come from a manufacturing company and all are thriving in the US. I am frankly sickened by the management at car companies here -- why can Toyota build in the US but Ford can't?

Anyway, regulation builds consumer confidence. When the FDA approves a drug or a food, they endorse it. The consumer doesn't feel they need to research it or work to see if it works. It increases sales. And it also creates jobs. See the entire accounting industry.

And lastly, what's the reference to "Obamacare" (which, really, we can't use real words here?) doing in here? Most small business owners I know (and yes, here's a count -- I've had this discussion with 12 family members and friends who own or run small businesses and it's 12-0) would KILL for the government to take over health care. Do you know how expensive small business health care is in this country? Big companies are getting strangled by costs and they can self-insure -- little business are getting absolutely obliterated by insurance companies.

You do realize this has nothing to do with the Obama's health plan? The system is broken from top to bottom, but it has little to do with what Obama did.

If people want to talk about what will fix the economy, we need to get off bad party rhetoric and look at what practically works. We have too much principal and idealism in these discussions -- there's idealistic elements here but at some level it needs to be pragmatic. Regulation is a red herring.

[And to show I'm not partisan on this: yes, business, not government will bring us out. And in addition to Health Care, lawsuits are a huge issue -- lawyers suck an amazing amount of money and do add some value, but it's overkill at this point so there needs to pragmatic, not ideological legal reform. And why are we paying farmers not to farm when we could put that money into infrastructure? Why do we support oil with tax credits when they are doing just fine? Why invest in the industries of yesterday or the financial industry when it is remarkably inefficient at driving real economic growth?]

[SFHoya99]

For example, if you are going to give a relative tax break to some kind of income, why would it be capital gains?

I understand the political desire to drive certain behaviors and can cotton to some capital gains -- investments in fledgling businesses, improving your home, etc. But what's the relative benefit to the country of investing in GE stock, watching it go up, etc., relative to me earning income from my job where I create something?

Forget the discussion of whether the total tax revenue should go up. Someone let me know why we should politically incent that kind of income more than going to a job? And yes, I get the value of a liquid capital market for new investment, but does anyone think that wouldn't exist at the normal income tax rates? Or could you merely incent investment in companies that directly receive the money (IPOs or near IPO, pre-IPO businesses?). The stock price going up and down for my company doesn't really help us generate cash for future investment leading to growth.

[TBird41]

Interesting post SF.

A couple of thoughts:

1) Regulations tend to hit hard in the energy sector and in building infrastructure, where it takes a lot longer to build a project and is therefore a lot more expensive and regulations can very easily be the difference between going forward on a project and not starting. (hence the lack of shovel ready projects). They might not be a problem as much in other sectors, such as manufacturing, except for the increased costs that expensive energy and poor infrastructure cause.

2) There's a big reason why American auto companies tend to make their product outside of America and why foreign car companies tend to make their product inside America--unions. Foreign owned car plants are almost uniformly non-union, and mostly located in right to work states.

3) The tax code needs reform. Badly.

4) How do we get innovation and growth to happen in the short term? Drastically cut the corporate tax for manufacturers in the U.S.? Combine regulation rollback with investment in energy projects and infrastructure so that the projects are shovel ready? Reform the tax code using the Debt Commission's plan?

[SFHoya99]

Sept 27, 2011 18:23:21 GMT -5 TBird41 said:

Interesting post SF.

A couple of thoughts:

1) Regulations tend to hit hard in the energy sector and in building infrastructure, where it takes a lot longer to build a project and is therefore a lot more expensive and regulations can very easily be the difference between going forward on a project and not starting. (hence the lack of shovel ready projects). They might not be a problem as much in other sectors, such as manufacturing, except for the increased costs that expensive energy and poor infrastructure cause.

I can see that and I assume there are case by case issues. I just don't agree with the general viewpoint that regulations kill the economy.

2) There's a big reason why American auto companies tend to make their product outside of America and why foreign car companies tend to make their product inside America--unions. Foreign owned car plants are almost uniformly non-union, and mostly located in right to work states.

This is true, and while I agree with the idea of unions, there's no doubt many unions have gotten away from the point. In large part, there's a real problem with car company management in the US. These people are the still the same people who sent away Arthur Deming in many cases. Toyota may not have union issues, but they are also better at making better cars cheaper than Ford.

3) The tax code needs reform. Badly.

Agree. And there are things philosophically you and I are likely not to agree on. I just wish when there is a pragmatic issue we could get past some of the other stuff (when I say we I mean the country).

One of the big issues that people like Warren Buffett can pay such a low tax rate is these weird incentives.

4) How do we get innovation and growth to happen in the short term? Drastically cut the corporate tax for manufacturers in the U.S.? Combine regulation rollback with investment in energy projects and infrastructure so that the projects are shovel ready? Reform the tax code using the Debt Commission's plan?

I'm not really sure. At its heart, innovation and growth is only something the government can encourage and support, not really create on a consistent basis (aside from offshoots of investments in military and NASA applications).

Real infrastructure projects for sure. Our infrastructure is weakening. These are real, local jobs.

I'm all for encouraging manufacturing because I think tangible products are needed to support a strong internal economy and we're really service heavy right now (though that would include electronic products like software to a certain extent). Not sure about the tax dynamic -- because sometimes that just gets pocketed. But it's worth a try (I'm also a big fan of experimentation -- something that NEVER happens in a political environment. Can you see a politician saying, let's see if this works, and if it doesn't, we'll stop?).

Loans/Investment/Tax Cuts in new technologies, especially ones that allow for the US economy to stay home. Robotics investment is an example -- both in companies that make them and companies that buy them do reduce manufacturing jobs -- but most of those have gone overseas anyway and you need skilled labor to oversea and upkeep.

Investment in education. I don't necessarily mean more money though it may come out that way. But if we're going to stay expensive, we need skilled labor. I realize this is longterm, but I'm going to keep harping.

Investment in alternative energy/more efficient energy. Want to boost the US economy? Cut energy costs. Whether it's high fuel efficiency vehicles or cheaper electricity, this is a goldmine. Because more efficient energy creation doesn't mean less employees in the most likely scenario (often means more if you count who builds the new tech), limits our foreign dependence, lowers costs for companies and individuals, etc. Let's not forget that while the housing credit crisis cemented the recession, the initial kick in the balls was oil rising over $100/bbl.

[Fun fact: there's a building in Berlin with more solar panel coverage than the entire state of Texas, according to a speaker I saw over the summer (former CIA Head James Woolsey).]

It's tough, and I'm not sure you can do a ton. But in the midst of the good ideas, there's just a lot of smoke over things that don't matter but make good sound bytes or economists like to harp on.

[Another aside: if we're looking for business hotpoints, it's commodity costs far and away the highest for manufacturers and thus retailers, then health care and worker's comp for most people I know. I'd throw in effective, affordable IT as well. We're in CA and we can live with higher cost of living and wages. But worker's comp and health care is very hard to handle, especially for small businesses. And sadly, so is finding skilled labor.]

[kchoya]

Sept 27, 2011 19:00:46 GMT -5 SFHoya99 said:

[Fun fact: there's a building in Berlin with more solar panel coverage than the entire state of Texas, according to a speaker I saw over the summer (former CIA Head James Woolsey).]

Maybe the devil is in the semantic details, but I can't believe that's possibly true.

[AustinHoya03]

Sept 27, 2011 19:29:05 GMT -5 kchoya said:

Sept 27, 2011 19:00:46 GMT -5 SFHoya99 said:

[Fun fact: there's a building in Berlin with more solar panel coverage than the entire state of Texas, according to a speaker I saw over the summer (former CIA Head James Woolsey).]

Maybe the devil is in the semantic details, but I can't believe that's possibly true.

Yeah, I hate to nitpick, since SF's posts today have been really good, but it must be a hell of a building. Austin has at least five acres of solar panels within the city limits:

www.statesman.com/news/local/ut-pickle-campus-solar-power-system-billed-as-1515490.html

Sept 27, 2011 17:49:09 GMT -5 SFHoya99 said:

And lastly, what's the reference to "Obamacare" (which, really, we can't use real words here?) doing in here? Most small business owners I know (and yes, here's a count -- I've had this discussion with 12 family members and friends who own or run small businesses and it's 12-0) would KILL for the government to take over health care. Do you know how expensive small business health care is in this country? Big companies are getting strangled by costs and they can self-insure -- little business are getting absolutely obliterated by insurance companies.

While I'm nitpicking, it should be pointed out that a lot of American small business don't pay for employee health care, because (as you point out) it is ridiculously expensive. It is a widely repeated myth that these businesses will be forced by the new federal health care law to provide employee coverage. (My parents, who are small business owners, believed this for a short period of time.)

The new law intends to reduce costs for small businesses. Whether it actually will is a fair point for debate. (For the record, I think the law is constitutional but will not effectively lower the percentage of GDP we contribute to healthcare expenses.) The bottom line is: 2012 won't change anything for small businesses which choose not to offer employer-based health care to their employees.

I think you are absolutely correct that this issue is largely unrelated to the current state of the economy.

Other than that, great posts. Can we disguise you as Chris Christie and get you elected?

[SFHoya99]

Yeah, I couldn't believe it either, but would a former head of the CIA lie? Wait. Man. Or I might have heard or remembered it wrong. I think his point is probably still true in the larger sense; I'd imagine that the giant, empty expanses of some parts of Texas are wildly underutilized.

EDIT: Here's a link to another interview - www.mlui.org/growthmanagement/fullarticle.asp?fileid=17359 which is interested across the board, but also has his real claim. As usual, I screwed it up a bit -- but it's still crazy, so he may also be stretching.

"That’s the reason why, in Germany, there is one building in Munich that produces more solar power, two megawatts, than the entire state of Florida or the entire state of Texas."

The whole thing is an interesting argument. He argues for a feed-in tariff here, but when I saw him, he focused more on the security benefits of alternative and de-centralized power.

[Boz]

I would like to bring us all back on topic here and just say that I think it is a damn, damn shame that America will not have a great, big, mean, rude, fat man as President.

I ask you: Is there anyone who screams out "USA" more than Chris Christie?

[hoyainspirit]

Sept 28, 2011 9:50:58 GMT -5 Boz said:

I ask you: Is there anyone who screams out "USA" more than Chris Christie?

Yes. Barack Obama! Interesting discussion here. Points well made.

[SFHoya99]

Sept 28, 2011 9:50:58 GMT -5 Boz said:

I would like to bring us all back on topic here and just say that I think it is a damn, damn shame that America will not have a great, big, mean, rude, fat man as President.

I ask you: Is there anyone who screams out "USA" more than Chris Christie?

If Christie ran, how much would the fat man aspect hold him back? Bob Dole was mean and rude, and even then only in private, and it cost him a lot in terms of party support as well (Dole was funny as hell when he was being mean and rude).