Nov 29, 2011, 11:25 am EST
The Republican presidential candidates all have the same answer to America’s budget and debt woes: Cut the corporate tax rate. Unfortunately, fixing the nation’s economy is more complicated than simple slogans that make for good politics and lousy policy.
Mitt Romney, the presumptive GOP standard bearer, promises to introduce a bill on his first day in office that would reduce the top corporate income tax rate from 35% to 25%. Former House Speaker Newt Gingrich does the ex-Massachusetts governor one better, calling to reduce the corporate rate to 12.5%. Rick Perry, the Texas governor, wants the rate set at 20%. Herman Cain speaks of instituting “across-the-board tax cuts to provide long-term relief” and is promoting his 9-9-9 tax plan.
The candidates and their ideological supporters often point out that U.S. corporate tax rates are among the highest for members of the Organization for Economic Cooperation & Development (OECD). That’s true, but it doesn’t tell the whole story. Of course, raising taxes too high can throttle growth. However, low corporate tax rates don’t necessarily lead to prosperity, and high rates don’t necessarily impede growth. Read
Nov 28, 2011, 5:25 pm EST
Citigroup (NYSE:C) tried to pay off regulators with a $285 million settlement to squash accusations it duped investors into buying now-infamous subprime mortgage debt. But thanks to one Manhattan judge, that hush money won’t be paid and Citi might now face a day in court.
That, of course, is the hyperbolic description of what U.S. District Judge Jed Rakoff did Monday with his decision to reject a settlement between the Securities and Exchange Commission and Citigroup. The losses to subprime mortgage investors who relied on Citi total about $700 million, more than double the proposed fine. Oh yeah, and Citigroup does about $110 billion in annual revenue — yes, billion, with a “B.” Kind of makes $285 million seem like a parking ticket, doesn’t it?
But that wasn’t really what riled Judge Rakoff — at its core, this seemed to be a case where banks could just do whatever they want and pay a nominal fine to avoid any real penalties. Read
Nov 28, 2011, 3:56 pm EST
During the past 100 years, American voters have been brainwashed into believing a complete portfolio of nonsense packaged by self-serving bankers and politicians. It is difficult, of course, to admit that most of what we have grown up believing about our government structure and monetary system is deeply flawed and skewed with self-interest.
Ron Paul has been outlining the ongoing fraud to Americans for decades. I have followed his work from the start, and I am not aware of any other politician in Washington who better understands the mess we are in and what to do about it. I hope you will read Ron Paul’s End the Fed and Liberty Defined and come to realize that there is indeed a chance to get America back on the true Federal Republic course envisioned by Thomas Jefferson.
In Liberty Defined, Ron Paul puts the laser light on the dangers of progressive thinking: Read
Nov 28, 2011, 11:59 am EST
Dreaming up a deficit reduction commission was the easy part. Unfortunately, nobody thought getting committee members to agree would be the hard part.
How will the deficit impasse affect U.S. Treasury prices? Are higher bond yields just ahead? And what about the U.S. government’s credit rating?
Agreeing to Disagree
After two months of intense negotiations, talks among the 12-member “supercommittee” broke down last week. The committee is an even split between Democrats and Republicans and they agreed to disagree, which means $1.2 trillion in automatic spending cuts that begin in 2013 have been triggered. What’s so bad about that? Automatic spending cuts are good for the deficit, but only if Congress doesn’t try to undo them. Read
Nov 24, 2011, 6:45 am EST
Do the markets care whether the U.S. fiddles while Europe burns? Apparently. This week’s 600-point nosedive by the Dow should prove (for anybody who didn’t realize it already) that America isn’t about to “decouple” from Europe, financially or economically.
For the past few weeks, a parade of smiley faces has tried to tell us that Europe’s woes didn’t matter for the U.S. markets. We, and maybe the Chinese, could keep chugging along regardless of what was happening in the EU.
It was a foolish conceit, for two reasons: First, as I’ve explained in previous blogs, Europe is an important buyer of U.S. exports. A deep recession “over there” will hurt the bottom line of many large U.S. companies, particularly in the otherwise thriving industrial sector. Read
Nov 23, 2011, 7:00 am EST
Ron Paul is out of the picture.
At least, that is exactly what entrenched politicians on both sides of the aisle — the neocon military/industrial complex intelligentsia, the media, the Greenwich Village pseudo-intellectual liberals and the Hollywood buffoons — would have you believe. It is hard to read a good word about Ron Paul, is it not? The silence on the media front when it comes to Dr. Paul makes you wonder if you hadn’t missed his obituary. Well, not quite. Out of eyesight, it looks as if Ron Paul’s Iowa ground army is overrunning opposition forces and propelling him to the front ranks of America’s first nominating battle in Iowa.
Ron Paul may well win Iowa and also New Hampshire. Victories in both states would dump the fat in the fire and panic would set in fast for the entire crowd outlined above. Can Ron actually get the nomination and win the White House? The Wall Street Journal wrote of Dr. Paul: “His radical views about the size of government probably doom him to defeat in the Republican primaries … As a candidate, Mr. Paul is likely finished.” Read