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Tax cuts and the Government “Mess”

June 22, 2017

If you were to take today’s headlines about taxes and Kansas Governor, Sam Brownback, as Gospel, you would be persuaded that cutting taxes doesn’t encourage economic growth.

Chicago Tribune-“Epic fail of Kansas’ Tax Cut Plan a Lesson for Us All”-”

Los Angeles Times–“Kansas’ Tax Cuts are an Epic Failure.”

Thank goodness President  Donald Trump’s dyslexia keeps him from reading newspaper reports.  But his Treasury Secretary, former Goldman Sachs executive, Peter Mnuchin does read newspapers and is not going to make Sam Brownback’s mistake.

Sam Brownback is a believer in Supply-side Economics which is founded on the idea that tax rates, particularly capital gains taxes, directly affect the performance of the economy. So, cut those taxes fast and wait for the economy to spur economic growth.

That, unfortunately, isn’t really the point.

Yes, lowering tax rates will spur economic activity, if those cuts permit those with significant income to reinvest in businesses and take risks in financing entrepreneurs to start businesses. But this process takes time and requires a culture of private enterprise, savings and investing.

In 2012, Gov. Brownback thought he could jump start the economy of Kansas quickly and ended up with significant, five years later Kansas has a budget deficit of $900 billion and the GOP controlled state legislature overrode Brownback’s veto of a measure that would raise taxes.

Brownback’s optimism got the best of him and he expected quick results. Had he planned to spur growth by lowering taxes over eight years instead of four, we wouldn’t be reading about his failure.

But, even if Brownback has been more moderate in his approach, the nation’s economics are working against him. Spurring entrepreneurs to take risks requires capital and regulations instituted when the U.S. Securities and Exchange Commission was created segregated American citizens into two classes:  “accredited” and “non-accredited.”

Today, if you’re total assets are less than $1 million, excluding the value of your personal residence, you may not invest in non-registered securities. Only the wealthy, “accredited,” investors may invest in a new startup, or take impulsive risks by investing in non-registered securities of local people you may know and trust.

That’s why the IPO for Krispy Kreme was phenomenally successful. For the first time, ordinary people, non-accredited investors, could buy stock in a company whose product  they enjoyed eating.

That’s also why Steve Mnuchin’s advocates politically popular middle class tax cuts that will not have the same effect as giving the wealthy a financial break. Trump’s head of the National Economic Council, former head of Goldman-Sachs, is not a “Supply-sider” so middle class tax relief is as much as he’s willing to budget in a Trump Administration tax reform.

Neither Mnuchin nor Cohn seem to be aware of the attempt in the JOBS Act of April 2012—five years ago–that was designed to remove restrictions on non-accredited investors that would enable them to invest in business startups and other non-registered securities. The SEC, backed by the deep state, brokerage industry and big banks, decided that was not something that should be permitted.

I must conclude that the Trump Administration’s efforts to spur economic growth through tax policies will fail. Going into the 2018 Congressional elections and the 2020 Presidential election, President Trump will not have an effective economic plan, but he is likely to have a healthcare plan that expands the federal deficit, and he will faces foreign policy issues with Russia, the People’s Republic of China and its client, North Korea, and Iran.

How can this be avoided? One way is to secure the nomination of conservative experts to fill the more than 500 critical positions throughout the U.S. government that require Senate confirmation. In other words, Trump must put together a government and stop trying to run the U.S. government as if it were a private company. His statement that “we have too many people” is absurd.

Hire as many conservative experts as are willing to serve a Trump administration. Encourage them to formulate policies that can be implemented immediately and nominate conservative experts to serve in vacant positions at regulatory agencies such as the Federal Trade Commission and the Securities and Exchange Commission.

President Trump is right. He inherited a mess, but after six months in office that “mess” is even greater. If he doesn’t clean up his act, the voters will say “You’re fired.”

 

 

Realignment of the GOP

June 12, 2017

A report surfaced two days ago that Mitt Romney may seek election to the U.S. Senate from Utah. If he does that, his destination is the White House and over the dead body of Donald Trump.

In a tussle between the GOP Establishment represented by G.W.H. and George W. Bush, John McCain and Mitt Romney and Donald Trump, we conservative Republicans are the losers.

A solution that I now think is viable requires that we absorb, take over, or buy the Constitution Party rename it the Conservative Party and register our Party in as many states as possible for 2020.

I call this the coming four Party system.

Educating for World Leadership

May 24, 2017

President Ronald Reagan’s first major international meeting in June 1982 at the 8th G7 Summit  held in Versailles, France revealed that the President was ignorant of world affairs, foreign policy and international politics. Fortunately, Prime Minister Margaret Thatcher intervened to protect that President from embarrassment and a strong and important relationship between Margaret Thatcher and Ronald Reagan was the result.

Unfortunately, American politicians who succeed to high office know very little about the world beyond our borders. Few private sector occupations prepare Americans for international relations and the wonks who study foreign policy at university do not aspire to elective office.

It is unfortunate, therefore, that there is no program that prepares aspiring politicians for world leadership. All American politics is local and a politician who lets it be known that he is interested in foreign policy and international politics is likely to lose elective office. Seats on the Senate Foreign Relations Committee or the House Foreign Affairs Committee are usually assigned to Members of Congress from safe districts or hold secure Senate seats.

How then can we better prepare the nation for world leadership?

Military service tends to give opportunity to foreign travel, as do some executive positions in major corporations. But, survival in those positions usually requires strong ties at HQ or the Home Office, and many are those who are terminated because “out of sight out of mind.”

During the Reagan Administration a group of conservatives were appointed to what was then called USICA, formerly known as USIA that now resides at the Department of State in the office of the Under Secretary for Public Diplomacy and Public Affairs.

Unfortunately, Reagan’s appointee to head USICA, Charles Z. Wick, terminated their employment and the Reagan Administration’s contribution of a cohort of knowledgeable, conservative, foreign policy experts was a big fat “zero.”

Can we plan the development of a corps of international experts, politically astute and philosophically sound, to guide Republican Presidents through the minefields of foreign diplomacy?

 

Little Known Teterboro Airport

May 15, 2017

A Learjet crashed at Teterboro airport today killing two pilots. Few know or remember that Teterboro airport is a municipal civil aviation airport that was sold to a private company.

Privatization of airports has been blocked by the Federal Aviation Agency and, after 9/11, the future of privatized airports is quite dim. So, why and how did this airport escape the clutches of federal government regulators?

Several years ago, I made an effort to find out when I assisted the County of Allegheny in Pittsburgh, Pennsylvania to privatize some of its government services. A college friend, Larry Dunn, had been elected Chairman of the County Board of Commissioners–the first Republican to control county government in sixty years. Commissioner Dunn had run for office on the pledge that he would privatize the county’s civil aviation airport, or resign.

When we realized that there were regulations making that sale impossible, Commissioner Dunn went to Washington, DC and initiated legislation that would permit the privatization of ten airports. I looked into how many U.S. airports had been privatized and found that only Teterboro had successfully freed itself from government control. “Why and how,” I asked.  The answer: this is Jersey!

“Best” and “Worst” Presidents

May 13, 2017

Quinnipiac University  in Hamden, Connecticut, is host to the Quinnipiac University Polling Institute. Compare the “best” Presidents with the “worst.”

Best president since World War II:

  1. Ronald Reagan (30%)
  2. Barack Obama (29%)
  3. John F. Kennedy (12%)
  4. Bill Clinton (9%)
  5. Dwight Eisenhower (tie) (3%)
  6. George W. Bush (tie) (3%)
  7. Harry Truman (tie) (2%)
  8. Lyndon B. Johnson (tie) (2%)
  9. Jimmy Carter (tie) (2%)
  10. George H.W. Bush (tie) (2%)
  11. Richard Nixon (<1%)
  12. Gerald R. Ford (<1%)

Worst president since World War II:

  1. Richard Nixon (24%)
  2. Barack Obama (23%)
  3. George W. Bush (22%)
  4. Jimmy Carter (10%)
  5. Ronald Reagan (5%)
  6. Bill Clinton (4%)
  7. Lyndon B. Johnson (3%)
  8. George H.W. Bush (2%)
  9. Gerald R. Ford (1%)
  10. Harry S. Truman (tie) (<1%)
  11. Dwight Eisenhower (tie) (<1%)
  12. John F. Kennedy (tie) (<1%)

Can this country be saved?

May 13, 2017

I’ve begun research on a new book.  The working title is “Can this country be saved.”  I am attempting to outline what our problems as a political community are and why there is a consensus that America’s civil society is in crisis.

There are four books that I’ll examine closely at the start of my research on this topic.

Tocqueville’s Democracy in America (1835).

Francis Graham Wilson, Order and Legitimacy (1967)

James Pinkerton, What Comes Next (1993)

James Piereson, Shattered Consensus (2015)

Professor Wilson did not promote his scholarship and has been long forgotten. But half a century ago this erudite philosopher examined the condition of American civil society and explored how 19th century Spanish philosophers addressed problems that were quite similar.

Spain? It will be interesting to see what Professor Wilson discovered.

Kentucky Oaks/Derby Picks

May 4, 2017

My handicapping of Thoroughbred horses begins with pedigree, then race results and style.

Here are my Picks for the Kentucky Oaks and Derby, May 5 and 6, 2017:

Kentucky Oaks: 10/1/6

FIRST

  1. Miss Sky Warrior, Paco Lopez/ Kelly Breen 9-2   Giant’s Causeqay/Conquistado Cielo, Great race Davona Dale, March 4  4 preps all first place

SECOND/THIRD

  1. Ever So Clever, Luis Contreras/ Steve Asmussen 20-1  Medaglia D’Oro/ElPrado (Closer) Last raced April 14

SECOND/THIRD

  1. Vexatious, Kent Desormeaux/ Neil Drysdale 20-1  Giant’s Causeway/Rahy

Kentucky Derby: 3/16/8 or 12

FIRST

3. Fast and Accurate (1st at Turfway)–Michael Maker

SECOND

16.  Tapwrit (Closer,  1st Tampa Bay Derby) Todd Pletcher

SECOND/THIRD

8.  Hence (Closer,   1st in Sunland Derby)  Steve Assmussen

12.  Sonneteer (Closer, 2nd in Rebel) Desormeaux