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Santa Claus ain’t Coming

March 26, 2017

Failure of Obamacare repeal revealed substantial problems that led to this legislative impasse and future ones that will surely dog the Trump Administration for years.

Let’s begin with criticism of President Trump that he did not master the details of his healthcare legislation and that, according to Newt Gingrich, “he has to have a much more hands-on approach to drafting these things…”

The President is an “ear learner” because he reads with difficulty and is incapable of absorbing the details of proposed legislation. What we saw is what we’ll get.

Second, Speaker Paul Ryan cannot be a traditional free market, limited government, conservative, if he proposed a reform that kept expansion of Medicaid under Obamacare and is proposing a “border adjustment tax” to assess duties on imports. Ryan must be replaced.

And, third, as pointed out last week, Treasury Secretary, Steven Mnuchin’s tax plan with its focus on middle class tax relief ignores the history of how tax reductions can and cannot work their magic.

More efforts must be placed on how to make palatable the politically unpalatable tax relief for the wealthy, and it must be understood that these tax cuts may take four years or more to work their way into the economy.  The country needs tax relief and simultaneous reductions in federal spending.

Mnuchin’s background as a very traditional Wall Street investment banker limits his knowledge of finance to the system established in 1935 when the Securities and Exchange Commission was created.

Nothing less than total rethinking of the regulatory agencies that govern trade and securities transactions is required to save the American economy from collapse. With reform of the Federal Trade Commission and the SEC, we can begin to recover from limitations that have stood in the way of economic growth for decades.

That idea is just too radical a thought for the many alumni of Goldman Sachs that now make key decisions in the Trump administration.

And, fourth, there is President Donald Trump himself who makes the term “big spender” sound weak in comparison to his infrastructure spending plans, his plan to leave Entitlements untouched, and other measures that work against reductions in government spending.

Policies that may increase the federal deficit in return for long term economic growth cannot be made by big spenders and former investment bankers. That case was never made, nor proposed, by Republican leaders who “lost” their Party to a celebrity nominee who won because he promised what an uninformed electorate wanted–Santa Claus.

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