Expect to have hope rekindled.
Expect your prayers to be answered in wondrous ways.
The dry seasons in life do not last.
The spring rains will come again.
Sarah Ban Breathnach
Quiz of the Day
What was this Senate vote 276 about? [Answer below.]
Vote Result: Motion Agreed to
Measure Number: H.R. 4853 (Airport and Airway Extension Act of 2010, Part III )
Measure Title: A bill to amend the Internal Revenue Code of 1986 to extend the funding and expenditure authority of the Airport and Airway Trust Fund, to amend title 49, United States Code, to extend authorizations for the airport improvement program, and for other purposes.
Vote Counts: YEAs 81
NAYs 19
The first thing we do, let's kill all the lawyers. - Dick (the Butcher)
Shakespeare, Henry VI, Part 2, Act IV, Scene II
Mort Zuckerman: Only Business Can Put Obama On Top
Taxes get most of our attention, but probably even deadlier to job and economic growth are regulations. For example, consider the question of the bank reserve ratio (to cover incidental withdrawals of amounts on deposit). Basically, the amount of money that can be lent out commercially is inversely related to the reserve ratio. So if the central bank demands a higher reserve ratio to serve as a lender of last resort, this dampens the multiplier effect of money (i.e., fewer loans or money in circulation). Since we are in a globally competitive economy, any adverse discontinuities in financial policies can be exploited by foreign competitors. Thus, if our financial services industry finds itself unduly constrained in terms of introducing cutting-edge products and services, we could be undermining one of the crown jewels in our national economy.
Mort Zuckerman subtly implies this as he references one of Obama and Chris Dodd's proudest achievements: financial reform: " 'Reform' only imposes a new generation of regulation, more bureaucracy and taxes. The financial regulation bill... includes over 400 “rules-making” studies, compared with just 14 for the previous record holder, the Sarbanes-Oxley act [in response to the corporate scandals]." Does Zuckerman exonerate banks? No, but he points that the SEC imprudently enabled greater leverage and thus risk taking near the height of the real estate bubble, bank lending decisions were influenced by exogenous political factors mitigating risk considerations, and the Fed Reserve was not proactive in its supervisory capacity over banks. Zuckerman explicitly at one point frankly addresses the issue of institutional incompetence, and that's a salient issue I've discussed a number of times: it doesn't help to build this obfuscatory regulatory empire if companies or regulators engage in analysis paralysis, and the effectiveness of regulation is directly related to the expertise and performance of the government regulators.
Zuckerman also prescribes a good game plan for Obama, echoing some of the same points I've made in this blog:
- Obama needs business advisors in his inner circle
- He must focus on simplifying taxes and regulations
- Immigration reform (beyond Latinos) is needed to facilitate economic growth
- De-politicize infrastructure development and expand fee-generating projects (e.g., toll roads)
- Sound business and economic policies trump interpersonal dynamics, political spin and photo ops
- He needs substantive policy on deficit reduction, not symbolic, token measures
Incidentally, if you read Zuckerman's column, you'll get a strong hint of whom I've chosen as 2010 Jackass of the Year. I'll be publishing that post this weekend. (The decision was made weeks ago, but great minds think alike.)
And The Answer To The Quiz Is...
The Senate this afternoon overwhelmingly approved the bipartisan tax cut compromise including a 2-year extension of Bush tax cuts and extension of unemployment compensation. Three compromise-breaking amendments were voted down. Just 5 of the 19 opponents were Republican: arch-conservative Coburn (OK) and DeMint (SC), Ensign (NV), Voinovich (OH), and Sessions (AL). There's predictable grumbling from Tea Party people and potential Presidential candidates like Romney and Palin. As Zuckerman also alluded to (above), we conservatives would have preferred more emphasis on paying down on the cost of the package, but we have already seen the bitter, time-consuming feuds over taxes. A number of conservative bloggers believe that we should have simply let the time tick off the clock and strike a better deal with the new GOP-controlled House, making tax cut extensions retroactive. That's not a viable choice for two undeniable reasons: (1) companies need to compute tax withholding for January payrolls, just over 2 weeks from now, and (2) Obama still holds a veto next Congress, the Democrats still control the Senate, and the last thing the GOP needs is to have to explain denying unemployment compensation funds with over 15 million American workers out of work.
The progressive House Democrats are still steaming over Obama's concession on the class warfare issue and are still threatening to attach a compromise-killer amendment (most likely on the estate tax, commonly referred to by fellow conservatives as the "death tax"). I think the size of the bipartisan victory in the Senate will discourage House Democrats from playing a political game of chicken a week before Christmas, with a bipartisan majority in the Senate and the President opposing any substantive changes. There may be a largely symbolic protest vote, forcing an alliance of Republicans, Blue Dogs, and enough House Democrats to defeat it.
Political Humor
You wouldn’t know it in Los Angeles, but it’s freezing in much of the country, with temperatures in the 20s in parts of Florida. I don’t know how she did it, but the whole country has turned into “Sarah Palin’s Alaska.” - Jimmy Kimmel
[You know it's getting cold in DC when the temperature falls below President Obama's approval rating...]
The people [also shopping at Macy's] were all so rude. I was pushed, I was shoved, I was groped. I’m going back tomorrow. - David Letterman
[You can get the same experience at any airport. Except the TSA requires you to buy a ticket before you get into the security line...]
Musical Interlude: Holiday Tunes
Melissa Etheridge, "Christmas in America". I have LOVED this relatively recent (2008) Christmas song since the first time I heard it. Melissa Etheridge's bluesy vocals wrap snugly around the verses, a spot-on complementary alternative to the standard "I'll Be Home For Christmas": a woman's omnipresent concern and longing for her man at Christmas, serving overseas in harm's way.
