Follow the money No. 87
Could more conspiratorial environmentalistas’ interpretations of our times be correct, that is, someone has been putting something in the water and we are all being lobotomized, even without major brain surgery?
You could make the case this week. Much of the world’s leadership, even though presumably suckling their bottled water, exhibits all the manifestations of imbibing something adversely affecting the normal cognitive processes:
- Pres. Barack Obama gets on television to boost his proposal for creating jobs by massive government expenditures and tax increases at a time when mostAmericans think the main problem – after disappeared jobs — is a runaway federal deficit. Never mind he sent a $447 billion spend and tax bill up to the Congress without a co-sponsor in either of the houses, that his own Party’s Senate leadership initially refused to look at it, then introduced something radically different as a Millionaires’ Tax. All that even though the President has repeatedly endorsed his Republican opposition’s claim any tax increase during a recession is job-killer. Of course, neither bill has a – woops! we can’t say that any more – chance of getting through the Republican-dominated House or the splintered Democratic Senate. Hello?
- Russian Prime Minister Vladimir Putin [soon scheduled to slip back into the presidency in Moscow’s musical chairs] has dreamed up a restoration of Stalin’s old USSR as a “Eurasian Union”, a regional agglomerative dictatorship. Putin’s vision is a world of such regional blocs, graciously allocating the U.S. the Western Hemisphere. Unable to accomplish fundamental post-Soviet reforms, he has put together helter-skelter economic collaboration with neighbors [including pumping their gas and oil] with Belorussia, Kazakhstan and a loose customs union [Common Economic Space]. He now aims bringing in the current pro-Moscow Ukraine leadership. But his present arrangements already cost Moscow $1.7 billion in tariff sharing revenues last year. Meanwhile, prospective investors in this harebrain scenario are trading every ruble to dollar they can get their hands on and tossing them out of the country – more than a record $49 billion so far this year. Hello?
- Luxembourg Prime Minister Jean-Claude Juncker, chairing the Eurogroup finance ministers, says “[E]verything will be done”. He means in an effort to avoid Greek default and without Athens opting out of the 17-member single currency. But the rating agencies just whacked Italy’s credit rating, Spain’s soaring borrowing rate fell only because the already strapped European Central Bank bought its increasingly high risk bonds, and debt-ridden Portugal is failing to meet targets. The decision whether Greece will get the next tranche of its bailout was delayed until mid-November so the European Union, the European Central Bank and the IMF can pull themselves together to decide whether Athens has met conditions for receiving help. Latest official figures say not: the Greek budget deficit will hit 8.5 percent of GDP in 2011 instead of the 7.6 percent it promised creditors. Greek officials now pledge the 2012 deficit will be slashed 6.8 percent of GDP instead of the promised 6.5 percent if a €6.6 billion [$8.83 billion] worth of supplementary austerity and reform measures package is forthcoming by 2013 Without the “current” €8 billion [$10.71 billion] tranche, Athens would bankrupt by this November with major repercussions for Europe and the world. Hello?
- Syrian Dictator Bashar al-Assad allegedly told visiting Turkish Foreign Minister Ahmet Davutoğlu Damascus would strike Israel with missiles if NATO helps his country’s rebels during his rapidly escalating civil war. “If a crazy measure is taken against Damascus, I will need not more than six hours to transfer hundreds of rockets and missiles to the Golan Heights to fire them at Tel Aviv,” Assad warned after Turkish foreign minister conveyed a United States’ polite request to clear out. Assad continued: “All these events will happen in three hours, but in the second three hours, Iran will attack the US warships in the Persian Gulf and the US and European interests will be targeted simultaneously” True, Assad is rumored to have chemical and bacterial warfare stocks. But the Israelis sit on the Golan Heights less than 75 miles, downhill to Damascus. After Assad’s father tangled with the Israelis in 1982 — the largest air-to-air combat of the jet age and one of the shortest – Syria lost 85 Soviet MiGs. Hello?
Yep, must be something in the water, the wine, the arak or wherever.
— Sol Sanders, a veteran international correspondent, writes weekly on the intersection of politics, business and economics, can be reached at firstname.lastname@example.org and blogs at http://www.yeoldecrabb.wordpress.com
Posted in economic development, economic growth, EU, Europe, Israel, Russia, Syria
Tagged Basher al-Assad, Israel, jobs, Obama, something in the water, stimulus, Syria, taxes, uro. EU
The dust has far from settled on the Washington stalemate over setting a new debt limit. As Thomas Sowell pointed out, so logically, were an increase in the debt ceiling only “routine”, held up by pesky Congressional Tea Partiers, as the spenders charged, then what would be the purpose of having a ceiling at all? But while an indecorous debate encapsulated the larger ideological divide, America rapidly moves on, remorselessly, to threatening politico-economic issues cascading in from Europe and Asia as well as at home.
Ironically the current world crisis proved one thing: a continuing overwhelming faith in America’s importance, whether economically or culturally. Proof is “the flight to quality” by investors worldwide into the American Republic’s indebtedness as witness all-time record low interest in U.S. Treasuries auctions. Prime Minister David Cameron’s turn to American police [overcoming the usual our British Greek to your American Roman prejudices] in the face of chaotic English urban rioting is another indicator. But disquieting news from Libya approaching indecisive civil war and tragic events in Afghanistan where withdrawal leaves a highly vulnerable Pakistan indicate just how wanting is continued Obama Administration “leading from behind”.
US economic amelioration and patching up its world role would require extraordinary statesmanship. And as many observers, Pres. Harry Truman for one, have judged, the Constitution and history has made the presidency a very strong executive, and it sometimes matters less what he decides but that he act. “The buck stops here”, Mr. Truman’s pithy saying, remains a call for presidential courage on Pres. Barack Obama.
Here’s the kind of action that might result were that summons answered:
- Send Michelle and the kids off to Martha’s Vineyard while making a seminal Oval Office Labor Day speech on economic affairs. The spin might be: while holding to fundamental beliefs for a new era of economic justice, pragmatism demands that agenda be put on hold to meet the deepening emergency replaced by a program of cooperation with business to produce jobs immediately.
- Ask the Congress to skip vacation and reconvene in special session, if needs be three days a week, to consider economic-political measures necessitating legislative action, or simply as a forum to vent the public’s criticism.
- Call for a summit at the highest level with our allies in Europe and Japan on the world economy — including the simultaneous attendance of all central bankers –to discuss coordinating economic strategies and tactics.
- Begin weekly meetings in closed session with a group of recognized private sector leaders to brainstorm recovery strategies and tactics.
- Call for an immediate minimum two-year extension of the Bush tax cuts, ask Congress immediately to cut capital gains to zero, and begin the examination of longer term tax alternatives including a flat tax.
- Propose a tax reform commission of experts modeled after the Defense Base Closure and Realignment Commission to suggest immediate incremental incentives for small businesses – the fountainhead of jobs.
- Lift all administrative restrictions on discovery and production of fossil fuels, especially in the Gulf and Alaska and Virginia, creating perhaps a quarter of a million jobs immediately.
- Use the extensive administrative powers written into Obamacare to suspend any implementation for at least five years and suggest its review by a body of medical, insurance and regulatory technocrats to be presented to the Congress before November 2012.
- Ask Congress for a one-time tax remission for multinationals to encourage repatriation of an estimated $2.5 trillion in profits held overseas, on condition 25% be invested immediately in an infrastructure fund [highways, bridges, airport, rail reconstruction, etc.], a private sector Reconstruction Finance Corporation administered by those companies in collaboration with local governments.
And then sit back and see the American economy take off!
Alas! I fear we have as much hope for such a program, either thematically or in its specifics, as the proverbial snowball in the nether regions. Hangers-on, leftwing Democrats and the kept mainstream media will continue to hope for victory in next year’s elections, clinging to an agenda designed to enthuse the President’s “politically correct” base, demonize his opponents and flimflam independents by pretending a position of compromise.
Unfortunately, it looks like that indomitable American economy with its incredible history of jobs creation will have to continue to tread water – as it will manfully — against a Washington tide.
Posted in debt ceiling, economic development, economic growth, Elections 2012, Inside the Beltway Capers, leading from behind, Libya, Middle East, Obama, Obama foreign policy, Pakistan
Tagged buck stops here, business council, economy, fossil fuels, martha's Vineyard, Michelle Obama, multinational profits, Obama, Pres. Harry Truman, Reconstruction Finance Corp., rioting, taxes, UK, your Greek to my Roman prejudices