Three Press Conferences

After the “what shellacking?” outcome of Tuesday’s mid-terms, Senate Minority Leader (and expected Majority Leader in the next Congress) Mitch McConnell (R, KY) held a press conference in which he invited bipartisanship and a working-together atmosphere in which the President and Congress could get done the things that need doing in those areas in which there was substantial agreement and continue debating those matters in disagreement.

Trade

I wrote earlier about our GDP number, including the impact on it of our trade gap—specifically our import numbers. Now the other side of that coin has been exposed.

The US trade gap widened in September as exports fell to a five-month low, a sign of weaker demand for US-made goods that underscores concerns about a global economic slowdown.

The trade deficit rose 7.6%…. Exports decreased 1.5% from August while imports were almost unchanged.

Two reports don’t make a trend, but they are suggestive.

Outcomes, Again

Last September, [House Minority Leader, D, CA] Nancy Pelosi warned Americans that a Republican Senate majority would mean that “civilization as we know it would be in jeopardy.”

Now the Republicans have a chance to achieve exactly that. “Civilization” as Democrats know it needs to be thrown onto the tailings pile where it belongs, and American civilization revived. After all, even though Pelosi’s BFF, Secretary of State John Kerry, has said, “In America you have a right to be stupid,” that right does not exist in government officials where the stupidity is so damaging to our entire nation.

Outcomes

Tuesday’s mid-term elections have the potential to be a sea change in the governance of our country and in the direction we take as a nation. The elections have resulted in a sharp change of control of the Senate to the Republicans, giving them both houses of Congress for the last two years of President Barack Obama’s term; an expansion of House control by 13 seats; a net gain of three (so far) governorships; and an increase in Republican control, depending on how too-close-to-call local races come out, to between 67 and 69 out of 99 of State legislatures. The governorships are especially telling given some particular victories: Scott Walker in Wisconsin, John Kasich in Ohio, Rick Scott in Florida, Bruce Rauner in Illinois, and Larry Hogan in Maryland, among others.

Another Case for Tax Reform

British Prime Minister had this to say Thursday (if that link doesn’t work, the Daily Mail has a good summary and paraphrase):

We know the economic case for cutting taxes: in a competitive world we cannot afford to carry on as a bloated, high-taxing, welfare-heavy nation.

We have to direct our resources to incentivising work through tax cuts and not incentivising welfare through extra benefit entitlements.

We have to fight the notion that you can endlessly suck more taxes out of businesses and bite the hand that feeds…. For me, the simplest way to help with living standards is this: allow people to take home more of their own money.

In A Separate Report….

Overall household spending [Note: household spending is different from the consumer spending I referenced in yesterday’s article, and this is a different report from the one I referenced yesterday] fell 0.2% from August, the first decline since January and only the third since the recession ended in mid-2009, the Commerce Department said Friday. The drop reflected a big decline in purchases of big-ticket items such as cars.

Economic Improvement?

Our GDP grew at 3.5% last quarter compared to the prior year’s 3rd quarter, against economists’ expectations of a 3.0% growth rate. That’s good, right?

Why did it grow?

Part of the growth came from trade: imports fell sharply. Net trade is a definitional component of our GDP, and net trade consists of Exports less Imports. A reduction in imports, then, by definition elevates GDP.

This particular reduction, though, reflects a reduction in buying goods and services from overseas, which is entirely consistent with another trend: Americans aren’t buying stuff at any high rate, still.

European Taxes

…and, by extension, the goal of this administration’s Europe-wannabe tax schema.

Matthew Karnitschnig and Robin van Daalen, in The Wall Street Journal, interviewed the newly retired Marius Kohl, who was for 22 years the Attendant—head—of Luxembourg’s Sociétés 6, or Companies 6, the Luxembourg government agency that, among other things, determines the annual tax owed by each of roughly 50,000 Luxembourg-registered holding companies.

It’s a wide-ranging interview and well worth the read, but I want to focus on one small bit of it.

Trust

I’m going to poke my nose into European affairs, again.

The backdrop is the French budget crisis. The backdrop to that is this. In one of the EU’s responses to their part in the global economic crisis of 2008-2009, the EU passed the Stability and Growth Pact, which authorized the European Commission, the executive body of the European Union (though the Commission has its own president, the body acts like a President-by-Committee) to require EU member nations to submit their national budgets to Commission approval. If the Commission disapproved the budget and the nation in question refused to make Commission-directed corrections, the Commission could levy very serious fines on that nation.

Federal Subsidies and Block Grants

I’ve written elsewhere about converting Medicaid subsidy transfers to the states to block grants on a declining schedule that eliminates the Medicaid subsidy altogether over a 10 year period.

In an era of excessive Federal government spending, ongoing Federal budget deficits as the normal state of affairs, and the resulting burgeoning Federal debt, it’s time to look at converting all Federal transfers to the states on a declining schedule that eliminates the subsidies altogether over a 10 year period.

It’s time to restore the Federalism to the Federalism concept of our Constitution.