Tag Archives: political economy

More Jobs

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JP Morgan Chase says it’s going to spend its tax cut savings to

develop hundreds of new branches in the US, increase wages and benefits for hourly US employees, make increased small business and mortgage lending commitments, add 4,000 jobs, and increase philanthropic investments.

Nor is this a one-shot affair.  It’s a five year, $20 billion investment.  So much for pocketing the money and cutting out charity work, the loud Leftist refrain during the debates over tax reform.

As an aside, the pay raises are good and so are the additional jobs implied by the additional branches—400 of them (against an existing 5,130 branches, an 8% bump, which is also good for consumers)—openings.  But frankly, for my money, the additional jobs are more valuable than the pay raises for the existing employees.  The latter are getting a larger piece of the pie, which is good, but the former are getting their first slice—and making the pie itself bigger.

Here’s another datum.  Kim Lopdrup, Red Lobster’s CEO, is saying

Tax cuts, that’s clearly going to be stimulatory for the economy. We think that’s going to be great for the restaurant business[.]

More money left in the coffers of a small-margin business like a restaurant?  Yewbetcha.

Certainly, a couple of data points are little more than anecdotes, not a trend.  But they are promising anecdotes and well worth watching to see whether a trend develops.

This is the sort of thing, though, that the Progressive-Democratic Party opposed when they fought so hard against the just-passed tax reform bill.  It’s almost like they want Americans trapped in the Progressive-Democrat welfare cage.

Taxing and Spending in New York

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Bookending (in more than one sense of the term) California’s move to confiscate business’ tax cuts, New York’s Progressive-Democrat governor Andrew Cuomo wants to increase the taxes levied on that State’s citizens by $1 billion.  He’s claiming, in all seriousness,

You can’t possibly get anywhere near where you want to be on education and health care unless you raise revenues.  It’s just too big a deficit, and the choice of cutting education or cutting health care I don’t think is a place anyone wants to go to this year. So you have to raise revenue.

This is a false choice.  The largest cause of the State’s deficit, after all, is its spending level, not the size of its revenue.  Thus, one choice Cuomo is carefully eliding is this: the State’s government could cut spending across the board; there is, after all, more going on in New York than just education and health coverage costs.

Alternatively (which Cuomo also avoids mentioning), the State’s government could simply reallocate existing spending into education and health care.

Still another alternative unmentioned, the State’s government could fix its runaway pension funds for its public unions by using accurate projections of investment return rates and increasing the contributions union members and the unions themselves make to the funds.  Along with this, the State’s government could fix its health coverage program, replacing its version of Obamacare with market-based solutions, and freeing the citizens to buy the health plans that suit them rather than suiting Government.  Or not buy at all.

There’s simply no need for more revenue for the State’s government, no need to take even more money out of the pockets of the State’s citizens.

Unfortunately, neither the man nor his Party cronies in the legislature are emotionally capable of conceiving of actually cutting spending, or even of reallocating existing spending.

True Colors

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The Progressive-Democrats, especially those in the Senate, have shown their true colors as they voted last Friday to shut down the Federal government, voting to block a temporary funding agreement that would have kept the government open for another month.  I wrote earlier about that shutdown’s practical effects.

Here’s what the Progressive-Democrats voted to kill: six years of funding for CHIP, so now some millions of children in our poverty-level families will have no access to health insurance.  DACA reform so that those illegal immigrant children could have some hope for their future.

CHIP funding was in the stop-gap bill, but now there’s no funding for it, and the program has expired.

DACA reform was not in the bill, having nothing to do with funding, but the Progressive-Democrats, led by Senate Minority Leader Chuck Schumer (D, NY) demanded it be included or there would be no votes from his Party (in the event, five Progressive-Democrats from Republican States whose seats are in jeopardy in this fall’s elections, knowing their Party would kill the funding, cynically cast their meaningless votes for the bill).  It didn’t matter to these worthies that DACA had until early March to be negotiated or that there already exists bipartisan agreement on the outline and substance of a DACA proposal that could have been debated and voted up by the end of January in a separate bill.  Schumer and his Party cronies demanded their DACA right damn now.  Their attitude has badly poisoned any future DACA negotiations, perhaps fatally.

It gets worse.  There was nothing in the bill to which Progressive-Democrats actually objected.  It funded the government for a time, which the Prog-Dems claim they want.  It funded CHIP, which the Prog-Dems claim they want.  It funded defense, which even Prog-Dems claim they want.  The clean funding bill just didn’t have all the other, unrelated, things the Prog-Dems also demanded.

When Schumer went to the White House late Friday before the vote to deal personally with President Trump, he went with a Christmas tree of Progressive-Democrat demands beyond just DACA for inclusion in the stop-gap bill, including for instance, bailing out public union pension funds, added spending on opoid programs, and on and on.  That Christmas tree is what Schumer was talking about when he said after the meeting that progress had been made, but “we still have a good number of disagreements.”  All of these extras also could have been negotiated and voted on in the ensuing period.

Not good enough.  The Progressive-Democrats voted to shut down the government because the stop-gap didn’t have DACA and Schumer’s Christmas tree.  Party ego before national weal.

Remember this next fall.

Update: The Senate, on another cloture vote later this morning, voted 81-18 to end the filibuster and bring the bill to the floor for an up or down vote. The bill is changed trivially–the funding period is good for three weeks instead of four–but otherwise, it’s the same bill.  Because of that period change, though, it has to go back to the House, where I expect it’ll be voted up forthwith and sent to the President for prompt signing.

In return, Senate Republicans promised negotiations on DACA and on immigration and a vote on DACA. The DACA debate has been going on, all along, as noted above.

Businesses Behind the Tree

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California wants the Federal tax reform-saved money for itself, and they want a State Constitutional amendment to make the seizure permanent.

A proposed Assembly Constitutional Amendment by Assemblymen Kevin McCarty (D) and Phil Ting (D) would create a tax surcharge on California companies making more than $1 million….

The Progressive-Democrats claim the money would go to “programs that benefit low-income and middle-class families,” but that’s just tear-jerking.  The State’s government would divert the monies to favored programs at convenience.  That’s minor, though.

The point of the proposal is to take the money from business—the surcharge is a tax of fully 50% of business’ Federal tax cut—because Government Knows Better, and business doesn’t deserve it, anyway.  Nor did they earn it.  Government did that.

Don’t tax you, don’t tax me.  Tax that business behind the tree.  That’s not quite what Russell Long (D, LA) said all those years ago, but California’s new tax proposal is close in spirit.  What the Progressive-Democrats in California’s legislature and governor’s mansion are missing, though, is another sentiment of Long’s regarding tax breaks for businesses:

I have become convinced you’re going to have to have capital if you’re going to have capitalism.

This is an understanding completely absent in the Progressive-Democratic Party.

A Government Shutdown

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Louise Radnofsky had a piece early Friday morning—before the Senate vote on a bill that would keep the Federal government running for another month—outlining the costs of a shutdown, based on the Progressive-Democrats’ 2013 shutdown.  Over those roughly two weeks of relative inactivity, the costs were quite trivial.

Those trivial costs are part of why the Progressive-Democrats are so anxious to have the shutdown this time around, too—they know there’ll be small practical impact while having large publicity impact.

Frankly, I hope Trump stands firm, and with the government shut down that it stays shut down for far more than a couple of weeks—let everyone see how little Big Government is needed and how well a skeleton government (at least compared to the present morbidly obese government) functions.  After all, to take one example from that 2013 shutdown, then-EPA Secretary Gina McCarthy admitted that more than 90% of her EPA personnel were non-essential, and she furloughed them for the duration.  Now, 90% probably overstates the long-term case (assuming we actually need an EPA, but that’s a separate discussion), but the EPA’s current budget request, which reflects a 47% reduction in EPA employees, is a good place to start.