Thursday, August 12, 2010

Tell It Like It Is, Unless You Prefer Platitude

The Morning Joe Rebuttal for August 12th, 2010


1) The Weiner vs. Scarborough confab is confusing. Mr. Weiner is completely guilty of using semantics like a juvenile, Mr. Scarborough is guilty of using the airwaves like a juvenile. Mr. Scarborough has opted to forgo the winning logic, which is available to him – that Mr. Weiner claiming that the amendment resistant yes votes are yes votes and free of any obstruction by the virtue of their yes vote - simply to pound out a loser argument that the Democrats are as bad as the Republicans about putting negative efforts ahead of governing.

Let’s break this down. Mr. Weiner when asked why the blue dogs would walk if the immigration amendment was there didn’t answer the question and avoided by the semantic trick “but they voted yes”. A yes vote on an unpassed bill has the same effect of a no vote on an unpassed bill by virtue of the failure of the greater goal. This is further questionable as the chosen strategy because they have these things called whips in Congress that reduce the surprise of voting far less than Mr. Weiner would let on.

Mr. Scarborough rather than parsing that failure of logic, in fairness he may not have had a chance given the vacuum of willingness to actually debate, decided to camp on the ‘Pelosi opted to let the vote have a procedural defeat to paint the failure on the opposition”. The problem is that strategy works, the bill is alive today because the Republicans will not live down the no vote. They will either have to compromise on the amendment or vote yes to the 2/3rds version. It’s bad, but it’s hypocritical to attack Pelosi where the Republican strategy lives. The other side does every obstructive tactic available to it hoping to find salvations in future elections.

Bottom line, Mr. Scarborough had the high ground and didn’t use it. Instead he participated in a useless display. That makes this episode less about the merit of the debate, and more about what’s in it for Joe Scarborough. That question will answer itself, because the US needs an influx of young teachers and Congressmen, and if Scarborough comes off like a bitter pill in the next 5 Weiner interviews, think Mark Haines here, how long can the show go on if it kills off these hopeful influxees one by one?

2) All you ever see is the ‘keep calm and carry on’ thing. You had an author on today that said his book describes the ‘Zeros Decade’ as Wall Street and Washington willfully ignoring the precipice before them. They likely utilized a similar mantra on their way to the next political or economic free fall. They both had them. So when you see the show spend so much time in the analysis that was not kind to Robert Gibbs, you wonder if lucid recognition of facts on the ground will ever be welcome again.

Mr. Gibbs is apparently guilty of putting things like elections in best, worst, most likely analysis openly, despite the conventional wisdom of selling a company line no matter the circumstances. Mr. Gibbs is apparently and most currently guilty of openly telling the far left, as Ezra Klein puts it “stop complaining about things we couldn’t provide for you in our administration, that you couldn’t provide for yourself, and that the Republicans would never do for you”.

By acknowledging that this rift in his party exists, he takes that party up the evolutionary plane by one level. A level not yet mastered by the Republicans who are forced to return to their districts and sermonize extreme politics of their extreme base every election cycle. The Democratic party is attempting to tell it like it is, the center needs to rule, the extremes need to understand their outlier status and can expect proportionate net effect instead of unrealistically thinking they will drive the party. That unrealistic expectation is the Achilles heel of the Republicans, because it ages them, it drives them away from a governable center over time as the extreme values become a smaller and smaller demographic.

Mr. Gibbs is self correcting. In the last administration he would’ve been replaced by President Cheney in seconds. It’s just a refreshing reminder that the politburo is gone.

Keep calm and carry on should be a mantra of acknowledgement rather than avoidance.

3) As I watch endless ‘we can’t afford it’ rationale from Afghanistan to entitlements to health care to stimulus, I am just shocked at the lack of acknowledgement of the most obvious solutions to our current malaise. Money solves every thing. A penny saved is a penny earned, but we did not solve the Reagan deficit with cost control, as the host of Morning Joe would have you believe. Any congress can force a balanced budget or a pay as you go requirement, if there is adequate revenue.

Not to diminish the historic effect of the two things, revenue and some salient expenditure control happening at the same time, but Bill Clinton raised money. He increased tax revenue, then he benefited from the wealth effect, which single handedly did the heavy lifting for him. Where did Mark Cuban get all that money anyway? Do you remember?

We have no current appetite to talk in any manner other than platitudes about this way out of our trouble. To understand why, and why the whole world is fixated on austerity like a goldfish on a flake of food, is to understand the breakdown in mutual goals of the government and Wall Street. The business guys are saying you are giving all the deficit away in bad government spending, the main street guys are saying business appears to be de-incentivized to prefer domestic growth.

Corporate taxes amalgamate to around 7% of national revenue. Real revenue occurs when individuals materially participate in the path forward for their companies, like stock options. These revenues are capital gains. Proprietary trading is lobbying heavily to avoid capital gains, but currently pays them. Real revenue occurs at full employment at the lowest sustainable income tax rate.

The E=MC2 of this is to make a polynomial integration of your domestic goals, something like domestic job growth plus green technology competitive advantage plus domestic manufacturing plus trade deficit plus provable saving of federal expenditure plus normative equity of executive pay = reduction of capital gains plus reduction of corporate tax liability. If you make an investment on a domestic green technology facility, you have a 67% superior upside potential versus a gain subject to a 40% capital gains tax exposure.

Additionally, what if you made a clawback laundering mechanism that released the liability of any dollar invested as displayed above from any liability found later via improper participation in the mortgage or derivatives crisis, or tobacco liability, or usury irregularity? A way to answer the clawback wolf’s cry and the need to funnel money through the US first, NAFTA second, China last.

It’s simple, we got our first surplus via the wealth effect of fool’s gold spun off of the crisis. What if we privatized our necessary next recovery and solved our federal deficit at the same time?

This is about the 5th time I’ve mentioned that the answer to the problem is on the revenue side. I see green shoots in small unsynthesized steps towards using capital gains to improve our fiscal status. But it will take an integration to make a solution.

All of you bickering about cost side economics look as orange as John Boehner to me. You need to realize that the buyers remorse you have about not negotiating better with the banks on the bailout is about to have a second chance at redemption. John Boehner wants you thinking about cost because he doesn’t want you thinking about the solution until his corporate benefactors can get all corporate taxes and capital gains out of the tax reach.

Then it would be too late, because you will be giving the same tax break to Walmart who is selling you goods made by China at slave wages, that you would be giving to Tesla or the Bloome Box. You have a chance.

Don’t be that orange guy.

That's all for today, see you tomorrow.

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