Balance the budget by cutting spending and dealing with entitlements. This is easier said than done (if it were easy, it would have been done already). But one effect of a government that is spending so much more than it takes in every year, and has accumulated so much debt, is that people and firms expect either inflation or tax increases. So they hang on to their money instead of hiring.
Jacob Gershman, my former colleague at the New York Sun, has a piece in the Wall Street Journal today about New York's 5 millionth Medicaid patient:
Over the past decade, more than two million people were added to New York's Medicaid rolls, an increase of nearly 75%. In 2001, 15% of the population was on Medicaid. That percentage is now at 26%, about 10 points higher than the national average....In recent years, the state eliminated resources tests, allowing most applicants to attest their family assets. It also stopped requiring face-to-face interviews, switching to mail-in applications.
Last year, the state health department posted online tips explaining how people with too much income for Medicaid can still get into the system.
This latest debate had a slightly changed dynamic, driven by the opinion polls showing Herman Cain gaining and Governor Perry falling. Some of the other candidates started directing their attacks at Mr. Cain.
Rep. Ron Paul, for example, used his chance to ask a question of any other candidate to ask Mr. Cain why he opposed auditing the Fed. And the former senator from Pennsylvania, Rick Santorum, attacked Mr. Cain's plan for a 9% national sales tax. Mr. Santorum asked the audience, "How many people are for a sales tax in New Hampshire?" Getting no response, Mr. Santorum said, "That's how many votes you'll get in New Hampshire, Herman."
Governor Perry, who had been the center of attention after he entered the race, was said to have been put to bed early by his aides to make sure he had gotten enough sleep for the debate. Alas, it wasn't clear the aides had awakened him early enough; he struggled to assemble a single coherent or grammatically correct sentence. Not that articulateness is everything in a politician or a candidate, but at a certain point one begins to wonder if it points to some deeper problem.
The CEO of the giant money management firm PIMCO, Mohamed El-Erian, has an article up at the Huffington Post that, among other points, claims that Facebook and Twitter have helped Occupy Wall Street compensate for "its lack of...access to traditional media outlets." Sorry, I don't think that access to traditional media outlets has really been a big problem for these guys. They are all over the newspapers and television.
This one comes from Senator Hatch, Republican of Utah: repeal the Dodd-Frank financial "reform" legislation. Bloomberg is reporting that Goldman Sachs, "whose shares have fallen 43 percent this year, may report its lowest quarterly profit since the 2008 financial crisis." And the Wall Street Journal is reporting on a report by a branch of the New York City government warning that "New York City's securities industry could lose nearly 10,000 jobs by the end of 2012." Meanwhile, consumers are still protesting banks and their newly increased fees. If this is the result of financial regulatory "reform," maybe we'd be better off without it. Repealing it might cost the jobs of some regulators or compliance officers, but Senator Hatch is probably right that on a net basis repealing the law would be a job-creator.
Pass the Regulations From the Executive in Need of Scrutiny Act of 2011, or REINS Act. It has 177 cosponsors in the House already. This requires Congress to have a vote on any regulation that would have an annual effect on the economy of $100 million or more or significant adverse effects on competition, employment, investment, productivity, innovation, or U.S. competitiveness.
Thomas Sargent, who just won a Nobel prize in economics, is the subject of my weekly column, which is up at the New York Sun and at Reason.com. Check it out here (Sun) or here (Reason).
At Forbes, John Tamny has a report from the Nantucket Project: "maybe someday readers of the elite media will read positive news accounts of the very rich who, rather than disposing of their fortunes, choose to hold on to their money in order to grow more wealthy; their investment serving as seed capital for future businesses and the jobs they inevitably create." Maybe.
Also: "the audience appeared to tilt left on the political spectrum, and this was largely the lean of the speakers too. But eager to offer some balance with the goal of stimulating thought and conversation, they invited Ed Crane..., co-founder of the libertarian Cato Institute, to speak....Where it became even more interesting was how very much an audience that seemed skeptical embraced Crane's talk. Far from a leper, to observe him throughout the weekend was to see Crane regularly approached by attendees with high praise."
This New York Times piece on Steve Jobs and Thomas Edison was worth the time for me, even though I felt like I'd already read plenty about Jobs: "with Mr. Jobs, the tributes were to a fellow mortal, exactly our own height, just as vulnerable as we all are to the random strike of a life-ending catastrophe."
One of the two highly touted editors of the Bloomberg View opinion/editorial operation is already gone, so at least we know that Jamie Rubin is not to blame for this Bloomberg editorial:
If anything, the statistics point in the other direction: When taxes have risen, so have the number of jobs....
the data don't back up assertions that tax increases on the affluent thwart growth and jobs.
Look what happened under President Bill Clinton, when the top marginal tax rate was raised to 39.6 percent from 31 percent. Almost 23 million jobs were created, versus the 1.1 million new jobs under George W. Bush's lower-tax years. Even more compelling: During the golden age of growth in the 1950s, the top tax rate was as high as 91 percent.
There are two strong counterarguments to the Clinton and 1950s examples that the editorial does not take into account.
Do nothing. That's right, do nothing. This one might be my favorite of the whole lot so far. And it's particularly timely. In July, it was the height of the supposed "political dysfunction" related to the debt limit increase, and Republicans fought off an attempt by President Obama to get them to agree to a tax increase. In August, President Obama and Congress went on vacation. In September, though Mr. Obama gave a lot of speeches about what an emergency it is and how Congress needed to pass his job-creation bill, Congress did not pass the bill. And today, lo and behold, the Bureau of Labor Statistics announced that, according to the seasonally adjusted payroll survey, total private employment grew by 173,000 jobs in July, 42,000 jobs in August, and 137,000 jobs in September. That's not fabulous, but it's not terrible, either, especially given the oft-repeated claim that political dysfunction (what the left and the establishment center calls our constitutional system of checks and balances that allows Congress not always to do exactly what the president asks for) was creating job-destroying uncertainty.
Sell some government land. This is a George W. Bush idea that not only would raise funds to reduce the deficit or debt, but would put the property on state and local tax rolls and allow the owners to put Americans to work extracting resources from the land (mining, forestry) or building on it (housing, commercial real estate) or farming it. We're not talking about National Parks here, but mainly about some of the 248 million acres of land controlled by the federal Bureau of Land Management.
Earlier: Cost-Free Job-Creating Idea No. 17: Pass the Cement Regulatory Relief Act, preventing the Environmental Protection Agency from imposing new rules on cement manufacturers that the industry says would kill 4,000 cement jobs and another 12,000 to 19,000 construction jobs.
The Wall Street Journal has an editorial about the proposal by Senate Democrats to impose a 5.6% income tax surcharge for ten years on taxpayers earning $1 million a year or more beginning January 1, 2012. The editorialists wonder: "How this would stimulate a sluggish economy even under Keynesian economic theory is a mystery, unless you believe like Democrats apparently do that tax rates don't matter to economic growth."
Here's the abbreviated version of President Obama's hourlong press conference today: The president refers to "an economy that is currently weakening," by which he means, America. "Right now we've got an emergency," he says. Jobless Americans "are losing their homes. Their kids are dropping out of school because they can't afford student loans."
The president lashes out at China: "China has been very aggressive at gaming the trading system....and currency manipulation is one example."
In response to two questions about Solyndra, the president says the American government should keep funding green energy firms. While "traditional energy" is cheaper, he says, "The problem is, it's running out, it's polluting." He said, however, that America is "not gonna duplicate" the system in China, in which state-run banks give money to state-run companies, "ignoring losses and ignoring, you know, bad management."
He repeatedly referred to Lehman Brothers as "Lehman's." Asked about the protests on Wall Street, he said, "I think it expresses the frustration the American people feel."
Here is John Abrams of the South Mountain Company, a housing and energy design-build firm and someone with progressive, i.e., left-leaning, politics, complaining to Governor Deval Patrick, Democrat of Massachusetts, about senseless government regulation:
I said the solar industry is booming in MA due to very progressive state policies and incentives, and thanked him for that. "But," I said, "there are several potentially crippling obstacles that need immediate change. One is the state Fire Marshal's ruling that only licensed electricians can install solar systems. This makes no sense. Electricians don't build buildings or bridges, they don't install signs and billboards, they just do the electrical part. This ruling has the potential to cut out the people who built the industry and decrease quality to boot."
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