talkpolitics | How to Fix What Ails Us

Entry tags:

crisis,
stimulus

How to Fix What Ails Us

Intel's CEO, Paul Otellini, had some fairly harsh words for the folks in power this week:

Otellini singled out the political state of affairs in Democrat-dominated Washington, saying: "I think this group does not understand what it takes to create jobs. And I think they're flummoxed by their experiment in Keynesian economics not working."

Since an unusually sharp downturn accelerated in late 2008, the Obama administration and its allies in the U.S. Congress have enacted trillions in deficit spending they say will create an economic stimulus -- but have not extended the Bush tax cuts and have pushed to levy extensive new health care and carbon regulations on businesses.

...

As a result, he said, "every business in America has a list of more variables than I've ever seen in my career." If variables like capital gains taxes and the R&D tax credit are resolved correctly, jobs will stay here, but if politicians make decisions "the wrong way, people will not invest in the United States. They'll invest elsewhere."

Take factories. "I can tell you definitively that it costs $1 billion more per factory for me to build, equip, and operate a semiconductor manufacturing facility in the United States," Otellini said.
The rub: Ninety percent of that additional cost of a $4 billion factory is not labor but the cost to comply with taxes and regulations that other nations don't impose. (Cypress Semiconductor CEO T.J. Rodgers elaborated on this in an interview with CNET, saying the problem is not higher U.S. wages but anti-business laws: "The killer factor in California for a manufacturer to create, say, a thousand blue-collar jobs is a hostile government that doesn't want you there and demonstrates it in thousands of ways.")

"If our tax rate approached that of the rest of the world, corporations would have an incentive to invest here," Otellini said. But instead, it's the second highest in the industrialized world, making the United States a less attractive place to invest--and create jobs--than places in Europe and Asia that are "clamoring" for Intel's business.

This is similar, as CNet reports, to what Carly Fiorina had to say on the matter, with the difference being that Otenelli isn't running for office. But clearly the business class is less concerned about speaking up right now.

We do need to think ahead to what's going to fix the problems, though. "Unexpectedly," unemployment claims are increasing again, home sales are in decline, and the stimulus, which was supposed to save us all, has "done exactly as we expected it to", which is to mean not performed as intended at all.

So let's see - we have a failed stimulus, a looming tax hike, new costs associated with health care and financial reforms, and businesses are not spending money in anticipation of this uncertainty. What's the way out? How do we fix this problem? Where do we go from here?

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Oregon is infamous for chasing industries away and a good reason that we've always struggled financially as a state, especially since we've lost our timber and fishing industries. A lot of good tech companies who used to be here have pulled up and left and many new ones are too frustrated by our politics, consider us and quickly move on.

Massachusetts has New Hampshire directly north of us, which means no sales tax, lower taxes across the board. It's no wonder Massachusetts is lagging so far behind.

You'd think politicians would learn from things like this. Massachusetts can't compete with New Hampshire for obvious reasons, but somehow competition between nations isn't enough to really worry about? Really? Look how well Texas is doing - we can't do more to emulate that?

Regarding your last paragraph, I have absolutely no idea what the answers are but I scared for my future and that of my young adult children.

In the short term, I'm hoping this is just one of those minor bouts of insanity this nation goes through from time to time. I mean, the government response to this economic situation has been a massive failure in almost every way, so it's getting past the gatekeepers of that information and making sure people know it.

Long term, well, it's going to depend on how we respond today, is it not?

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Yeah, jeff papered over some of NH's very severe problems. When you have to shut down jury trials as a whole for 3 months out of every year simply because you can't afford it, and even when they are open your courts are only open for 3 days a week, and this is considered one of the SMALLEST budgetary concerns... yeah. NH has issues with its lack of a reliable tax base and need to rely on property taxation. Especially with the trend in property values meaning lower taxable value...

As someone who lived in NH for a while, I didn't paper anything over. NH has made choices to adjust to the life people want, and they're benefiting from it. And when property taxes are still competitive with the taxes to the south, it's no wonder Massachusetts is set to lose Congressional representation.

"Long term, well, it's going to depend on how we respond today, is it not?"

How conservatives respond? I expect it will be 'not'.

Look how well Texas is doing - we can't do more to emulate that?

Texas is doing okay because so much of our economy is tied to natural resources which are somewhat recession-proof. However, we've still got historically high unemployment and an $18 billion structural deficit for next year's legislature to address. Our state services are already pretty minimal, so we either cut crucial services or raise taxes.

Texas is doing okay because so much of our economy is tied to natural resources which are somewhat recession-proof. However, we've still got historically high unemployment and an $18 billion structural deficit for next year's legislature to address.

Texas is doing okay because they're willing to make the hard choices and not screw businesses over. Will they have a deficit? Absolutely, but you notice it's not getting the negative attention others are. Why is that, do you think?

Our state services are already pretty minimal, so we either cut crucial services or raise taxes.

Perry's smart enough to know that services will have to go, I think.

Why is that, do you think?

A compliant media and a conveniently straightforward narrative. The same reason there is or isn't negative attention on so many other things.

Perry's smart enough to know that services will have to go, I think.

Yeah, that 49% graduation rate is clearly indicative of too much spending on schools. And the Harris County jail is now the largest psychiatric ward in the state after spending on state mental facilities was cut. No reporting on how much more it costs to house inmates in a jail rather than patients in a hospital, though.

A compliant media and a conveniently straightforward narrative. The same reason there is or isn't negative attention on so many other things.

So you think this left wing media is compliant when they have an opportunity to create right wing failures? Sheesh.

Yeah, that 49% graduation rate is clearly indicative of too much spending on schools.

As the last 40 years has shown, spending on schools is not an indicator of success or failure.

I think the right wing has constructed the myth of a left-wing media because it makes them feel better about their failures with policy and candidates.

As the last 40 years has shown, spending on schools is not an indicator of success or failure.

Nonsense. Higher salaries bring in better, more qualified teachers and allow for classrooms with fewer than 40 students in them.

I think the right wing has constructed the myth of a left-wing media because it makes them feel better about their failures with policy and candidates.

Anything it takes to deny reality, I guess. Then again, I guess this media has done a great job talking about how poorly the stimulus has gone...oh, wait...

Nonsense. Higher salaries bring in better, more qualified teachers and allow for classrooms with fewer than 40 students in them.

Sure.

oooh! another misleading graphic!

How's it misleading? Use facts and sources if possible.

costs -- independent costs -- have gone up. The value of the dollar has gone down. Thing fucking cost more now. And there's no reason to point to a source you will simply wave away.

costs -- independent costs -- have gone up.

Source? Link?

And there's no reason to point to a source you will simply wave away.

Much easier for you to just bullshit your way through it, I know.

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dwer.livejournal.com - 2010-08-25 21:27 (UTC) - Expand

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badlydrawnjeff.livejournal.com - 2010-08-25 22:26 (UTC) - Expand

ROTFL.

Did you see that little thing over there on the left where the graph says IN CONSTANT 2008 DOLLARS?

Means that inflation costs have already been accounted for in the graph.

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mrbogey.livejournal.com - 2010-08-25 23:36 (UTC) - Expand

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dwer.livejournal.com - 2010-08-26 00:27 (UTC) - Expand

Then again, I guess this media has done a great job talking about how poorly the stimulus has gone...oh, wait...

Economic consensus is that it has done okay. I know you can find some economists at Cato or some columnists for the Wall Street Journal that disagree, but there's a reason they aren't working at non-partisan institutions.

"This media" also does a crap job of reporting scientific facts, and goes out of its way to claim that Paul Ryan's "budget proposal" is anything new or feasible. Conservatives just love to play the victim - one of many things they learned from Nixon, who also campaigned against the media.

And of course education costs will go up over time, education is a service. As of 2007, health care costs have gone up about 20 times since 1970 (see page 2). (http://docs.google.com/viewer?a=v&q=cache:FXit5BlCfkkJ:www.kff.org/insurance/upload/7670.pdf+health+care+costs+statistics+40+years&hl=en&gl=us&pid=bl&srcid=ADGEESgWZY1hjDiFlu8gSJiAtWNAFhj4MwnucD1GoMVOiEZMj5I60qL1ViJxZ9eMtvkU_-Esn77I0jYLlc7DeECatvCOm9LG2ppQG6B31Cn_4kyiOTegWkSk3D0nzlOyfsOteI1Ww38h&sig=AHIEtbQ4xi6TzjCuLCiIXPgXDRAL4SqDJQ) I guess that means our education system is doing relatively well. See also: Baumol's disease. (http://www.springerlink.com/content/q6701364lwj576t2/)

Economic consensus is that it has done okay. I know you can find some economists at Cato or some columnists for the Wall Street Journal that disagree, but there's a reason they aren't working at non-partisan institutions.

Says your media. d:-)

And of course education costs will go up over time, education is a service. As of 2007, health care costs have gone up about 20 times since 1970 (see page 2). I guess that means our education system is doing relatively well. See also: Baumol's disease.

I think you missed the point of my graph.

'The graph is scary until you realize that the cost of services grows quickly.'

Economists call that "inflation". Maybe they should index that stuff, yaknow.

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nevermind6794.livejournal.com - 2010-08-26 16:58 (UTC) - Expand

I thought the point of your graph was that education spending has increased a lot over the years.

My point was that in context, no, it really hasn't. The graph is scary until you realize that the cost of services grows quickly.

The point is that the increases have happened with no corresponding improvement in results. And the numbers are constant dollars - do you really think the cost of services have doubled in 2008 dollars in 30 years?

OT: Your icon probably has a very sweet story behind it, but I have always seen it and gotten freaked out because it looks just like a picture of a tall friend of mine with a short horror movie person, and I keep being reminded of it.

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nevermind6794.livejournal.com - 2010-08-26 17:08 (UTC) - Expand

'I know you can find some economists at Cato or some columnists for the Wall Street Journal that disagree, but there's a reason they aren't working at non-partisan institutions.'

Non-partisan such as?

The CBO, Tax Policy Center, and Moody's were the three I had in mind. I know there are some others.

Well, the spending allows for smaller class sizes - phrased that incorrectly.

Not to mention a graduation rate of about 50%.

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