How to Fix What Ails Us

[badlydrawnjeff.livejournal.com]

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?

Comments

[dwer.livejournal.com]

and you're skipping over the point that California's highest marginal tax rate is 10%, and it doesn't change the fact that California cannot raise the money it needs.

[404.livejournal.com]

Ok, how much do you want Californians to pay? 39% state and 39% federal? That comes out to 78%, not including property & other local taxes. Might as well take it all at that point. That still would probably not be enough for statists like you.

[dwer.livejournal.com]

it's funny, because I'm hardly a statist.

No, I don't think I want California's richest people to pay 78%, although there are several people who could certainly live on 12% of their income. That's another thing you lolbertarian neotards love to do -- pretend that the highest tax rate, which only applies to a certain percentage of the most highly paid people's salaries, is the rate that EVERYONE pays.

[badlydrawnjeff.livejournal.com]

Will you address anything in this thread or just throw off pithy statements until people give up?

[dwer.livejournal.com]

It's funny, because when I use facts, you dismiss them without concern.

[badlydrawnjeff.livejournal.com]

You've used facts?

[dwer.livejournal.com]

I know; they are unfamiliar to you in their native form. Perhaps you should take an Adult Extended Education class at your local community college.

[badlydrawnjeff.livejournal.com]

You? You've used facts?

[mrbogey.livejournal.com]

If California can't raise the money it needs with one of the highest GDP's in the world and other states can by taxing less with smaller GDPs then maybe Californians need to realize that the party that runs the state is incompetent.

[dwer.livejournal.com]

The Republicans? Well, duh.

But once again, you're ignoring the laws of the state. New spending can be approved by a flat majority, but new revenue gathering has to be approved by 2/3 majority.

[mrbogey.livejournal.com]

Sounds like that state needs to cut spending then.

[dwer.livejournal.com]

slashed to the bone already. The state needs to reform it's spending, certainly, but it needs to be able to raise more money. See this post here: http://community.livejournal.com/talk_politics/673178.html most of the corporations aren't paying their share.

[badlydrawnjeff.livejournal.com]

slashed to the bone already.

Nonsense. Even you could find things to cut in that budget. Go ahead, you said you're no statist, do it.

See this post here: http://community.livejournal.com/talk_politics/673178.html most of the corporations aren't paying their share.

See this comment (http://community.livejournal.com/talk_politics/673178.html?thread=50277274#t50277274), that myth has been busted.

[mrbogey.livejournal.com]

It's laughable to say it's slashed to the bone.

[404.livejournal.com]

http://news.yahoo.com/s/ap/20100822/ap_on_re_us/us_taj_mahal_schools?bcmt=23173420#mwpphu-comment-23173420

When a high school in LA costs almost half a billion dollars to build, there's major structural and ethical problems that California is having to deal with, and that does not involve squeezing more money out of people, but to better spend what they do have.

[dwer.livejournal.com]

which means you missed the part where I said The state needs to reform it's spending, certainly

On the other hand, if I have to choose between spending half a billion dollars on a school and spending half a billion dollars on a fighter-plane, I'm pretty sure I know which one is more important.

James Sohn, the district's chief facilities executive, said the megaschools were built when global raw material shortages caused costs to skyrocket to an average of $600 per square foot in 2006 and 2007 — triple the price from 2002. Costs have since eased to $350 per square foot.

From your own article. Also from your own article:

Sohn said LA Unified has reached the end of its Taj Mahal building spree. "These are definitely the exceptions," he said. "We don't anticipate schools costing hundreds of millions of dollars in the future."

So your statement implying that all schools in LA are costing hundreds of millions is false anyway.

[404.livejournal.com]

The California budget doesn't spend money to build fighter planes, so that's out the window to begin with. And does LA really need "Taj Mahal" schools? How about fix the ones that really need help, rather than pour money into a couple that on the whole will not help the whole city.

The point is, that California does not have an income problem, but a spending problem, and statist apologists like you will go out of your way to maximize the former, and minimize latter.

[geezer-also.livejournal.com]

Sorry, when 3.5 billion was authorized for stem stem cell research, I don't call it slashed to the bone.
When the state legislators here say they've slashed to the bone, what they mean is only automatic, built in increases will be given, instead of all the extra stuff they want to give.
The state and most of the major cities are run by the unions. A couple of months ago Mayor V wanted to lay off about 1400 city workers, however the union contract was written in such a way that if workers were laid off, automatic pay raises would go into effect. So what would happen it would actually cost L.A. MORE money to lay people off.....gotta admit somebody was pretty smart :D

[badlydrawnjeff.livejournal.com]

But once again, you're ignoring the laws of the state. New spending can be approved by a flat majority, but new revenue gathering has to be approved by 2/3 majority.

So you now recognize that it's a spending, not a revenue, problem, I hope?

[dwer.livejournal.com]

Not in the slightest. States have slashed budgets to the core. When cities are ripping up paved roads and replacing them with gravel, spending is not the problem.

[badlydrawnjeff.livejournal.com]

Ever think we may be overpaving? Or maybe we're paving roads that don't need to be repaved, thus not needing to rip up existing ones.

You've already come to your conclusion, so now you're trying to fit the narrative to it. No dice, sir.

[dwer.livejournal.com]

... Wow. Talk about fitting a conclusion to a narrative.

[the-rukh.livejournal.com]

Does your out of the blue assertion have any evidence?

[badlydrawnjeff.livejournal.com]

Which one is out of the blue?

[badlydrawnjeff.livejournal.com]

and you're skipping over the point that California's highest marginal tax rate is 10%, and it doesn't change the fact that California cannot raise the money it needs.

Maybe California needs to spend less.