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]

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?

[the-rukh.livejournal.com]

We may be overpaving.

[badlydrawnjeff.livejournal.com]

Maybe we're paving roads we shouldn't be. I know for sure that our idea of "obsolete" and our ratings in general don't really reflect reality as common folks understand it. Regardless, if we're tearing up roads, we're doing something wrong along the way.

[the-rukh.livejournal.com]

What would you base this opinion on?

[badlydrawnjeff.livejournal.com]

Which part?

[the-rukh.livejournal.com]

That we're paving roads that shouldn't be.

[badlydrawnjeff.livejournal.com]

It's speculative, thus the maybe. We have a lot of little traffic roads in the Northeast, for instance, that might not really need to be paved.

[the-rukh.livejournal.com]

Or they might need to be. I just don't think bringing up a speculative with no evidence of it just because it makes your position plausible is good reasoning.

[badlydrawnjeff.livejournal.com]

I don't think saying "breaking apart roads = we don't have enough money" is good reasoning, either.

[the-rukh.livejournal.com]

That's nice, but don't be a relativist.

[geezer-also.livejournal.com]

Well considering this thread is kinda focusing on Calif......
In So Cal it's not so much a matter of over paving, just repaving the wrong stuff....well certain areas (read where the wealthy donors live) seemed to get re-paved every so often, while certain areas don't seemed to have been resurfaced even, in my lifetime.

[the-rukh.livejournal.com]

That's not necessarily state revenue though, it's often county revenue. If its a rich county, they probably have plenty local tax money left over to pave their roads with the teeth of foreign children or whatever they do.

Same reason people bitch and moan that zomg we spend so much on schools. No, certain rich counties skew the graph way high because they spend a ton on their own kinds.

[geezer-also.livejournal.com]

True, about the streets, it is county, which is why it works like it does in L.A. The freeways are mostly state funded, but I noticed we got one of those "signs" on the Reagan Frwy, of course they have been widening it for 3 years now, but it's nice to know we are getting some federal money. (actually it's supposed to be a combination of state and federal money anyway, but I don't know how it's alloted.

As to the schools, I'm not sure it works the same way in Ca as it does in Oregon. I do know (or at least am pretty sure) all schools in LAUSD get the same per pupil funding, and the schools are far from equal. Considering where that new 500+ mil K-12 school complex is, I doubt they will much exceed the 50% grad record the LAUSD schools are famous for.

Honestly, no one will ever convince me that lack of money is the problem with education today, I'm too aware of how the money is spent. Fortunately it's too close to my bed time to start one of "infamous" public school rants. :D