Centrist Pundits

So it is looking likely that the Senate will allocate more money to the Cash for Clunkers program.  Maybe they’ll have already done so by the time I post this.  I’m glad.  There’s a lot of debate about if Cash for Clunkers is actually doing anything helpful in the long run, and its legit, but I still think it’s a good idea to keep it going.

Some say that the Clunkers program isn’t really good for the environment.  Those clunkers would have been off the road in the next few years anyway, they say, as they broke down.  They may be right.  4500 may will have been the difference between “I’ll eke another year or two out of this car” and “I’ll go get a new car”.  And newer cars do tend to be more efficient.  Plus, we now have to deal with the environmental effects of disabling the turned in clunker and scrapping it, etc.  I get that, and it may be that cash for clunkers isn’t actually that environmental, but it certainly doesn’t hurt the environment to get some gas guzzlers off the road early.

Others say it isn’t good for the economy.  Some say it puts money in to the hands of foreign car owners, and that’s true, I suppose, when someone uses Clunkers to buy a Toyota or a Honda or what have you.  On the other hand, most of those foreign manufacturers have American plants these days, so when you buy a car you are keeping an auto worker on the line.  Others talk about the economic waste of trading in perfectly good vehicles for only slightly better vehicles.  That’s true, too, and to be honest I don’t have a good counter-argument for that.  On the other hand, it is a good idea to shore up car sales, car manufacturing, and all the related industries.  It’s a complex system and I’m not sure anyone can fully map out the advantages and disadvantages of the Clunker program in that way.

But you know what?  It is popular and it is cheap.  And while neither of those things alone, or even together, make an idea a must-do, taken in the context of other things we are doing, it makes sense.  Americans see the Government as an obstacle to what they want to do, much of the time, so to see the Government serving the people isn’t a bad thing.  As for the cost, sure, it may be a billion – or 3 billion after this cash infusion – spent badly, but that’s a drop in the bucket compared to hundreds of billions spent on bailouts for banks of dubious success and hundreds of billions spent on military actions of dubious justification.  3 billion of a project that makes voters happy?  Pah.  Not even anything to think about.  Just vote yes, Senator.

JC Economy Cash for Clunkers, commerce, Economy, senators, stimulus

Republicans have aired ads and made statements attacking the stimulus.  It is an easy target, as the economy isn’t feeling much better most days.  Never mind that Politifact is having most of Boehner’s statements rated as false or barely true, it’s a good sound bite, which is what a lot of politics is about these days.  Meanwhile, some Democrats are talking about a second stimulus to get more money out there.

Both parties are being stupid.

If this were a school, it wouldn’t be an F or an A, it would be an incomplete.  I know everyone wanted the stimulus money to move quickly.  “Shovel-ready projects” and all that, meaning projects that were good to go, including all site reviews and all that jazz, except for funding.  But the truth is billions of dollars don’t move quickly.  Only 10% of the stimulus money has moved so far.

When Republicans claim that it is already a failure, it is too early to say that.  If they want to make a legitimate claim, talk about how the stimulus is being disbursed slower than they would like.  Not as good a sound bite, but the advantage of being true.

When Democrats talk a second stimulus, it is too early to know if that is a good idea or not.  If the money hasn’t be sent out yet, then we don’t know if this is throwing away more money, or if the first money is going to handle what we need it to handle, or if the current stimulus is getting us a lot but needs a bit more… which is when you talk a second stimulus.  A “surge” if you want to use Republican-speak.

I get it when the people have unrealistic expectations, but the leaders should have a greater understanding of reality.  Of course, they probably do, and it probably has no bearing on their actions; the attempt to score points is what has bearing.

JC Economy, Political Parties commerce, stimulus

President Obama is in the news today discussing the closing of a number of loopholes in the corporate tax structure.  Details can be found at various sources on the internet, such as http://money.cnn.com/2009/05/04/news/economy/obama_corporate_tax_proposals/index.htm

Obama’s stance is that there are unintended consequences in the way these codes are written that make it too easy for corporations to send work overseas and still get tax breaks in the U.S.  Opponents of what Obama is intending are saying that every time you raise costs for a corporation, they become more likely to just pack their bags and go wholesale to some lower-cost nation.

I’m reminded, to some degree, about the minimum wage debate.  Raising the minimum wage is seen as a good idea because it keeps those earning the lowest amounts at least somewhat able to afford food, shelter, etc, and keeps them from being exploited.  On the other hand, it can force small businesses to close their doors and it can make larger businesses go overseas.  In fact, it is a fairly predictable and easy formula – if it costs less to have someone make it in, say, Malaysia and to ship it here then it does to have it made here, then the job will go overseas. 

That same kind of formula could apply to the tax costs – if it costs a corporation more to do business with the HQ in America then it does for them to do their business while based elsewhere, then they will move elsewhere.

My problem is I’m just not sure how to win, here.  If we leave the loopholes open and they continue to provide jobs overseas while getting tax breaks here, how is that really any better than if they just move overseas entirely?  I guess the thought is that the few jobs they are providing here in America are better than the none that they’d be providing if they moved?

“Win” here is pretty simple: provide good jobs to Americans.  So what’s the best way of encouraging corporations to do so?  Seriously, I’m asking you.

JC Economy budget, commerce, finance, international, obama, taxes

The other night I noticed the local supermarket had a sign up.  It was saying how they will no longer be processing film at the supermarket, due to the fact that so little film is processed anymore and the expansion of the digital market.  Another local store had installed a digital photography do-it-yourself processing station, but no longer develops film.  And I realized that while film may never go away completely, it will by and large become a specialty thing and people will need to go to specialty shops to use it.

And it may be strange, but it got me thinking about how industry transforms.  20 years ago, if anyone had told you that you’d not be using a film camera soon, would you have believed them?  If they had told you that you wouldn’t be able to get film developed in an easy, convenient, all in one shopping plaza, you’d have laughed.  Kodak and Polaroid doing massive layoffs and abandoning their headquarters which provide hundreds of jobs in certain cities?  Nonsense.

We haven’t had a film bailout.  But we do seem to be bailout prone when an industry is “too large to fail”… but I don’t know what that means. 

After 9/11, the hospitality industry was struck hard by a massive loss of business.  I worked in the periphery of hospitality at the time and even out at the edges, it was obvious the entire industry was very wounded.  No part was more wounded, perhaps, than the airlines themselves.  Suddenly airplanes were less transportation and more gigantic weapons that any crazy with a box-cutter could employ.  Security measures were slow to be implemented and when implemented, somewhat lazy and not at all reassuring.  The government made sure that the airlines had enough cash to make it through, because the airlines were to vital to the economy and the American way of life.  Or is it?

Air freight is definitely an integral part of the American economy, but passenger liners?  Face to face meetings are great, especially on an international front, but domestically, teleconferencing and increasingly video-conferencing are serving the same purpose.  Tourism would be hurt, but it would be more likely to be transformed from mega-hubs like Vegas and Disney to local day trip tourism, museums and parks and quirky Americana.

Just today, the auto industry is turning in to Congress plans on how to revamp their failing business model in to a success in hopes of getting more money to survive.  The auto-manufacturers employ many, many people and I agree, with my admittedly limited economic understanding, that failing would put a massive hurt on the American economy and on the local economy of areas already hard-hit by manufacturing going overseas and the rustbelt phenomenon.

But 100 or so years ago, when the automobile was exploding on to the scene, did Congress move to protect Big Horse-and-Buggy?  Suddenly, you didn’t need a horse.  Or the feed for your horse.  Or a whip.  Or wooden carriage wheels.  The collapse of the horse and buggy industry no doubt had repercussions that ranged wide, and hurt many who knew no other kind of life.  Yes, I’m being sarcastic, but even if Congress did protect the old business model, would that be the right thing to do?  Cars are superior to horse and buggy for most purposes, so artificially keeping horse and buggy alive would be a mistake.

Similarly, if a method to instantly transport goods and services around the world were to be unveiled tomorrow, airplanes would instantly be obsolete.  Would protecting them make sense in that context?

I guess what I’m asking is, what does to big to fail mean?  Or more precisely, doesn’t it just mean we don’t know what comes next?

JC Economy commerce, finance

CNN is reporting that Senator Gregg is removing his name from consideration for Secretary of Commerce.

I wonder if Obama will now name a Democrat, and drop his plans to bring the Census under the control of the White House?

If he does, then we’ll know that Obama was always trying to play politics with the Census, and that’s not a good start for him.

I think that the President would do well to name another Republican to show it’s not politics involved… but I am not holding my breath.

Greg National Politics, Political Parties census, commerce, gregg