In 1930, the first six months of the year following the ’29 Stock Market Crash, unemployment never reached double digits. After six months, unemployment had fallen to 6%. Then Congress began to circulate the Smoot Hawley tariff act. After it was passed, and more than a year after the stock market crash, unemployment finally hit double digits in the wake of protectionism.
In his SOTU speech, President Obama floated the same trial balloon. Despite the fact that millions of American jobs depend on overseas companies, he’s ready to penalize international corporations and instigate retaliatory measures by the rest of the world. He believes “If you restrict international trade and international transfers, that will translate into more jobs for Americans.”
“…and to encourage these businesses and others to stay within our borders, it is time to finally slash the tax breaks for companies that shift our jobs overseas and give the tax breaks to companies that create jobs right here in the United States of America.”
Financial professionals and, all too often, government leaders explain that we are doing things better than before, we are smarter, and we have learned from past mistakes. Each time, society convinces itself that the current boom, unlike the many booms that preceded catastrophic collapses in the past, is built on sound fundamentals, structural reforms, technological innovation, and good policy.
So when President Obama gives a State of the Union speech where he says he’s going to penalize overseas corporations who ship goods into the US AND he’s going to continue pushing Health Care Reform that will surely ruin the best medical care in the world, you know its only because Obama knows he can sell the “we’re doing it smarter than ever” to a shrinking audience and still get all the credit and none of the blame no matter what happens.
“…we said from the start that it was going to be important for us to be consistent in saying to people if you can have your — if you want to keep the health insurance you got, you can keep it, that you’re not going to have anybody getting in between you and your doctor in your decision making. And I think that some of the provisions that got snuck in might have violated that pledge.”
In fact, I’m beginning to have the sneaking suspicion that its the President himself who is blocking Health Care Reform now. Instead of focusing on the three or four major things that nearly everyone agrees on and are simple and easy to understand, he is continuing to pursue a Health Care Reform bill that he admits violates many of the principles he set about to achieve in the first place.
With all the impetus on pursuing a bill that is not going to be passed, no one is going to pick up the pieces and try to pass SOMETHING. Obama is going to just keep talking about “I’m not a quitter” and pushing the dead bill, and NOTHING is going to get done. And when it’s all over, and ANOTHER year will have passed, he is still going to point at the Republican Party and say “They said NO”.
Rachel Carson was an environmentalist icon, whose writings against DDT led to the worldwide ban. Who today remembers her? Who today blames her for the fact that her false crusade was followed by a resurgence of malaria that killed, and continues to kill, millions of people in tropical Third World countries every year? She’s responsible for more deaths since her passing in 1964 than Mao and Stalin combined. She’s a perfect example of the leftist intellectual who thinks they are smarter than everyone else and her cause will cure social ills. She’s also been left largely blameless for her ideas.
Obama is looking to Rachel Carson, and, like FDR, he’s already got his Hoover in George W Bush.
I don’t understand why corporations should receive tax breaks to move overseas. Why give them an incentive to flee? They’re already getting many things provided by US taxpayers overseas:
1) cheap labor guaranteed by NAFTA and NAFTA-like trade agreements that require third world governments to use military force (funded by US taxpayers) to squash any union movements
2) Exemptions from environmental regulations. Google Smithfield Farms and their ‘fecal lagoons.’ Look at the US/Mexican border.
3) Billions in agribuisness subsidies. This, among other things, has given us genetically modified foods and under many trade agreements poor countries are no longer allowed to use non-GM seeds. GM seeds are sterile after one planting, which means that poor farmers have to keep buying more and more seeds. Furthermore, GM seeds have a built in pesticide that has been shown to degrade the liver of rats.
So please tell me why they should receive finacial incentives to move out of the country, which just erodes our tax base?
First of all, there isn’t a business out there that looks at the tax incentives we give ALL corporations for the revenue they generate, as a reason to move. They get them if they stay or if they go.
But IF you start penalizing companies, foreign or domestic owned, for – say, manufacturing parts elsewhere to be assembled in America, then you have an effective TARIFF. And whatever country that company now is in recognizes that as a TARIFF. What’s worse, you could be giving the company an incentive to even stop sending its parts to America to be assembled. And now those people are out of work in America too.
And now you have accusations of protectionism, other countries are doing it to American companies in their countries… this isn’t something you want to start.
Its the economy stupid!
Seem we are talking about 2 different things, 1 the tax breaks that business currently receives, how is ending a tax break for moving overseas a tariff.
By defination isn’t a tax break something you would get for a certain action that others do not get that are not doing the same thing ?
A tariff is a direct tax on an imported good, if we are giving tax breaks on imported goods that are not given to the same goods produced here, how is that a tariff?
IF that is the case then one of two things need to happen a tax break equal to or greater then that of those given on imported items or an end to the tax break.
We cannot continue to have the production of goods we consume here to be moved offshore, if you do not make things you do not create wealth. The you end up living on a credit card until you reach the limit.
To end the federal Deficit we also have to reduce and reverse the trade deficit, we must create weath in this country if we expect our standard of living to begin to climb again.
Reducing oil imports,creating jobs and finding a way to balance the trade imbalance without lowering the value of the dollar and causing hyperinflation are going to be very difficult challanges.