On Morning Joe today there was a more serious approach, with Scarborough coming on long distance from Boston for a short while. The guests were Steve Rattner, Howard Dean, Michael Steele, Donnie Deutsche and a few others. The main subject was the fiscal cliff and what the two parties are doing to solve the fiscal problems. Howard Dean says that a multi-faceted approach is necessary and that allowing the time period to pass and the automatic cuts to take place along with the tax hikes across the board is the best way to go although it will painful. Rattner believes the markets will react too negatively if we go over the "cliff". Scarborough wants to raise capital gains taxes, or whatever we can do to get more money from the rich without hurting small businesses. Scarborough also wants to see reforms to entitlements. Michael Steele is on Scarborough's team.
What's actually happening is that Obama is taking his plan to the Little People to tax the rich so that the rich bastards pay their fair share. Boehner wants entitlement reforms and tax reform, but Obama wants to raise tax rates. Democrats like Reid and Durbin say they've already proposed spending cuts up to a trillion dollars, and that now we need higher taxes. Many moderate Republicans are now saying they are fine with higher tax rates on the rich -- after all, it's only fair.
When all is said and done, we're still stuck with serious financial problems. For decades interventionist government has complicated our economy. The business people who spoke with Obama say they want certainty, but the great majority of businesses will have no certainty. The giant corporations which have become a part of the State have sophisticated teams to deal with politics and ensure their connections with government and the changes that come from government are managed, but the great majority of businesses, small, medium and large, but with no political connections, have no certainty and will have no certainty going forward.
The federal government and the states can't decide what to do with Obamacare, so businesses don't know how to factor in the costs. When the dust settles, the tax hikes on the super-wealthy will not be enough, so immediately there will be talk of other means of raising revenues -- carbon tax, wealth tax, whatever they can come up with to take more money from the private sector. Spending cuts will be promised for the future when the economy recovers -- Keynes said this is the way to do it. The large connected corporations will survive Obamacare, taxes and regulations, but the majority of businesses who could do most of the hiring to get unemployment down don't have the ability to deal with changes, so they will wait it out, and some will go out of business. We don't know, though, how long they'll have to wait, because this is different. Although Obama's actions and inactions have contibuted to the problems, until we change our statist system, these problems will continue under any President. Bush's Medicare D is an example of government intervention and spending that has gone on for decades and now has reached a tipping point -- we can't afford the spending, the debt is crushing us, and the continuous stream of regulations are all combining to stagnate the economy, for the most part. It is slowing businesses down so that hiring is stagnant and expansion is out of the question. Businesses don't know what to expect next, and they don't what the costs will be.
Warren Buffett can blabber about taxes and his secretary's tax rate, but it means nothing to the millions of people dependent on stable rules for the game. At a time when we should reign in regulatory agencies, lower business taxes and eliminate capital gains, so that American businesses can take advantage of our global position regarding energy production and the extra boost this would give all parts of the economy, those in DC who have created this mess are trying their best to tax wealth producers as many ways as they can and to tie their hands with more regulations. The business people in huge corporations who are rent-seeking in DC are, like Buffett, a part of the problem, so one of the main things that should happen first with any list of solutions is to end all corporate welfare, but followed by limits on government power so that the problem doesn't come back. This is not going to happen, so what we'll see are higher taxes on the rich, the same financial problems, more regulations, more uncertainty, more confusion with Obamacare and nothing will get better. But, symbolically, higher taxes on the rich will look good to the Little People.
Obama will give another speech with an even larger group of Little People behind him, and Obama's team will perfect their hi-tech email and social media campaign to control the Little People and get them politically involved and active. The Morning Joe crew raved over the Democrat's sophisticated get out the message and vote machine, but what have they achieved with this machine -- how can they govern? What will they do with this system that is geared toward destruction? We're headed toward collapse, but the good news is that the machine that delivers us to collapse is the most sophisticated the world has ever known -- full speed ahead.