GOP: the Good, the Bad & the Ugly

[Master Shake]

Re: GOP: the Good, the Bad & the Ugly

For example some of the historical arguments that large inheritances are antithetical to a meritocracy are compelling to me.

But, is the cure (giving it to the government) worse than the disease?

Honestly, I'm open to either side, but it's not an easy answer.

[lektrode]

Re: GOP: the Good, the Bad & the Ugly

For example some of the historical arguments that large inheritances are antithetical to a meritocracy are compelling to me.

But, is the cure (giving it to the government) worse than the disease?

Honestly, I'm open to either side, but it's not an easy answer.

if only to prevent a few families from owning the entire country, yes.

we've already got too much concentration of wealth and the political class is/has been busy creating their own aristrocrisy,
due to A: an ill-informed if not mis-informed electorate (courtesy of the liberal-dominated editorial depts of big media)
and B: due to the lack of turn-over, lack of fresh thinking in both the beltway and state leg's

with most of em clinging like barnacles to the status quo = THE BIG PROBLEM
and why i still say we need TERM LIMITS

and flatly refuse to accept the apologists for the politcal class/status quo arguments against them.

[lektrode]

Business Voices Frustration With GOP

lets try see if can get this one back to its 'natural' track...

Business Voices Frustration With GOP

By Laura Meckler
Oct. 16, 2013 8:42 p.m. ET
The budget stalemate that had the U.S. flirting with default has left business and the Republican Party, longtime political allies, at a crossroads.

In interviews with representatives of companies large and small, executives predicted a change in how business would approach politics. They didn't foresee a new alignment with Democrats but forecast backing challengers to tea-party conservatives in GOP primaries, increasing political engagement with centrist Republicans and, for some, disengaging with politics altogether.

Many business executives say they were dismayed that some Republicans didn't heed their warnings that closing the government and risking default would hurt the U.S. economy. Others expressed disgust with Washington politics in general. All said the crisis could have been averted with a more pragmatic approach.

The decadeslong relationship between American business and the GOP is certainly likely to endure, with business still feeling a kinship and shared goals with many in the party, including a push for lower taxes and lighter regulation.

But the conversation among businesses is "characterized by tremendous frustration and angst," said Dirk Van Dongen, president of the National Association of Wholesaler-Distributors, a trade group. "Because at the end of the day, the system is supposed to produce results, and the failure to produce results has consequences."

The episode has prompted top business lobby groups, including the U.S. Chamber of Commerce, to consider taking sides in Republican primaries next year in hopes of replacing tea-party conservatives with more business-friendly pragmatists.

Mark Thierer, chairman and CEO of Catamaran Corp., a major pharmacy-benefit manager, said business's relationship with the GOP "is going to need a retooling," adding that he would continue to make modest contributions to centrists. "I am not going to give up on the Republican Party—I am going to encourage moderation," he said.

This kind of reaction challenges the long-standing relationship. Tensions emerged after the GOP takeover of the House in 2010, fostered by an empowered group of conservatives who saw companies seeking tax breaks and government grants as an embodiment of a traditional mode of politics they wanted to break.

The Chamber of Commerce, which has given tens of millions of dollars to Republican candidates, is researching what challengers might be viable next year. It urged House members to support the final compromise by including Wednesday's vote in the scorecard it uses when weighing possible endorsement of members of Congress. By contrast, FreedomWorks, which backs tea-party candidates, urged a "no."

Bruce Josten, the Chamber's top lobbyist, said he has pushed members of Congress to keep the government open and to understand that flirting with default is "just plain stupid." To Republicans who tried to use the budget battle to unravel the health care law, he said: "They've accomplished nothing."

Russ Walker, national political director for FreedomWorks, said any effort to displace tea-party candidates will fail. "The grass roots is going to choose those people who will speak up for them," he said.

For the tea-party bloc of the GOP, the priority has been trying to stop implementation of the new health-care law, which its members strongly oppose, even if it meant closing the government. They dismissed warnings of economic peril, saying it is more crucial to curb spending.

"A fight on principle is always worth it," said Rep. Scott Garrett (R., N.J.), who backed the tea-party effort, while heading into a House GOP strategy session Wednesday.

The group's goals are shared by many executives, business lobby groups and other Republicans, but many criticize the tactics, saying they could never succeed given Democratic control of the Senate and the White House.

Maurice Taylor, chairman and CEO of off-road tire maker Titan International Inc. of Quincy, Ill., was one business leader who supported the tactics of tea-party-backed Republicans in the budget fight. For his taste, Republicans in Congress aren't focused enough on controlling the federal bureaucracy. "It's like a cancer it just keeps growing," he said. "The House is doing a pretty good job. I hope they stick to their guns.…The tea party in 2014 is going to be stronger than they've ever been."

Businesses worry that Congress will now be unable to tackle other big issues on their agenda, including immigration policy and overhauls to the tax code and entitlements. Success in any of these areas will require compromise, something business lobbyists and leaders say has been sorely lacking.

John Engler, the former Republican governor of Michigan who now heads the Business Roundtable, a trade group, said the normal legislative process—where bills are debated and passed by each house of Congress, and then marriedtogether—encourages compromise. "Today we have a significant number of people who don't want to compromise because they think they can win something that's been unwinnable," he said.

David French, top lobbyist at the National Retail Federation, guesses that business lobbies will back somewhere between 12 and 25 business-friendly Republicans in primaries next year. "We don't like having a very high stakes poker game where we're dealt out and nobody's going to win," he said.

Even before the partial shutdown two weeks ago, Republican executives pressing for an immigration overhaul were venting frustration that the full House has been unwilling to consider any immigration legislation, including a bipartisan Senate bill, in the face of opposition from one wing of the party.

Norman Braman, a Miami businessman and GOP donor, said he is asking candidates who solicit campaign contributions for their position on immigration and will be reluctant to support those who don't back a revamp. "Those of us who have been active and supportive of the party have a duty to express our feelings," he said.

Several business executives said they were counting on establishment GOP leaders, including House Speaker John Boehner of Ohio and House Budget Committee Chairman Paul Ryan of Wisconsin, to move immigration and future fiscal legislation. But those same leaders struggled to steer the House toward a fiscal compromise and struggled to pass another business priority, the farm bill, amid conservative demands to curtail food stamps.

Some say the key will be engaging Main Street business leaders to press upon their representatives the need for compromise. Others predict business leaders outside Washington will disengage altogether, disgusted by the results.

Hal Sirkin, a senior partner with the Boston Consulting Group, said his conversations with executives in a range of industries suggest widespread frustration with the Republican party. The budget battle "is giving them pause to reconsider everything that they believed" about conservative support for business, he said. Some executives have told him they plan to pull back their support for the party "as a message to say, this is not acceptable. You can't trash the business community," he added.

"Right now, I'd have a hard time voting for any incumbent," said Kevin Hartford, president and co-owner of Alle-Kiski Industries Inc., a Leechburg, Pa., maker of metal parts used in power generation and rail locomotives, among other things. Mr. Hartford said he typically supports Republican candidates but now believes the party "has become fractured, lacks vision, is leaderless and discombobulated."

—Rachel Feintzeig, James R. Hagerty, Joann S. Lublin and Bob Tita contributed to this article.

RED = hot button, not necessarily 'disagreement'

[dcarrigg]

Re: Business Voices Frustration With GOP

The US Chamber is still the #1 donor besides the DNC and the RNC is American politics...at least it was last time. McCutcheon v. Federal Election Commission might change things. But this move might be getting to the point I made before. There's a line between pragmatism and hardline ideology. Now we will have Freedomworks + Heritage Action + Cato + Club for Growth vs. US Chamber of Commerce in primaries. Four organizations that claim to be working for business and free enterprise are going to dump millions fighting against the millions laid down by actual business and free enterprise. Stranger things have happened in American politics. But this one could be big.

[dcarrigg]

Re: GOP: the Good, the Bad & the Ugly

Did they inherit from parents who had a saving ethic and paid down debt?

The greatest generation sure had a saving habit. But they did it by not getting into giant debt in the first place.

Did they themselves have the same view on spending?

Clearly not. The 2 trillion in home equity loans sucked out going into the housing bubble burst is evidence of that.

Should we then tax them extra on this?

I don't know anyone who is proposing to tax people by age.

With the demise of pensions, people who sacrifice to max out 401K and other retirement plans may accumulate $1 to $2 million.

That's 4 to 8 times the average 401k balance for boomers. And that's an average. The median value for boomers is much lower. This is top 5%. Top 1% networths are $14 million up.

Meanwhile those that do have pensions like government workers have income streams indexed to inflation which the taxpayer is partially on the hook for. How do we reconcile the accumulation of actual wealth compared to "pension" wealth?

It's easy. You vote in politicians that unilaterally void everyone's pension contract and give it to hedge fund managers instead.

What about those that don't save but spend now for higher living standards? Do we penalize savers to subsidize the spenders retirements and nursing home costs?

What penalty is exacted on your tax-preferenced 401(k) account by social insurance?

I only speak of those that could have saved, but spent instead.

Who determines who tried and who didn't? Who doles out the divine retribution you seek? I agree that some people - in every generation, boomers absolutely not excluded - live very irresponsibly. But what would you propose? Expand debtor's prisons?

Don't forget most of the middle class wealth in this country is in homes and retirement plans.

It's pretty much only homes. 401(k)s have been an abysmal failure from a policy perspective. Only the top 20% networth folks have a retirement fund that even comes near their housing wealth.

If they have full paid off their house instead of using it as an ATM, should they be penalized?

Again, I'm not sure who you think is penalizing these people or how, unless you are arguing against ZIRP. They are already more richly rewarded in terms of wealth than any other generation in America, living or dead. How is coming out #1 on top of the world with the lowest tax structure and highest benefits in living memory and for the foreseeable future penalizing to boomers as a group? Most boomers propose slashing SS and Medicare for Gen X and Younger (but not themselves), and federal tax rates are far lower than they have been for past generations.

If you save for years and pay down debt in the same manner an older person will accumulate much more than a person 20 years or 40 years younger. But the older person then has to spend down when they can no longer work. The younger can continue to progress in careers and save and pay down debt while doing so, thus repeating the pattern of their older "wealthy" citizens.

There's some truth to this. But it is assuming that there will be jobs for the younger. There have not been in great numbers. It is also assuming that salaries will keep up for younger generations. They have not. The generational income and wealth gap is the largest it has been in living memory, and it is growing.

The reason that the estate tax exemption is $5 million is that the income from that principal will be needed to pay for long retirements, long term care if needed, and to pass on to children for helping them get started.

If you need mommy and daddy to cuff you $5 million each to get a start in this world, you deserve to fail.

Now one can say we should not go after reasonable amounts of middle class frugality. We only go after the big pools of money. Fine. But how much is really there?

Who is going after what in your mind? Is this about Boomers fretting over setting tax rates back to the scary 1990s levels that the Silents had to pay?

If you take the entire fortune of the Forbes 400 and confiscate it you pay the federal budget for this year. what do you do in 2014? Go after the next 4,000? In 2015? The next 40,000?

You guys really love that word confiscate. It's like in your mind there's always a thief in the shadows is waiting to take your precious ring, gollum, gollum.

In a few years the golden goose is gone. How do we create more wealth by increasing the size of the pie instead of cutting a static or declining pie into warring pieces?

The pie has grown tremendously over the last 30 years. Except 90% of us kept getting the same size piece - or a little smaller. We could make a pie the size of the grand canyon. Why should the vast majority of us care if we still get only a tea-saucer sized sliver?

It's interesting that Buffett and Gates are leading a billionaires movement to give almost all their wealth to charities. It's ironic that they feel it is better used by charities than governments that can't spend what they have in the interests of those that need it.

I don't know how this is ironic. Gates directs his own charity corporation. Clearly he personally wants to choose what to do with it. And he doesn't want to spend too much of it in the US. That doesn't mean that they can't see that a growing pie has not made pieces bigger for everybody.

I've said before that the reasons for labors swiftly declining share of value vs. capital are 1) financialization, 2) bad trade deals, 3) poor tax / social insurance arrangements, and 4) technology, in that order. This is true for every developed country. There is an additional truth that population growth has slowed and the median age has ratcheted up as a result. This hurts. Economic growth has been strongly correlated with population growth, especially population growth ages 20 to 60.

The real question in my mind is how to translate GDP growth into broad-based income growth. How does one go about this in a post-Reagan era of global "free trade" giveaways where a more progressive tax structure is never going to happen politically, and balancing the chronic trade deficit will never happen because the owners of this country still care about cheap foreign labor more than patriotism? And I think the first step is taming financialization. But even when Dodd-Frank got passed, most of it was never implemented. I don't know that there's the political will to tame the beast in this country. As a corollary, taming financialization means less debt to go around, which you seem to be a big fan of.

[dcarrigg]

Re: GOP: the Good, the Bad & the Ugly

I love your depth and breadth of knowledge, dc.
I'd also love to see your reading list, say, your top 10 or 20 books on .... anything we discuss on iTulip.

You know what, that's actually a wonderful idea if each of us would like to share. We could start a thread about it, and I'd be happy to mull it over and come up with some things.