Tag Archives: Economy

Business? Hooray! Big Business? Big hooray!

Business, even big business, is a key element of a healthy economy, and we should be as business friendly as it is humanly possible to be, short of allowing cronyism, special privilege, influence based on money given to folks in government. We need government to make sure there are some reasonable rules and that they are followed by everyone, and beyond that we need to let entrepreneurs run their businesses and not punish them for success.

Here’s a very narrow example: Let’s not do government supplied or guaranteed loans on the front end, lending to folks who might be able to do a thing, such as Solyndra, who got the money and went out of business, profitably it seemed to me, if you were a principal. Let’s establish a goal and a prize: If you achieve XYZ, then you get K dollars. That way, they put their own money at risk, and probably only if there’s a reasonable chance of getting it done. And, if they do, bonanza! I can imagine that there are things it would be important enough for us to encourage business, but let’s do so by rewarding success, not doling out money for trying based on influence.

We’re supposed to be the revolutionaries. Let’s be revolutionary!

Taxation

The tax code should be more or less scrapped and rewritten from scratch. The sheer volume of the thing leads to a complexity that could be taken as evidence of a complete lack of interest on the part of lawmakers in creating comprehensible law. A lack of interest in creating comprehensible law can only lead to mischief at best and, at worst, leads to laws that simply cannot be obeyed even by citizens of above average intelligence and with the best intentions. Some critics now claim that the current tax code has exactly this nature.

How should the tax be? As flat as possible, with preferential treatment for the raising of children. If entertainment is an expense of doing the business of commerce, then why aren’t good food, good clothes and good education considered legitimate expenses of doing the business of raising a family?

Now, just about the worst turn we could take would be to reframe the discussion of raising children in the language of business. One problem with our society is the tendency to idolize business and try to view everything as some sort of business. There are specialized philosophical discussions in which doing this makes perfect sense, but it is unnecessary and even destructive to carry this practice over into the everyday discussions we should be having about raising our children.

There are certainly times when it makes sense to provide government funding for some development activities, such as when a developing technology seems essential to the nation’s competitiveness or security, but this shouldn’t be handled through the tax system, where provisions are buried so deep that no ordinary citizen could possibly decode what’s going on.   A better system is to insist that everyone and every business pay some reasonable rate of tax. Then, let those who think that they deserve help apply for a loan or a grant, just as any ordinary citizen would have to do. That way, the help is in the public record, clear as a bell, and the votes that approve the help are on record and easy to review.

Fat chance.

“Alternative Loans” (aka Subprime Mortgages) Strike Again.

You have to be kidding!  It appears that, having learned nothing form the “subprime mortgage” fiasco except that you do have to use different language to sneak the same nonsense through a second time, we appear to be about to watch Subprime Mortgage II: The Alternative Loan Escapade.

Read about it FrontPageMag.com:

Obamanomics in Catastrophic Action.

It only takes two paragraphs to get a good idea of what’s coming, so, for your convenience, start here:

“Remember a few years ago, when the American housing market collapsed as a direct result of government policies that—in the name of racial justice—pressured banks to approve mortgage loans for massive numbers of underqualified nonwhite applicants? Remember how that collapse set in motion the financial crisis that then-presidential candidate Barack Obama repeatedly called “the worst economy since the Great Depression”? And remember how Obama—who had long been a leading proponent of precisely the policies that had triggered the crisis—cast himself as the savior who was going to restore fiscal sanity and untangle the whole big mess?

“Well, now Savior Obama and his White House are excitedly introducing Americans to their latest brainchild, the “HomeReady” mortgage program—offered through Fannie Mae and designed to help borrowers in “low-income” and “high-minority” census tracts. “For the first time,” boasts Fannie Mae, “income from a non-borrower household member [e.g., a roommate or family member] can be considered to determine an applicable debt-to-income ratio for the loan.” And if those combined incomes aren’t enough to qualify an applicant for a mortgage loan, HomeReady comes with additional built-in “flexibilities” like “allowing income from non-occupant borrowers, such as parents.” In other words, just keep rounding up everyone you know, until you can scrape together a 3% down payment and show a combined income that’s high enough to qualify for an individual loan. This makes the slipshod lending standards that caused the crisis of 2008 look exacting by comparison.

I was going to say that I’d bring the popcorn, but I think my appetite just died.