Evan Bayh D-Indiana, much to the chagrin of the White House, announced today he's not running for another term in the U.S. Senate.
http://news.yahoo.com/s/afp/20100215/pl_afp/uspoliticsbayh
He waited pretty late in the game considering candidate registration closes on Friday. I was a little surprised the President could not talk him into running again, he'd even been rumored as a possible running mate to President Obama.
It is hard being a centrist in a blinding partisan world.
I wasn't a big fan. He pushed to water down the health care bill (his wife is a lobbyist for big Pharma) and voted with the Republicans too often during the Bush years for me.
I think it would be hard to run for re-election in Indiana. The unemployment rate there was 10% a year before the rest of the country.
Unlike others who are stepping down, his lead over Coats, the GOP opponent is claimed as in the 20's which is shockingly high for any incumbent right now. Do you think there should be more a shift to the center or should everyone be shifting further left with the problems we are facing as a country? Just curious your opinion, not baiting, honest ;)
There needs to be a reason to shift. I am a centrist on certain issues, but far left on many more.
As to the countries ills...
President Clinton raised the minimum wage and helped create a strong economy and low unemployment. The two Bush Presidents gave tax cuts to high income earners and the country's economy went the other way.
Bait eaten.
Quote from: RecycleMichael on February 16, 2010, 07:39:08 AM
There needs to be a reason to shift. I am a centrist on certain issues, but far left on many more.
As to the countries ills...
President Clinton raised the minimum wage and helped create a strong economy and low unemployment. The two Bush Presidents gave tax cuts to high income earners and the country's economy went the other way.
Bait eaten.
You sound like me, Michael.
My left leaning ideologies:
Allow women their right to choose.
Keep religion out of government.
Right to FAIR health care insurance for all.
My right leaning ideologies:
Smaller government (but some social services are needed)
No amnesty for illegal immigrants
I've asked Conan if he'd like to join me in the Modern Whig party. I was only half-joking. My assertion that some social services funded by government are needed puts me at odds with those who identify as Libertarian I think.
Quote from: Hoss on February 16, 2010, 10:10:59 AM
You sound like me, Michael.
My left leaning ideologies:
Allow women their right to choose.
Keep religion out of government.
Right to FAIR health care insurance for all.
My right leaning ideologies:
Smaller government (but some social services are needed)
No amnesty for illegal immigrants
I've asked Conan if he'd like to join me in the Modern Whig party. I was only half-joking. My assertion that some social services funded by government are needed puts me at odds with those who identify as Libertarian I think.
Hoss, Modern Whigs are probably a better fit for my leanings. I keep thinking about changing my voter registration to unaffiliated but I really hate giving up the right to vote in GOP primaries which is important in this red district and state. I've voted probably for as many Democrats as I have Republicans in local, county, state, and U.S. Senate races but still have yet to vote for a Democrat Presidential candidate. There have been a few I could have voted for, but they never made it as far as nominee.
No one seems to be able to adequately explain to me the mechanism by which tax cuts cause unemployment and recessions. I can Google around and find plausible arguments for and against this theory. Some suggest the Bush II tax cuts were coincidental to a normal recovery period, others suggest somehow that rising government deficits caused the recession.
Several things we know because the data is tangible: tax reciepts rose from 2003 to 2007, unemployment was reduced, and GDP grew. Was that a result of Bush tax cuts or coincidental?
If government spending were the key to pulling out of a recession, then we should be in great shape now considering how much spending increased under Bush II and in the first year of the Obama Admin. The pace of government spending under Bush II simply out-paced revenues. Revenues kept rising until the bottom started to fall out of the economy.
During the Bush years:
Military spending increased 61%, Non-defense total 23%, and payments to individuals 32%
Payments to individuals are retirement and entitlement programs. The theory espoused behind popular tax give-aways was stimulating the economy, yet does government putting money in the hands of individuals really stimulate the economy? If it did, how did we find ourselves in a recession after a period of record growth in government spending?
Social Security and Railroad Retirement 19
Federal Employees Retirement and Insurance 16
Unemployment Insurance 28
Medical Care 54
Student Assistance 129
Housing Assistance 12
Food and Nutrition Assistance 43
Public Assistance and Related Programs 17
Other Transfers to Individuals 10
http://www.aier.org/research/briefs/750-big-government-under-the-bush-administration
Is it possible this recession was caused by a trend of over-borrowing, over-spending, and over-employing finally coming to a head and that government taxation and expenditures have far less to do with recessions and growth than some are led to believe?
So Bayh got out by all accounts at his own volition and very very suddenly. He was way ahead in the polls, had a substantial bank account, and up till just last week was supposedly going full steam ahead for reelection. So it does make me wonder if something was/is up. 'Cause, seriously, he flat out bailed.
If it's as advertised, and he bailed because of congress's dysfunction, I can't say as I disagree. On the other hand, as a card-carrying member of the Blue Dogs, I'd say he wasn't really helping the problem, either.
My new theory is we've moved into a period in American politics where there is no value to being a centrist. Or rather, there is value to your constituents (who themselves may very well be centrist), but to the _______-wing of your party, which is looking for faithfulness to orthodoxy, and to the media which is constantly looking for simple, oppositional story lines to pimp, your centrism is without value. And in fact it may be more of a liability than ever, because as you're searching for compromise it will LOOK like you're betraying the foundational ideals of your party. You'll be branded a ___-INO. Your search for compromise might even keep your party from achieving some of its long-cherished goals, and then you'll find yourself in Bayh's position. Not a man without a party, necessarily, but definitely a guy whose convictions and positioning don't serve his party well in their current position.
Who knows if this is true, though.
Quote from: Conan71 on February 16, 2010, 11:01:29 AM
Several things we know because the data is tangible: tax reciepts rose from 2003 to 2007, unemployment was reduced, and GDP grew. Was that a result of Bush tax cuts or coincidental?
I do want to point out that tax receipts rising could have something to do with the increase in home values (leading to increases in property taxes and sales taxes as people used the equity in their homes to make improvements and buy high end electronics and appliances). Additionally, unemployment was reduced, but notice that one of the first sectors hit with the economic slowdown was construction (esp home construction).
Obviously doesn't explain the entire picture, but it is still very important in understanding the period of time.
Quote from: Conan71 on February 16, 2010, 11:01:29 AM
Is it possible this recession was caused by a trend of over-borrowing, over-spending, and over-employing finally coming to a head and that government taxation and expenditures have far less to do with recessions and growth than some are led to believe?
I would actually agree. We've seen tax cuts both stimulate and hamper economic growth. We've seen spending stimulate and hamper economic growth. So... what is the answer?
Quote from: we vs us on February 16, 2010, 11:42:18 AM
So Bayh got out by all accounts at his own volition and very very suddenly. He was way ahead in the polls, had a substantial bank account, and up till just last week was supposedly going full steam ahead for reelection. So it does make me wonder if something was/is up. 'Cause, seriously, he flat out bailed.
If it's as advertised, and he bailed because of congress's dysfunction, I can't say as I disagree. On the other hand, as a card-carrying member of the Blue Dogs, I'd say he wasn't really helping the problem, either.
My new theory is we've moved into a period in American politics where there is no value to being a centrist. Or rather, there is value to your constituents (who themselves may very well be centrist), but to the _______-wing of your party, which is looking for faithfulness to orthodoxy, and to the media which is constantly looking for simple, oppositional story lines to pimp, your centrism is without value. And in fact it may be more of a liability than ever, because as you're searching for compromise it will LOOK like you're betraying the foundational ideals of your party. You'll be branded a ___-INO. Your search for compromise might even keep your party from achieving some of its long-cherished goals, and then you'll find yourself in Bayh's position. Not a man without a party, necessarily, but definitely a guy whose convictions and positioning don't serve his party well in their current position.
Who knows if this is true, though.
Great post, you are right it's incredibly sudden. It's easy to think there's got to be a scandal brewing or sudden rift with him and the WH because that's what we are used to hearing when something like this happens. Perhaps he's simply someone with a conscience who just can't play this frustrating game any longer and the jobs bill was the proverbial straw for him, representing a state with 10% UE.
Interesting gallup poll data (newest I could find from June '09)
21% identify themselves as liberal, 35% as moderate and 40% as conservative.
http://www.gallup.com/poll/120857/conservatives-single-largest-ideological-group.aspx
One of the usual reasons given for increased tax revenue after a tax cut is that it is less expensive for the wealthy to pay the tax than to pay the accountants to avoid it.
I haven't researched the raw data. I just remember having seen that at more than one source.
Quote from: TURobY on February 16, 2010, 11:46:06 AM
I do want to point out that tax receipts rising could have something to do with the increase in home values (leading to increases in property taxes and sales taxes as people used the equity in their homes to make improvements and buy high end electronics and appliances). Additionally, unemployment was reduced, but notice that one of the first sectors hit with the economic slowdown was construction (esp home construction).
Obviously doesn't explain the entire picture, but it is still very important in understanding the period of time.
I would actually agree. We've seen tax cuts both stimulate and hamper economic growth. We've seen spending stimulate and hamper economic growth. So... what is the answer?
I wish I knew the answer to that. It seems to be purely a philisophical difference and not scientific. I've believed and stated for a long time that a President's greatest impact on the economy is his public faith in it or lack therof. I'm really not sure how much Presidential policy can guide an economy or at least how much more impact it can have over the actions of the FED and the effects of Congressional legislation.
As far as tax reciepts this was strictly Federal income and employment taxes rising which I was referring to and would not have taken into account property or sales taxes. Most definitely the burst in the housing bubble and unemployment trends are battering state and local governments all over the country since many of them are reliant on both of those methods for tax revenue.
I think that tax cuts for the higher income brackets used to work. The top 10% became wealthier and they then spent that money on luxury items or as entreprenuers creating new businesses and jobs.
Something changed. Now the rich travel, keep lots of cash on hand or invest in gold then hire temps to work for them. Maybe it is the fault of all the employee lawsuits or maybe union threats...something is making businesses cautious about real hiring.
I am a firm believer that rising the lower class better invests our money. They won't invest it in travel or precious metals. The poor will turn that money over often within their own neighborhoods and communities.
Quote from: RecycleMichael on February 16, 2010, 01:53:39 PM
I think that tax cuts for the higher income brackets used to work. The top 10% became wealthier and they then spent that money on luxury items or as entreprenuers creating new businesses and jobs.
Something changed. Now the rich travel, keep lots of cash on hand or invest in gold then hire temps to work for them. Maybe it is the fault of all the employee lawsuits or maybe union threats...something is making businesses cautious about real hiring.
I am a firm believer that rising the lower class better invests our money. They won't invest it in travel or precious metals. The poor will turn that money over often within their own neighborhoods and communities.
I think two things happened. The American upper classes have transitioned into consumers and passive investors, just like most Americans have; at the same time, we've seen the rise of the corporate form to facilitate investment.
You rarely see someone make direct investment in businesses any more -- like, from your savings account into the business itself. Instead, we have LLCs and C and S corps to protect groups of investors; our local, regional, national, and international banks have lending arms, effectively bundling funds from all of their depositors to support business. Not to mention funds and investment banks and professionally managed pools of money the world over, looking for good bets.
This is why I think the tax-cuts for the rich model is flawed; the rich don't invest directly anymore. Here and there, sure, but by volume alone the financial system is the direct actor nowadays.
This is why fixing our banking system now is so crucially important. Small business needs it to get by.
Quote from: we vs us on February 16, 2010, 02:11:43 PM
I think two things happened. The American upper classes have transitioned into consumers and passive investors, just like most Americans have; at the same time, we've seen the rise of the corporate form to facilitate investment.
You rarely see someone make direct investment in businesses any more -- like, from your savings account into the business itself. Instead, we have LLCs and C and S corps to protect groups of investors; our local, regional, national, and international banks have lending arms, effectively bundling funds from all of their depositors to support business. Not to mention funds and investment banks and professionally managed pools of money the world over, looking for good bets.
This is why I think the tax-cuts for the rich model is flawed; the rich don't invest directly anymore. Here and there, sure, but by volume alone the financial system is the direct actor nowadays.
This is why fixing our banking system now is so crucially important. Small business needs it to get by.
Huh? By far the majority of LLC's and S-corps are people investing directly into business and they are the largest source of private sector jobs in the American economy.
Banks and investment houses have always bundled funds from various depositors to lend to support business via commercial loans directly and they help support consumption in the economy which supports business by making personal loans and property loans (i.e. homes & cars). Banks have always made money by essentially re-distributing wealth in the form of loans and making interest for being the broker of the transaction. You make it sound as if passive investment is simply money evaporating from the economy into rich people's bank accounts that's simply not true.
With CD rates and Money Market rates like they are, no one is going to get rich quick using them.
Quote from: RecycleMichael on February 16, 2010, 01:53:39 PM
I am a firm believer that rising the lower class better invests our money. They won't invest it in travel or precious metals. The poor will turn that money over often within their own neighborhoods and communities.
How to best raise the lower class has always been the question.
I think I've got a new man crush:
"In an interview on MSNBC this morning, newly retiring Sen. Evan Bayh declared the American political system "dysfunctional," riddled with "brain-dead partisanship" and permanent campaigning. Flatly denying any possibility that he'd seek the presidency or any other higher office, Bayh argued that the American people needed to deliver a "shock" to Congress by voting incumbents out in mass and replacing them with people interested in reforming the process and governing for the good of the people, rather than deep-pocketed special-interest groups."
http://news.yahoo.com/s/ynews/ynews_ts1134
He's sort of like the Jerry McGuire of Congress.
He had me at "dysfunctional".
I applaud you Senator Bayh. I wish more Congresspeople shared your views.
Folks, those words exemplify a great American statesman.
Quote from: Conan71 on February 16, 2010, 02:44:47 PM
Huh? By far the majority of LLC's and S-corps are people investing directly into business and they are the largest source of private sector jobs in the American economy.
Banks and investment houses have always bundled funds from various depositors to lend to support business via commercial loans directly and they help support consumption in the economy which supports business by making personal loans and property loans (i.e. homes & cars). Banks have always made money by essentially re-distributing wealth in the form of loans and making interest for being the broker of the transaction. You make it sound as if passive investment is simply money evaporating from the economy into rich people's bank accounts that's simply not true.
No, and that's not really what I was getting at. Corporate forms create an entity to own and disburse the funds, right? The entity is taxed, it pays the bills, it pays salaries, it pays dividends, etc. It protects investors from liability. It does the hiring and the firing, not the people who initially created it. That's really what I mean . . . that the engines of growth are corporations making decisions to hire and fire, not individual investors. One guy may have started a corp with his savings account and run the business alone, and make those hiring and firing decisions, but that's very rare these days. More likely it's a pool of investors, with some additional seed money from a bank or investment house, plus miscellaneous grants, grantors, etc. Many different cooks, many different stakeholders.
That's why tax cuts for the rich aren't stimulative to the economy. Rich people aren't directly hiring and firing. The entities that they're investing in are doing the hiring and firing.
Quote from: Conan71 on February 16, 2010, 03:11:49 PM
Folks, those words exemplify a great American statesman.
. . . who decided to suddenly quit rather than work for reform.
Meh.
Quote from: we vs us on February 16, 2010, 03:14:36 PM
. . . who decided to suddenly quit rather than work for reform.
Meh.
He can't do it in this political climate. I can understand his frustration because, as a moderate, that's how I feel. He makes a great point that it's come down to Senators campaigning six out of every six years whereas when his father was a Senator they would campaign for two and legislate for four. I can't blame him.
Governor Palin on the other hand...
Quote from: RecycleMichael on February 16, 2010, 01:53:39 PM
I think that tax cuts for the higher income brackets used to work. The top 10% became wealthier and they then spent that money on luxury items or as entreprenuers creating new businesses and jobs.
Something changed. Now the rich travel, keep lots of cash on hand or invest in gold then hire temps to work for them. Maybe it is the fault of all the employee lawsuits or maybe union threats...something is making businesses cautious about real hiring.
I am a firm believer that rising the lower class better invests our money. They won't invest it in travel or precious metals. The poor will turn that money over often within their own neighborhoods and communities.
RM You are getting close. You almost hit it on the head. The wealthy are not spending, and businesses are not hiring, but money has little to do with it.
Lets look at how things really work, and not focus on tax cuts, stimulus, rebates or other silly things.
Many incorrectly tend to focus on the exchange of money as the economic engine.
When speaking of "stimulation", Conservatives justify rewarding productivity, or top down economic stimulation. Liberals focus on "bottom up" elevation of the poor to a more economically productive status. Both philosophies have merit, but both ignore the true prime mover in a capitalist economy.
Capitalism is a "value" based economy. Money only exchanges hands and benefits the market when there is "value". Trickle-up and trickle-down models both fail in many circumstances because they do not take value into consideration. In a healthy economy, investment in the community has value, in a sick economy savings is valued more. In a healthy economy growing your business and increasing productivity has value, in a sick economy safe investment is valued more.
The economically challenged feel that throwing dollars in all directions will fix things. This is a juvenile assumption. Value cannot be created by politicians, it can only be destroyed in their hands. Value only exists in the free exchange of ideas and the innovation and labor of people.
So back to the point. . . Business are not spending because there is little value in it. There is little value because good business people are not reactionary. They forecast and plan.
The promise of penalty, regulation, tax increases, higher energy costs, caps on production, and the looming inevitability of inflation from run-away debt, combined with the administration's anti-profit philosophy change the game plan. The smart business person will make sure that he/she can weather the storm and the best way of doing this is by shedding unnecessary personnel, and curtailing spending.
There is no injection point where we can just add money and the economy will turn around. The administration must prove that it will not interfere with production or profit, and this administration has based its platform on the contrary.
We are in unchartered waters now.
"Republicans who had co-sponsored a bill with him to rein in the deficit turned around and voted against their own bill. "
http://news.yahoo.com/s/ynews/ynews_ts1134
Quote from: we vs us on February 16, 2010, 03:13:40 PM
No, and that's not really what I was getting at. Corporate forms create an entity to own and disburse the funds, right? The entity is taxed, it pays the bills, it pays salaries, it pays dividends, etc. It protects investors from liability. It does the hiring and the firing, not the people who initially created it. That's really what I mean . . . that the engines of growth are corporations making decisions to hire and fire, not individual investors. One guy may have started a corp with his savings account and run the business alone, and make those hiring and firing decisions, but that's very rare these days. More likely it's a pool of investors, with some additional seed money from a bank or investment house, plus miscellaneous grants, grantors, etc. Many different cooks, many different stakeholders.
That's why tax cuts for the rich aren't stimulative to the economy. Rich people aren't directly hiring and firing. The entities that they're investing in are doing the hiring and firing.
Yes S corps and LLC's do provide a veil of protection against certain liabilities for the owners and investors that sole proprietorship does not grant. In today's litigious climate, I can't fathom anyone not being an LLC. I certainly was when I was in business for myself.
Take a walk down Brookside between 33rd St. and 51st St. Many of the businesses lining either side are perfect examples of what S corps and LLC's look like. Many of those are operated by the direct investor in the business.
Physicians and small law practices are another example of S corps and LLCs (or LLPs).
The company I work for is a locally-owned corporation with three stock-holders from the same family. It employs 12 people and two of the three stock holders are involved in the day-to-day operation of the business. The third stock-holder is a family member and he is responsible for the day-to-day operation of another corporation the family owns. That company employs about 20 people. Between these two companies, they generate about $8mm in the local economy.
The family is free to close down or expand any or all of their business operations any time they see fit. I assure you, it's two brothers making decisions, not a nameless corporate phantom and that's the case with the majority of what passes for the definition of small business in the United States. I can think of multiple clients of mine who personally oversee and invest in small businesses employing anywhere from 5 to 200 people. One in particular took the funds from the sale of his previous business venture and started another one up about five years ago, soley using his own funds. That company presently employs about 100 people in the Tulsa economy in jobs ranging from welding to engineering. At last count they are doing about $30mm per year and the owner is quite involved in every phase of the operation.
Your characterization of LLC's and S corps being deft entities is incorrect. Your description is more fitting of companies like Boeing, AEP, Ford, etc.
That's fine, I agree that certain small businesses have three direct investors, or two, or one, and that it's family run, etc. In many ways the number of investors is beside the point. The point is that when I buy a beer on Brookside, the profit from that sale doesn't directly go into the bar owner's pocket. It goes into the company coffers. The owner might draw a salary and take his profit that way, but it still must be paid back to him. Similarly, the family that owns your company almost certainly doesn't run it as a sole proprietorship. The profits don't flow through to them. They invest in the company and the company pays them dividends.
All I'm arguing is that individual investors aren't running businesses directly from their bank accounts, and because of that, cutting their individual income tax rate isn't effective as stimulus.
Quote from: we vs us on February 16, 2010, 04:20:02 PM
All I'm arguing is that individual investors aren't running businesses directly from their bank accounts, and because of that, cutting their individual income tax rate isn't effective as stimulus.
Why? Their corporate profits are counted as income in these situations. LLCs and S Corp filings are affected by such cuts. Significantly!
I was part of a S Corp in the early 90s. I paid personal income tax at my highest bracket on money that went back into the Corp. No income, just tax. Actually, I think we tried to distribute enough to cover the tax. It came close but I don't remember if it covered all the tax.