President Barack Obama’s much-trumpeted move to the center? Apparently, it doesn’t go much beyond using buzzwords such as “innovation” and employing CEOs as stage props. His 2012 budget introduction and Wisconsin incursion make that clear.
The Obama White House finally has a kinda-sorta housing plan. But here is the thing: Fannie Mae and Freddie Mac, seized by the U.S. government back in 2008, don’t possess the political clout they used to. But the two mortgage finance giants still have a network with shared interests. That lingering influence is a big reason why they — or possibly similar-looking replacements — will be around for a while longer.
A few thoughts on President Obama’s speech to the U.S. Chamber of Commerce:
1. Would it be too much trouble for him to be more specific about how deeply he wants to cut corporate tax rates? I hope he doesn’t see the OECD average of 25 percent as a floor. Canada’s rate will be dropped to just 15 percent next year. And if he really wants more of company profits to be “shared” with workers, then he ought to propose abolishing corporate taxes altogether since 70 percent of the tax burden is passed along to workers.
The president told Fox’s Bill O’Reilly that he hasn’t shifted to the center. “I’m the same guy,” Obama says. Right, he’s the same guy — a guy who will try and push through as much of his left-of-center agenda as he can. If he had the votes, for instance, Obama would certainly be pushing a cap-and-trade energy plan or higher income taxes. But he doesn’t, so it’s time for Plan B.
Team Obama would surely love to run a Reaganesque, “Morning in America” reelection campaign, cruising to victory by taking credit for a dynamic economic recovery. But for that scenario to play out — or anything close to it — the unemployment rate would have to drop a whole lot. (The president’s political advisers will be closely watching the January jobs report.) In a new research note, analyst Matt McDonald of Hamilton Place Strategies, a policy advisory and strategic communications consultancy in Washington, makes the following points:
If only U.S. Treasuries had covenants like corporate debt does. Instead of linking to EBITDA, metrics like borrowing or spending as a share of GDP could be used. That might be a stretch, but lawmakers are still trying to implement new fiscal rules. It’s an idea whose time has come – or at least come back.
David Leonhardt (NYT) makes the point that U.S. companies often pay far less than the top statutory corporate tax rate of 35 percent: