I was watching C-Span, again. This would be pretty sad but, I have to tell you, it is better than Ambien. Anyway, C-Span was rerunning a talk between David Wessel of the Wall Street Journal and Representative Dave Camp (R-MI), the Chairman of the House Ways and Means Committee. This talk was conducted at the Wall Street Journal’s recent CFO Network Conference. In general the discussion involved the current budget/debt ceiling negotiations. The attendees, who should probably be considered a friendly crowd, are nonetheless generally intelligent. From the comments he made however, you might believe they were all a bunch of know-nothing yahoos from a sod farm in Saskatchewan.
The thing he said which immediately seized my attention:
On corporate tax reform:
Well we have had a lot of global companies come before the committee, we’ve had a lot of hearings and testimony, we’re actually doing a novel thing. We’re having employers and job creators tell us what they think we aught to do and we’ve had a lot of good testimony…
Either Camp is an idiot or he thinks we (and/or a bunch of corporate CFO’s) are. Last year 11,195 corporate lobbyists, over 20 per legislator, spent a little under three billion dollars last year lobbying in Washington. This amount of money was six-times all other non-corporate groups combined. Maybe Camp thinks it is novel that they actually testified instead of running government from the shadows.
From there he talks about the tried and true half truths which have been the Republican talking points for some time. Individual income tax rates as job creators are one of my favorites. In order to protect big donors I suppose, Republicans have said for years increasing taxes on people who make above a quarter of a million hurts small business job creation. The inference is most small businesses file tax returns as individuals. Mainstream politicians or media sources never seem to want to debunk this myth. Of the 26 million small businesses only around 700,000 pay income tax on an individual return. Of those individual return filers, a smaller percentage make more than the quarter of a million required to pay the tax.
He was also questioned about the elimination of tax breaks or deductions to help balance the budget. He was, of course, opposed to such nonsense. He said it would hurt economic growth. Later however, he advocated reorganizing (that’s Republican for lowering and Democrat for raising) the corporate tax code (rate). In this discussion Camp told us businesses told him they wanted consistency. When asked for an explanation he told the crowd through the years congress had tried to attract different industries and had passed various tax incentives to do so. This yielded, he said, inconsistency which should be fixed so corporations would create jobs and quit shipping good “headquarters jobs” overseas. By this time, I had become confused about what he was trying to sell to whom. It is beginning to take an advanced degree in circular logic to even follow the arguments. I am afraid politicians (not just Camp) are beginning to lose track of reality themselves.
In this environment of spin, double talk, and multiple constituencies, does Congress have enough grip on reality to realize the stakes and do they care?
As we barrel toward another financial Armageddon, I wonder when (if) reality finally dawns on our legislators. From their statements, we already know some like Michelle Bachman (R-MN) and Bernie Sanders (I-VT) are in total denial. In their parallel universe, the principal is the only thing. You can bet bond/currency traders are taking notes when a double dip recession … depression…seem to only be collateral damage on the way to certain utopia. As much as these zealots quote the Constitution, one would think they might understand the kind of compromise required to pass it. With these yahoos, I doubt the Constitution would even make it out of committee. I guess this column shoots my theory on Ambien and C-Span.