Wednesday, June 24, 2009

Biden’s Snares and Delusions

President Obama said at his press conference yesterday that no second stimulus package is being contemplated right now. Well, I sincerely hope that’s the case, because the current package is a disaster. It spends far too much for far too little in return. All of this frenzied fiscal nymphomania is placing a tremendous burden on Treasury-bond rates and the U.S. dollar. It is undermining the confidence of key foreign investors like China, Brazil, Russia, and others who have to buy our bonds.

But the worst thing I heard yesterday was the snare-and-delusion proposal announced by Vice President Biden. Apparently, Joe Biden wants to create a new government council to help laid-off autoworkers who are supposed to transition to solar, wind, and biotech industries. Huh? Are you kidding me?

Look, if you really want to help manufacturing workers everywhere, then cut that ridiculously high business-tax rate by 15 to 20 percentage points. Then allow full cash expensing for immediate tax write-offs for new business investment. Heavy industries will soar. This is FedEx CEO Fred Smith’s idea, and I totally agree with it. It would boost the manufacturing, auto, and transportation sectors.

And by the way, let’s move forward and deregulate the energy industry so we can drill, drill, drill and nuke, nuke, nuke. We’re talking about an enormous potential job-creator here. The fact of the matter is that alternative energy will be a tiny part of the energy calculus for many years to come. That’s just the reality. So let’s get real and eliminate all these ridiculous regulatory roadblocks standing in the way of American job-creation and energy independence.

And what’s this about a sub-czar for cars? Talk about a sub-par idea. I’m sorry Mr. Biden. Personally, you’re a good man. But economically, this is a terrible idea. Tax incentives are what will help the blue-collar middle class rise out of the doldrums.