Although there exist very different views about 2007-2008 great recession and there are very conflicting opinions about how this crisis is being dealt and how this should be dealt, I don’t know anyone who would say, at least publicly that the re-invigoration of our businesses and re-strengthening the buying power of our consumers should be the two most important keystones of recovery process and policies. Different people have different views about how these goals can and should be achieved. But everyone agrees, at least in public, that raising taxes on middle class, during this serious financial and economic crisis could be very disastrous. I am using the phrase “at least in public” because, some politicians and big media pundits are not doing what they are saying in public. Now, while economy is showing the definitive signs of recovery, from Bush and Republican era mess, and the continuous and intense propaganda from right wing conservatives about Obama being a failure and disaster for U.S. economy, is failing apart and proving to be wrong, the last things we need is another blow from right wing extremists to the hard working middle class families. What is unbelievable, is the fact that this same party which is not ready to do absolutely any compromise on Bush tax cuts for wealthiest Americans. If they are so pro-tax cuts, why this tax cut is such an issue for them? is this because, it is not benefiting their bosses in because it is benefiting the middle class Americans, who are very less likely to donate money to a corporate big corporations and their lobbies, who are financing their election and advertising campaigns? or crook?
Employment rate is improving, Dollar is strengthening, stock market recovering, retirement portfolios and savings accounts are being replenished and manufacturing, including automobile industry, is on rise. All this shows that president Obama’s policies to hold uncontrolled banks and corporations accountable, has raised the confidence level in Americans, in general, and consumers, in particular. On the other hand, Republicans are trumpeting same old rhetoric, which has already failed several times, in our history and has caused serious crises like great depression, black Monday, recession in 1990s, tech bubble and real estate bubble, that cutting taxes for wealthiest American and corporations, deregulation, reducing spending, small government and cutting entitlement programs will solve all the problems, we are currently facing.
No doubt, these are very important elements of any successful economic and financial policy. But the economy and financial structure is now far too complicated, to be managed by these simplistic and basic measures alone, as used to be in past. The economic and financial balance is very much shifted, now. We have to very careful about how much of this needs to be done, right now, and with what pace. An overdose of this good medicine or too many doses of this medicine can have dire consequences.
Situation right now is that the same corporations to which Republicans want to reward more money in the form of more tax breaks, many of them are already making record profits and are sitting on trillions of dollars of hard cold cash and are not yet ready to invest this cash in American economy and recovery.
Republicans blame this situation on high corporate taxes. Problem is that this notion cannot be proven by any of the scientifically done statistics, available. While worlds largest corporation like GE, is ending up to pay zero taxes, Oil companies are getting billions of dollars in subsidies, while making record profits, and most rich people like Mitt Romney are paying less then 14% in taxes, while Warren Buffet’s secretary is paying more taxes then her boss, how dare you even propose that taxes on richest corporations and people are too high.
Problem is that, for very long period of time, under the influence of rich and powerful corporate lobbies, congress has designed tax codes that place a high, very deceiving basic tax rates for corporations and wealthiest people to make people think that they are getting taxed higher. But, at the same time, these mischievously designed tax codes provide so many loop holes and tax breaks for these richest corporations and people, which are not available for average Joe and a small businesses, and due to which the richest corporations and people end up paying less tax then the middle class people and small businesses.
Republicans continuously play on these highly deceptive tax codes and try to convince us that the richest corporations and people are paying dramatically high taxes, while, in fact, they are paying very low.
The reasons for the shipment of jobs to overseas are not really taxes and this problem cannot be fixed by lowering the taxes on richest corporations people, even more. The very first and basic fact is that, the cheap manufacturing has never been successful in countries with higher standards of living, simply because the wages in this sector cannot support their higher standards of living. In 1980s, every one thought that Japan will overtake United States, because, every thing was being manufactured in Japan. Their economy was booming and GDP growth rates were very high. Yet, Japan was never able to overtake America and rather went into a deep and prolonged recession. mainly because their economy was relying on manufacturing mostly based on second grade and older technologies, expired patents and lower quality copies of American products. In the meantime, Americans kept being highly creative, innovative, inventive, R&D oriented and focused on higher and better technologies. Americans inventions like computers, Internet, cell phones, software and web related services, soon seriously outpaced the Japanese catching game.
This is what we need, now. This is what that has always worked. This what that has kept us ahead of the curve, throughout our history. This is what that has kept us on the leading position, in world. We need extensive and seriously, made easy financing process for start-ups and early stage small companies. This financing process can be made effective and going with full pace by using all of our resources like government financing, and real and strong incentives for individual investors, venture capital companies, banks, big, cash holding corporations and investment holding companies to aggressively invest in start-ups and early stage, capital deprived small companies.
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