Posts Tagged ‘Dodd-Frank’

2011/10/03: Taxulationism Update: Fisher Confirms Fed View & Protectionism Back With a Vengeance

October 3, 2011 Leave a comment

There is a new and pernicious development on one area of Taxulationism that did just not seem that important in the face of more pressing concerns on taxation and regulation: protectionism (which is the ‘ism’ at the end of Taxulationism.) For the most part up to this point it has included nothing more than the US scoring points against itself by failing to pass free-trade agreements which would significantly enhance export potential.

That is substantially due to the degree to which the Liberal faction in Congress wants to impose labor law requirements on our trading partners. The sense of things there seems to be that it would be better for the low-end laborers in these countries to have no jobs rather than jobs where the wages and environmental standards don’t suit the sensibility of the US Congress. Of course, this is nonsense that has allowed our other trading partners to take advantage of the US. And we will be revisiting an even more benighted effort from Washington DC below.

In the meantime, for any of you who didn’t see it, Dallas Fed President Richard Fisher appeared as a guest host on CNBC’s Squawk Box this morning. He has been one of the most vocal opponents of the Fed’s quantitative easing efforts, and has also been very clear on the degree to which the weak economy is a creature of Congress, and something they (and NOT the Fed) must address.

And while not railing against regulation very specifically this morning, he once again focused on the degree to which Washington DC is creating confusion on the fiscal front as well. He noted that unless and until business felt a greater sense of ‘clarity’, not much was going to happen on the business investment and especially the jobs front. He even went outside of his region to point out the dilemma of an institution generally perceived as being very rich: Harvard University.

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2011/09/27: QuickPost: Taxulationism Trumped? Collins Calls for Regulatory Timeout

September 27, 2011 Leave a comment

For any of you who haven’t run into it before, ‘Taxulationism’ is a term describing over-taxation, over-regulation and the impact of protectionism. It was one of the key topics which was included in my US midterm election-day 2010 Financial Times ‘Insight’ column on why the Fed’s QE2 liquidity infusion was likely to be ineffective. To give credit where credit is due, that term came out of a conversation I was having with my friend Jack Bouroudjian at his office early last summer.

Like many of us, Jack was astounded by the retrogressive taxation and especially regulation efforts of the Obama administration. He noted that none of them had probably ever read Arthur Laffer’s work on the regressive nature of elevated taxation and regulation, and I suggested that we should describe it as ‘taxulation’. Jack then added the ultimately prescient thought that those sorts of things always lead to protectionism as well, and completed the effort by evolving that into ‘Taxulationism’.

And there is little doubt it is the major hurdle which is crippling US job creation. That comes from everyone beginning with Alan Greenspan late last year, through Dallas Federal Reserve President Richard Fisher, others at the Fed (or sick of being asked, “What the Fed is going to do about the economy“, when the real problems are creatures of Congress), and even many in Congress itself.

And finally someone right there in the belly of the beast has suggested a pointed solution to the problem that has constrained any meaningful job creation by corporate America… AND she’s among the most moderate.

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2011/08/10: How We Got Here-IV: Welcome to the Island, Survivor (…we hope)

August 10, 2011 5 comments

Yep, it seems to have all turned into a big game of Survivor… And the two-way stretch from the stress factors is obvious. Getting through this is going to be a test of who can stand the huge amount of cognitive dissonance imposed from the outside. That includes the increasingly tedious and blindingly benighted machinations of the political class and alleged financial luminaries, and the radical, rabid dog reactions it foments in the markets.

It increasingly seems this is going to be a test of endurance, as Ben Bernanke was probably right to indicate that there won’t be much need to raise rates between now and mid-2013. In other words, after his previous soothing views on the economy and markets, the Fed head has thrown in the towel on expecting anything truly positive to develop in the intermediate term. And that’s not just us playing off his perceptions, as we have been great skeptics of the ability to return to an upbeat economic environment in spite of any improvement in equities and risk assets. And neither is it plain old bearish talk. Beyond the fiscal and debt ceiling dilemmas, there is good reason to believe it can’t get better this side of the next US general election.

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