Home > Political Animal > Banks Takes the Plunge…into the Swamp
Banks Takes the Plunge…into the Swamp
By Jim Sack
Fort Wayne Reader
2017-12-18
“In his eighth and final budget, President Obama continues the liberal practice of taxing and spending with no regard for fiscal restraint. At the heart of the President’s budget is a $2.6 trillion tax hike that will stifle job growth and crush our rebounding economy.” Candidate Jim Banks.
Note: we are at “full employment” and our economy is growing nicely.
Recently, our congressman, Jim Banks, a super nice guy with a lovely family and high moral standards, voted for the Republican tax overhaul that a bi-partisan/non-partisan consensus of economists estimate calculate will add $1.4 trillion to our national debt.
Congressman Banks now writes: “Our (tax) plan will help middle class families, simplify our tax code and encourage new investment and job creation. This proposal is pro-growth and will return our economy to consistent and robust economic growth.”
Maybe.
First, it is hard to square the idea of attacking President Obama’s “spending with no regard to fiscal restraint” with his championing with voice and vote approval of adding $1.4trillion deficit. Doesn’t that fall under the old chant, “saddling future generations with debt?”
Both comments sound like rhetorical gymnastics, an effort to gracefully justify what he had once chastised. In short, when he is on the outside he opposed what he now supports as an insider.
But, of course it’s not the first time a candidate acts hypocritically for political gain.
But, let’s parse his last comment. Will the bill create jobs? Most economists agree some jobs will be created, as some will be lost, out with the old in with the new. They question is whether new jobs will be in tech or burger flipping. Additionally, the economy is at full employment, so to improve the economy the new jobs will have to be at the higher end of the economic ladder or in new industries, such as computer programming, robotics and big pharma, all areas that require quite a bit of education and training. Businesses are on a drive to increase profits, not hire more people. When polled, businesses say they will buy more tools and robots, not hire more middle class folk. Robots displace workers at increasing speed. But, if the discredited theory of trickle down that Mr. Banks espouses is to be believed, it will be years before the middle class gains anything more than a couple dollars per paycheck, if that. In such a big overhaul, the law of unintended consequences kicks in and unpredictable surprises await us, so let the big gamble begin.
And the tax bill is anything but an effort to simply the code, on the contrary.
Making American Great Again? Not if you consider the bill still allows businesses to write off moving to China.
Economic stimulus is also questionable. Interest rates are already extremely low — under four percent — so any business that needs to borrow can do so at pitifully low rates. And, the stock market, where corporations raise cash, has been on an upward trajectory for nine years. Capital formation, the basis of job creation, has hardly been stifled.
Consensus is the stock investor class, the upper 1%, and those with corporations structured by their lawyers to gain from the new lower taxes on businesses will be the real winners. The president and his cabinet will certainly benefit handsomely. In short, unless you are well-healed, have a good tax accountant, and a clever lawyer you are a bobber on the ocean subject to the whims of the market.
As for “returning our economy to consistent and robust growth,” the economy has been on a steady upward trajectory since the last president took office in the wake of the Wall Street Recession. You may remember how the economy nearly collapsed in 2007-2008 hemorrhaging nearly 800,000 jobs per month, for months, at the end of the Bush and beginning of the Obama Administrations. Since then the economy has gradually and steadily improved with growth around 2% per year. Robust it has not been, but robust led to the tech bubble and bust, and to the housing bubble and bust of 2007-2008, so in the biggest economy in the world, steady growth, predictable and consistent, is king. As they say on Wall Street, the trend is your friend. We are and have been growing nicely, despite what Friend Banks says. The real dislocation came through technology where one robot replaced twenty workers, where cheap gas replaced coal, where computers replaced secretarial pools, and turned hundreds more jobs into apps. Expect corporate tax savings to go into tech, not new jobs or pay raises.
What Mr. Banks neglects to say is our huge deficit will balloon by $1.4 or so trillion. If revenues do not grow, as the Republican hope, they will lament the deficits they have fattened and they will call for spending cuts. You can guess where they will cut.
Mr. Banks is among the nicest of men, a veteran, and father to a beautiful family.
Knowing Jim, and knowing his high moral values, it is hard to image he would have stood so close and smiled so sweetly with a man who is alleged by dozens of women of violating their trust and worse. Mr. Banks has moral fiber, Mr. Trump has none. The selfie suggests Jim is compromising his morals for power; his statements on the tax bill underscore that.
So, why would Mr. Banks’ do two about faces? Has he already become corrupted by power and the hope to climb the party ladder to even more influence? What’s that old line about power corrupting?
Part of Mr. Banks problem is that has insulated himself from the views of all but his loyal supporters and contributors, so how would he know how the tax bill will affect the average farmer, machinist, clerk or nurse? In trying to convince us that the tax bill is broadly beneficial he stakes out a partisan position.
His promise to represent everyone in the district rings hollow, he is now a man of the party, by the party and for the party.
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