Ryan Streeter
The IBD’s editors draw our attention to an important point as we look at what needs doing in the lame duck Congress and the new 112th.
They write:
Today’s leaders, as with those in every one of the 26 market cycles since 1900, are the entrepreneur-driven innovators whose shares have been brought public in recent years…They are companies that are outmoding those that led the market as recently as 10 years ago, let alone those that set the pace in the last century.
They go on to write that Cisco, Intel, Microsoft and GE are all off their peaks and resting more on their laurels than current performance. Same for Wal-Mart and Home Depot.
I leave it to market analysts to dispute IBD’s implicit claims about valuation. The point worth focusing on is the blunt reality of America’s dynamism when it comes to innovation and new firms.
Growth and innovating firms go hand-in-hand in our country, and in a political marketplace riddled with anxiety about growth and jobs, the GOP should absorb the underlying conclusions in IBD’s editorial.
First, the GOP cannot leave anything on the table when it comes to extending the Bush tax cuts. Higher taxes on income and capital gains will do nothing to move capital off the sidelines to support the innovators.
Second, shame the Obama administration and Democrats in Congress publicly who will not act to provide predictability in financial markets. The fact that the Fed and other regulators have been delegated so much authority in Dodd-Frank has capital sitting around waiting to know what it can and cannot do. Don't spend time publicly defending the financial services class and their value to society. They will survive. Focus on enterprise and say, over and over, how capital freeze hurts them.
Third, use the Bowles-Simpson proposals to make the point, over and again, that our 35 percent corporate income tax needs to be dropped. We are trailing the developed world miserably in an outdated corporate tax code. In the end, those who get hurt are the people who should be hired by innovating firms but are not – because the firms aren’t growing as fast as they could.
Fourth, make healthcare reform about enterprise. Obamacare has really only made things worse for business. Firms want to be competitive by offering healthcare plans to their employees. Pushing people out onto the exchanges isn’t good for HR policy. But Obamacare has only made insurance more expensive, which curbs business competitiveness in a major way. This needs to be a major theme going forward.
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