Republicans posts
FeedPosted Sep 9th 2010 6:00PM by Joseph Lazzaro (RSS feed)
Filed under: Politics
The 2001 Bush income tax cut is one of those issues whose fate has been sealed by objective economic conditions.
Simply, if the U.S. economy had registered robust growth during the final two years of the Bush administration, and no other negative economic events occurred, the tax cut, which will increase the deficit by $336 billion this fiscal year, $295 billion in fiscal 2011, and by more than $320 billion per year through fiscal 2019, perhaps would have had a chance of being extended.
Continue reading The 2001 Bush Income Tax Cut: A Major Policy Mistake
Posted Aug 3rd 2010 4:00PM by Joseph Lazzaro (RSS feed)
Filed under: Politics

A key figure in the Reagan administration's supply side economics policy implementation opposes extending the 2001 Bush income tax cut.
David Stockman, who served as budget director under President Reagan, in a
New York Times op-ed piece, said a Republican effort "to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing."
Stockman also called the current Republican stance of wanting to extend the tax breaks as not fiscal responsibility, but "vulgar Keynesianism robed in the ideological vestments of the prosperous classes."
Continue reading Former Reagan Budget Director Stockman Opposes Extending Bush Tax Cuts
Posted Feb 24th 2010 12:50PM by Joseph Lazzaro (RSS feed)
Filed under: Politics, Federal Reserve

One upside to gridlock in Washington? The U.S. Congress won't likely move forward with its effort to allow the General Accounting Office to audit the
U.S. Federal Reserve.
One (big) downside? President Obama and Congressional Republicans, particularly Republicans in the Senate may not be able to agree on next year's budget. This could result in a shutdown of the federal government if the two political parties don't agree to pass a continuing resolution in the meantime. Any inability of the parties to agree on new budget or a continuing resolution as a temporary bridge will likely rattle both the bond and stock markets.
Continue reading Washington Gridlock: Upside and Downside
Posted Feb 19th 2010 2:00PM by Joseph Lazzaro (RSS feed)
Filed under: Politics

President Obama will offer one health care reform proposal that combines "some of the best ideas" from the House and Senate bills when he convenes his
health care summit Thursday, February 25, but investors should not look for a bipartisan agreement on a health care legislation this year.
That's because it's high unlikely Republicans will agree to anything: to-date they've gained politically by being the 'party of no' --- by being obstructionist, despite the nation's many large problems, so why would they change now? At this juncture, electorally, until the American people make them pay for their obstruction, there's little incentive for the Republicans to change their stance.
Continue reading Look for More Partisan Gridlock at Health Care Summit
Posted Jan 20th 2010 4:40PM by Joseph Lazzaro (RSS feed)
Filed under: Politics, Recession

A few points about the public policy impact of Tuesday's stunning Republican victory in the Massachusetts U.S. Senate election:
You'll hear a great deal of analysis arguing that health care reform, and the bank bail-out, convinced Independents to vote for
Republican Scott Brown. To be sure, those two factors (in political science, they're called
variables) played a role, as did Democratic candidate Martha Oakley's listless, clumsy campaign, but the biggest factor affecting vote was the Massachusetts' unemployment rate, which is high, as it is across the United States.
Continue reading For Democrats, the Only Good News Is It's January, Not November
Posted Nov 2nd 2009 5:30PM by Joseph Lazzaro (RSS feed)
Filed under: Forecasts, Politics, Recession, Financial Crisis
New York Times (NYSE:
NYT) columnist
Paul Krugman argues quite persuasively that the major problem with the fiscal stimulus package was that it was too small, given the financial crisis and the large economic crater the accompanying, pronounced recession created.
Further, the fiscal stimulus' many benefits -- including substantial job retention in essential public services such as education -- are harder to see and not likely to translate into too much political gain for President Obama and Congressional Democrats, he said. That's consistent with a political science axiom -- often repeated by U.S. Rep. Barney Frank, D-Massachusetts -- that
"Congress gets little credit or benefit for averting something." Indeed, retained jobs are hard to see, and the fact that a local public school system is is still operating with as many teachers is an accomplishment, but one that most American voters will take for granted, and not give Democrats credit for.
Continue reading Fiscal stimulus package's primary flaw: It was too small
Posted Sep 9th 2009 1:00PM by Joseph Lazzaro (RSS feed)
Filed under: Forecasts, Politics, Recession
Amid the lamentable health care reform debate, one fact is incontrovertible: despite President Barack Obama's large 2008 presidential election victory, one in which the Democrats gained 21 seats (to 257-178) in the House and eight seats in the Senate (59-40, not counting the late Senator Edward M. Kennedy's seat), the Democratic Party's majority still is not large enough to pass progressive legislation.
The solution to this is obvious enough: win more seats in the 2010 off-year congressional election, and then in the 2012 presidential/congressional election. And how does a majority party accomplish the above? By solving the nation's problems. These days, that means: 1) getting the U.S. economy growing again with robust job growth, 2) keeping the U.S. safe against international terrorism, and 3) ending the Iraq War successfully and making substantial progress toward victory in the Afghanistan War.
Continue reading Economically, Democrats still don't have a large enough majority in Congress
Posted Mar 11th 2009 12:15PM by Joseph Lazzaro (RSS feed)
Filed under: Politics, Recession

In his column last week,
New York Times (NYSE:
NYT) columnist and Nobel Prize-winning economist Paul Krugman laid waste to those who argue that he's not critically assessing Obama administration programs. He offered a cogent critique of the U.S. Treasury's tardiness regarding
the banking system fix. Either temporarily nationalize those banks that are clogging the system, buy the toxic assets at unsubsidized prices, or announce some other market-valued removal plan to unclog the system, but let's put this train in motion, Krugman said, in so many words, to get to the root of the matter: We need to get credit flowing freely to facilitate commerce.
Continue reading If the U.S. economy strengthens, Fiscal Stimulus II may be shelved
Posted Feb 26th 2009 2:55PM by Joseph Lazzaro (RSS feed)
Filed under: Politics, Recession, Financial Crisis

In the landmark, blockbuster film
"Jaws" (1975), reluctant sailor, Police Chief Martin Brody (Roy Scheider), while chumming bait, gets his first look at the great white shark that's been terrorizing Amity's shoreline community. Captain Quint (Robert Shaw) and Marine Biologist Matt Hooper (Richard Dreyfuss) are immediately struck by the shark's size.
But Chief Brody is struck by another reality. "You're gonna need a bigger boat," Brody said.
In today's environment, with the U.S. economy in a pronounced recession and credit markets still constrained, the Keyensians - - which include most Congressional Democrats - - are playing the role of Chief Brody. They know what's needed to go after that shark (the recession).
'You're gonna need a bigger stimulus.' (In this case the 'bigger stimulus' means
a second stimulus package.)
Continue reading Will the U.S. economy need a second fiscal stimulus package?
Posted Feb 14th 2009 9:01AM by Peter Cohan (RSS feed)
Filed under: Politics
Last night's vote to send the $787 billion stimulus bill to President Obama's desk raises an interesting question: Are Republicans destined to become an ever smaller minority? Can the Republican party come up with new ideas that will attract enough voters to help it win back seats in Congress and take back the White House?
The voting numbers reveal that important legislation can get passed without Republican support. For example, the House vote was 246 to 183, with just seven Democrats joining all 176 Republicans in opposition. In the Senate, the vote, 60 to 38 reflected the pick up of three centrist Republicans who joined 55 Democrats and two independents in favor. Simply put, Republicans can talk themselves into red-faced stupors and it won't change the result.
Continue reading Are Republicans history?
Posted Feb 12th 2009 2:20PM by Joseph Lazzaro (RSS feed)
Filed under: Forecasts, Politics, Recession, Financial Crisis

The U.S.'s first fiscal stimulus package 'of size' since the recession's start has passed - - albeit in a modified form that decreased spending by about $140 billion over the original outline.
Further, the young
President Barack Obama, like the young President John F. Kennedy, has learned that presidential honeymoons can be short inside the beltway, particularly if you have to trade policy to obtain votes both inside your party and among the loyal opposition.
Meanwhile, investors and the financial community more broader await the specifics pertaining to Obama administration's revised plan to
stabilize the banking system, with
the declining Dow discounting that even a successful plan will require months of systemic adjustment, and, of course, more public funds.
Continue reading Where does the U.S. economy go from here?
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