OCR Text |
Show The Emery County Review, Tuesday, December 2, 2008 VIEWPOINT A7 Opinion and Letters to the Editor Editor’s View Searching for a Silver Lining James L. Davis You couldn’t help but detect a note of disappointment in the news articles printed in the past several days on Black Friday, the day after Thanksgiving. Before the Thanksgiving holiday, and the rush of shopping that typically hits stores on the Friday after, the media was widely reporting that sales were expected to be down as consumers stayed home, too worried by a badly failing economy to open their wallets for the holiday season. Initial reports seem to indicate that the exact opposite may have happened. An Associated Press news article that appeared in the Sunday edition of the Salt Lake Tribune pointed out that the holiday season got off “to a surprisingly solid start,” with sales during the day after Thanksgiving 3 percent higher than last year. According to the Salt Lake Tribune article, sales in the South were up 3.45 percent from last year, while they climbed 2.6 percent in the Northeast. On MSN.com a news report detailed hopes by investors that Wall Street can build on the strongest weekly performance for stocks since 1932 and this fact is almost overshadowed by the overall tone of the article that whispers to you that despite the good news, there are still far too many clouds to wrap that silver lining around. For those who pay attention to the national or regional news on a daily basis, it’s hard to find any silver lining at all. The news is bad and it’s just going to get worse. The economy is sputtering along or threatening to completely break down at any moment and the phrase “not since the Great Depression,” is a precursor to any news report about the economy. The media seems intent on giving us a Great Depression, if not literally, then certainly as a psychological condition. Not to say that things aren’t bad. Anyone who has a 401K can attest to the fact that things have definitely been better and reclaiming the losses experienced in the past year may take years. But if the economy is on the verge of collapse, I believe the media can take its share of the blame for that fact. The media, albeit not all of the media, but certainly most national media, feeds off the drama that can be generated by comparing our present circumstances to the greatest economic challenge this nation has ever faced, the Great Depression. Whether the current economic situation and the one that led to the Great Depression can reasonably be compared seems beside the point; it makes for a great headline. The national media has been predicting a recession for more than three years now and finally, they seem to have a recession to wrap their gray clouds around. Of course, the economic doom and gloom that currently has the media so preoccupied is just the latest in a news cycle that focuses almost exclusively on bad news. Before the economy it was the Iraq War, which we were so badly losing that the country was facing another Vietnam. We were fed those headlines one right after another, despite the overwhelmingly posi- tive results our troops were seeing on the ground. Once those reports overshadowed the doom and gloom the media was trying to feed us every day, the news turned to another subject -- the economy. The media, like any hungry, irrational animal, is always on the lookout for its next meal and, unfortunately, bad news has always fed the beast well in the past. Just like rubbernecking at an automobile accident, we can’t seem to help but turn in to hear about bad news. Bad news sells newspapers and increases television ratings. But just because the news we see is overwhelmingly bad, doesn’t mean that there isn’t any good news out there. Sometimes it’s just harder to find. Maybe as a nation we are starting to realize that. Despite the bad news on the economy, or in spite of it, perhaps the best thing we can do as a nation is to stop worrying so much about the doom and gloom reported endlessly by the media. Perhaps we should instead go in search of our own silver linings. Commentary Obama’s Pro-Growth Economic Team? appointments strongly suggest there will be no tax hikes next year. Stocks, for one, like what they’re seeing from Obama’s latest Cabinet selections. On Nov. 21, Obama announced Tim Geithner will be his Treasury man, and on Nov. 24 he made Lawrence Kudlow When President-elect Obama had a chance to squash the tax-hike threat once and for all at his news conference Nov. 24, he took a pass and let the question linger for another day. But his new economic Cabinet Established January 2, 2007 James L. Davis, Publisher & Editor w w w w w w w w w w w w w w w Colleen A. Davis, Co-Publisher, Office & Advertising Manager C. Josie Luke, Assistant Editor Lyndsay Reid, Advertising Design Kathy P. Ockey, Staff Journalist Casey Wood, Webmaster Our Vision To be a valued member of the communities we serve and to be trusted as an honest, truthful and reliable source of news. w w w Our Mission To inform, entertain and provide a public forum for the discussion of events impacting the people of the Emery County area and to inform with news and features relevant to those who call the Castle Valley area home w w w Our Principles We will be ethical in all of our efforts to provide information to the public. We will be unbiased in our reporting and will report the facts as we see them and do our best to focus on the good news of the county, its people, history and way of life. We will be strong and active members of the community and assist in any way that we are able. We will strive to provide the best quality product possible to our readers and advertisers...always. We will verify the details of news we are reporting and if a mistake is made on our part we will correct it immediately. We will always listen to suggestions on how to do our job better. Editorial Submission Guidelines The Emery County Review welcomes and invites letters to the editor and guest opinion articles on public policy or current events. We welcome letters of thanks to individuals who have helped make our community a better place to live, work and play. The editorial staff reserves the right to edit all submissions for space constraints, clarity and errors in fact. Submissions must include author’s name and contact information. Contact information will not be published. Letter’s and opinion articles can be sent to jldavis@theemerycountyreview.com, mailed to The Emery County Review, P.O. Box 487, Orangeville, UT. 84537 or faxed to 435-748-2543. Larry Summers his White House economics tsar and named Christine Romer to the top spot in the Council of Economic Advisers (CEA). Stocks rallied 900 points across this stretch. That’s not the end of the stock story. Markets also like the new super-TARP government plan to bail out Citigroup, which effectively guarantees the banking system with a massive insurance-like policy. But markets may also sense a little pro-growth good news in the Obama policy mix. When asked about tax hikes Obama said the debate is between repeal and not-renewal. In other words, repeal the Bush tax cuts in 2009, thereby raising tax rates on capital gains and successful earners, or wait until the Bush tax cuts expire at the end of 2010. Investors want to hear the latter, and Obama said his team will make a recommendation. Here’s my thought on his team. Summers, Geithner and Romer will all recommend no tax hikes in a recession. Maybe for Keynesian reasons; maybe a nod to supply-siders. Obama talked about a liberal-conservative consensus. But what’s especially encouraging is the appointment of Romer, who easily could serve as CEA head in a Republican administration (just like Geithner could have been McCain’s Treasury man). About a year and half ago, economist Don Luskin sent me a long article about taxes by Christine and her husband David Romer, who were writing for the National Bureau of Economic Research. From the introduction: “The resulting estimates indicate that tax increases are highly contractionary. ... The large effect stems in considerable part from a powerful negative effect of tax increases on investment.” Later in the article, the Romers write, “In short, tax increases appear to have a very large, sustained and highly significant negative impact on output.” That’s what makes the Romer appointment so interesting. In fact, there is no question that Obama’s economic team is right of center. All three are market-oriented. They’re also pro-free-trade. Hopefully Summers and Geithner maintain the Robert Rubin King Dollar policy of the Clinton years. And if Romer can stop tax hikes, that will help the greenback even more. At a minimum, both Romer and Geithner could have served under Gerald Ford or George H.W. Bush. But they may be more progrowth than that. Romer’s study of the damage of tax hikes on the economy and her emphasis on investment are right on target. In a New York Times story, a former Treasury colleague of Geithner’s says, “He’s no liberal.” As for Summers, while he has been mau-maued by Democratic feminists and some of the unions, he is a tough, clearheaded thinker who has for years tried to merge Keynesian and supply-side policies. No mean feat. Now here’s the rub: all this talk about a $700 billion stimulus package. I hate to be the one to pull the plug, but government cannot spend our way into prosperity. The wish list of Democratic spending initiatives includes short-term tax rebates, massive new transportation bills, even more education money, exotic green-technology spending, a big-government embrace of health care and heaps of cash for UAW-Detroit carmakers. None of that will stimulate economic growth. Economist Paul Hoffmeister has it right: We need to invigorate incentives to produce and invest. Let me take it even further. We need to revive the dormant animal spirits, which have been beaten down by a brutal bear market in stocks, the ongoing housing slump and all the myriad blockages to credit availability. A bunch of new spending won’t do the trick. Lower tax rates will. Government policy must make it clear that new successes will be handsomely rewarded. This will be Obama’s greatest challenge. While he may not raise taxes in 2009 -- a good thing -- he hasn’t yet come up with a new bolt of electricity that will hardwire the serious risk-taking that lies at the heart of free-market capitalism. Right now, the missing electric bolt is lower tax rates and greater rewards for new risk investment by investors, successful earners and business. On the plus side, however, Obama talks optimistically. That’s good. He says he’s hopeful about our future. And he says he is confident that American spirits will be resilient in this difficult time. That’s Reagansesque, Kennedyesque and FDResque. But while FDR’s big spending and regulating prevented economic recovery, John Kennedy and Ronald Reagan opted for across-theboard supply-side tax-rate reductions to get America moving again. (Copyright 2008 Creators Syndicate Inc.) |