Going forward doesn't look so hot. Regulations, taxes, uncertainty. and "stuck on stupid" with Keynesian Do-Loop inanity are all mentioned.
Unless government policies are altered, he predicted, "the next big thing will not be invented here. Jobs will not be created here."
Thus spake Paul Otellini, CEO of Intel.
The U.S. legal environment has become so hostile to business, Otellini said, that there is likely to be "an inevitable erosion and shift of wealth, much like we're seeing today in Europe--this is the bitter truth."
Not long ago, Otellini said, "our research centers were without peer. No country was more attractive for start-up capital... We seemed a generation ahead of the rest of the world in information technology. That simply is no longer the case."
We've mentioned regulatory costs. Otellini defines them:"I can tell you definitively that it costs $1 billion more per factory for me to build, equip, and operate a semiconductor manufacturing facility in the United States," Otellini said. ...Ninety percent of that additional cost of a $4 billion factory is not labor but the cost to comply with taxes and regulations that other nations don't impose
So glad you brought up "taxes."
"If our tax rate approached that of the rest of the world, corporations would have an incentive to invest here," Otellini said. But instead, it's the second highest in the industrialized world, making the United States a less attractive place to invest--and create jobs--than places in Europe and Asia that are "clamoring" for Intel's business.
By the way, it was not ONLY Obama. It was Bush II, Clinton, Bush I, Carter, and Roosevelt, not to mention the Professional Pandering Class which occupies the Capitol in DC and damn near every State in the Union.
I've seen you cite CBO in the past, so I'm assuming it's a source you respect. How do you respond to the CBO report which states the recovery act significantly mitigated job losses and averted a much stronger downturn? http://www.cbo.gov/ftpdocs/117xx/doc11706/08-24-ARRA.pdf
ReplyDeleteAnd here we go again.....What's Otellini eluding to in order to fix the world's problems?
ReplyDeleteWell of course! Incentive! Cut taxes and they'll start hiring people and businesses will relocate here from China and India and Germany and wherever and the world will go back to the land of milk and honey.
We don't have an uncertainty problem in this country. Look around, we have a DEMAND problem.
Again, it doesn't matter if you eliminate "uncertainty", corporate America HAS NO CUSTOMERS. You can repeal Obamacare, cut corporate tax rates, cancel Cap and Trade and corporate America will be left with the same glaring problem it started with. The largest source of demand in the world (the U.S. consumer)is deleveraging and the only viable alternative in offsetting this collapse (Uncle Sam), is sitting on their hands and watching the house burn down.
...and the idea that the U.S. has the second highest tax rate in the industrialized world is a joke. Corporate America exploits every loophole that their lawyers can find. Our tax system lets them get away with all kinds of shit. This kind of statement is rhetoric used to convince the suckers that cutting corporate tax rates will trickle down to them in the end. It hasn't worked for 3 decades and won't work now.
Probably something like this Jim:
ReplyDeleteWe shouldn't have given all that money to extend UI and fortify state balance sheets and cut taxes for middle class Americans. That's a waste. We should tell the 8 million Americans on UI to get a job and let the states burn.
Then we should have given all that ARRA money to Intel so that they could build another $4 billion facility that'll sit vacate because they their isn't anyone in the country buying processors because over a quarter of the population doesn't have a job or UI benefits.
Because if there's one thing in this world we need right now is more production capacity sitting idle, rusting away.
Thanks, Struppster, but I'll write my own response.
ReplyDeletePage 10 of the report has a helluvalotta qualifications, ifs, ands, or buts--but the key line is on P. 11:
The actual impact
could, in principle, be significantly larger or smaller than
the number of jobs reported
Further, let us recall that Fed spending is included in GDP; thus, one must delete ARRA funds from GDP calculations. The result is a smaller-than-reported GDP.
But even if the report is dead-accurate, it doesn't crow about PRIVATE-SECTOR jobs, which, after all, support the PUBLIC-SECTOR jobs which were the principal beneficiaries of ARRA.
As I mentioned to Struppster, I'd rather have seen the Feds spend 75% of the money on acquiring a new fleet of automobiles, trucks, PCs, F-22's, and tanks--all of which would goose employment in the private sector significantly.
So happens I agree that demand is a larger factor than 'uncertainty.' However, 'uncertainty' cannot be cavalierly dismissed; ObamaCare and the bank-reform bill have created lots of big, unanswered, questions. Like it or not, businesses prefer predictability.
75% of what, is the question. 75% of the total stimulus package or 75% of the tiny infrastructure spending section of ARRA?
ReplyDeleteAs I said before: The bulk of ARRA is simply UI extensions, tax cuts and aid to state budgets which became severely impaired following the collapse in tax receipts since '08. There isn't much else in the ARRA so i'm not sure how much money you could throw at other gov. spending programs unless you would be taking funds away from those areas.
Either way, this amount of money doesn't get us back to anywhere near full employment.
to Hell with the States.
ReplyDeleteAnd we won't HAVE 'full employment' so long as The Regime works to destroy stability and confidence.
The new car fleet is not a bad idea. I would have preferred HEAVY investment in fixing infrastructure (by private contracts would be fine, but I had a hankering for CC like solution, just for old times sake). Particularly bridges. I know there's WAS a big chunk there, but much bigger. Obama came out of the gate with a 60/40 spending/tax split, so the Rs had little to barter. I'd have gone 100% infrastructure spending (and about one and a half to two times as much as was spent). The Rs could have negotiated that down to 80 and felt like they were actually contributing to the solution and had something to bring home to constituents (i.e. big business).
ReplyDelete2 trillion.....minimum. Delivered mostly via direct gov. spending programs. And even that wouldn't get us back to 5% unemployment. Let the Fed. do the rest via massive QE.
ReplyDeleteIOW, stop screwing around. Start up the printing presses for real.
Ironically, Intel just issued an earnings warning due to poor sales in Q3......but Otellini wants to whine about taxes:
ReplyDeletehttp://www.bloomberg.com/news/2010-08-27/intel-lowers-third-quarter-sales-gross-margin-forecasts-on-weak-pc-demand.html
And one has to do WHAT with the other?
ReplyDeleteOvertaxation results in ZERO earnings, you know.
I wouldn't go that far......
ReplyDeleteMy point is that taxes aren't the main concern right now. If you don't have customers, you don't have earnings. Who cares about taxes when you're losing your shirt.
What? You don't pay Social Security taxes, Struppster?
ReplyDeleteNo sales taxes? No taxes which are called "FEES"?
And you pay those no matter your profits--or losses--or cashflow before mortgage/food/utilities.