Phil Gramm could teach Barack Obama a thing or two about how the economy works. He left Congress to go work for UBS, and has been out of politics since 2002. Six years later, he’s still a limited government, free market Republican, who understands what happens when there is too much meddling in the market:
“It used to be that it was a sign of your importance in the world to be listed on the big board,” he warns. “Now many of the largest IPOs in the world are occurring on other markets. In the six years that I have been a banker, I have seen decisions made to open functions in London rather than New York because of a better regulatory climate. Every American should worry a lot about this. We have benefited enormously from New York being the financial capital of the world because we had a more efficient regulatory structure than other nations did.”
He fingers the U.S. corporate income tax as another competitiveness killer: “We can’t possibly compete with a 35% corporate tax rate that is so punitive that if a company opens a plant in Ireland it costs them a billion dollars less than in the U.S. over 10 years because of the difference in corporate taxes.” Mr. Gramm urged Mr. McCain to add a corporate income tax cut (to 25%) as part of his economic package.
“Why is America the richest country in the world?” he asks. “It’s not because our people are more brilliant; it’s because we have a better free-market system. Why has Texas created 1.6 million jobs in the last 10 years whereas Michigan has lost 300,000 jobs and Ohio has lost 100,000 jobs? Because governance matters, taxes matter, regulation matters. Our opponents in this campaign are so dogmatic in their goal of having more government because they love the power it brings to them that they’re willing to let it impose costs on the working people that they say they want to help. I am not.”
For those who don’t know, Phil is working for John McCain. He says McCain is right for America now for three reasons:
First, he will win the war against terrorism; second, he will get runaway federal spending under control; and third, he will steer America away from the course of trade protectionism that the Obama Democrats favor.
As I was reading this, I was thinking “Cap and trade, man…ask about the cap and trade plan.”
I remind Mr. Gramm that Mr. McCain supports the multitrillion dollar cap-and-trade global warming tax, which contradicts much of what he says on shrinking government. It is comforting to learn that Mr. Gramm is not so comfortable with that McCain position. He agrees that this legislation would be “one of the largest interventions of government into our economy in my lifetime and could do lasting economic damage. We can’t allow Congress to spend any of the revenues from selling these carbon allowances.” One Gramm idea would be to claim the revenues to allow “real private investments that are owned by Social Security recipients.”
This could really screw things up, but let’s do it and pretend like we can keep Congress from pissing this money away too. Get real. Just the like Maverick himself, just when I am starting to warm up to Gramm, he goes and says this and just puts me off my breakfast.
The last thing the American economy needs right now is a new set of taxes on the biggest companies in the country. Who do you think is going to pay for those?
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