Showing posts from February, 2012

Obama's proposed tax reforms face challenges

Business Times - 28 Feb 2012 Obama's proposed tax reforms face challenges By LEON HADAR WASHINGTON CORRESPONDENT SO what's not to like about President Barack Obama's proposed changes to the US corporate tax structure? After all, both Democrats and Republicans, as well business executives and labour leaders, seem to agree that the current US corporate tax code is useless and riddled with loopholes, breaks and credits that are crafted by Washington lobbyists to favour their powerful clients. At the end of the day, all these loopholes reduce the tax revenues that the federal government is supposed to collect. Moreover, since the current corporate tax of 35 per cent is higher than in most of the other major industrialised nations, it seems much cheaper to do business in Asia and Europe, placing the US economy at a disadvantage at a time when very few politicians and analysts disagree on the need to increase the global competitive edge of the American economy and ensure that Ame

'New jobs for jobless' pledge a white lie

Business Times - 23 Feb 2012 'New jobs for jobless' pledge a white lie US firms look for young, energetic and tech-savvy workers, not those middle-aged ones yet to learn how to surf Internet By LEON HADAR WASHINGTON CORRESPONDENT WE are all familiar with, and occasionally have even uttered one of those common white lies such as 'Thanks so much for that wonderful gift!' or 'You really look great in that dress' or 'Your baby is so cute'. So let me add another one to the list - 'Most of America's unemployed workers will eventually find new jobs'. They won't. Indeed, this white lie is being articulated by both US President Barack Obama and the leading Republican presidential candidates. While Mr Obama and the Democrats suggest that government-backed program-mes to train unemployed workers would help those who had lost their jobs in the manufacturing industry, Republican presidential candidate Mitt Romney and his supporters argue that an unreg

My take on Robert Kagan's thesis

Business Times - 21 Feb 2012 The reality of America's global power No great power can retain military superiority with weakening economic superstructure By LEON HADAR  WASHINGTON CORRESPONDENT AS a life-long hypochondriac, I was laughing out loud when reading the tragic-comic inscription on the tombstone located in the cemetery in Key West, Florida: 'I Told You I Was Sick!' I could imagine the poor guy confronting family and friends and insisting to no avail that what he had was more than just the common cold or the seasonal flu. 'You are not sick,' is the kind of reassuring message that Robert Kagan is sending to the nation's foreign policy hypochondriacs aka 'declinists' in his new non-fiction book The World America Made, contending that America is in tip-top military and economic health and ready to take care of the rest of the world. He recalls that the same kind of hypochondriacs had complained that America was really, really in decline in the after

China can help speed up US economic growth

Business Times - 18 Feb 2012 China can help speed up US economic growth But economic, geo-strategic components in the complex Sino-American relationship are tangled By LEON HADAR WASHINGTON CORRESPONDENT IT is not surprising that China bashing is being embraced by US politicians campaigning for votes in this election year dominated by nationalist, xenophobic and anti-immigrant sentiments. Indeed, when you are targeting the financially distressed American electorate, angry that their well-paid manufacturing jobs are allegedly being stolen by scheming foreigners, one effective way to win votes is by stirring up resentment against China's prosperity - seen by many Americans as an outcome of a well-coordinated strategy aimed at destroying the American economy. That may explain why Michigan Republican Senate candidate Peter Hoekstra decided to launch his campaign against incumbent Democratic Senator Debbie Stabenow on Super Bowl Sunday by running a television ad which introduces a young

Obama's budget: it's about politics, not economics

Business Times - 15 Feb 2012 Obama's budget: it's about politics, not economics By LEON HADAR WASHINGTON CORRESPONDENT THE way to examine US President Barack Obama's proposed budget for the government's fiscal year of 2013 is by recognising that its main goal - perhaps the only one - is to ensure that Mr Obama remains in the White House in 2013. Indeed, notwithstanding all the admirable plans for stimulating the US economy and narrowing the growing social-economic gap that were included in the president's budget proposal, the chances that the Republican-dominated Congress would embrace them before the November election are very low. For Republicans, the idea that the federal government should pursue another fiscal stimulus programme or use its power to increase the tax burden on the wealthy in order to help the middle class and the poor are antithetical to their free-market agenda. Promoting the main themes of his budget proposal (AKA election campaign themes), Mr O

Republicans won't beat Obama by alienating white middle-class voters

Business Times - 14 Feb 2012 Republicans won't beat Obama by alienating white middle-class voters By LEON HADAR WASHINGTON CORRESPONDENT ONE of Mitt Romney's electoral assets as a Republican presidential candidates has been what could be described as the 'nostalgia factor'. A tall and fit white man, with broad shoulders and a strong jaw, exuding energy and optimism, the former Massachusetts governor reminds many white Americans of the baby boomer generation of America's post-1945 Golden Age, when political leaders and business executives who looked like Romney ruled America - and the world. It was time of prosperity and you even didn't have to lock the door when you left home - a reflection of strong social solidarity. Indeed, Romney, former house speaker Newt Gingrich and the other Republicans seem to relish in this Politics of Nostalgia, suggesting that they could revive the spirit of the good old days of the 1950s, make America militarily and economically str

Silver lining in an Iran-Israel war?

Business Times - 10 Feb 2012 Silver lining in an Iran-Israel war? A short-term military conflict could well turn out to be the catalyst for long-term stability, cooperation and peace By LEON HADAR WASHINGTON CORRESPONDENT NOTWITHSTANDING the never-ending stream of all those based-on-reliable-intelligence-sources analyses, it is doubtful whether these same analysts would be willing to bet whatever is left of their 401K retirement accounts on their predictions that Israel will - or will not - attack Iranian nuclear sites this year. And while research institutions have conducted interesting exercises to try to figure out the military, diplomatic and economic repercussions of a confrontation between Israel and Iran, the dictum that no military plan survives the contact with the enemy applies also here - in addition to the unintended consequences, blowbacks and the proverbial 'black swans' that are bound to show up even in the unlikely scenario under which Israel achieves all or mos

New job numbers could be a political 'game changer'

Business Times - 07 Feb 2012 New job numbers could be a political 'game changer' By LEON HADAR WASHINGTON CORRESPONDENT WHILE addressing new economic numbers showing 243,000 new American jobs in January - including 50,000 manufacturing jobs - US President Barack Obama seemed to be going out of his way to contain the expected enthusiasm manifested on the same day in the rising Dow. The new numbers showed that the 'the economy is growing stronger' but there remained 'still far too many Americans that need a job', Mr Obama told an audience in Virginia on Friday. But if Mr Obama sounded a somewhat restrained note in public there is no doubt that he and his economic and political aides were in a good mood in private last week. Currently at 8.3 per cent, the unemployment rate is in its lowest level since Mr Obama has entered office. That unemployment has been falling consistently for several months may not a sign that the economic recovery is finally taking off. But i

Florida voters bring Gingrich back to earth

Business Times - 02 Feb 2012 Florida voters bring Gingrich back to earth Former House speaker's grandiose planetary vision fails to find much of an audience there By LEON HADAR WASHINGTON CORRESPONDENT WELL, it seems that Republicans in Florida have not warmed up to Newt Gingrich's plan to establish an American colony on the moon during the next eight years and turn it into America's 51st state. The former speaker of the House of Representatives had hoped to exploit the political momentum generated by his earlier victory in the Republican presidential primary in South Carolina, and was trying to woo Floridians who work in the space industry in the state by pledging that 13,000 Americans would be living on the moon by the end of his second term as president. And, as president, he would grant them statehood. But notwithstanding his grandiose planetary vision, Mr Gingrich was back on earth on Tuesday, after voters denied him victory in the Republican presidential primary in th