OP-ED CONTRIBUTOR
A Capitalist Idea
By WILLIAM M. WALKER
Published: September 6, 2011 appearing in the NYTimes
PRESIDENT OBAMA needs to go big. Jeffrey R. Immelt, chairman
of the president’s Council on Jobs and Competitiveness, may have suggestions,
but considering that Fortune 100 companies have killed 2.9 million jobs in
America over the past decade while adding 2.4 million abroad, that may not be
the best input. I’m an entrepreneur and I’m creating jobs. Here are eight
suggestions:
Significantly
reduce Sarbanes-Oxley regulations for public companies with revenues under $500
million. My company went public last year and spends $3 million to
$4 million a year in additional insurance, accounting and legal costs stemming
from compliance with Sarbanes-Oxley financial reporting. (Understand that Sarbanes-Oxley was instituted after Glass-Steagall was repealed. While Glass-Steagall was resisted in its beginning - 1933 - over the decades, it had become a part of the financial fabric of our system and was working well.- blog editor)
Reinstate
Glass-Steagall and eliminate Dodd-Frank. Get commercial banks
back to being banks, and get investment banks back to raising capital and
trading. Reinstating Glass-Steagall would force the “too big to fail” banks to
divest assets, something Dodd-Frank does not address.
Raise
rates on short-term capital gains and lower rates on long-term capital gains. Hedge
funds and private equity investors should not be rewarded for short-term
capital gains that produce enormous market volatility. Raise the short-term
capital gains rate to 35 percent, and lower the long-term rate (over one year)
to 10 percent. (Currently this rate is 15% across the board – blog editor)
Provide
companies with the confidence that if they invest in the United States, they
aren’t going to face increased wage and benefit costs. Businesses
will not invest if they don’t know the actual cost they will bear to comply
with health care, consumer protection, banking and environmental regulations.
The president has created a regulatory landscape that scares investors and is
making chief executives hoard cash.
Require
any mortgage originator who sells a mortgage to Fannie Mae or Freddie Mac to
take a first-loss position, meaning that if the loan goes
bad, the originator, not Fannie or Freddie, is responsible for the first 5
percent loss, and then shares losses with Fannie or Freddie up to 20 percent.
Means-test
Social Security. Many wealthy Americans do not
need benefits. Give them a tax deduction to the value of their estate for their
accumulated contributions.
Make
serious cuts in Medicare and Medicaid. The health care bill
sent the message that we will insure every American and cover every disease. We
cannot afford that type of health care. Americans need to take responsibility
for their health and realize that life choices (smoking, overeating, etc.) may
produce health conditions that are not covered.
Identify
100 major infrastructure projects that will put this country
ahead of our competition and put people to work building high-speed trains,
highways, water pipelines, irrigation canals and alternative energy sources.
Borrow as much money as the government possibly can to fund this investment. At
2 percent interest, it’s a good investment.
William M. Walker is chief executive of
Walker and Dunlop, a commercial real estate financing company.
Editor's notes: I never forget that I am a member of the plaid shirt crowd, an old and retired carpenter, who has been blogging since 2007. So, what do I know? Good question, and although the answer escapes me in perpetuity, that has never stopped me from speaking my mind. On his last point, Walker misses the point, I believe. I cannot see, for the life of me, that if municipalities, county and state governments have their own funding, why the federal government has to do anything as to this last suggestion. For the most part, this article is absolutely great. But, if muni-governments across the country, for example, do not have money for their specific projects, neither do other governmental entities. Let's not forget that the supreme capitalistic idea that separates America's version of free market capitalism from the
impostors of this world, is the demand that we balance our budgets or die. That is true both businesses and governments. Suggestions that push the notion of a Centralized Government spending money that it does not have, violates that standard. Understand that it is not free market capitalism that has failed us, of late. Rather, it is the fantasy of macro-economics and the silliness that we can dig ourselves out of the ditch in which we find ourselves.
The rules of family finance are precisely the same rules that make for a healthy (economically speaking) nation. If work is to be done, regulations are not prohibitive and money is available (as opposed to being printed), infrastructure will be repaired and this nation's GDP will explode, on its own.
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