Tag Archives: Barack Obama

Clinton proposes tax on trading

Democratic presidential candidate Hillary Clinton is proposing new taxes on large-volume trading in financial markets, one of several measures designed to appeal to the party’s liberal nominating base as she squares off against insurgent rival Sen. Bernie Sanders (D-Vermont). The challenger’s left-wing economic populism has won him traction in some early nominating states, putting pressure on Clinton to maneuver her campaign to guard against a repeat of 2008, when a relatively unknown Barack Obama swept the party off its feet with an appeal to passion and principle.

Hillary Clinton on the campaign trail. (Photo: www.hillaryclinton.com).

Hillary Clinton on the campaign trail. (www.hillaryclinton.com).

Clinton’s strength is seen as her experience and pragmatism, although clearly the campaign is focused on the nomination, and not the inevitable pivot to the center (rhetorically, at least) that marks most presidential bids as they begin to look towards the general election.

I hope to dissect some of her proposals in greater detail in the coming days. The tax on so-called high-frequency trading, is actually a tax on order cancellations in financial markets. This is designed to penalize large-volume, computer-driven trading strategies, which Clinton and some other critics blame at least in part for market meltdowns and flash crashes; it is also designed to discourage “spoofing,” a technique that can involve submitting open orders in an effort to push the market one way or the other, and later canceling them.

Debate will no doubt ensue as to whether imposing new taxes on market trading is likely to achieve the “fairness” and stability proponents claim to desire. These new costs would however, very likely do two things:

  • Reduce market liquidity, by making it more expensive to trade. Lower liquidity means higher spreads (the difference between bid and ask), which also makes transactions more costly. These direct and indirect costs will hurt both institutional and individual investors.
  • Increase the cost of risk management. Small and large traders alike often rely on series of continually adjusted stop orders to protect profits and cut losses. These systems can rely on orders that are placed and later canceled and replaced with a new order to reflect market movement. Taxing order cancelations will make it more expensive to manage risk in this way, thereby potentially injecting even more risk into capital markets.

Politico and others have reported that former Secretary of State Clinton is relying on former Rep. Barney Frank (D-Massachusetts) and Gary Gentler (who helped craft Dodd-Frank) to advise her on economic matters.



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Filed under 2016 Democratic Primaries, 2016 Presidential Election, Economy, Finance & Investing

Republicans should negotiate with strength and wisdom

Charles Krauthammer advocates real compromise when it comes to avoiding the fiscal cliff, saying Republicans should concede to tax increases only as accompanied by cuts to discretionary and entitlement spending along with tax code reform. In his weekly Washington Post column, Krauthammer writes that Speaker Boehner and his House Republican majority shouldn’t deal as if they come to the table without a card to play. They’ll take a hit, but President Obama will suffer lasting damage to his legacy if the American economy gets hit with across-the-board tax hikes in January.

There’s been a scuffle within the GOP family about the best way to proceed here. The reality is that we have a massive and growing national debt that must be addressed. The fiscal cliff does just that – but so suddenly and substantially that it seems untenable. The better way is with a deal that steadily reduces debt but also promotes prosperity and growth.

Real cuts to discretionary spending is probably the easiest place to start politically, and the need for them should be self-evident. Some of the fiscal cliff cuts are actually a decent place to start, but a new deal could contain a smaller package of cuts and one that no longer requires the military to take on the largest proportional share of spending reductions.

Entitlement reform will be incredibly difficult to agree (especially in such a short period of time) but really it must be included – even if it is a modest, incremental change, such as the gradual raising of the age of social security eligibility, say, by one or two years over the next decade. Something that will at least begin to change the liability curve over time and prevent these programs from not only consuming an ever-greater share of the budget annually but eventually drowning us in red ink entirely. We have got to start somewhere.

In exchange for these cuts, Republicans should go along with the removal of certain exemptions from the tax code. Everything should be looked at. All things being equal, you avoid popular programs like the home mortgage interest deduction to the degree possible. You also bring to the table cuts to corporate welfare; most obviously cases like Solyndra, where economically dubious pet projects are being promoted, but handouts for other business interests as well. Scaling back exemptions and subsidies not only relieves deficits but also flattens the tax code, which should be a perennial goal for the Republican Party.

All of that is easier said than done of course, but it could be a good road map for the next month as lawmakers try to avoid walking us off this cliff we have created for ourselves.

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Filed under Conservative Movement, Finance & Investing, Fiscal Cliff

Employers, employees hit by health care mandates

Howard Rich of Americans for Limited Government takes to the pages of Investors Business Daily to discuss the impact of the Patient Protection and Affordable Care Act, now that the election results means it is here to stay. Along with the mandate on individuals to carry health insurance or be fined, Obamacare also requires employers to provide coverage to employees working thirty hours or more per week.

“Not only will this mandate prevent job growth among small businesses, it will also result in fewer hours and less income for workers at larger companies. These are people struggling to make ends meet on limited income — people who cannot afford to lose these hours.”

Rich notes that Darden Restaurants, which employs 185,000 nationwide in popular chains like Olive Garden, announced last month it was reducing many employees’ schedules to twenty-eight hours a week. Kroger, a grocer with 350,000 employees, is making a similar move and will restrict part-time personnel to twenty-eight hours.

“In other words ObamaCare’s “employer mandate” will wind up hurting the very people Obama claims to be fighting for — reducing their take-home pay at a time when loose monetary policy is already whittling away at the value of every dollar they earn.”

The other possibility here – one that will be harder to detect and report – is that some employers will simply follow the law by providing insurance, but offsetting the cost through lower or stagnant wages. Or prices will simply rise, etc.

There simply is no such thing as a free lunch.

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Filed under Barack Obama, Health Care

Election night speeches

Governor Mitt Romney‘s concession speech, in text and video at the New York Times.

President Barack Obama‘s victory speech, also via the NYT.

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Filed under 2012 Presidential Election

Barone calls election for Romney

Michael Barone, author of the Almanac of American Politics and senior editor at The Washington Examiner, is forecasting a Romney win this Tuesday. I’ve waffled and haven’t wanted to make many predictions because the race has been so close at times and momentum has shifted at various junctures. Romney definitely seems to have had it the last several weeks – since the first debate, really – but may have plateaued at some point. The electoral college math is difficult for Romney-Ryan, no matter how you look at it.

Barone – who knows politics and elections like few others – actually says Romney wins the electoral college by a good margin, 315-223. He chalks up Indiana and North Carolina to the challenger (a safe bet for some time now) plus Florida, Ohio, Virginia, Colorado, Iowa and New Hampshire. The biggest surprise? He also includes Wisconsin and Pennsylvania in the list. The only swing states (which really have been Obama-leaning states for some time now in my view) he gives to the prez are Nevada, New Mexico, Michigan and Minnesota.

By this tabulation, Mitt Romney could still lose Pennsylvania (20), Wisconsin (10), Colorado (9) and New Hampshire (4) and still win the election. Encouraging. But as many others have noted, he’s got to win Ohio to take this thing.


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Filed under 2012 Presidential Election

Latest Rasmussen numbers show tight race; Missouri matters once again

Drudge links to Rasmussen Reports’ latest daily presidential tracking poll, which shows Mitt Romney and Barack Obama each earning 46% of the national electorate’s support. Romney actually has a 48-46 edge when undecided voters who are leaning one direction or another are included, and the president’s overall job approval continues to hover just below the critical 50% mark.

What counts, of course, is the Electoral College. There, Rasmussen credits the president with 237 votes versus the challenger’s 196, with 9 states totaling 105 votes up for grabs. Obama would only need 33 of those votes from toss-up states to reach 270 and seal the deal. That means Florida and only one other state, or a combination of several smaller states on the list including Colorado, Iowa, Missouri, New Hampshire, Nevada, Ohio, Virginia and Wisconsin.

Barack Obama won these battleground states in 2008, with one exception: Missouri delivered a narrow victory to John McCain that night, bucking its trend of picking – or at least predicting – the winner of every presidential contest since 1904 with only one exception (we went with Adlai Stevenson over Ike in ’56). So the Show-Me state is the only state Republicans carried last time around that is now in toss-up territory. Although, Rasmussen’s last polling here does indicate that Romney maintains a small advantage (48-45).

Senate hopeful Todd Akin has been blamed for jeopardizing the GOP’s presidential chances here, and no doubt that has played a role. Yet it shouldn’t be overlooked that that Democrats entered this season with strong top-of-the-ticket incumbent candidates in Governor Jay Nixon and Senator Claire McCaskill. At some point you also have to analyze how much impact the establishment’s abandonment of Akin is dragging on the ballot from top to bottom.

There’s little rallying behind the Senate candidate; gubernatorial candidate Dave Spence has a lot of dollars but entered the race without his own political resumé and team behind him to take on a strong governor; and the Romney campaign probably strategized early on that while some resources would be necessary to secure Missouri, it would substantially be able to count on the energy and organization generated by Missouri Republicans, for Missouri Republicans, to help carry the day here.

Judging from what’s played out publicly the last several weeks, the energy necessary to secure a Romney victory may largely rest with the enthusiasm to do just that. Is the establishment bet that that by helping Romney take Missouri, you also have a decent chance at maybe still picking up the Senate seat without actually having to tie one’s self to Akin? More on that to come…

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Filed under General & Miscellaneous

No you didn’t…

I’m having flashbacks of Mr. Obama‘s “share the wealth” comment in 2008.

“Cause, if you got a business – that – you didn’t build that. Somebody else made that happen.” So says President Barack Obama, on the campaign trail in Roanoke, Virginia on Friday. The comment has gotten a lot of play and has come under fire from groups like the NFIB (National Federation of Independent Businesses).

I love these moments of transparency from the president. When he reveals who he really is. Even though I feel like I know the president’s politics, it still shocks me sometimes when I hear things like this. The man  has a fundamentally and deeply ingrained collectivist worldview, which shows itself in a callous disregard – some might say contempt – for the entrepreneurial spirit.

I’d like to comment more on this later, because I think this story has legs for the fall, and it’s significant. Hopefully this, along with the campaign’s overreach on suggesting Mitt Romney is a possible felon for misrepresenting the timeline of his tenure at Bain, will help turn the momentum of the last several weeks back in Romney’s favor.

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Filed under 2012 Presidential Election