Of Time and Money Flowing

So, the Republicans won the election last week. They will assume control of the House of Representatives and will be able to stop anything they don't like in the Senate. During the campaign they insisted they will cut government expenses and reduce the regulations imposed on small businesses.

They were careful to say SMALL businesses, because popular opinion still is hostile to large corporations. Halliburton, Enron, and so forth still leave a very sour taste in the mouth of most people. Corporate executives who fly private jets to Washington to beg for bailouts are still on my mind even if many other people have forgotten them.

The Republican candidates were very cagey about what they will cut from the budget, but they did make two proposals: allow insurance companies to sell policies across state lines, and reduce or eliminate capital gains taxes. Supposedly this will stimulate economic growth.

I'm not too much of a fan of states-rights. Too often the concept was used to prolong racial segregation or thwart federal legislation. In the case of insurance companies, however, I'm inclined to invoke states-rights. Allowing insurance companies to sell policies across state lines would allow them to locate in the state with the most permissive laws, effectively nullifying the insurance laws of 49 states.

The idea of reducing or eliminating capital gains taxes is touted as a means of stimulating savings and investments. It seems to me that a far better way of accomplishing the same goal would be to reduce the tax on dividends and interest. This would promote steady growth while the capital gains option would result in an overheated boom-and-bust economy. We have seen the results of just such an economy in the last few years. A capital gains tax reduction or elimination bill should be titled "The Day Traders' Relief Act."

I wouldn't be too worried about either of these proposals if the Democrats would have the courage of their convictions, but they very well might run away from their convictions again. God, but we could use Harry Truman right now!