Click here to view the Huntsman Economic Plan.
My overall grade for Governor Huntsman is a D+. In short, he has some very good ideas, but his inclusion of his personal belief in the Green Fairy turns what could be a very strong, “A,” effort into a real mess. This may sound a little harsh, but I’ll of course be defending my analysis and grading system as we go along. I further get the idea that Governor Huntsman has done a lot of homework as far as trying to learn his economics, and he says a lot of the right things, but that he doesn’t quite get the subject matter. He still passes the bar set by President Obama, but only just.
His position on taxes to maintain our government is perhaps one of his two strongest pieces to his overall plan. He does not call for a flat tax like everyone else, but a much flatter progressive tax. Specifically, he calls for three tax brackets, with the top one being 23%. In his plan, every American would pay something. He also calls for the elimination of all credits and deductions. I agree with that completely. He advocates lowering the corporate rate to the mid 20’s. I would have liked to see this be lower, but I will give him props for the right idea. He also discusses the Alternative Minimum Tax, something which should never have been instituted in the first place, however, it should be noted that if the remainder of his plan is put into practice, there would be no need to eliminate a tax which would die of its own obsolescence simply by never being triggered. He is also careful to discuss repatriation of American funds, and discusses elimination of the repatriation tax, as is also found in the Perry and Gingrich plans. His tax plan also has the virtue of being something which would have a chance of passage.
Where I disagree with his tax plan is his determination to end taxation of all passive income. I do understand the argument that corporate profits are already taxed, but there are a lot of Americans who do not make an income and in fact earn a fortune. One of them is a Mr. Warren Buffett who then goes around the country advocating that the rest of us who do get W-2’s and 1099’s pay increased rates because of how unfair it is that he pays less than his fair share. Dividends and Capital Gains are income of sorts and should be treated as such. I see no problem with giving them preferential treatment, especially in the case of Capital Gains in order to spur investment, but they should not be used entirely as a means to skirt the system either.
His position on regulatory reform is where Governor Huntsman starts down the road to trouble. He says all of the right things, and then made the incomprehensible decision to keep going and disagree with himself. We have the usual list of GOP talking points here, repeal Sarbanes-Oxley, Obamacare, Dodd-Frank, reign in the EPA. He added in for good measure one new one in the FDA, which is actually pretty smart. Where he gets into trouble, and stays there for quite a while is towards the end of his regulation section. This is where he discusses subsidies to fund the Green Fairy Myth.
Joint Fuel-Efficiency Rules – This rule, approved by the EPA and Department of Transportation, will bar heavy-duty vehicles from converting to natural gas, which America has an abundance of. Astonishingly, this was enacted even after the agencies concluded that “more alternative-fueled vehicles on the road would arguably displace petroleum-fueled vehicles, and thereby increase both U.S. energy and national security by reducing the nation’s dependence on foreign oil.”
Either you are a free marketeer or you are not. Offering government subsidies is not a free market principle. I also would love to see a renewable energy source developed, provided that it makes actual economic sense to do so. First off, the idea that we could lower our taxes while providing government subsidies for what ever behavior the leaders in Washington wanted to coerce us into is what created almost every financial crisis ever experienced in our nation. This little bit of social engineering from Jon Huntsman would be no exception to that.
He continues to flounder in his regulatory section, not so much from a philosophical point of view, but from not quite getting the point. Implementing a cultural change in regulatory agencies, besides being meaningless, would at best be a temporary fix to a long existing problem. We need to implement a structural change to our regulatory system. Perry had the single best answer amongst all of the candidates on this particular issue here. He calls for a complete review of every single regulation on our books, with specific guidelines to keeping each one or trashing it on an individual basis. He also calls for a moratorium on any new regulation until that work is completed, with a review process necessary for all new regulations going forward. What Huntsman calls for is simply recognizing that we are all mad about the onerous regulations being inflicted.
Implement A Cultural Change In Regulatory AgenciesGov. Huntsman will demand a change in the culture of regulatory agencies that ensure businesses and citizens are treated like customers. The White House will provide accountability and measurements to ensure that timelines for approval are met, citizens are treated fairly and government doesn’t hinder growth through delay.
Huntsman shows his anti regulatory weakness again by simply planning to have a discussion of the NLRB. This merry band of bureaucratic evil has done nothing in its history to help with anything. It is nothing more than a tool of big labor to inflict its will upon American Businesses. Talking to them will do nothing, ending the NLRB will solve the problem. Fighting their every action in court will be a decent start.
National Labor Relations Board (NLRB)
President Obama refused to even comment on the NLRB’s attempt to block Boeing from relocating and creating jobs in South Carolina, a policy that will encourage American manufacturers to move to China and other low-cost nations, rather than to right-to-work states here in America. The NLRB’s policy is a reckless assault upon our nation’s free-market system. Gov. Huntsman will immediately instruct the NLRB to stop pursuing this politically-motivated attack on free enterprise, and if they fail to do so, he will replace them.
Next, Huntsman proves that he just doesn’t get it by suggesting that we should tweek Fannie and Freddie. GSE’s should never exist. Fannie and Freddie need to go. This was a text book example of what happens when the government gets itself involved in the private market place. Real Estate is an asset class, and the government tried simultaneously to support the price of the entire asset class while making another asset class, cash, more affordable. The result was a housing bubble, one which did what all bubbles do, it burst. All of this was done through GSE’s which by the way is what the GSE’s were established to do in the first place. The entire purpose of Fannie and Freddie was to inflict social engineering, by making it possible for people who could not afford to buy houses, to buy houses. The scary thing is that Fannie and Freddie are back to doing the same exact thing today, proving that Democrats are capable of learning nothing. We need to put an end to this silliness, and we needed to do it yesterday.
Privatize Fannie Mae and Freddie Mac
We must wind down so-called Government Sponsored Enterprises Fannie Mae and Freddie Mac. Today, the White House continues to use these institutions to perpetuate a failed intervention in the housing market, which costs taxpayers billions of dollars and prevents a natural stabilization. As President, Gov. Huntsman will scale back homeownership subsidies and privatize Fannie and Freddie.
His energy policy is a mess, as he is trying to accomplish the impossible. He is trying to reconcile a free market rhetoric with the ever elusive Green Fairy. He starts of by saying he believes in an, “All Of The Above Strategy.” O.K. fine, I’ll agree in principle to that, but we have two different meanings on the definition of that phrase. For me, this means getting out of the way of the free markets and allowing the price system to determine which forms of energy will be brought to market based on efficiency and merit. 6 decades of government subsidies into this area have produced chicanery, crony capitalism, energy shortages, rolling blackouts, unstable supply chains, and an outrageous regulatory environment coupled with massive boondoggle expenditures. Huntsman is suggesting continuing with that strategy, just with his personal slant on things rather than Obama’s. He wants to continue the subsidization, while admittedly allowing researchers quicker approval and access to funds. Windmill technology is not new, it is over 500 years old. One of the reasons it was abandoned several centuries ago, is that it is unreliable and no where near cost efficient. That being said, I do agree that we should be allowing fracking, horizontal drilling, utilizing coal, natural gas, and nuclear power in what ever form those producers are able to bring their wares to the market place.
The bogey man of foreign oil is mentioned by Huntsman, and it is here that I will say what I promised myself I would not immediately assume. He is a Rino at heart. We purchase oil from foreign sources for one primary and one secondary reason. Oil is a useful substance. We take the oil we purchase and use it to create wealth, jobs, get to work and back, make our lives more comfortable, build things, etc. We buy a lot more of it from people we do not like because the government has made it harder to produce our own or to buy it from people we do like. Buying oil is not a wealth transfer, it is a wealth exchange. We buy a dollar’s worth of oil, and it is used to create more than a dollar’s worth of wealth. Would I rather that we got our own oil out of the ground, absolutely. Make no mistake about it though, quitting oil for some non existent form of energy or magic wands will not produce a society that is independent. It would have the opposite effect. Huntsman proposes curing this ill by weaning us off of oil usage, and he is dead wrong in taking this non market driven solution seriously. This next piece from Huntsman’s economic plan tells me that he would be truly no better than President Obama. More of the same, only we die as a nation slower with Huntsman, does not instill me with confidence.
Ensure That Our Transportation Fuel Markets are Competitive
The current system of transportation fuels is essentially closed to newer competition because of (1) gasoline’s near-monopoly in the distribution network for light-duty vehicles, and diesel’s near- monopoly for heavy-duty vehicles; and (2) numerous regulatory barriers to entry.Accordingly, to create a truly competitive energy market, the federal government must:
Commence expedited review of the transportation fuel distribution network by both the Federal Trade Commission and Senate Judiciary Committee (the concentration of distribution ownership is similar to the broadcast network domination in the early 1970s, which triggered market-opening FCC rules and an antitrust consent decree).
Eliminate all regulatory barriers to entry for competing fuels, and create a level playing field that allows competing fuels full access to the distribution grid.
Ensure open markets for natural gas and other alternative fuels in order to stabilize prices and provide a predictable investment environment.
I agree with his entire section on Free Trade. I realize that many here do not, but it is also a position of mine that this is based on a fallacy. People who oppose free trade do so as a result of focusing on the seen only, while ignoring the unseen parts of our economy. By imposing tariffs on foreign steel for example, one may succeed in temporarily protecting the jobs of a few steel workers, but they threaten the jobs of everyone who utilize steel in their manufacturing process by making the secondary products higher priced than what the market would bare. Once those users of steel go out of business, the steelworker will ultimately lose his job anyhow. Take a good look around today, who smells Sulfur Dioxide anymore?
