Are the stock market and economy taking turns for the worse? Do we really need a new stimulus plan from Washington?
Let’s begin by rolling back the clock to last Thursday’s June jobs report. It was not a good report. Stocks have fallen over 4 percent since then. And here’s one reason why: plunging wages.
Private hours worked continue to free-fall. Hourly wages have flattened. It was a nasty report. Job losses are still substantial. It’s a powerful and nasty combination. While I am an optimist by nature, this does worry me. It suggests a later, and weaker, economic recovery.
So here’s a novel thought for all the geniuses down in Washington. Help businesses for a change.
You can begin by stopping the taxing of overseas corporate profits. Do not hike the minimum wage. Back off cap-and-trade. Do not nationalize health care. Stop the anti-trust assault on phone companies, pharmas, Google, airlines, and multi-nationals.
And how about a six-to-twelve-month payroll-tax holiday? That would make it cheaper to hire new workers. What about a corporate tax cut? And immediate cash expensing for business-investment write-offs? In other words, cut the tax cost of hiring, investing, and doing business. Because it’s businesses that create the jobs and the incomes for families all throughout America.
And if you are still worried about the housing story or bank toxic assets, how about a capital-gains tax holiday?
Does anyone in Washington understand the way the world really works? It’s called incentives. That’s what this is all about. And we’re going to need many more of them if businesses, investors, and families are to start prospering once again.