The munchkin is at the plate

The head twitter, having exhausted his list of targets to blame for last weeks fiasco now wishes to turn to what he calls tax reform. As an amusing sidelight, his OMB director Mick Mulvany stated that Washington was" more broken then trump thought". You got it wrong Mick. Washington is" more broken" now that Trump is president and the Republicans are forced to try to govern.

But onto tax reform and treasury Secretary munchkin. When I was in Europe, it was reported on CNN international that the other counterparts to the munchkin at the G 20 meeting found him somewhat" Unprepared". Obviously what they found, was that this former Motion picture producer, and former purchaser of distressed financial institutions which then embarked on a highly questionable program of foreclosure against homeowners, knows nothing about macro economics and the role of currency supervision' in maintaining some sort of order. After the Friday fiasco, the munchkin apparently stated that the tax reform may have to eliminate tax cuts for middle class Americans–i.e. those who need them –and only lavish them on business corporations and the wealthy.

Think about that. Our major corporations, the S&P 500 types, basically have more cash now than they know what to do with. They seem to use it typically for stock buybacks increasing the debt leverage of the companies and probably increasing the value of executive stock options. They have not been using it for capital expansion or research and development. Now why would that be? They are making good profits. I think most of us who have been in charge of running small businesses or even large ones know the answer. They don't see increased demand. And they don't see increase demand because the people who could increase that demand don't have much money. The virtuous cycle, which can start at any point on the cycle, is demand leading to capital expansion and increased workforce in turn leading to more aggregate demand and thus growing the economy. The monkey wrench in the works has been inadequate aggregate demand. America's productive capacity is only running at about 80%. So, if you give these people more money by tax cuts what do you think they are going to do with it? They are not going to engage in capital expenditures or higher wages. You will see more stock buybacks and probably base erosion in this country to hide more of the profits overseas. The Apple technique will flourish. This tax reform will doubtless be supported by more of the implausible fantasy economics of Paul Ryan and the heritage foundation. We can only hope the Freedom Caucus doesn't find it to be bad enough and somehow derails it. It is really great to have to bank on these nitwits