Friday, January 27, 2017

An Interesting Insight from Kevin Brady's District

Chairman Brady says he wants to listen but manifestly does not hear us.  According to him, we exaggerate and distort, and we are Special Interests. He will not engage on the facts, no rebuttal, just slurs and marginalization.  In a "Drain the Swamp" era, this is disappointing. , , times ten.

He asked for comments and feedback, and promised to listen.  But a politician and a promise, not a good combo.

I wrote a post recently called "Kevin Brady is WRONG - Twice - About VAT and Border Adjustment Taxes" and received the following comment today.  I want to make sure it isn't lost in the shuffle.

From Citizen:  "Brady is my Congressman. We tried to remove him in the last election but he squeaked by with 2%. He blocks Constituents, ignores e-mails, staff hang up on you when you call the office. He's a total disaster. We, the Citizens of TX 8, will remove him from office in '18. He's been in Congress since 1997. He's never held a job other than with the Chamber of Commerce. I hope he's blocked on this legislation."

As is well-known, at least to those with memory, all politics is local.  And "Citizen" is sending a message from home.  None of us like to be spurned or ignored.  Our employees don't like Washington power brokers playing dice with their careers and their life's work.  Our customers, American schools and American families, care deeply about their children and their futures.  They DON'T understand why politicians would needlessly endanger the products they depend on.  It's hard to get an answer if emails are ignored, staff hangs up, slurs are bandied about.

Listen to the justifications.  The politicians send out economists as stand-ins, and offer condescending blather to put off criticism.  From the Washington Post:  

"But economists say that under that taxation scenario, the value of the dollar would soar, thereby significantly cutting these businesses’ cost of goods. Therefore, the theory goes, they would not actually see a skyrocketing tax bill, and they wouldn’t therefore be forced to ratchet up prices for consumers. 'I think the focus on just the import costs and export prices, ignoring the potential exchange rate effect, is mistaken,' said Alan Auerbach, director of the Robert D. Burch Center for Tax Policy and Public Finance at the University of California, Berkeley. 'It’s understandable. But this is something that’s affecting the whole economy, not just one industry.' Woldenberg, for one, is skeptical as to whether that will play out in the real world like it does in the textbooks. Like many of his U.S. counterparts, his contracts with overseas factories are all in dollars. So he struggles to see how global currency fluctuations would affect his cost of goods. Auerbach concedes there might be some short-term pain there: Woldenberg and others like him would be stuck with the terms of their existing arrangements. But, for contracts on a go-forward basis, they can base their price negotiations on the new reality." [Emphasis added]

This kind of pap is so infuriating.  Let me translate Auerbach into English:  Woldenberg, poor guy, doesn't understand economics.  I have a PhD and worked under Martin Feldstein, so I speak with authority. Ergo my predictions must be right.  Hey, Kevin Brady is betting $1.2 Trillion on my idea. That blows my mind!  If I must be absolutely candid, "short term pain" refers to breathtaking inflation, budget cuts and lots of firings.  But they're only short term effects and will not affect my pay as a professor. And Woldenberg will muscle through, chin up, Old Bean. In the long run we're all dead anyway.  [Credit the last bit to John Maynard Keynes, a different economist.]

I might be able to take Auerbach's repetitive nonsense if he were actually accountable. He's not. He does nothing to rebut arguments based on empirical experience other than to deny them (generally in a condescending manner), assert his authority and repeat his extremely questionable predictions.  That's not an answer.  Sorry.

Ultimately, Citizen from TX-8 may have the only viable answer if the politicians won't listen.  Drain the Swamp indeed.

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