Use tax cuts to ignite incentives
The free market is a tough place. Only so many companies can be rescued by bailout funds, and the government's stimulus plan can't save everyone. Commentator Todd Buchholz says instead of trying to prevent failure, we should be looking for ways to ignite incentives, like tax cuts.
Commentator Todd Buchholz (www.toddbuchholz.com)
More on Taxes, Commentaries, America's Financial Crisis
CORRECTION: This commentary incorrectly identifies a scene in "The Godfather" movie. "Leave the gun. Take the cannoli," is spoken by Peter Clemenza to Rocco after the killing of Paulie.
TEXT OF COMMENTARY
TESS VIGELAND: Today, President Obama called the differences over a proposed stimulus package "very modest." The Senate took up a $900 billion version today. The House passed its own $819 billion bill last week.
According to commentator Todd Buchholz, both the president and Congress need a reality check.
Todd Buchholz: There's a scene in "The Godfather" when hot-headed Sonny Corleone gets whacked by two thugs. The senior thug turns to the younger and says, "Leave the gun, take the cannoli."
Our hot-headed housing and banking sectors have been whacked, and now we wonder: What firms do we rescue? Which do we leave for the undertaker? The free market is not a pain-free market. Some live and some die.
Preventing failure is like trying to put the economy in a lockbox -- safe from damage, but unable to move ahead.
The end of the Cold War left thousands of aerospace engineers jobless. Now many work at Cisco and Apple.
Thank goodness Theodore Roosevelt didn't put the economy in a lockbox -- or we'd never have driven a car, flown on an airplane, or expected to live past age 50.
Neither Republican nor Democrat leaders have even a rule-of-thumb for rescuing firms. Lehman dies, AIG limps on. Heck, Larry Flynt is lobbying for a bailout of the porn industry. Great, even our national libido needs a stimulus package.
Now Congress wants to contort President Obama's $825 billion fiscal plan. Congressmen can't wait to put their names on bridges, tunnels, roller skating rinks for senior citizens. Lobbying in Washington is so crowded, corporate jets can't get landing slots.
This is a mess.
Rather than bailing out those who've failed, rather than tax rebates where we all just send checks to each other, rather than paving every road with gold-plated blacktop, let's ignite new incentives. Cut taxes for companies that hire new employees. Cut taxes for jobless workers who take a new job. Cut taxes for companies that buy new equipment. Cut taxes for tech firms that add to their R&D budgets. This is not tax-cutting gone foolishly wild.
Foolish is when you waste money giving it away to make up for past blunders. Foolish is when you give in because some CEO puts a gun to your head and says, "The whole world will end unless you give me money."
Enough foolishness. Leave the gun. Take the cannoli. Bet on the future.
VIGELAND: Todd Buchholz is a writer and former White House economic adviser to the first President Bush. His latest book is "New Ideas From Dead CEOs."
Comments
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From brooklyn, NY, 04/14/2009
Todd, you're not a brother, you're not a friend, I don't want to know you or what you do...(Part II, Michael to Fredo)
I commend anyone doing their best(I hope this means you) to educate us lay folk on the economy, but that egregious Godfather error is just too much to take. As a result of this error, the credibility of your views(regardless of their merit)has to be questioned with the utmost skepticism.
In fact, had you not made this ridiculous Godfather blunder, you may have been able to persuade me to agree with your economic knowledge(that is your objective, yes?). But the fact that you confused Sonny with Paulie will likely mean that anything you say may be in for a long sleep...along with Luca Brasi and the fishes
From Austin, TX, 02/09/2009
Todd Buchholz commentary on Marketplace 2/2/09: Why do so many talking heads get their pop culture references wrong? In "The Godfather", Sonny was not in the "take the cannoli" scene. Sonny was killed on the causeway.
From Santa Clara, CA, 02/04/2009
Todd G. Buchholz has a habit for getting his facts wrong as noted with his errors in the movie. He also in 2008 painted a rosy upbeat picture for the economy. His prescription for tax cuts as a way of saving the economy is dismissed by most economists as ineffective. Why should we listen to him?
02/03/2009
It's too bad economists, particularly apologists for financial predators run amok like Mr. Buchholz don't live in a world as unforgiving as the Five Families. And Uncle Mikey: I agree with your ideas and sentiments, but let's keep the language fittin' for a polite forum like this.
From CA, 02/03/2009
Foolish? You think somebody's foolish? That's a bad word to use.
It's like "exterminate", as in:
"Exterminate? That's a bad word to use: exterminate! Get this guy. Watch out we don't exterminate you!" as spoken by Clemenza to PAULIE before he got taken care of.
Funny how something as inane as screwing up an iconic pop culture reference completely blows your entire credibility right out of the gate. You get the simple things wrong, waddaya gonna do with the important things, big shot? And you want us to just fuggedaboutit by issuing a lousy correction? No way, wiseguy! After all,
"I'm a supersticious man. And if some unlucky accident should befall him, if he should be shot in the head by a police officer, or if should hang himself in his jail cell, or if he's struck by a bolt of lightening, then I'm going to blame some of the people in this room and that, I do not forgive."
So who's foolish now, you stronz?
"Oh, Paulie? Won't see him no more..."
From Venice, CA, 02/03/2009
I identified Mr. Buchholz as a Republican as soon as he used the noun 'Democrat' as an adjective. This is a construct that was created by Gingrich as a back-bencher, when he was minority leader in Congress before the Contract On America of 1994. As I recall, his enforcers fined any Republican in the House caught using the word 'Democratic', and he notified, through Norquist's weekly breakfast, that this would be expected in all conservative quarters, from Dobson to Limbaugh. The idea is to steal the name, and prove that consistent marketing, without any content, can change anything, even your opponent's brand name. After all, this is all the Republicans have: marketing. Not a single new idea in over 80 years, just rebranding (Steele and Palin) and marketing. How many times did Buchholz recommend 'tax cuts' in his screed? And how many times did he propose anything else?
The shame is that even our new President used this 'Democrat ideas' construct last week. I called the White House to complain. I recommend it.
From Arlington, TX, 02/03/2009
Godfather. Sonny. I really couldn't pay attention to anything past that. I won't forget your name Todd Buchholz. Everything you comment on from now on is suspect. Need to spend a little less time trying to be clever and a little more time watching "The Godfather". And take notes, dude.
From Ashland, OH, 02/03/2009
Any man age 40 to 70 who has only seen The Godfather once should never ever quote it.
Any man who has seen this movie twice has also seen it a thousand times and quote it word for word.
I agreed with a lot Todd's commentary but just couldn't get passed the screw up.
So let me ask you Todd...
DO YOU KNOW WHO I AM?
From Cleveland, OH, 02/03/2009
As a longtime listener of MP I will try to be “civil, brief, and relevant.”
Most of the previous comments miss the message Mr. Buchholz is sending.
As it stands now, the $800 billion and growing stimulus plan is two-thirds spending and one third tax cuts. Quoting the WSJ , barely 12 percent of the package includes job creation. The spending examples are an embarrassing laundry list of social engineering projects that would make FDR blush. This plan needs to be immediate in its impact on job and wealth creation for the heartland of America.
From Centennial, CO, 02/03/2009
I find it disapointing that so many of the listeners of this show are so closed-minded as to even consider another viewpoint. Clearly, they missed President Obama's message when he said that he wanted to work with BOTH PARTIES. Almost all responders here are so entrenched in their deep-seated political views, that they are unwilling to entertain, even for a moment, that some of what Mr. Buchholz suggests may have some merit. As someone who voted for President Obama, I find it sad that many of you cannot take the very message that he is trying to convey (i.e., working together, getting multiple ideas and viewpoints) and apply it to your own lives without spewing some sort of venom.
From Cincinnati, OH, 02/03/2009
to echo the comments of Chuck Newby, if you're going to say "Democrat" when referring to the DemocratIC party, then you should also be forced to say "Republic" when referring to the Republican party. "Trickle-down" economics have been proven ineffective. What will it take for people to move on?
02/03/2009
conservatives believe in slow, evolutionary change. Hence, the claim once again, to cut taxes. We did that, and here we are.
Cutting taxes would never have sent people running to the new technologies of fax machines, nor the Internet. Not while the mail and telephones still worked well.
Old technology, and the old ways of doing things, is why we are here. We settled for the old ways of doing things, and pocketed the tax savings.
From Las Vegas, NV, 02/02/2009
I am glad you made the correction. If I owned a cell phone I would have called immediately and corrected you. However, there is one thing I want to say: Whenever you preface a story (for any NPR program) with "this may not be suitable for younger listeners..." Guys, younger listeners do not listen to NPR. I find it silly when NPR announces such a caveat and the most offensive word in the story may be "crap" or "gay." Give us listeners a break.
Thank you.
From Evergreen, CO, 02/02/2009
During Mr. Buchholz’s commentary, I noticed that he used the phase "Democrat plan" when describing the economic stimulus plan currently before the Senate but used the phase "Republican opposition" when characterizing Republican intransigence concerning the act. Mr. Buchholz needs an English lesson: both terms are adjectives therefore “Democrat plan” should have been “Democratic plan” as in “the Democratic Party” – get it? Of course you do! Could it be that you, as the ultra right-wing Republicans do, use the work “Democrat” as a slur against Democrats? Of course you do!
I am surprised and disappointed that Marketplace would allow its air to be used by a Republican operative who exhibits such clear bias and, therefore ignorance, concerning the serious difficulties that the American people are facing everyday.
From San Francisco, CA, 02/02/2009
Wow. Massive Godfather fail.
02/02/2009
What more could we expect from an advisor to ex-President Bush? Didn't we have a recession during that time and the president had trouble with a scanner in a scheckout counter - if I remember correctly? Another Bush just gave us a bigger recession - one that generations can remember - if we are able to get out of this hole. These advisers should be ashamed for their foolish and down right stupid advices - a disgrace. I am not too young to remember 'vodoo economics'!
From Huntington, NY, 02/02/2009
Todd Bucholz's over-confident delivery of his fractured recollection of the famous "Leave the gun; take the cannoli" scene in The Godfather reminds me of John McCain's stunning declaration last September that "the fundamentals of our economy are strong." You've got to wonder what these guys eat for dessert.
From Washington, DC, DC, 02/02/2009
Todd Buchholz's mangling of one of the best known lines in "The Godfather" ("take the cannoli" is uttered by Clemenza after Rocco kills Paulie Gatto -- Sonny is later gunned down at a toll booth) makes me doubt his analysis of President Obama's stimulus plan.
Mr. Bucholz should recognize that even further tax cuts can be classified as "fiscal irresponsibility."
Or perhaps he should take some advice from Don Corleone: "I spend my life trying not to be careless."
From Amherst, MA, 02/02/2009
I think it is telling that Mr. Buchholz's commentary has been most notable for his mangling of the Godfather. Either that says something about the value of his economic comments, or the place that movie has in so many Americans' hearts. Probably both.
From Grand Rapids, MI, 02/02/2009
I knew you would catch hell for that Godfather misquote. For men of my generation -50s to 70s - Godfather is more than a movie: it is a philosophical source for all life's questions. Correction: Sonny is killed in an ambush at the tollbooth, Pauly is the victim over whom Clemenza demanded the cannoli.
But to your point, we need tax incentives. For that I draw your attention to another 70's icon, rocker Gino Vannelli. In a song titled "The Work Verse" Gino laments, "I'm a man, and a man's gotta work!" I mention that quotation because it seems to me your formula for recovery overlooks the fact that this recession is as much psychological, a failure of consumer confidence, as it is economical: tight credit, etc.
Should the feds reduce my taxes, that will be nice, but I won't spend it because I'm worried I will need it when my job is eliminated. But if the government gives me a job, if I am confident I will be working next week, next month, etc., I will be more willing to take on a risk: buy a car, remodel my house, etc. It's the guarantee of a job that loosens my purse strings not a 10% reduction on my income taxes on a job I may not have next week!
Gino's right. Having a job breeds confidence, fills that psychological void. Even if it's someone else's job. Nothing like the sight of a construction crane to convince me that there will be progress. Guys coming into my diner in increasing numbers will cause me to hire a second fry cook!
And it's a two-fer Mr. Buchholz. We need to fix our infrastructure! Our economy can no more run on broken roads and rails than by body can run on brittle bones!
But I'll shut up now. There's one more quote from a 70's icon that requires me to do so. You are an economist, I am not, and as Guido the Killer Pimp in the movie "Risky Business" famously advised, "In a times of economic uncertainty, never fuck with another man's livelihood!"
From New York, NY, 02/02/2009
Ah, a voice from the previous failed Bush administration. It is breathtaking how simplistic this view is. Whatever you think of bankers, you have to sustain the banking system; or do you just, uh, do without it? The statement about Theodore Roosevelt makes no sense at all: please explain. As for the new tax breaks: let's return to your proposal when you start telling us the tax code is too complex and need to be simplified, shall we? And, oh, why would companies invest in new production if the customers are flat broke?
From bronx, NY, 02/02/2009
being a movie fan i understand a mistake.I have been guilty myself..but i can only wonder what other facts this 'expert' has reported incorrectly.
From Brooklyn, NY, 02/02/2009
Second Benjamin Freed's comments. Cf.: http://www.imdb.com/title/tt0068646/quotes
From St. Petersburg, FL, 02/02/2009
Benjamin beat me to it. Any Godfather fan remembers the infamous Sonny and his unfortunate death at the toll booth . . .
From DC, 02/02/2009
Correction: Mr. Buchholz needs to watch "The Godfather" again. The cannoli line is uttered by Corleone family member Clemenza after he and another wiseguy kill Paulie, a small-time gangster who ratted out the Corleones to a rival family.
Sonny, in another famous scene, got it at the tollbooth.
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