I was planning to write an optimistic post today, finding some measure of hopeful anticipation in the recent mini-rally on Wall Street and a number of positive economic numbers that came out the last two weeks. Hope and optimism, when based on a prudent business case, are contagious. And the irrepressible spirit of American innovation will win out sooner than later.
Things are indeed tough out there, but, really, the world is not coming to an end.
That post will have to wait until next week, assuming there are still some hopeful signs of a coming economic thaw after some lamentable actions by our political leaders. Call this post "What were they thinking: March 2009 edition."
- In a rare display of bi-partisanship, the U.S. Congress rushes to pass the "seize the AIG scoundrels' bonus" act yesterday, slapping a 90% tax retro-actively on bonuses to employees of any companies that received more than $5 billion in "bail-out" money. That includes capable people at such places as Wells Fargo and Goldman Sachs that didn't want the TARP money but were forced to take it by the Treasury Dept. so investors wouldn't be able to distinguish failing banks from the strong ones. Granted, no one in the Financial Products division of AIG should have received any bonus. But Congress' rash action doesn't bode well for business (aka, the engine that is going to get us out this economic rut).
- Of course, all politics are local and it is not just the Federal government that has taken a stupid pill. Illinois Governor Pat Quinn, by all accounts an upstanding and high-integrity breath-of-fresh-air to former Governor Blagojevich, confirms that, in addition to some spending cuts, he wants to raise the state personal and business income tax by 50% !!! (personal income tax would jump from 3% to 4.5% and the state business tax from 4.8% to 7.2%) to balance Illinois' bloated budget. That's on top of a sales tax rate that exceeds 10% in the city of Chicago. Update: The Weekend WSJ brings a national spotlight to "The Taxin Illini" in this op-ed.
No one needs to remind us, again, that we are in the midst of the WRSGD ("Worst Recession since the Great Depression"). Can you think of two worse actions you could take at a time when we need to inspire confidence in our business leaders, investors, consumers and employees? Wait, don't answer that question. You might give our "leaders" some ideas.
- Jon Harmon