Sunday, April 30, 2017

Charles Koch Rips Donald Trump But...

Charles Koch

Multibillionaire Charles Koch took to the pages of the Jeff Bezos rag to rip President Trump.

In the Washington Post op-ed, he singled out some of the plusses of the Trump administration:
 On the plus side, the president has taken a thoughtful approach to regulatory reform. He has appointed a strong team capable of acting on the best ideas to remove unnecessary regulations that undermine innovation, competition and opportunities for those who need them most. I also applaud the president’s selection of Neil Gorsuch for the Supreme Court. With a career of prioritizing the Constitution over political gamesmanship, the new justice will be a critical voice of properly applied constitutional law.
But he then quickly turned to ripping the heart of Trump policies:

 At the same time, I view some actions of this administration as counterproductive. These include broad travel bans, discouraging free trade and a tendency toward rhetoric that too easily divides Americans instead of uniting them.
Unfortunately, Koch then went on to promote policy initiatives that do nothing in terms of shrinking the government:
Comprehensive tax reform is long overdue. Americans deserve much, much better. The president’s newly offered plan to reduce rates and simplify the code is a step in the right direction.
But, as I have pointed out ad nauseum here at EPJ, tax reform is not about shrinking government. It is nothing but shifting points of taxation. It is a shell game that will benefit some at the expense of others.

One of the best tells when it comes to economic policy that will help you spot a big government advocate in the guise of a small government poser is when you hear someone calling for tax reform and /or elimination of "wasteful spending.".

We don't need tax reform, we need tax cuts from the current tax rate structure. If you keep the structure and only cut rates from the current structure there is no room for phony tax cuts with hidden increases elsewhere.

So, while Koch is correct in calling out Trump for many of the statist directions he is moving in, sadly, on the very important issue of taxation, Koch reveals he is a major league big government man.

Koch goes on to write in the op-ed:
This administration should instead make room for tax cuts by encouraging Congress to rein in wasteful spending and reduce corporate welfare provisions that benefit big business at the expense of families. A tax code that champions Main Street is vital for economic growth and innovation. On these issues, the president is well-positioned to lead.
This is the talk of a hustler pretending to be serious about tax cuts when he has no such intention.

What's this talk of corporate welfare over the expense of families?

Shouldn't a libertarian be in favor of cutting all government spending instead of this slick comment which could be interpreted as to calling for shifting government spending rather than cutting spending?

And a serious tax cutter would never say, "we need to reign in wasteful spending." This is the slick talk of Bill Clinton, Barack Obama and, yes, even Richard Nixon.

From Nixon's January 29, 1971 address to Congress on the Fiscal Year 1972 U.S. government budget:
In 1971, the Federal Government will employ almost 2,900,000 civilians, operate thousands of separate programs, and spend $212.8 billion. Through its tax laws, credit activities, grant programs, and in other ways, the Government affects millions of people and influences the disposition of many more billions of dollars than it controls directly.

Toward the end of the sixties, there was mounting evidence that our Government was so complex, clumsy, and unresponsive, that it was becoming unable to meet the needs and priorities of the people or to use efficiently the funds entrusted to it.
This must not be permitted in America. We have already taken actions to improve the organization and management of the Federal Government and, thereby, make it more efficient and responsive.

But we must do more.
This is what happened to Federal government spending between the period Nixon took office in 1969 and the day he resigned in August 1974:

This is what happened to Federal government tax receipts under Nixon:

 Calling for cutting "wasteful spending" is a scam.

A real tax cutter, who wanted to cut taxes and government spending would simply say, "From the current tax structure we should cut taxes rates by X% and cut spending by X%. "

Of course, I would have no objection to greater cuts in taxes over spending, or vice-versa, but they both must be moving in the direction of cuts and Top Line government tax and spending cuts.

Most remarkably in the op-ed, Charles "Free Market" Koch does not even call for and end to government intrusiveness in the healthcare system:
The health-care debate has been a mess, but I’m hopeful the president can get it on track. Let’s start by laying the foundation for innovation; this will reduce costs and improve quality for everyone. This can’t happen without new legislation, but there are actions the administration can take in the meantime, such as reforming the Food and Drug Administration and granting discretion to states to innovate within the constructs of Obamacare and Medicaid. While not perfect, such actions can move us closer to a system where all individuals can choose the affordable care that is best for them.
What the hell is this? Reform the FDA? It needs to be eliminated? Granting states discretion "within the constructs of Obamacare and Medicaid"? What about returning healthcare to the free market without any government involvement?

Koch's policy prescriptions in both the tax sector and the healthcare sector are simply moving statist rules around the policy board and should not be taken seriously by any free market advocate anymore than Trump's interventionist policies should.

It is utterly remarkable that a billionaire such as Koch who claims to advocate free markets doesn't have the balls to come out in favor of free markets when he has the opportunity to in a newspaper that Trump most assuredly reads. No wonder the principled libertarian Murray Rothbard split with him.


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