Texas Fed President, Richard Fisher believes fiscal authorities need to get their act together. “There is a limit to what we can do. We can’t have a Buzz Lightyear monetary policy: to infinity and beyond.”
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Fisher’s frustration with Washington is hard to miss:
“We have to completely reboot tax policy. We need to completely reboot spending policy……..This is all about job creation…..We have to build confidence in the business community, who are the job creators. And until we give them some clarity, they are just going to hold back. If we have temporary fixes to the fiscal cliff this just pushes out the envelope of indecision…… Just get the job done. Give the business community and those who employ people — the private sector — a sense of direction and confidence. Right now they know nothing. They don’t know what their taxes are going to be. They don’t know what spending patterns are going to be. They don’t know what the costs of these massive regulatory initiatives are going to be…. No business can plan right now…..”
It’s looking pretty good for a fiscal cliff / tax solution. Presumably this is because the Republicans are now prepared to increase taxes on the wealthy, and presumably that is because the Super-Pac swing-state ad blitz was useless and Citizens United did not transform the rich into “super-voters” whose interests must be protected at all costs. Having demonstrated that presidential elections can’t (yet) be bought in America, the election moved the parties dramatically closer to a tax deal.
I hope you’re right but I suspect that each side sees themselves as having a mandate from voters. Increasing taxes on the rich is just a side-show intended to confuse voters and distract them from the central issues: fixing Wall Street and saving Main Street. Even doubling taxes on the rich would not save the economy.