Election Day Advice for the New President, Whoever He May Be

Don't be afraid to bring in the best to help you. He or she won't outshine you because you are the president.

Don't get all your news from your in-house clipping service. Glance at the papers yourself occasionally and call old trusted friends often to get the word from Main Street. Call another to get the word from Wall Street. Main Street and Wall Street are both important, to each other and to you.

Sometimes "Don't just stand there, do something" is the way to go. Sometimes, "Don't do something, just stand there" is a better way. But explain your reasoning when you use the latter approach.

Perhaps the most important economic advice I could point you to is the nursery rhyme about the Goose that laid golden eggs. Take care of that goose and remind others to take care of it. Goose abuse could have dire long run consequences.

The most important near-term thing you could do to reassure financial markets and quell the turmoil is to announce early that you don't intend to eliminate President Bush's marginal tax-rate cuts. If you can't go that far, keep the adjustments as small as possible and announce your intentions to be moderate early. A little bad news early is better than great uncertainty and expecting the worse.

You have an education job to do. You must be able to articulate clearly how high tax rates on capital (capital gains, dividends, corporate taxes, the death tax, etc.) diminishes the demand for labor and keeps wages from rising.

While tax-rate increases are bad anytime, they are particularly bad in a recession. The timing couldn't be worse for a tax increase.

Energy limitations must be attacked on all fronts: drill, drill, drill, nuclear, clean coal, wind, solar, and so forth. Don't push for energy independence; push for less energy dependence.

Everyone knows that exports create jobs, but few focus on imports, which represent the gains from trade. Help educate people on the benefits of low prices via imports.

Don't overdo the regulatory reaction to the current financial crisis. Another Sarbanes-Oxley is the last thing we need.

That's enough for now. Maybe more later.

Bob McTeer

Comments (2)

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  1. Wayne Feldman says:

    Two comments and one question: (Sorry for the wordiness)
    I think we should call the financial people who placed our economy in such jeopardy “ECONOMIC TERRORISTS”. No enemy of ours have ever hurt our economy as bad as these “wizards”. And legislation should be enacted to punish those who do this in the future in the same vein as traditional terrorists. That might act as a restraint.

    No tax plan that a democrat or republican could devise or enact would reach into our pockets as deeply as the current politicians have allowed to our investments in the name of de-regulation and the lack of oversight during the last year.

    Question: What do we do with the auto industry ? How can we give our hard earned money to an industry that has been so mis-managed the last 30 years ? Bad enough we gave $700 BB to the financial industry. I do not know what is the right thing to do.

    Heard you speak at a Morgan Stanley evening a few months ago in Dallas. Now I read you every week. You are a voice of reason.

  2. Nicolas says:

    The following papagrarh is taken from an IRS publication regarding Itemized Deductions.Medical expenses include insurance premiums paid for accident and health or qualified long-term care insurance. You may not deduct insurance premiums for life insurance, for policies providing for loss of wages because of illness or injury, or policies that pay you a guaranteed amount each week for a sickness. In addition, the deduction for a qualified long–term care insurance policy’s premium is limited. Refer to Publication 502 , Medical and Dental Expenses.