ny Mark Scheinbaum
Angel Fire, N.M.
August 8, 2011
MARKETS: WHAT NOW, MR. PRESIDENT?
ANGEL FIRE, N.M., Aug. 8, 2011 -- The chickens of mismanagement, political dogma, and uncontrolled spending have now come home to roost on Wall Street.
As a solid citizen, Mr. President, I have written your announcements to the nation - which should have been delivered yesterday - but tomorrow will be just fine:
1. S&P -- Any member of my Administration who criticizes Standard & Poor's or their credit downgrade, or who cries about how the analysts can't add, will be fired. Take it like a man. We were warned and warned again. From now on we will focus on keeping the AAA rating with other agencies and not rehashing the past.
2. CAPITAL GAINS -- All taxes on individual capital gains will be suspended by the IRS for the fiscal years 2011, 2012, and 2013. Experts are conflicted on whether more money freed up will help the economy and create jobs. But the stimulus and "shovel ready" attempt to put people to work failed, so now we will try something else.
3. RULES OF ENGAGEMENT -- We are sticking to our withdrawal schedules in Iraq and Afghanistan. The new rules of engagement are that absent a direct attack on the soil of the United States and its key NATO allies, we will only confront others militarily when that action is approved by Congress.
4. DEFENSE SPENDING -- Any corporation securing a government defense contract must pay U.S. armed services personnel the same per diem salary as their own employees if uniformed American personnel are supporting them. Most will refuse, and create a de facto defense budget cut. The days of a corporal earning $29,000 escorting a truck driven by a guy from Memphis earning $240,000 a year are now over.
5. TARGETED JOB CREDITS -- A dollar-for-dollar tax write-off will be provided to any employer of 250 employees or fewer who hires a person full-time and keeps them on the payroll for two years or more. A six-month probationary period will be allowed, and if maintained for two years, 24 months of retroactive tax credits will be given, and will continue for another 24 months.
6. U.S. DEPT. OF EDUCATION -- Its $70 Billion annual budget will be eliminated June 1, 2012, and decentralized control of educational curricula and management will revert to the 50 state capitals.
7. SHORT SELLING -- By Executive Order, the SEC shall impose a $100,000 fine for the first conviction for illegal short selling or failing to secure stock loan permission for a short sale of any U.S. equity or derivative. A second conviction shall result in a fine of $200,000 per trade and five years in federal prison without parole.
8. CONGRESSIONAL BUDGET COMMISSION -- All six members of the new budget commission will sign a pledge that they will not seek re-election, nor work for any entity doing business with the federal government for five years.
AR financial writer Mark Scheinbaum is a former chief economist for Kaplan & Co. of Boca Raton, Fla.