Reading Between the Lines of the American Jobs Act

The American Jobs Act, which provides tax cuts for small businesses so they can hire and grow, invests in rebuilding and modernizing America, creates ways for Americans searching for jobs, and gives tax reliefs for families was just recently passed by the House of Representatives. This bi-partisan bill, predicted to be very popular between both sides of the aisle has since derailed in the Senate.

But why?

Well, for once, politicians decided to actually read the bill. Yes, you heard it correctly; they read the proposed piece of legislation!

When they read, they found that some provisions that depending on your point of view, are either rightly opening up the markets during a time when regulation bogs down start-ups of new businesses or deregulates the market for big, greedy corporations and banks to take advantage of.

For one, the bill allows “emerging growth companies” (companies making less than $1 billion in revenue…yes that’s right start-ups with profits under 1 billion) to bypass internal audits and recording regulations. It also reduces regulations on underwritings using public revenue to fund research, and it limits online “crowdfunding”.

Now, I understand that America has witnessed an 80% decrease of small companies going public and that local businesses have taken a tough toll since the 2007-2009 recession. And I realize that it is necessary to loosen regulations and credit entrepreneurs tax breaks so that they can start-up their own business.

After all that is what the United States is all about…a land where dreamers think the streets are paved with gold…rags to riches…you know, the American Dream.

Wrong.

In today’s world, if banks and big corporations are not regulated, the lenders’ corrupt desire for greed will lead to riskier business, and if banks go under, then the borrowers cannot be lent money, and this leads to firms going out of business, a period of deleveraging, and a recessionary cycle. I agree, yes, regulations can sometimes “crowd-out” private investment. But do I think that these “small businesses” (under 1 BILLION in revenue) should be allowed to bypass precautionary measures auditing their funding? Absolutely not!

Regulations were put into place to keep practices fair after the 2007-2009 collapse of the housing market and investment banks. Think about when Congress signed the Commodities Futures Modernization Act in 2000, which banned regulation on derivatives and led to unsupervised market activity. With credit default swaps, collateralized debt obligations, and credit default swaps on collateralized debt obligations, lenders participated in riskier moves due to higher interest rates and the chance to make tremendous amounts of money. These lenders promised to pay investors back if their CDOs or CDSs went bad, however, due to the lack of recording regulation, investment banks did not put money aside to cover losses. In 2008, the market for CDOs collapsed, which was followed by the collapse of investment banks and ultimately led to the mess we are trying to work our way out of today.

The markets need to be opened up, and incentives should be given, but deregulation of pertinent regulations that safeguard consumers and investors of corrupt auditing is not the answer. I suggest that the Senate make some major revisions before it goes to President Obama’s desk to sign. 

Campaign Finance in Need of Reform

As most American citizens are looking forward to spring for the warm weather, I’m becoming excited for the 2012 Presidential Election which is getting closer and closer. (I know, I’m part of the small minority of college students who is a political junkie) But nonetheless, this is an exciting time in our country! On the forefront of campaigns is the ever-important topic of campaign finance.

The money raised for the month of February came out recently, and go as follows: President Barack Obama raised $45 million, Mitt Romney $11.5 million, Rick Santorum $9 million, and Ron Paul $3.3 million. Accumulated, that is a lot of money! President Obama clearly has the advantage over his Republican adversaries, but donations for both the Republican and Democratic nominee are likely to pick up when the Republicans decide on their candidate.

However, Obama’s campaign manager, Jim Messina, is actually worried about the pace of donations. You see, when compared to the amount raised in February of 2008 against his opponent Hillary Clinton, the previous months funds are $11 million less than four years ago! So what does this reflect?

For one, the invention of the Super PACs has influenced this election already. This is the first year that Super PACs have participated in an election, and they have given way for unlimited corporate donations because you see, they are a private group so there is no limit on how much they can raise. Now, with this money, they are not “supposed” to coordinate with their candidate, but lets be serious here, you have to think that these groups are having some contact with their candidate to see what they need assistance with—literature, commercials, websites, dinner functions, events, etc—even though it is “illegal”.  So, could it be that donors are not donating to candidates but rather to these Super PACs? We will be sure to find out their impact after this election is said and done.

On what Obama ran on last election, I think it would be in Obama’s interest to denounce the use of Super PACs in campaign financing. Now, don’t get me wrong, the Republican candidates are using Super PACs as well, but President Obama has always said that he is a candidate for the working class. I feel that these new interest groups are just comprised of wealthy elitists who are donating a large amount of money that the otherwise, middle-class worker would not be able to afford. Is it right that the wealthy have more influence on our politicians because they have more money? No. America is a democracy, and I think more should be done to regulate and even eradicate the use of Super PACs. Campaign finance is getting out of control, and it is time a politician stepped up for the middle-class and the future of presidential elections. After all, the importance of the leader is their ideas and stances, not how much money they have. 

Social Media in Politics and the 2012 Presidential Race

So, you’re watching your favorite show and then the television goes to commercial. One of the commercials is a negative campaign advertisement against a Presidential candidate. Chances are, you probably are going to watch and afterwards reflect about the lack of validity, or you are going to switch to another channel. Just like our world is constantly changing due to globalization and technology, so is modern-day campaigning, and with the 2012 Presidential Election coming up, candidates are doing everything they can to be on the cutting edge to oust their opponent.

One of the reasons President Obama was so successful in the 2008 election was through his campaign methods. Not only did the President use his website mybarackobama.com to organize and fund a grassroots campaign, but he also used social media like Facebook and MySpace (when it was popular) to gather donations and support. His viral campaign introduced a new wave of politics in the 21^st century, and he continues to be an innovator when it comes to this upcoming election.

This Thursday night, Obama and his team will be releasing a much anticipated documentary called “The Road We’ve Traveled” which will air on his YouTube Channel and the platform will be used for organizing and funding his campaign. Viewers will be able to share the video on Facebook, Twitter, email, and other social medias, and they will be able to donate without leaving Obama’s page and with a simple click of their mouse. By having people “share” the video, campaign strategists are hoping that people will make their friends believe in the movie too and that the video will have more legitimacy if a peer endorses it.

Eventually, the Obama campaign would like to use media like YouTube to see the geographic location of viewers and see a list of their Facebook friends to extend their message.

Although the official Republican Presidential Candidate has not yet been nominated, Mitt Romney is taking a page out of Obama’s book and using his campaign website and YouTube Channel to allow viewers to sign up for campaign events, organize and donate.

So, campaign tricks like literature in the mail and television commercials are still pretty important, but with almost everyone having the Internet, a Facebook, and a Twitter, campaign strategies are molding to the new technology to expand their base and gain more votes. Not only is it now important to get their ideas out in the public, it is also important to be an innovator in campaign strategies using social media and technology to win a race. 

Rising Gas Prices

Political junkie or not, there is one thing that all Americans are always concerned about—gas prices. Why gas prices? They affect everyday life and the economic markets as a whole. As soon as gasoline prices increase so does the cost of transportation, the cost of labor and production, the price of goods, and all of these aspects directly affect consumers and workers.

Obama has recently been pushing to repeal United States tax breaks that benefit oil and gas companies. The repeal would give the American government $4 billion more dollars, and Obama articulates that this money should be used to invest in alternative energy instead of subsidies to oil industries, which it is being used for now. So why all of a sudden is Obama directing his attention to the big companies?

Well, for one it is an election year, and all politicians know that once gas prices go up, approval ratings go down. Additionally, not only is America demanding more oil, but also so is India and China. The more demand means the less supply of oil and the higher the prices.

Some analysts predict that gas prices are going to rise to $5 a gallon this summer. If this occurs, you can believe that Obama’s rating and chance of getting elected to a second term is going to drop significantly.

To avoid this, Democrats want Obama to tap into the oil reserves, which would temporarily bring gas prices down. Obviously, Republicans are not in favor of this, as they want the incumbent president to lose in the upcoming November election.

In addition, Republicans are blaming Obama for the current mess that we are getting into. They were in favor of the Keystone Pipeline, which Obama rejected.

I personally believe that tax and oil loopholes and tax breaks should be eliminated, and that money should be invested in alternative energy—our future. America has always been the leader in new technology and innovation, so why not keep that trend going and invest in clean, safe energy? However, I do not think we should tap into the oil reserves. With chaos in the Middle East, our reserves may become extremely pertinent in the future.

Call me crazy, but what I am an advocate for an increase in progressive taxation on gasoline. Currently the progressive tax is at 18 cents; if it was raised to 50 cents, consumers would not be able to blame politicians for the rise in prices but rather it is themselves who would have the control over their consumption.