Analysis of Economic Policy Relating to American Mainstream and Middle Class

“Never let your sense of morals prevent you from doing what is right.” -Isaac Asimov Like a good friend, Asimov gives advice on how we may be stubborn to omit the objective truth and reality. Three Revolutionary Democratic Innovative Economic laws upholding the Middle Class way of life. 1) Dollar cost averaging investment Differing from the older generation, average new Americans have become more proactive in investments in mutual funds and pension funds. The old generation finances were handled by their brokers completely. This is the anchor basic idea for the new generation of investors and the mutual fund theory. From a long horizon, you acquire shares of stocks on an averaged path, and avoid the extreme highs and lows. The return was 10% vs. 2% bank interest rate before the market crashed in year March 2000. In the advent of such cataclysmic event, the mutual fund account vs. your stock brokerage account may still have kept a bulk percentage of long time savings. Even if 35% was preserved, it is still mighty compared to maybe 5%. 2) Concept of Depreciation. For business owners, capital goods like eye examination equipment, and dentist tools, when the hefty purchase is incurred, it is deductible over its depreciation time, and this softens the blow to the business operators. To keep the strength of small businesses, this type of benefit should not be taken away. Likewise, a rental house also has these sound provisions built in. If a person is laid off because of outsourcing, in any corner of America, he has a rental, and he commits a loss of a furnace, any large purchasing item, this should not be depreciated across a spread of time. This is because this person has to come up with $3000 from his pocket right away and he may not have 30 years to gradually deduct it from the government tax code. Likewise, for $4000 painting, $3500 lawn sowing, all needs to be handled and committed as a loss without having to wait 28 years to recuperate the loss, so there is a bouncing back capability for him to keep his business without too large of tax burden. Two evils of the Tax code 1) Lack of Protection to the small business owner. If someone is defined as a small business owner when they are making under $200,000, when he makes between 0-200,000, he is taxed with 37% federal, 8% state, he needs to write a check for $45,000 for IRS. When he is in reversal of fortune, his loss is $200,000, the tax code only allows him to deduct $3000 annually, the government deserts you and drains your capacity to be back with your business. If he has lost his power to be a comeback kid as a business man, he needs to be encouraged by the government, so not to deplete it to the point of extinction. 2) Across America, no housing owner would like to see the deductions get manipulated, in California, or the Midwest. Housing usually is a means to weather the calamity like layoff from recession, or outsourcing. The government should have the morals not to take this away from ordinary citizens. Housing equity is often used as collateral for people starting a small business, so growing housing values are an important healthy part of the economy. 3) Market pricing along the demand and quality line In the high priced Tokyo, consumers learn to cope with it to make purchase when things are on great sales. This applies to high fashion luxury item and regular commodities as well. A handbag from $2000 down to $1000 for example. American $550 can be had when it is down to $150. Ellen Tracy, American designer, made in Korea, high quality fabric, can be purchased at Macy’s. When a consumer tossed out a $216 coat (made in Philippines) for its lack of quality and heaviness, they can opt for a higher quality and lighter cashmere coat of $189 (discount at $130), made in Dominical Republic by Kristen Blake (US), fabric from Italy, 70% virgin wool, 10% Cashmere, 20% Polyester. The consumers choice and market competitiveness ultimately decides who wins and who loses. In the Shanghai airport, despite at the duty free store, coats are priced at $1000, made in China with Chinese design. This is out of the bounds of the American middle class purchasing power. In the past 30 years, Macy’s has gone from Made in Japan, to Made in Hong Kong, Taiwan, China in 1985, to now in Korea, Indonesia, India, Pakistan, Philippines Dominican Republic, Saudi Arabia, Ukraine. Japan is very rare right now. One praise to Japan is that they tend to use real substance, either cotton, or quality wool. Even in Chinese supermarket, you can find high concentrated sesame original oil, then Chinese over-diluted product. It is an issue of business ethics. Warning for Made in China, the fabric is all artificial synthetic materials, unlike other countries with real cotton or wool, this will lose the competitive edges. Advice for the President, as a way to help him with State of the Union speech, as he is above a middle class American, and he never travels in duty free shops or Macy’s, Nordstrom. FEMA director did buy things in Nordstrom. December 5, 2005 President Discuses the Economy and Tax Relief in North Carolina John Deere-Hitachi Construction Machinery Corporation Kernersville, North Carolina “Do you realize products going from the United States to Central America were taxed? Products coming the other way weren't. It seemed to make sense to level the playing field, which we're in the process of doing. But it also means that by working together with Central American partners, North Carolina textiles are more likely to be able to compete with Asian textiles. My predecessor worked to get China into the WTO. And one of the conditions was that the United States and other WTO members would take steps to prevent their markets from being flooded with cheap Chinese textiles. Last month, we reached an agreement with China to have them meet that obligation under the textile agreements. It's an important agreement. It means that not only are we for free trade with China, but we expect China to be fair with American textile companies and American workers.” Free mind comments: President Bush doesn’t know that the Chinese are paying a hefty price for American made cars, like Plymouth is $48,000. In Taiwan, we used to get the heft American made products via Commissary outlet, before department stores were built. To help EU, China made a $10 billion purchase of 150 Airbus via the visit of Premier Wen Jiabao. China also made purchase of Boeing planes via the visit of President Bush in November 19 visit. I believe the punishment of the Chinese textile sector is not fair to the Chinese workers. Millions are being laid off. They can’t be working at the Boeing site. Meanwhile, the coal mines explode throughout China. For the moral conscience of an American president, one wonders if he believes men are born equal. Should the 1.3 billion population in China be left to the havoc of unduly politics and trade wars? The essential issue is with a large population, textiles, mining, sectors all employ a large labor force, and they do pay for the higher capital goods and purchasing items like Boeing and Airbus, to help other sets of American and EU Workers. Bush has said that America is a country of rule of law. The American Congress instrumented the Chinese exclusion act in 1882, which is a stain on American history because Chinese have become the only ethnic race to have a law specifically excluding them. We hope in his speech, he can be aware of this U.S. historical injustice and be sensitive in his remarks toward the Chinese.