Survey Results: You haven’t heard from me in a while. No need to check the obits, I’m still here. What with 2 national conventions, a busy month home in the district, and some vacation on my part, I thought I’d give us both a little break. Not that either of us could avoid the non-stop national campaigning.

When I last wrote you, I included a survey with various proposals on what to include and not include in a potential income tax reform bill next year. The results are detailed below. But, here is my “executive summary and analysis”:

• A majority of you agreed with all of my proposals.

• The most popular proposal with you all (76.9%) was to eliminate all deductions and credits except charitable contributions, home mortgage interest and non-elective medical expenses.

• The least popular proposal, albeit still over 50% at 56.3%, was to go to only 2 tax rates, one for incomes below $100,000 and one for incomes above that amount. 27.2% of you believe that we will need more rates than that, and 15.2% of you want only one rate.

• You may recall that I had a joke answer… Read More

It will not surprise anyone reading this that serious problems persist in the housing sector. Many solutions have been proposed, including several pieces of legislation I have introduced in Congress, to help homeowners, completely reform our housing finance system and fix the housing crisis. Most of the proposals out there are focused on struggling homeowners trying to make the next payment and are about the greater good of the country. However, you may or may not be surprised that a couple of California cities have decided to not waste a good crisis, to paraphrase the now infamous axiom, realizing there is a lot of cash to be made off underwater homeowners.

In an astonishingly expansive and untenable interpretation of eminent domain authority, several local governments, notably San Bernardino, have proposed plans to override private property rights through a scheme that is specifically designed to make money for over-leveraged cities. This scheme is being sold as assistance for hurting homeowners, but it is purely a ploy to use federal tax dollars to seize distressed home loans and force unconventional, yet profitable loan modifications.

However, not only will… Read More

*NOTE: SPECIAL SURVEY EDITION. This week’s edition includes an interactive survey. After you finish reading, please make sure to assess my plan and tell me what you think!

Taxes: Taxes are always a big issue in politics and public policy. However, right now there is a crescendo of agreement building in Washington that it’s time to make some fundamental change to our tax system.

The debate in Washington of late has been confined to the so-called Bush tax cuts, all of which are scheduled to expire at the end of this year. Essentially, should we extend all of them, none of them, or some of them? The erudite readers of these missives (that’s you) have heard all of this before and know the arguments for and against the extension and all about taxing the “rich” and such. So, I won’t repeat them here. Economists are unified in their predictions of recession if we are allowed to go over the “fiscal cliff” on December 31 and allow all of the tax cuts to expire and the sequestered spending cuts… Read More

Lessons from Europe: Unless you have been hiding in Attorney General Eric Holder’s “Fast and Furious” documents file, you know that trouble is brewing in Europe. Big trouble. Real big trouble. None of us know where it will go from here. But, I can see no good outcome. The experiment of monetary union without fiscal or political union has failed. Most of the solutions they are now discussing will simply delay the inevitable. Using debt that you have no plan to repay in order to pay other debts that you can’t repay doesn’t work with mortgages and will not work with governments. And, it is hard to even describe the political challenges they have over there. Look at the gridlock we have here with one country, one culture and 2 political parties. Now, imagine having 17 countries, dozens of cultures and a hundred political parties. I think you get the point.

Whenever the European crisis hits and however it is manifested, the US will be affected. It could affect us in a small way or a big way. That is impossible to predict at this point. It is also not possible to predict when it will hit, as doing so involves the collective… Read More

I’m really trying. But I just can’t keep up with dumb ideas from the other party.

On the campaign trail, I’ve told the story of a meeting last year with some plaintiffs’ lawyers who specialize in employment law. I mentioned the idiotic and counterproductive Labor Code requirement that bars ten hour work days, even if the employee wants them. In a flight of what I thought was hyperbole, I added that Democrats act as if, without that law, “there would be 12 year old urchins in basements sewing garments again.”

“Oh, no, Mr. Wagner,” one of the lawyers earnestly replied, “that’s exactly what would happen.”

What I took as an obvious exaggeration, she took as a very good argument for a very bad law.

A couple of weeks ago, Democrats on the Assembly Education Committee complained about the narrow scope of a bill by State Senator Bob Huff. They objected to it because it didn’t completely fix a big problem (ironically, a big problem of Democrats’ own making with faulty legislation they passed a few years ago – but I digress). Instead, the bill dealt only with a small piece of the larger problem, and supposedly was objectionable for… Read More

The final chapter….sounds dramatic, doesn’t it? I’m just taking my cue from Desperate Housewives and House and such to draw you in. Maybe this will be as big as the last episode of M*A*S*H?!

Except that I’m not going to be satisfied with cable channel reruns like those shows. No, you will continue to hear from me about a variety of matters. But, it is time to wrap up our series on how we can fix our economy.

In the previous VIII Episodes, I have talked about strategies to address the too big to fail problem, repair our deficits, and set housing, energy, health care, education, infrastructure, and manufacturing all on a path to prosperity. Most of these strategies are built upon tenets that could elicit bipartisan support. And, every single problem I’ve addressed can be successfully resolved in the United States regardless of what happens in Europe or China or anywhere else. But, before I sign off from this series, there are 3 more points I would like to make:

Absolutism Will not Work: There are some of my colleagues on the right who believe that tax cuts can cure anything. There are some on the left who believe that… Read More

Too Big to Fail: There is a lot of talk these days about the $3 billion loss at JP Morgan Chase. There is a lot of hand-wringing, concern, and investigation into what happened. We are asked about it on Capitol Hill, we have an opinion, and we all care about it. And, that is the problem. We shouldn’t have to care.

The only reason we are all in a tizzy over this is because JP Morgan is too big to fail. If Apple announced it lost $3 billion tomorrow, the shareholders, Wall Street and some trial lawyers would care, but it wouldn’t be any of Washington’s concern. That’s the way it should work with private companies. They take risks to make money. Sometimes you win and sometimes you lose.

Dodd-Frank did not fix this problem for the banks. Arguably, a provision in Dodd-Frank was part of the cause of the JP Morgan loss. Dodd-Frank requires disclosure of trading that was previously private. Hedge funds saw JP Morgan taking big positions (which just a few years ago would not have been made public) and decided to play the other side of the trade. The hedge funds won and JP Morgan lost. However, in this case, we all lost. That’s why… Read More

Episode VII – Education: In 1979, President Jimmy Carter created the Federal Department of Education. He did it to make the quality of education in this country better. This year, that department will have an administrative budget of $69 billion. That does not include the roughly $19 billion in federal dollars we will spend on education entitlements like Pell Grants and student loans.

The question is simple: Is American education better now than it was in 1979? Has spending trillions of federal dollars over the last 33 years led to America’s students consistently receiving a superior level of education?

The answer is painfully obvious. NO! So, why are we still trying to do what has failed for over 30 years expecting to achieve positive results?!

Sorry. I’ll calm down now. I have included education in this “Fix It” series on how to jump start two new decades of American hegemony, growth and prosperity because, like infrastructure, a strong education system is a prerequisite to growth and prosperity. So then, what is the state of education in America? In order to analyze our system, we have to break education into two… Read More