It seems pretty obvious that Presidents and their policies can have only minor effects in controlling "major economic swings" but economic policies and interest rates can have an effect towards pushing things in the right direction.

In that respect it also should seem obvious that lower interest rates set by the "Fed" and President Bush's policies on taxation have indeed served to both boost the economy and create jobs.

What is surprising is that John Kerry might have enough sense to agree.

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From the Wall Street Journal

John Kerry, Supply-Sider?

He admits corporate taxes are too high, but his plan would make things worse.

Now that he's escaped the fever swamps of the Democratic primaries, John Kerry seems to be taking economics more seriously. His new plan at least admits that U.S. corporate taxation is a problem, even if in the end he'd make things worse.

The most pleasant surprise--even shock--is that Mr. Kerry is endorsing the idea that cutting tax rates can increase incentives to create jobs. Supply-siders have been saying this for years, much to the derision of most Democrats. (We accept their apology.) On the other hand, Mr. Kerry would cancel out most of this benefit with his increase in tax rates on individuals and dividends, not to mention with the fine print of his corporate tax reshuffle.

The central problem here is that in recent decades most countries have been reducing corporate taxation, leaving U.S. rates among the highest in the world. The U.S. is also one of the few countries to tax companies on profits made overseas. The stopgap U.S. response has been a system of tax deferrals allowing companies to avoid paying tax on their foreign income until they repatriate it. Not surprisingly, this has locked up a pool of as much as $639 billion in capital overseas. It has also opened companies to the accusation that "Benedict Arnold CEOs," in Senator Kerry's gracious phrase, are moving jobs overseas merely to enjoy tax breaks.

The best remedy would be to bring U.S. corporate taxes closer to global norms and restrict the scope of taxation to profits earned within U.S. borders. Decisions to move jobs abroad would then be made on the business merits, rather than on tax incentives.

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