Swiss exporters, who provide more than half their country’s GDP, have been hammered over the last year as the franc vaulted 30% against the euro. That the franc – along with the yen and gold bullion – is viewed as a safe repository for the world’s capital provides little value when the economy begins to tank.  “The strong national currency is presenting existential problems not only to the export sector and tourism but to the whole Swiss economy,” warned Gerold Buehrer, president of Economiesuisse.  Neither near-zero interest rates nor the imminent multi-billion dollar settlement between Swiss banks and the United States could stanch the tide of foreign money.  In fact, policy makers became so addled that the Swiss central bank considered unifying their currency with the euro, to, in effect, join the community of pending sovereign defaults (Greece, Portugal, et al.) and bank crises (e.g. Societe Generale).   Though such a radical, and antithetical move would require significant constitutional modification, “nothing,” noted central bank board member Jean-Pierre Danthine, “is excluded” from consideration.

This absurd line of reasoning is like having unprotected sex with a couple of hookers on Mermaid Avenue so that the fear of carnal befoulment won’t cramp your style on Friday nights.  Wouldn’t it be easier and equally effective to simply protect your fleshy Argo against the sirens’ plague by wearing a sheath?  You know, to put a lid on the damn thing.  In the end, the yodelers in Bern and Zurich came to such logic and simply capped the franc at 1.20 to the euro.  Their coinage thus fixed on the business end and free to wiggle out on the other.  Such an exchange rate target (vs. the German mark) was used successfully in the late ‘70s and allows the Swiss (unlike faltering Eurozone countries) to devalue as a means of economic revival.

Without question, the continent’s discordant fiscal policies and centralized monetary scheme have made for a poisonous admixture.  With the status quo clearly untenable, many are calling for dismemberment of the monetary union.  Curiously, Angela Merkel is not among them.  The German Chancellor is urging member countries to further harmonize (or, rather, subsume) their economic policies.  “We will only be able to maintain this common currency,” she opined, “if there is deeper integration.”   Good luck with that.

Here in America, we have our own problems; they’re known on this side of the pond as Republicans.  Hell bent on retaking the White House by bludgeoning our moribund economy, they steadfastly reject tax hikes as an approach to balance the budget.  Responding to the president’s $447 billion jobs bill – paid for in part by raising taxes on millionaires – Speaker John Boehner (R-OH) averred, “It would be fair to say this tax increase on job creators is the kind of proposal both parties have opposed in the past.”  Yet the evidence unassailably shows that raising marginal income tax rates does not “kill” jobs, rather it helps to create them.

In 1986, Ronald Reagan slashed the maximum income tax rate to 28%, the same percentage at which capital gains were assessed.  New business formation faltered and unemployment rose.  These trends reversed only when Bill Clinton raised the marginal income tax rate to 39% and lowered the capital gains rate to 14%.  Why?  Because the tax rate differential incentivized people to invest in businesses rather than maximize personal income.  As a result, new business incorporations accelerated, as did the level of employment.

It is most telling that Republicans desperately want to extend the Bush tax cuts even though they have been an unmitigated disaster for the nation.  Sen. Orrin Hatch (R-UT): “If we want to spur economic growth and reduce the deficit, then let’s stop these massive job-killing tax hikes.”  Yet the Bush tax cuts have added $2.5 trillion the national debt, and turned a budget surplus into a monstrous deficit.  Compared to Clinton’s era, W’s economic stewardship comes off as feckless and irresponsible.   Six years after their respective changes in tax policy, Bush oversaw the creation of 6.3 million new jobs (vs. 18 million for Clinton), cumulative GDP growth of 16% (vs. 26%) and an increase in real household income of 1.6% (vs. 14.7%).  On the other hand, under President Bush, the rich got even richer; in 2007 U.S. income inequality reached its highest point since the threshold of the Great Depression.  And in case you’re a member of the Tea Party, let me connect the dots for you: 2008 was the year your 401(k) disappeared and you started living in your car.

According to a recent Census Bureau report, 46.2 million Americans are living in poverty; even more are without health insurance.  Yet the 245 millionaire members of Congress seem to have no qualms with the current state of affairs. Perhaps they’re intoxicated with the growing number of our fellow citizens willing to scrub their toilets or pluck their nose hairs.  Which is why any attempt to “put more money in the hands of employers” is less about employment and more about campaign contributions.

Corporate America is sitting on $2 trillion of cash reserves, yet the unemployment rate remains mired above 9%.  Rather than hire new workers, companies such as Lowe’s, Heinz and Travelers are raising their dividends.  Others, like Verizon, Pfizer and Intel are buying back $34 billion of their own stock.  Some are left to merely buy each other.  So far this year there have been over 1200 mergers and acquisitions (recall: Broadcom snapping up NetLogic or Google swallowing Zagat’s) valued at $450 billion.

Obviously, sloshing money around the country club has done little for the economy; rich folks tend to slurry excess income into offshore hedge funds or generation-skipping trusts.  Poor folks, by way of contrast, spend every dime they get.  Earlier this year, a Congressional Budget Office analysis concluded that the most efficient way to boost the economy is to increase aid to the unemployed; extending tax cuts, on the other hand, penciled out as essentially useless.   Former Reagan Budget Director David Stockman: ”To stand before the public and rub raw this anti-tax sentiment, the Republican Party, as much as it pains me to say this, should be ashamed of themselves.”  Or perhaps Yari from Curb Your Enthusiasm put it more succinctly: “We will grab them.  We will fuck their sisters in the cunt! …   Fuck these people!”