Herman Cain: "Cainsian" Economics Examined

By:  Thomas R. Eddlem
10/27/2011
       
Herman Cain: "Cainsian" Economics Examined

Presidential candidate and former Godfather’s Pizza CEO Herman Cain fielded questions from voters in Concord, New Hampshire, on October 12. Cain’s rise in the polls has created intense interest in the businessman’s 9-9-9 plan, which has become the centerpiece of his campaign. And the question-and-answer sessions seemed unremarkable until one voter asked: “So sir, if you bought under 9-9-9 an Apple computer designed in the United States, with components made in Malaysia and assembled in China, would you get to deduct it?”  Cain amazingly replied: “I have no idea.”

 

Presidential candidate and former Godfather’s Pizza CEO Herman Cain fielded questions from voters in Concord, New Hampshire, on October 12. Cain’s rise in the polls has created intense interest in the businessman’s 9-9-9 plan, which has become the centerpiece of his campaign. And the question-and-answer sessions seemed unremarkable until one voter asked: “So sir, if you bought under 9-9-9 an Apple computer designed in the United States, with components made in Malaysia and assembled in China, would you get to deduct it?”  Cain amazingly replied: “I have no idea.”  The question from the voter came after Cain explained the nine-percent corporate tax portion of his 9-9-9 plan this way:

On the first nine, relative to corporate profits, you are allowed to deduct — this was in the calculation — you are allowed to deduct purchases and capital investments. 100 percent. No depreciation schedules. Capital expenses and purchases, if those purchases were made here in the United States of America. If you purchased components from a country outside of the United States, you can’t deduct them. What does that do, folks? It makes U.S. goods more competitive with the rest of the world. It levels the playing field. This is how we deal with China.

Cain’s response of “I have no idea” was noted with an ample helping of snark by liberals such as MSNBC’s Lawrence O’Donnell and concern from serious business analysts such as the Wall Street Journal. Indeed, if Cain — the author of the proposal — doesn’t know the details of how it would work, then it raises serious questions about the proposal.

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Photo: AP Images

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