This is a blog, thankfully, and therefore is a biased collection of opinions and rants from me as well as opinions from my cohort. As such, you get to listen to yet another one of my rants, in which I take an article and pretty much skewer it.
The full article is here
February 15, 2008
Obama's Gloomy Big-Government Vision
By Lawrence Kudlow
Senator Barack Obama is very gloomy about America, and he's aligning himself with the liberal wing of the Democratic party in hopes of coming to the nation's rescue. His proposal? Big-government planning, spending, and taxing -- exactly what the nation and the stock market doesn't want to hear.
We don't? By all means, continue.
Obama unveiled much of his economic strategy in Wisconsin this week: He wants to spend $150 billion on a green-energy plan. He wants to establish an infrastructure investment bank to the tune of $60 billion. He wants to expand health insurance by roughly $65 billion. He wants to "reopen" trade deals, which is another way of saying he wants to raise the barriers to free trade. He intends to regulate the profits for drug companies, health insurers, and energy firms. He wants to establish a mortgage-interest tax credit. He wants to double the number of workers receiving the earned-income tax credit (EITC) and triple the EITC benefit for minimum-wage workers.
The Obama spend-o-meter is now up around $800 billion. And tax hikes on the rich won't pay for it. It's the middle class that will ultimately shoulder this fiscal burden in terms of higher taxes and lower growth.
The middle class? I'd love to see the proof behind this, especially when other reputable authors (David Cay Johnston, Perfectly Legal, book, published 2005) tell me that the richest 1% of the country has seen their income rise by 558% since 1970 while the poorest 90% have received a NEGATIVE increase, or otherwise known as a DECREASE, of 0.1% since 1970.
For someone who is trying to decry class warfare here, it sounds an awful lot like you're playing the same game... proof?
This isn't free enterprise. It's old-fashioned-liberal tax, and spend, and regulate. It's plain ol' big government. The only people who will benefit are the central planners in Washington.
Oh, no proof, got it. Just the same generalities you're already decrying Obama for.
Obama would like voters to believe that he's the second coming of JFK. But with his unbelievable spending and new-government-agency proposals he's looking more and more like Jimmy Carter. His is a "Grow the Government Bureaucracy Plan," and it's totally at odds with investment and business.
You'd better believe it! Eight years of Reagan, four of Bush 1, eight of Clinton's pro-business regime, and eight more of Bush 2 have certainly shown the efficacy of free markets in regulating themselves and making sure that people are paid equitably for their work.
Obama says he wants U.S. corporations to stop "shipping jobs overseas" and bring their cash back home. But if he really wanted U.S. companies to keep more of their profits in the states he'd be calling for a reduction in the corporate tax rate. Why isn't he demanding an end to the double-taxation of corporate earnings? It's simple: He wants higher taxes, too.
Compared to the double-taxing of Social Security and income tax on my paltry check? Guess who's more likely to keep the money inside the nation, Einstein.
The Wall Street Journal's Steve Moore has done the math on Obama's tax plan. He says it will add up to a 39.6 percent personal income tax, a 52.2 percent combined income and payroll tax, a 28 percent capital-gains tax, a 39.6 percent dividends tax, and a 55 percent estate tax.
Based on WHAT? This is disingenuous at best. What number are we starting with? $10,000 yearly? $1,000,000 yearly? Big difference between those two numbers.
Besides, I'm fairly sure the Wall Street Journal, a newspaper marketed to high-echelon earners, will attempt to introduce bias into reporting policies that may be designed to cut into the discretionary income of such earners, which may impact their ability to continue to buy... the Wall Street Journal.
(Side note. Dammit, I will come out and tell you, I am biased. It's too bad that media outlets won't.)
Not only is Obama the big-spending candidate, he's also the very-high-tax candidate. And what he wants to tax is capital.
'Cause you can't tax dreams, I'd assume.
Doesn't Obama understand the vital role of capital formation in creating businesses and jobs? Doesn't he understand that without capital, businesses can't expand their operations and hire more workers?
Doesn't Obama understand that without money to pay CEOs more that the American worker can't possibly keep food on the table and buy more from other corporations to keep them in business? Wait up here...
As a serious side-note, why can't reputable economists understand that when the pyramid is too top-heavy, when there is not a base (of taxpayers to keep police and courts, of consumers to keep markets alive) that the earning will come to an end? If Wal*Mart can't sell another Chinese toy, who will get hurt ultimately? Wal*Mart's CEO. Of course, that will be because he and all other CEOs have driven the rest of the American people into subterranean catacombs where their only company is other poor people.
Dan Henninger, writing in Thursday's Wall Street Journal, notes that Obama's is a profoundly pessimistic message. "Strip away the new coat of paint from the Obama message and what you find is not only familiar," writes Henninger. "It's a downer."
Because this country IS in trouble! Can't you see this? Get out of New York, where the wealth of a nation accumulates, and check out the freaking countryside. There's a good fricking reason that they call the Midwest "The Rust Belt", because people decided to STOP INVESTING IN IT. And when GM buys out another 74,000 workers, these people can't buy the fricking Wall Street Journal anymore either. (Though I'm sure Richard Wagoner still buys his WSJ, and the $8.5 base salary he enjoys is certainly based on the number of cars he personally manufactures...)
Obama wants you to believe that America is in trouble, and that it can only be cured with a big lurch to the left. Take from the rich and give to the non-rich. Redistribute income and wealth. It's an age-old recipe for economic disaster. It completely ignores incentives for entrepreneurs, small family-owned businesses, and investors. You can't have capitalism without capital. But Obama would penalize capital, be it capital from corporations or investors. This will only harm, and not advance, opportunities for middle-class workers.
Until of course they utilize government-backed unemployment insurance... which will show them that they need to get back to work. But because companies are too busy trying to outsource and offshore their labor pools, said worker will probably have to go into business for himself. Maybe by taking out a loan from the Small Business Administration, backed by the federal government. And go into business for himself, and prove that it can happen in the U.S. Just a scenario, I'm sure.
And again, note language. The people victimized are "small family-owned businesses" -- like, oh, the Hilton hotels or, maybe, Wal*Mart -- entrepreneurs, and investors. "Investors", by the way, also includes people like George Soros, Bill Gates, Warren Buffett, and Donald Trump... the poor people who will get "hurt" by Obama's policies. Won't you buy The Donald a cheeseburger when he comes to clean your windshield after Obama's elected? It's only the nice thing to do.
Obama believes he can use government, and not free markets, to drive the economy. But on taxes, trade, and regulation, Obama's program is anti-growth. A President Obama would steer us in the social-market direction of Western Europe, which has produced only stagnant economies down through the years. It would be quite an irony.
Hey, moron... should I show you a chart of the growth of the Euro currency compared to the U.S. dollar? These economies are just fine, and they do a far better job of making sure that everyone benefits from the work that is done, rather than just a select few.
By the way, using the government to regulate the free market is a damn good idea. I hope that it happens again in my lifetime.
While newly emerging nations in Eastern Europe and Asia are lowering the tax penalties on capital -- and reaping the economic rewards -- Obama would raise them. Low-rate flat-tax plans are proliferating around the world. Yet Obama completely ignores this. American competitiveness would suffer enormously under Obama, as would job opportunities, productivity, and real wages.
And flat-tax plans are REGRESSIVE. Especially with the way that the loopholes are developed in this nation. Some rich guy can claim depreciation at the same time as claiming income, and the resulting amount he has to pay on is zero because he can afford a lawyer, while the IRS keeps a damn good eye on me because I can't fudge my wage earnings report, especially with my employer reporting this information to them.
There's a reason that tax plans should be progressive. If someone makes $1M a year and gets taxed 50%, that means that they still take home $500,000, which is a livable wage. If I make $30,000 yearly and get taxed 50%, I get $15,000 after tax, barely even enough to make a house payment.
Besides, said millionaire is probably using more services than I am anyway. I'm sure that the millionaire is using the court system to make any challenges others have to his/her weatlh moot, utilizing airport and airplanes far more, (ship-)port facilities and the international waters... the highway system, the police, and generally leaving a far larger imprint on society that requires money to keep going.
Imitate the failures of Germany, Norway, and Sweden? That's no way to run economic policy.
I'd LOVE to imitate the "failures" of any one of those nations right now.
I have so far been soft on Obama this election season. In many respects he is a breath of fresh air. He's an attractive candidate with an appealing approach to politics. Obama is likeable, and sometimes he gets it -- such as when he opposed Hillary Clinton's five-year rate-freeze on mortgages.
But his message is pessimism, not hope. And behind the charm and charisma is a big-government bureaucrat who would take us down the wrong economic road.
Because the road we've been driving down, where companies are allowed to merge and screw their workers (too numerous to count), allowed to misreport numbers and screw their workers (Enron, Tyco, etc), allowed to trade freely with other countries to export jobs from this country and utilize sweatshop labor and screw workers (Nike, Wal*Mart), write nasty open-ended contracts which allow only themselves to set rates at the detriment to all other people (credit-card issuers like Bank of America, Chase, and Discover/Novus), and sell bad loans which threaten people's houses (Countrywide et al), should all be celebrated under the grand and bold heading "the freedom of the market". It's got "Freedom" in it! Celebrate it!!
Dammit, if there was ever an economy which needed to be brought into regulation and conformity, it's ours. It's amazing that big business can try to streamline as much as they want to, which may end up making workers irrevelant as they attempt to squeeze every last ounce of productivity out of the money they invest, but if the people of a country try to streamline their markets as well as the controls and methods that companies use, this is immediately "immoral" and "Communist". That's odd, because the money that I send to the U.S. government is often used on such things as "corporate welfare", which lets companies like Exxon post *billion* dollar profits. Can't I have a say about the productivity of Exxon on my economy and government? I'm investing in it, dammit!
Lawrence Kudlow is a former Reagan economic advisor, a syndicated columnist, and the host of CNBC's Kudlow & Company. Visit his blog, Kudlow's Money Politics.
What a bleeding surprise... he has a reason to be completely biased too, because if rich people don't get to keep their absurdly low 15% capital gains tax, which they routinely GET AROUND ANYWAY, they won't have the time or patience to read a blog from an advisor to what's become a failed economic system.
There's a reason that the 90s did so great. The market hummed along terrifically because money was getting reinvested all over the place. It was, technically, wealth redistribution, with all the Internet startups, and the wealth redistribution allowed American workers to earn more money. Not coincidentally, when the American workers have more money to work with, our country is far better off because happy and productive workers produce more. (What a concept.)
Now? We have wealth concentrating into so few hands that the rest of the country is absolutely hurting.
Hey, Corporate America! The citizens of the US are kind of like stocks... if you INVEST in them, they can give you a BETTER RETURN on your investment! Try it out someday!
Yeah, I'm pissy. This may become a regular feature given time and more outlandish statements from known idiots.
As is, vote Obama. Please. Let's *relearn* the lesson we needed in the 1930s, that when the government lets the markets run free that they usually end up hurting everyone involved.