There is a difference between wishing that the world was a better place and offering to “change” it, and viewing the world as it actually exists, and attempting to improve it.
It’s beginning to look like the O-Man has a real chance to win the Democrat party nomination; assuming, of course, that the Hill-Bill Death Machine doesn’t use the contents of those wayward FBI files from the first Clinton Administration to persuade enough Super Delegates to ignore the primary results and give the nod to Hillary instead.
Let’s assume for the moment that history is indeed on the side of “Change,” and Obama actually succeeds in becoming his Party’s standard bearer in the November presidential elections. I listened to his 45-minute State of The Union Address after his victory in the Wisconsin primary, and saw for the first time some actual substance to his ubiquitous call for something new, something different, and something other than what we have now.
I use the term “substance” in a liberal sense (no pun intended), because there’s a difference between talking about change and actually naming an economic idea. But for someone whose speeches read like the index to a book rather than the chapters themselves, this represented at least a modicum of progress in giving us some insight into the mind of the presumptive 44th President of the United States of America.
Let me pick out one Big Idea to illustrate the problem I see with President Obama’s attempt to transition from the completely vacuous to the utterly vapid. Creating a slogan based on wishes is not the same thing as offering an actual policy or program based on reality. In other words, real policies and programs begin with an understanding of things as they presently are, and offer changes from there. Obamanomics starts with the world as one wishes it to be, and builds on this foundation to produce a concrete idea.
And so we get two related ideas from President-to-be Obama: No income tax for the new poor of this country (anyone making less than $50,000 a year), and confiscatory tax policies for those making the most money.
On the surface this will supposedly do two important things. The little guy, the backbone of this country, will no longer have to shoulder any real financial responsibility for our schools, roads, defense, or other tax-supported common interests. This supposedly makes him a better citizen (although I’m not sure how), as well as improves his standard of living by making more of his own money available to him. Of course, as sales taxes, use taxes, fees and other national, State and local charges kick in to pay for President Obama’s visionary (and expensive) new social welfare programs, and States and localities struggle to make up lost revenue from a declining economy, we may all wish for a return to the bad old days when people actually paid their fair share of the public bill. But hey, as Ross Perot would say, that’s just a detail.
Okay. So you got an income tax break, but got hosed in a dozen new ways — all of which served to suck as much, if not more, money from your pockets. But at least you can feel good about the fact that all the ROWGs (Rich Old White Guys) who have all the money got screwed even worse! Well, maybe not really, because income taxes only tax income, and as any ROWG worth his salt can tell you (just ask Ted Kennedy, George Soros or Bill Clinton), there are lots of different ways to shelter non-income — but real money nevertheless — derived from trust funds or invested in off-shore tax shelters. But still, in a world where words in and of themselves have substance, thus the clarion call for Change, intent matters. And because President Obama’s heart was in the right place, you can still count this one as a positive effect even though reality may have a slightly different take on the matter.
Which of course leads to the second tier of Obamanomics; tax the hell out of the people who have the most. Like a used car salesman I once heard say on his TV commercial, “We may lose money on every sale, but we make it up in volume,” Obama knows his no-tax scheme won’t produce the effects it presumes, so he’ll get the money he needs from the ROWGs who actually have it.
Forget, for the moment, that even if 100% of the top tier’s income was confiscated it still wouldn’t be enough to meet the government’s needs and obligations, this idea is fatally flawed in another important way. Unless you’re Ted Kennedy living off your Daddy’s Trust Fund, George Soros manipulating currency to hurt the US while helping his own pocketbook, or Bill Clinton cutting deals with former Communist dictators on behalf of his business buddies and receiving a hefty tax-free (with no strings attached) payment for his Presidential Library and living expenses, you’re going to view the world as a traditional risk-reward calculation. And the greater the risk, and less the potential reward, the more unattractive the calculation becomes.
Let me give you a little anecdote to show how this actually works. A few years ago my partners and I put several million dollars into a new technology company we were creating. For well over a year none of us took any income from this endeavor, and we used our own savings to add additional capital to this venture. Like many new businesses this one eventually failed, and we went on to other, thankfully, more successful projects. During this time, though, we employed several people, and paid a lot of money to big and small businesses for their material and creative support. The millions that were lost weren’t burned or spent on a vacation in Aruba. It was used to create jobs and buy things, which helped sustain jobs in other companies.
Now, as entrepreneurs (another name for ROWGs in Obama-speak), we all understood the risk. Once the money was gone, there was no government program to replace it. The money that was lost, and time that could have been spent on less risky ventures, was forever gone. We took a calculated risk and failed, but the important thing to understand here is that the risk was calculated. Had we succeeded we expected a certain payoff for our efforts to make the risk worthwhile. This is the essence of the American entrepreneurial system.
Something interesting happens when you begin to fool with a key element of this calculation. Starting any new business is risky in and of itself. Starting a multi-million dollar business is very risky in and of itself. Starting a multi-million dollar business where any success will be taxed away at prohibitive rates so the money can be redistributed to those who pay no tax at all isn’t risky; it’s completely insane! If I fail, I lose. If I win, I win very small. If I don’t play at all, I keep as much — if not more — of my own money; particularly if I can steer it into some non-income revenue-producing sources like Uncle Ted, George and Bill do.
So what’s the real impact of Obamanomics as finally articulated in an Obama victory speech? Under an Obama economic program, there is no way I would invest a penny of my money in any new business venture of the type I was willing to pursue just a few short years ago, or even today for that matter. Instead of looking for ways to create new jobs and through this, increase my economic status, I’m going to look for ways to avoid getting hosed by the government, and preserve my economic status. Risk is acceptable if the possibility of a commensurate reward exists. It’s not acceptable if my success is seen as something that needs to be taxed away in the name of economic harmony and fairness.
This is the difference between wishing the world was a better place, and offering to “change” it, and viewing the world as it actually exists, and attempting to improve it.
Jackson-ic@hotmail.com
http://www.scifi-jackson.com/
Read more articles by Phillip Ellis Jackson
In the following quote you may simply delete the 6th word and replace "bourgeois" with ROWGs and you have an Obama speach. But first let's get rid of Billary.
In a higher phase of communist society, after the enslaving subordination of the individual to the division of labor, and therewith also the antithesis between mental and physical labor, has vanished; after labor has become not only a means of life but life's prime want; after the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly — only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs!
Comment by Ivan Ivanovich | February 22, 2008
Phil, am I hearing echos of Ayn Rand? The producers withdraw from the marketplace? Did Atlas really shrug?
The founding fathers belief that our great country would be doomed when the masses found a way to vote money for themselves has already come true and under Obama would, as you correctly point out, deteriorate further.
So, where do we go since we are handicapped by being able to read, write, compute, and understand basic economics? McCain is not a choice since he has never met a tax he didn't like, nor is Clinton. It seems to me that the real battles have to be fought in the trenches at a federal level which means that conservatives have to vote for the most conservative candidate no matter what the party affiliation may be.
Drop your Republican registration, register as an Independent and make sure that your local, state, and national party knows why you have made the registration change. Then show some backbone and vote only for the best candidates according to the conservative template. By the way we need a few good candidates too!
Comment by Mickey G | February 22, 2008
Mickey: Voting third party or becoming "independent" is an irrelevant exercise in a contest about political power, as I written about extensively. We need to focus instead on regaining control of the Republican party through the election of like-minded Congressmen, Senators, and State officials, one of whom will ultimately rise to the party's standardbearer in a future presidential election.
In the meantime, I'm not so much withdrawing from the marketplace as I am shifting my emphasis from increasing my standard of living to preserving and protecting what I already have. Until the reward justifies the risk, I'll eat the seed corn myself rather than give the fruits of my labor to the government for redistribution.
Comment by Phillip Ellis Jackson | February 22, 2008
Phil, I have been following the process of stashing the seed corn so that the government can't redistribute it. I sold a couple of my businesses that I had kept as side endeavors over the years and handled one of them as a no-tax swap which was an interesting experience. Bottom line I have cut my investments to an absolute minimum to fund my short term cash needs and placed savings and investments in areas that are unlikely to be taxed beyond the current convoluted statutes.
Someone should ask Obama and McCain about tax policy and how long they think they can tax the "rich" before they withdraw to the sidelines and drop us into a depression.
Comment by Mickey G | February 22, 2008
Mickey:
It's a sad commentary on the political process when people like you and me, who are willing to take risks that can create jobs for other people, are now switching off because the rewards are getting increasingly small (or are no longer there). You can't treat a capitalist system like a socialist workers paradise and expect the capitalists to keep funding the whole thing.
Comment by Phillip Ellis Jackson | February 22, 2008
Philip,
McCain said nothing about the Berkeley-Marine Corps fiasco, the de facto retraction by the NIE of its own report, and the FISA reauthorization. Boy, he sure showed us conservatives what his leadership role as a future CiC would be like. Thanks, John. I knew you were a true conservative all along.
The last 7 recessions according to the NBER, dates & durations:
http://www.nber.org/cycles.html
04/60 - 02/61; 10 months
12/60 - 11/70; 11
11/73 - 03/75; 16
01/80 - 07/80; 6
07/81 - 11/82; 16
07/90 - 03/91; 8
03/01 - 11/01; 8
I was a gainfully employed adult during the 1973-5, 1980, & 1981-2 recessions. They hit everybody in the gut. In fact, the entire 9 years from 11/73 (start of 1st recession) thru 11/82 (end of 3rd recession) sucked economically.
It’s been over 25 years since the last major recession. The 1990-1 and 2001 recessions were mild compared to the previous 5. We have an entire generation unused to economic bad times.
My metamorphosis from liberal to conservative started in the mid-70s. When Reagan was sworn in, he was my President, thanks mainly to an ulcerous gut that finally forced my brain to reassess my political ideology.
Obamamaniacs need the same lesson. Der Spiegel, certainly not a member of the VRWC, said it best:
http://www.spiegel.de/international/world/0,1518,536232,00.html
If democracy functions only half as well as the market economy, the Obama bubble will burst. The burning question is: When? Will it happen before the Democratic nomination this August — or not until afterwards?.
Obama hasn’t copyrighted the word ‘hope’. I hope Obama becomes President. I hope the bubble bursts when he’s in office. I hope his supporters get kicked in the gut. I hope the same dynamics reoccur that caused tens of millions of voters 25 years ago to abandon the Democratic Party and vote Republican. I hope a generation unused to economic bad times reassess their naïve beliefs, discover how stupid they are, and reinvigorate conservatism.
We conservatives can’t reinvigorate conservatism. Look at you, Philip. You’re essentially abandoning capitalism. If you’re counseling abandonment, great. You can take some credit for my abandoning McCain.
Yes, abandonment is the only rational choice. We need to do what we can to rebuild the Republican Party from the ground up, but we won’t get anywhere until the tens of millions of new converts enter our tent. Their newly minted, fresh zeal will reinvigorate conservatism. We tired, old conservatives can become their mentors.
Obama is a 1:45 AM bar beauty. We conservatives just need to wait the long night until this new generation wakes up and discovers the Hydra sleeping alongside them.
Comment by LiveFreeDieFree | February 23, 2008
"You’re essentially abandoning capitalism."
*** LiveFree, this is somewhat twisted logic. If Obama becomes president, and takes away my incentive to invest, I will not invest. When the situation changes, and the potential rewards again justify the risk, I'll invest again.
What's anti-capitalist about this? Believing in capitalism doesn't require me to subsidize liberal social experiments with my discretionary funds. Only a fool would keep the same investment outlook/strategy under an Obama administration as he would under, say, a Reagan administration.
Also, even though this isn't the subject of my essay, I'd be curious to know how you can "rebuild" a party that you "abandon"? The Republican Party isn't a loosely-organized social club. It has people in positions of power and control. How does leaving them persuade these power-holders to change? I can understand how staying, fighting and challenging them would, but I don't understand the mechanics of how walking out on a party somehow transforms it.
If the agents of change leave a party, what's left is a shell that still provides jobs, some prestige and some power for those who remain. These people may opt to enjoy the status of being a Congressman or party official (albeit a minority party status), rather than go out and try to re-affect the disaffected. This is why the Republicans languished in the House for 40 years. The 1994 party revolution came from within, not without. The Libertarians didn't force the Republican party to change; Newt and the boys (who were current, active party members), did.
To quote myself again so as to avoid any charges of Obama-like plagerism :), "This is the difference between wishing the world was a better place, and offering to “change” it, and viewing the world as it actually exists, and attempting to improve it."
Comment by Phillip Ellis Jackson | February 23, 2008
“…tax the hell out of the people who have the most. … Starting a multi-million dollar business where any success will be taxed away at prohibitive rates so the money can be redistributed to those who pay no tax at all isn’t risky; it’s completely insane! If I fail, I lose. If I win, I win very small.”
Well, there is a factor you didn’t mentioned here: lobbying. Rich people are powerful because they are, well, rich. I remember the tax tables of the pre-Reagan years; the top rate was 70%, and in the ‘50s it was a whopping 90%. It was all eyewash. No rich person ever paid those marginal rates. In the pre- AMT days of the mid ‘60s, US News ran an article about the rich who paid no taxes; and among those who did, the highest rate paid was 48% [amazingly they found one who claimed he could legally pay nothing but felt he should pay at least 10% and did]. Then there was my favorite: the story of the René Corporation, a company that leased luxury yachts, only it owned only one yacht, the René. The owner of the company was the the '50s CEO of GM who was the only person who ever leased the yacht. All the expenses of buying/maintaining the René were write-offs designed to offset the CEO’s regular income. This is the equivalent of incorporating your kitchen as a restaurant and you’re the only customer.
But there is another problem that was the subject of another article in the Wall Street Journal about 20 years ago [wish I had kept a copy]. The author polled ordinary people on their feelings about the income tax. One thing he found out was that the ordinary person would be willing to get screwed by the tax laws so long as he perceived that the rich were getting screwed also. He concluded that a lot of educating needed to be done to get the conservative message through.
What I’m saying is that the rich [whoever they are] are powerful enough to get special preferences written into the tax code to lower their effective rate; the published highest rates are nothing but the necessary eyewash to give the poor [whoever they are] the impression the rich are getting screwed. Apparently, your enterprise wasn’t large enough to afford a good lobbyist.
Comment by sedonaman | February 23, 2008
Sedona: I'm working on achieving that status in my present endeavor. A couple of billion dollars more, and I'll get myself that lobbyist!
Comment by Phillip Ellis Jackson | February 23, 2008
The widespread reality (not just belief) that others will pay for your lunch is simply too seductive to ignore for sheeple. As long as they are not paying, they really can't be bothered with precisely who is footing that bill. All they know is that they have grass and over-grazing is somebody else's concern.
Hence, it should not surprise us in the least that Obama gets traction with such messages. And the the ultra-rich "Smart Set" will continue to reason that they'll either have loopholes that allow them to talk the talk without walking the walk, or that paying 50% of a really big number leaves…a really big number left to live on.
Why we despise the rich in this country is beyond me. Apparently we cannot wait to return to the socio-economic model of the country that gave us birth two centuries ago. We even have our own version of royalty to be adulated whenever they burp or fart. Their work product is easy to find: http://www.itunes.com.
Comment by Steve Sabin | February 23, 2008
senonaman writes: "it’s completely insane!" and "Apparently, your enterprise wasn’t large enough to afford a good lobbyist."
I feel your pain, but it's not insane and when it happens it won't matter if you have a lobbyist or not. It happened in 1917 Russia, 1922 Italy, and 1933 Germany. Unless you are willing to condemn all Russians, Italians, and Germans as insane you will have to admit that people of sane mind desire the utopian ideas of the left without regard to the consequences.
Even self-described "conservatives" I have met will rail against "corporate welfare". When I explain to them that a corporation is not able to pay taxes, because it is only an imaginary legal entity and only shareholders, employees, and customers (i.e. real people) can pay taxes, they look at me as if I have committed some heresy. We must continue to use every opportunity to advance the ideas of the authors of our constitution, Adam Smith, George Orwell, and others to discourage the socialist agenda just as we discourage our children from eating only candy. It is not enough to call our children or leftists insane.
Comment by Ivan Ivanovich | February 23, 2008
Phil:
Don’t forget, hiring a lobbyist should be looked on as an investment itself. Its cost should be more than offset by what it saves you in taxes, IOW gives you a positive return.
I wonder if the cost of lobbying itself is tax-deductible.
Comment by sedonaman | February 23, 2008
Steve:
“Why we despise the rich in this country is beyond me.”
That’s easy. It’s envy, pure and simple. Ever hear conservatives be accused of practicing “the politics of greed”? Well, if there is such a thing as “the politics of greed”, there also has to be “the politics of envy”. Although it does seem like a paradox that people hate what they all would like to be.
Comment by sedonaman | February 23, 2008
Sedona: As a former lobbyist, I've used that line myself on many occasions. But no matter how good the lobbyist is, there's still a risk-reward calculation that needs to be considered. Am I better off just pocketing the $20K/month and preserving what I have, or spending $20K/month (or more like $50K for the really big companies) to get an earmark or favorable tax legislation? You've got to be in the Fortune 300 to justify this exponditure. If you're not in that league, you're screwed, and your best startegy is to try to hold on to what you have by limiting your risk.
By the way, these are mid-90's fees based on my memory. Hiring a top-tier lobbyist in the mid-late 2000s would undoubtedly cost a lot more.
Comment by Phillip Ellis Jackson | February 23, 2008
Phil:
"…these are mid-90's fees based on my memory. Hiring a top-tier lobbyist in the mid-late 2000s would undoubtedly cost a lot more."
I forgot you had been a lobbyist at one time.
I had an inkling it was very expensive when, back in the ‘90s, a news program did a story on a popular, well-paying part-time job for college students in the D.C. area was waiting in line for a Congressional committee hearing. The student could study while waiting line and earn $20 per hour (then), and his “coyote” would get $10 per hour. It’s obvious that if a lobbyist could pay $30 per hour for someone simply to wait in line for him, his time must be extremely valuable!
Comment by sedonaman | February 23, 2008
Sedona — it's even worse than that. Dick Gephardt once offered to "brief" my company on an important piece of upcoming legislation. We accepted of course (the Dems controlled Congress at that time). I was new to the business, and a little surprised to learn that my "contribution" for the briefing would be $500. I got off easy because I was making a low 6 figures at the time. The top guys in the firm (about 30 of them), who pulled in $4-500,000 year, had to "voluntarily" contribute about 2 grand each. There was a rotating schedule of who got dinged for what when. The unwritten rule was that about 25% of your income was expected to go to political contributions annually. I knew we would have to maker strategic contributions from time to time; I just never thought that we would get solicited so blatantly by members of Congress themselves!
I guess even lobbyists need lobbyists to keep from getting screwed by the elected officials dreaming up new ways to take our money. Phil
Comment by Phillip Ellis Jackson | February 23, 2008
Sedonaman:
Have to agree with you, it’s amazing that any U. S. corporation pays income taxes, at least according to a very intelligent friend with a Masters in taxation and a corporate tax expert for 24 years. That’s a bit of hyperbole since corporations do pay income taxes, but with tax loss carryforwards, international tax treaties, etc. a competent tax manager can eliminate or reduce corporate income taxes to an amazing degree.
But, employers do pay other taxes besides income taxes; payroll taxes, sales and use taxes, excise taxes, one time taxes, business license taxes, environmental taxes, etc. and they pay in spades within the United States. However, what the public doesn’t realize is that corporations are also the unpaid servants of the government and to a much greater extent than individual taxpayers are.
If Robin Hood were alive today, a few of my friends would be in serious danger from the “black arrow”. Why? Because they’re tax collectors, not willingly of course, but Prince John in the guise of the federal, state and local government forces them to be. They and many other employees in corporations collect taxes for the government. They learn pages and pages of regulations, determine what taxes are due, fill out forms, send in checks for hundreds of thousands of dollars monthly and patiently assist government auditors in determining why their employers haven’t paid still more tax.
My friends and their counterparts in other corporations serve the government in two ways: First, as tax collectors, second, to provide government jobs to others. For example, there is no uniformity in sales and use tax regulations. Each state and locality can levy sales and use taxes and they do so with a vengeance. And, not only are taxes levied but the forms used to report them are all unique to the individual states and localities, the regulations vary from locality to locality, the rates vary within and between states, etc. In short, the most computerized and efficient information processing country on the face of the globe can’t standardize state and local sales taxes.
And why not? Because state and local governments see no need to. They can unilaterally add as much complexity as they like to the process – they’re not the ones charged with collecting the taxes. Nor do they pay corporations to act as their agents; in fact, they impose severe fines on corporations who do a poor job collecting their taxes. Amusingly, the added complexity provides a convenient reason to add more government jobs to monitor the complexity the governments themselves initiated. These jobs pay well, produce no usable goods or services and have to constantly increase in number to offset the increasing complexity the government applies to business for the privilege of being in business. So government, in effect, creates a demand for more government which in turn requires more taxes to fund the increased government.
For example, in California, the base sales tax rate is 7.75% last I looked but it’s 8.75% within the San Francisco area. Why? Well, localities can legally add fractions of a percent to the base rate to cover their local projects and boondoggles. Now, assume a firm in the San Francisco area buys supplies from a firm within the Los Angeles area. The rate in the L.A. suburb is 8.0% so the San Francisco firm pays the supplier an 8.0% sales tax. But wait, the government isn’t done yet. The San Francisco firm is legally required to levy an additional 0.75% sales tax on itself if the supplier neglected to do so – remember the local rate is 8.75%, not 8.0%. They are also charged with keeping all this straight within their records and dutifully reporting it in detail to California’s Franchise Tax Board.
Corporations pay billions each year to collect the government’s taxes; they pay their employees, they pay software vendors, they pay consulting firms, they pay tax processing vendors and the list goes on and on. Of course, you and I as individual consumers are the ones who pay indirectly as the corporations pass these costs on. Adding this overhead to corporations doesn’t help them compete with overseas firms - but so what - globalization is win-win right?
Being the unpaid and unwilling minions of governments doesn’t end with being tax collectors however. Corporations are also the primary statisticians of government as well. Each month, information reporting forms arrive from a plethora of government agencies asking detailed questions about various facets of the firm’s business. By law, the firms are required to fill out the forms, file them, answer follow-up questions, submit to audits, pay fines when forms are late – and all this at no charge to the government. And who’s asking? Well, who isn’t? The SEC, the Commerce Dept., the Census Bureau, the Defense Dept., the EPA, the IRS and an endless list of other agencies. And, all these agencies have government employees who read, monitor the form’s correct completion and follow-up with questions regarding the completed forms. And who pays for all this information gathering and compilation – it isn’t the citizens of China.
The “rich”, the “poor” and everyone in between are already heavily taxed, they just don’t realize all the many ways the taxes are levied. So, Obama promises to tax the rich even more heavily – we all know that’s just a politician making noises and doing his little organ grinder’s monkey dance. Our government will end up killing the golden goose of capitalistic investment – it’s in the very nature of all governments to do so. I’m always depressed at how complacent and docile the American public is when it comes to the excesses of big, little and medium sized government. I believe we’re going to need much more than another Ronald Reagan to defy our modern King George and motivate Americans to hold on to their personal wealth.
Comment by Pat Skurka | February 23, 2008
Who is rich? Just a little story to illustrate: I was watching a show on TV with my wife who understands Russian. Pavel Bure, the hockey player, was speaking to a Russian talk show host. He was asked how it feels to be rich (he earned $10 million at the time). His answer was "I'm not rich. The guy that signs my check is rich and I'm glad he is!" Maybe you have to be from a communist country to understand capitalism.
Comment by Ivan Ivanovich | February 23, 2008
Phil,
LiveFree, this is somewhat twisted logic. If Obama becomes president, and takes away my incentive to invest, I will not invest. When the situation changes, and the potential rewards again justify the risk, I’ll invest again.
This is somewhat twisted logic. If McCain becomes president, and takes away my incentive to support him and the Republican Party if they govern as center-leftists, I will not support them. When the situation changes, and their actual words and deeds justify my fealty, I’ll support the Republican nominee and Party again.
Sure, yea, the parallels are weak, but it was fun playing around with a petard.
You’ll like this article. It echoes your message.
“Note to McCain: Don't Move Right” by Pierre Atlas, PoliSci prof at Marian College
http://www.realclearpolitics.com/articles/2008/02/note_to_mccain_dont_move_right.html
Political scientists tend to view the political party as a rational team of office-seekers. The primary goal of political parties–and of their professional cadre of experts and activists–is to win elections. In a two-party system, a party must be able to appeal beyond its own (often narrow) base to attract the votes of independents and crossovers if it hopes to be victorious in a general election… The contest between McCain and Obama will be fought in the middle. Whoever attracts the most swing and crossover voters will win… There is always tension between a party's professionals and its "amateur" ideological activists.
However, I can make the anti-case that, since Reagan, “’amateur’ ideological activists” have been right, and party professionals wrong. The case is a stretch, but worth considering.
Reagan succeeded as a conservative. Bush I cratered because he raised taxes, a conservative anathema. Clinton was elected because he was perceived as a conservative Southern governor, but crated during 1993-1994 when he governed as a liberal. The Gingrich revolution of 1995 to 2001 forced Clinton to govern as a center-rightist. Bush won in 2001 because he like Clinton was perceived as a conservative Southern governor. When he began governing as a communitarian, the conservative base became disenchanted with Bush. We have every right to deplore what Bush and the Republican Party did to try to buy the 2004 election. Based on OMB budget figures, the difference between discretionary spending and discretionary receipts (Forgive the somewhat inaccurate use of words here) for the period 2003 to 2009 totals $3.59 trillion, an average of half-a-trillion dollars a year. http://www.whitehouse.gov/omb/budget/fy2009/hist.html A half-a-trillion dollars a year. We ‘amateur’ ideological purists haven’t coined a phrase for this malady, but call it BDS: Bush Disgust Syndrome.
We were fooled once with Bush. In our opinion (ie, “’amateur’ ideological activists”, McCain is trying to fool us again.
In any case, for over 25 years, the country rewarded conservative economics, and punished liberal economics in one way or another, but party professionals are always right, aren’t they?
Hard-headed pragmatism demands that a President McCain triangulate with both parties just as Clinton did, so he’ll be triangulating with a socialist Democratic Party and a communitarian Republican Party, which means that a President McCain might best Bush’s record of overspending by a half-a-trillion dollars a year.
But, party professionals counsel that McCain do just that. After all, what’s the big deal about three-quarters-of-a-trillion dollar deficits a year as long as we retain the Presidency?
Comment by LiveFreeDieFree | February 23, 2008
Pat Skurka :
“…all these agencies have government employees who read, monitor the form’s correct completion, and follow-up with questions regarding the completed forms.”
You forgot the consultants the government hires to actually do these jobs. The government employees only “monitor” the contract. I know because I’ve seen it.
“…localities can legally add fractions of a percent to the base rate to cover their local projects and boondoggles.”
Yes, and they do. Here in AZ, the sales taxes vary from county to county, and there is one city (Cottonwood) near where I live that charges 2% sales tax on food that is generally exempt elsewhere. It gets even more dicey with food items purchased from a fast-food sandwich shop for home use. For example, if you go to a regular grocery store and buy custom cold-cuts from the deli counter, there is no tax. However, if you buy the exact same item from a fast-food sandwich shop, they will charge you tax. According to the AZ website, they aren’t supposed to, but try to explain it to a $5 and hour clerk. Most localities have a sales tax in the 6 – 7% range; the State’s plus the County, plus the City of Sedona’s is 9.35%! I guess they were just to ashamed to make it 10%.
Then there is the income tax. I use to live in CA, and thought the state income taxes were difficult enough (there are worksheets to calculate what worksheet you should use to calculate whether you can take the full $72 personal exemption or if it should be reduced to $64 – all over eight lousy dollars!). Then I moved to AZ and found that while the taxes are much lower than CA’s, they are much more difficult to figure.
IMHO, the bottom line on who pays the taxes has got to be the people at the bottom of the economic pyramid; others higher up can simply pass them down to the tier below.
Comment by sedonaman | February 24, 2008
Phil:
Undoubtedly the "voluntary" contributions are in turn factored into the lobbyist's fees.
Comment by sedonaman | February 24, 2008
Pat — absolutely correct!
Comment by Phillip Ellis Jackson | February 24, 2008
Good discussion, but most of it ends up centering on taxes. For the record the only corporations that "may" pay taxes are those losing money. Why? Because the customer always pays and just like the lobbiest contribution going into setting the lobbiest fee so do taxes go into setting retail prices. Politicians, however love corporate taxes because the public is either too poorly educated or simply not intelligent enough to understand that taxing business raises their costs. Gives politicians a great way to tax you without you believing you have been taxed.
There is a solution to the taxation issue which politicians will hate because it takes away their ability to hide taxes…The Fair Tax. Read up on it but avoid those that cannot spell economics particularly some left leaning economists that believe that businesses pay taxes (shows what a government education can do for PHDs).
Comment by Mickey G | February 25, 2008
Mickey G :
I have read up on the Fair Tax and concluded that the prebate amounts to shoveling money into the streets.
Comment by sedonaman | February 25, 2008
"the only corporations that “may” pay taxes are those losing money. Why? Because the customer always pays"
Sorry to say, it's not only the customer that pays. The employees and stock holders also pay in the form of reduced wages and lower dividends. When large corporations demand discounts from thier suppliers it simply shifts the burden down to those people below. Imposing a tax on corporations is about the same as a law that says your pet dog must pay a tax. The dog does not have any money so you have to pay.
Comment by Ivan Ivanovich | February 25, 2008
Sedonaman, you have read up on it then you probably agree that, even with the prebate shoveling money into the streets to make the plan palatible to those favoring the roman circus to keep the plebs in line, that it is a simpler, clearer, and more difficult to play political games and buy votes. As to the shoveling money into the streets we have to take care of the "unfortunate" out there…
I would prefer a system where everyone pays but that is not likely to happen in our lifetimes. At least it makes illegals contribute something.
Comment by Mickey G | February 25, 2008
Mickey G:
“I would prefer a system where everyone pays but that is not likely to happen in our lifetimes. At least it makes illegals contribute something.”
I agree with your first sentence but not the second.
According to their website http://www.fairtax.org/site/PageServer?pagename=about_main , the Fair Tax prebate “Refunds in advance the tax on purchases of basic necessities.”
“The monthly prebate check http://www.fairtax.org/PDF/FairTaxPrebateExplained2007.pdf is calculated by multiplying the annual poverty level spending published each year by the Department of Health and Human Services times the FairTax rate and dividing by twelve.” The amount each household would get is also determined by its size; for example, a single adult would get $199 per month; a two-adult and two-child family would get $537 per month.
As was once said, the devil is in the details. I would be willing to bet my first year’s prebate that these amounts are enough to live on in Mexico, so all Mexicans need do is have their prebate checks go directly to a US bank and move back to Mexico. As word spread that Gringos are shoveling money into the streets in the US, this would cause an immediate rush of illegals across the border into the US to get signed up, since the courts have consistently held that the government cannot withhold benefits from illegals. Once signed up, they too would then return. This would not be limited to Mexicans. Other countries’ nationals would also be attracted. What’s to stop even a casual tourist from signing up?
I will concede, however, that it will help solve the illegal immigrant problem in the long run.
Comment by sedonaman | February 25, 2008
Phil,
You might know: Is Obama his campaign message, or has he crafted his campaign message to sell? If the latter, then is the underlying motive for his campaign strategy idealistic, pragmatic, or idiotic?
Obama’s message may be substance-less, but so is the understanding of Obama the politician. Everyone seems to accept Obama’s message as he mouths it.
I was struck by a particularly insightful comment by Fred Barnes in the Weekly Standard:
http://www.weeklystandard.com/Content/Public/Articles/000/000/014/789phzdp.asp?pg=2
*** Then there's bipartisanship or, as Obama puts it, bringing us together. This is the core of Obama's appeal. It allows him to campaign not from his ideological home on the left but from somewhere above the fray, somewhere in the heavens. McCain, alone among Republicans, can bring him back to earth. Obama talks about crossing the partisan aisle and ending polarization, but he's never done it in any serious way. McCain specializes in it–one more thing infuriating many Republicans. He's joined with Democrats on campaign finance reform, immigration, global warming, judicial nominations, and a lot more.
During the debates, McCain could say this:
*** You constantly talk about ending bipartisanship in Washington. I must compliment you. A noble goal. Certainly, one of my own. However, after researching your record both in Congress and the Illinois legislature, my aides found no incident where your leadership broke a partisan gridlock and spawned compromise legislation satisfactory to all parties. But, NP. It's OK that you have no accomplishments to match your rhetoric. What you need is a mentor, someone who has actually done what you’d like to do. Who would be a good mentor here? Humbly, I offer myself. I'll not bore everybody with a list of my bipartisan compromise accomplishments, but maybe you and I, Obama, can agree here on national TV to convene a series of meetings where I can tutor you in this fine art. Absent any experiencing brokering compromises, following the advice of an accomplished mentor is the next best thing.
What I found amazing was that, amidst the dozens and dozens of political columns I’ve read about Obama, nobody articulated this obvious and killer truth.
Look at Obama’s record. Has he ever practiced bipartisanship? I dare you to find the evidence. More damningly, has he ever demonstrated leadership? Again, his record in the Senate and in the Illinois legislature is that of a ghost. His legislative imprint has been slight to nonexistent.
What about the rest of his resume? He can claim some modest successes as a community organizer in Chicago, but that’s about it.
In any case, Barnes’ comments got me to thinking. What else hasn’t been mentioned? Hence, my question re Obama’s campaign message and strategy.
Everybody seems to assume that Obama’s campaign message and strategy is a direct result of his life experiences. But, is it? If it is, then we’ll discover bits and pieces of this message early in his life.
We know when his message erupted fully formed: His keynote speech at the 2004 Democratic Convention. So, when did he begin crafting it?
I haven’t read his 1995 book Dreams from My Father but, in the reviews I read, I couldn’t find any hints of his campaign message. Are there hints during his 1997-2004 tenure as an Illinois legislature? I don’t know but that’s the damned problem.
Here’s my hypothesis: Obama realized only after giving the keynote address at the 2004 Democratic Convention that he could run for President based on its core message.
Keynote addresses are noteworthy for their sweeping and grandiose rhetoric, and their pure political theater. Sideline the head, and infatuate the heart. The classic stuff of American politics. The Dems knew that Obama was good at this stuff. His 1995 book was proof. So, prodded by the Democratic establishment, Obama delivered.
Now, contemplate the responses Obama received from that speech. Hard-headed politicians fawning at his feet, telling him he was the future of their party. In all this, there was a subtext: Save us from the miseries of Carter, Mondale, Dukakis, Clinton, Gore, and even Kerry. Bring back JFK. We miss Camelot. With Clinton, we had Come-a-lot. Save us, Obama, from ourselves!
Ergo, I think Obama cynically and clinically calculated that the message in his keynote speech could become his key to the Presidency. With it, he’d achieve 2 things: (1) Romance the Democratic Party who desperately wanted to be romanced; and (2) Check and mate the Clintons.
In hindsight, we realize now how ineffective Hillary’s strategy has been against Obama, but maybe Obama realized that he could check and mate the classic Clinton strategy in the aftermath of the 2004 convention.
So, I don’t think Obama is an idealist. My guess is that he doesn’t believe his own words. After all, he’s not practiced them during his entire political career. He’s been a mundane, garden variety, not particularly noteworthy legislator.
Obama may be naïve. You could answer this, Phil, but has anyone ever run for the Presidency with such a superficial message? Certainly nobody in the post-WWII era. Obama could be somewhat of a dumb shit thinking that soaring oratory is all it takes to win the Presidency.
In the final analysis, though, I think Obama is an opportunist who’s levering his keynote speech.
Some smart Republican operatives better be examining Obama’s record in detail with this aim in mind: Showing the American people the rupturous disconnect between Obama’s words and actions.
Of course, we all know Obama is fluff. There’s plenty of nothing to talk about in the lovely dirty politics world. But, portraying Obama as a cynic might be the real killer.
Obama is cynic. Think about it.
Comment by LiveFreeDieFree | February 25, 2008
Sedonaman, as I read the fair tax material the illegals will pay but will not receive the prebate since they are not in the country legally. I suspect you may have raised an interesting point on the prebate since it should only be remitted to citizens actually living in the United States due to the fact that the taxes it is protecting against are only being collected in the United States.
I think I will raise your comment with the fair tax folks to get their reaction.
Comment by Mickey G | February 25, 2008
Mickey G:
“…as I read the fair tax material the illegals will pay but will not receive the prebate since they are not in the country legally.”
I couldn’t find that in their website. As I pointed out, it won’t matter because the courts will most likely rule against this. Examples: An immigrant has to know English to become a citizen; so why are ballots printed in a hundred different languages? And we can’t even ask a voter for a simple ID.
“…it should only be remitted to citizens actually living in the United States due to the fact that the taxes it is protecting against are only being collected in the United States.”
Why would there be a citizenship requirement since non-citizen residents are obligated to pay taxes too? In any event, there would be no way of finding out if they were even residents since in my likely scenario they would have their checks be direct-deposited.
“I think I will raise your comment with the fair tax folks to get their reaction.”
I would be interested in their reply, but it doesn’t seem to me that this idea has been carefully thought through.
Comment by sedonaman | February 25, 2008
Live Free
I haven't thought that much about the issue. You may be right about his keynote speech. As for the observation that "nobody articulated this obvious and killer truth", my guess is that the Reps are waiting for him to secure the nomination before pulling out the big guns. It's too early to go nuclear on BO yet. The charges will have more impact after the convention. Meanwhile, we can just sit back and watch the race/sex war unfold in the Democrat primaries. Phil
Comment by Phillip Ellis Jackson | February 25, 2008
Phil,
You can’t make this stuff up.
So, in researching Obama’s accomplishments, I scoped the de rigueur Wikipedia entry. Wow. It appears Obama may have a substantive legislative record.
However, based upon the premise that the world has bought Obama’s spiel, and that nobody’s done any real investigation of Obama’s past, I decided to do some independent research. I thought said research would be a fool’s errand, but not so. Almost immediately, I ran across a recent (Feb 21, 2008) nugget column by an Obama defender, Helenann, on DailyKos:
http://www.dailykos.com/story/2008/2/21/164117/783?new=true
*** It has really been bothering me - the charges that Obama is all talk and no action. Those of us who support him and have reviewed his record know there is no basis to this charge, but just to make sure, I went to the Congressional Record (www.thomas.gov) and did a search for bills sponsored or co-sponsored by Senator Obama in his three short years in the US Senate. I searched the 109th and 110th Congresses which cover the years 2005-2007. In a nut shell I found: Senator Obama has sponsored or co-sponsored 570 bills in the 109th and 110th Congress. Senator Obama has sponsored or co-sponsored 15 bills that have become LAW since he joined the Senate in 2005. Senator Obama has also introduced amendments to 50 bills, of which 16 were adopted by the Senate. His record is in fact quite impressive for a junior Senator from Illinois.
Wow. 570 bills sponsored or co-sponsored. Slam dunk, right? Obama must be a legislative maestro.
But, the devil is in the details. In her post, Helenann details 10 of the 15 bills Obama sponsored or co-sponsored which became law (The others are presumably minor; eg, continuing resolutions, naming post offices). She wonderfully provided the Senate bill number. Using GovTrack.us, I did research. Info is below: Bill #-Congressional session: description; sponsors & co-sponsors; estimated cost per American; and link:
(1) 2125-109: Democratic Republic of the Congo Relief, Security, and Democracy Promotion Act of 2006
Sponsor: Obama, 12 co-sponsors
Palestinian Anti-Terrorism Act of 2006
Sponsor: McConnell (R-KY), 70 co-sponsors
$0
http://www.govtrack.us/congress/bill.xpd?bill=s109-2370
(3) 2803-109: Mine Improvement and New Emergency Response Act of 2006
Sponsor Enzi (R-WY), 11 co-sponsors
PREEMIE Act
Sponsor: Alexander (R-TN), 42 co-sponsors
OPEN Government Act of 2007
Sponsor: Leahy (D-VT), 17 co-sponsors
$0
http://www.govtrack.us/congress/bill.xpd?bill=s110-2488
(7) 2590 - 109: Federal Funding Accountability and Transparency Act of 2006
Sponsor: Coburn (R-OK), co-sponsors 47
Terrorism Risk Insurance Extension Act of 2005
Sponsor: Dodd (D-CT), 33 co-sponsors
$0
http://www.govtrack.us/congress/bill.xpd?bill=s109-467
(9) 2167 - 109: PATRIOT Act Extension bill
Sponsor: Sununu (R-NH), 31 co-sponsors
$0
http://www.govtrack.us/congress/bill.xpd?bill=s109-2167
(10) 1184 - 109: “A bill to waive the passport fees for a relative of a deceased member of the Armed Forces proceeding abroad to visit the grave of such member or to attend a funeral or memorial service for such member”.
Sponsor Biden (D-DE), 2 co-sponsors
$0
http://www.govtrack.us/congress/bill.xpd?bill=s109-1184
Obama’s sponsored only one bill: S 2125-109, the Democratic Republic of the Congo Relief, Security, and Democracy Promotion Act of 2006.
He co-sponsored only 2 bills in the 110th Congress.
Only 1 bill, S 1184-109, had fewer than 11 co-sponsors.
You can’t make this stuff up.
But, what about the amendments Obama offered? Surely, they’ll demonstrate his legislative leadership. Well, based upon the above, I think we can safely conclude that they would not.
What Helenann did is certainly impressive, but what her post proves is the opposite of her main contention.
Comment by LiveFreeDieFree | February 25, 2008
Live Free — some guy tried the same line in the "Cult of Obama" comments — listing all the bills supposedly linked to Obama in Illinois. Everyone's reaction to it was the same as yours above. Notwithstanding the fact that introducing bills is not necessarily a demonstration of leadership or substance, the best comment was “Would the author of [the Obama legislation list] please alphabetize these? It won’t be any more precise or concrete, of course, but it will seem more organized.
Comment by Phillip Ellis Jackson | February 25, 2008
Phil, LiveFreeDieFree:
Looks like Obama's staff has been busy. How could one person even READ and UNDERSTAND (much less compose) 570 bills while stumping all over the country?
Comment by sedonaman | February 26, 2008