Friday, March 6, 2009

Obama's Killing American Capitalism

From Michael J. Boskin, "Obama's Radicalism Is Killing the Dow: A Financial Crisis is the Worst Time to Change the Foundations of American Capitalism":

Obama Urkel



It's hard not to see the continued sell-off on Wall Street and the growing fear on Main Street as a product, at least in part, of the realization that our new president's policies are designed to radically re-engineer the market-based U.S. economy, not just mitigate the recession and financial crisis.

The illusion that Barack Obama will lead from the economic center has quickly come to an end. Instead of combining the best policies of past Democratic presidents - John Kennedy on taxes, Bill Clinton on welfare reform and a balanced budget, for instance - President Obama is returning to Jimmy Carter's higher taxes and Mr. Clinton's draconian defense drawdown.

Mr. Obama's $3.6 trillion budget blueprint, by his own admission, redefines the role of government in our economy and society. The budget more than doubles the national debt held by the public, adding more to the debt than all previous presidents - from George Washington to George W. Bush - combined. It reduces defense spending to a level not sustained since the dangerous days before World War II, while increasing nondefense spending (relative to GDP) to the highest level in U.S. history. And it would raise taxes to historically high levels (again, relative to GDP). And all of this before addressing the impending explosion in Social Security and Medicare costs ....

Increasing the top tax rates on earnings to 39.6% and on capital gains and dividends to 20% will reduce incentives for our most productive citizens and small businesses to work, save and invest - with effective rates higher still because of restrictions on itemized deductions and raising the Social Security cap. As every economics student learns, high marginal rates distort economic decisions, the damage from which rises with the square of the rates (doubling the rates quadruples the harm). The president claims he is only hitting 2% of the population, but many more will at some point be in these brackets.
I want to stress Boskin's last point in particular: The increased marginal tax hikes on incomes above $250,000 are not trivial. I've been roaming around the web today, finding attacks on conservatives as stupid, irrrational, whiney, hypocritical, even criminal, but the underlying economic logic is unimpeachable.

That's your John Galt effect right there.

See also, "Mission Accomplished! Did Obama intentionally nuke the economy?"

Image Hat Tip: Liberty Pundit.

12 comments:

Norm said...

The Obama White House is amateur hour. Hillary is so full of herself that she cannot see that she is truly
an amateur in international relations. I feel like my car is stuck on the tracks and I can see the light of the locomotive heading my way.

Donald Douglas said...

Amateur hour...

That's a good analogy, Norm.

Dave said...

Whoever wrote this "plan" for Obama knew exactly what they were doing.

The socialists are taking full advantage of the current economic situation in order to further the cause of socialism. Rahm the ballerina said it himself, essentially.

The socialists are counting on the fact that they can rapidly bring us to the point of no return economically before most of the government-educated populace really catches on to what is happening.

They are not trying to re-engineer our free market economy so much as they are working to utterly destroy it.

The ultimate goal of the socialists is 100% government control along with 100% government dependence, or as close to it as they can get.

Whatever semblance of free enterprise that should survive this Marxist coup (and that is exactly what we are witnessing) will be regulated out of existence in short order.

It also appears the socialists are going for a full-blown government takeover of our nation's health care system by the end of the year. Should they prevail, the America we all know and love is over with.

-Dave

Arlen Williams said...

Obama/Pelosi "progressives" are destroying the free American economy on purpose. Obama and Pelosi are firmly in the Alinsky/Cloward-Piven camp. That is the plan to overload and destroy government, in order to bring in MarxoFascism:

http://investigatingobama.blogspot.com/2009/03/its-marxism-stupid-what-is-so-difficult.html

Arlen Williams said...

Norm, no. They are not that stupid. They are insurrectionists. Sorry, let me try the link again:

http://investigatingobama.blogspot.com/2009/03/its-marxism-stupid-what-is-so-difficult.html

Jason said...

Ha! I couldn't get past the picture. That sums it all up so nicely.

Doctor Biobrain said...

Economic logic? What logic? Who is going to give up $70k in income to save $2100 in taxes?

Seriously guys, you think it's logical to intentionally lose $67,900? Why would anyone do that?

Rich Casebolt said...

Seriously guys, you think it's logical to intentionally lose $67,900? Why would anyone do that?

That's called sacrifice for the sake of your nation ... or perhaps an investment in their (and our) future, in an effort to make the madness stop before your kind of forced "morality" leads BACK to 91% marginal rates ... and the shredding of our most effective and trustworthy "safety nets" -- private charitable entities, that can run rings around the government aid you think is the only "safety net" possible.

Even your fellow-travelers in Democrat policy are getting concerned about this.

We look ahead, to the logical conclusion of the philosophies of those who deign to lead us ... and are proactive in dealing with that (il)logic.

I don't mind paying taxes ... but I do mind when I am asked for more and more, to pay for the expansion of governmental philosophies that have already demonstrated a lack of effectiveness in lifting people from poverty and ignorance to productivity and awareness, in large part because they suppress the immediate need for personal responsibility.

Had your predecessors in Leftist lunacy done so during my childhood, and not put all our eggs in the basket of Big Government, the War on Poverty would have been won decades ago ... and we would have still had those safety nets you seek, because Americans have shown time and time again they are a generous people, when real needs are put before them.

You want to know what is illogical ... and has been shown to be such empirically?

Believing that, when it comes to the highly-individual problems of society, a relative few who study such problems from the comfort of academia and bureaucracy can come up with better solutions than 300 million problem solvers who live with these problems, every day ... and take resources from the latter in great amounts to fund the former.

What is being perpetrated upon us by our leaders today is not "change" ... it's change BACK to proven failure.

Doctor Biobrain said...

Rick - First off, you're dealing with a separate issue than what we were talking about. Donald was saying that it was logical to assume that productive people would stop working so hard if they'd be taxed an extra $2100 for making $70k more. Sure, he didn't put numbers to it, but if he had done so, he'd realize how illogical his idea was. That's why you guys REFUSE to apply actual numbers. Because if you did, it'd totally undermine your point.

As for your point about people being less productive as a form of protest, I can't believe there are many people who will do so. You're saying that people will essentially pay almost $68k to protest Obama's spending policies. I find that extremely unlikely.

And beyond that, what does your protest idea have to do with the tax increase? Were Obama to keep tax policies the same as now, someone making $320k would still be paying over $83k in taxes. Shouldn't they have been denying that to Obama's big government plan too? So paying $83k is ok, but paying $85k is government theft? And yes, I know you imagine you're doing this to avoid fantasy tax hikes that might happen some day, but I can assure you that this belief of yours only makes you look silly. It's just as bad as the liberals who insisted that Bush was going to cancel the 2004 and 2008 elections and would never allow us a Democratic president. You guys are really looking that silly with these imaginary tax hikes and whatnot.

And finally, why do you keep imagining that these are all anti-poverty programs? Are extended unemployment benefits for people who were laid-off due to the economic collapse the counter-productive anti-poverty programs you're referring to? What about the infrastructure projects to fix our old roads and bridges? And then there are all the earmarks in the omnibus bill, many of which came from Republicans, which you guys laugh at but which serve real purposes. And you can disagree with the wisdom of these pork projects, but you can't call them anti-poverty.

So what ARE the anti-poverty programs you keep going on about? How much money are we talking about? Because I can assure you that the majority of this spending is NOT for anti-poverty welfare programs. Yet that's all you keep talking about, but without ever identifying these programs or their costs. And maybe you're right. Maybe Obama is promoting a huge expansion of old school anti-poverty programs, but I certainly haven't heard of them. I'd be amazed if even 10% of the spending was for such programs.

If I didn't know better, I'd say you were a victim of class warfare from a demagogue who's convinced you that greedy poor people are stealing your hard earned money. In fact, I'm quite sure that's what's happened. Perhaps I'm wrong and you can explain all these anti-poverty programs that I haven't been hearing about in my liberal circles; but I'm fairly sure they'll turn out to be minor amounts. But perhaps you'd like to put actual numbers to your rhetoric and prove me wrong.

Righty64 said...

Love the photo! I got it from Michelle Malkin. It is truly like Steve Urkel IS running the United States! And Norm, I kind of feel the same way about the locomotive and the train tracks. We will get through these next few years, but the GOP needs to get a coherent message out there as to the damage-fiscal, foreign policy and spiritual-Team Obama is doing to the United States.

Rich Casebolt said...

Professor, your graphic reminded me of this, from Uncle Jimbo over at Blackfive:

And Biobrain ... you are DEAD wrong about me being the victim of some demagogue ... what I seek is the end of the lying of the Left, with regards to what it takes for individuals .. and by extension, this nation ... to thrive economically.

But you are right about one thing ... greed is not a function of pocket depth.

When you seek to "game the system" instead of acting to legitimately earn your keep, that is greed ...

... whether you're a scientist who shades your conclusions to impress those with grant money and an agenda ...

... a union boss who uses the preferences of the law for unions to compensate for a deficit of productivity on the part of the membership ...

... an activist who utilizes ends-justify-the-means tactics to see their political supporters elected, assure that their cause is in the media eye, and/or keep those donations that pay their salaries rollin' in (sometimes by threatening to put others in the media eye) ...

... or even a needy person who seeks to just keep getting by through taking aid, but doesn't bother to do the heavy lifting to get ahead, become self-sufficient and perhaps even become a help to others (as we have seen time and time again) ...

... all the above, are expressions of greed.

It's not just for rich people ...

(As for the rest of your rant, you can find my response here, along with some research on the numbers, courtesy of the good Professor.)

EagleEye said...

Anti-Poverty Program #1- S-Chip. Add a 50 cent tax to tobacco products to pay for health care for the 'poor', who now can make upwards of $90K and still be eligible.

Anti-Poverty Program #2- Extend the unemployment benefits so people can stay out of work longer. Am I saying people do not need help? Nope. But we now make it easier to say 'I'll look tomorrow, when my benefits run out' or for people to work just long enough to get benefits before going back to the freebie line.

Anti-Poverty Program #3- Infrasturcture stimulus. I actually agree that our infrastructure needs work, particularly the energy grid. But what happens to all of those jobs when the $$ stops? Do we then cut those jobs? Nope. We spend more to keep them gainfully employed on the taxpayer dime.

Anti-Poverty Program #4- Green Jobs. A total farce that is wasting our time. Except the energy grid, which will require massive rework to support the idiotic electric cars.

Should I go on? Everything being done is 'for the children' or 'for the middle class and poor'. If it were not, it would never get passed.

The problem with such liberal mentality is that we are now the welfare state of the world. We are even spending billions supporting criminals here illegally.