Worry gives a small thing a big shadow.
Swedish Proverb
Don't Pass the Stimulus v. 2 Bill:
The President's Press Conference : Part 2
We've also got to rein in our deficits and live within our means, which is why this jobs bill is fully paid for by asking millionaires and billionaires to pay their fair share. Some see this as class warfare. I see it as a simple choice: We can either keep taxes exactly as they are for millionaires and billionaires, with loopholes that lead them to have lower tax rates in some cases than plumbers and teachers...We can fight to protect tax cuts for folks who don't need them and weren't asking for them, or we can cut taxes for virtually every worker and small business in America. But we can't afford to do both."Pay their fair share"? "Tax cuts for folks who don't need them"? By whose standard? Your arbitrary judgment, based on pure ideology? What about the fact that the highly-compensated already pay twice their share of national income? What about the fact (other than perhaps a few minor excise taxes like fuel or phone taxes) that nearly half of workers (lower-income) do not pay a single penny towards federal government operations and in fact often qualify for net distributions from the government?
I am not part of the highly-compensated class; I do not personally know or have ever heard from or ever met (to the best of my knowledge) any of them, and I have certainly not worked for them or received any compensation from them. I am not impressed by anyone whom has attained great wealth; I don't approve of lavish corporate compensation packages or indulgent lifestyles. But it's not personal: it's business. Do I believe the federal government, in particular, Barack Obama--whom doesn't have a clue on what it takes to create and run a business--is a frugal custodian of the people's money? OF COURSE NOT! Barack Obama has already spent $4T he's never had and almost certainly will beat the entire net debt accumulated under Bush by the end of this fiscal year (FY2012) next September. If he had done a similar thing in the private sector, not only would he have been fired for cause, but he would probably have state and federal authorities prosecuting him.
No, what is particularly morally reprehensible is the fact that he is NOT calling for common sacrifice, but sacrifice from the most disproportionately taxed segment of the population. I think this is a blatantly unconstitutional means of taxation; I don't care if the 98% of the country not in the top 2% overwhelmingly agrees with Obama (they don't, by the way: there may be a simple majority whom think it's "fair" for the well-to-do to have to pay the tab for the fiscal malfeasance of Barack Obama and his fellow super-spending Congressional Democrat cohorts, but far more than the 2% targeted by his proposed tax cuts oppose his class warfare policies; the real story is the people, like myself, who have the moral courage to say other people are entitled to the fruits of their labor).
Even if the public is in general agreement with this stimulus package, it doesn't mean that it should come from new money--new tax revenues; Barack Obama hopes that the entire country will not even question this implicit assertion. He also hopes that the rest of the country doesn't realize that the only "spending cuts" Obama accepts do not involve givebacks (e.g., unspent money from TARP) or baseline budget cuts but later-year cuts, mostly from automated increases to the budget. He engages in other gimmick cuts, like to government price lists (say, for Medicare/Medicaid) where reimbursements already fall below breakeven for providers. He is trying to lock in program increases passed in the last Democratic-controlled legislature.
"We can fight to protect tax cuts for folks who don't need them and weren't asking for them, or we can cut taxes for virtually every worker and small business in America. But we can't afford to do both." WHAT A PATHOLOGICAL LIAR! His quote is purely nonsensical political spin. He is still pushing class warfare tax hikes. Let's take, again, the Bush tax cuts. As I have repeatedly noted in this blog, over three-quarters of the Bush tax cuts went to the middle class. Obama doesn't have a problem piling up strings of $1.3T annual increases to the national debt. But he says that the class warfare tax hikes, which MAY reach as high as $70B per year are unaffordable. Because, of course, he can't find $70B in a $3.7T budget. He presents a false choice: others and I would be willing to consider across-the-board tax hikes, if we got serious spending cuts in return. Money is fungible. Why is the middle class more equal than the top earners?
But let's focus on Obama's long-debunked issue of comparing Warren Buffett's secretary's tax rate to his own; he's repeating the same distinction above by comparing the tax rates of plumbers and teachers to millionaires. Let's do a little tutorial here.
Income consists of multiple factors, including wages and investment income (dividends, interest and capital gains). Dividends, interest and capital gains receive special tax rates for individuals. But what most media (and Democrats) fail to point out is that investment income is often computed based on NOMINAL, not REAL income; second, the same stream of income is often taxed at a prior, business level.
The first point is relatively easy to understand: for example, say inflation is running 3% a year and I'm earning 1% on my bank savings. I am, in fact, losing money by keeping my money in the bank. But the federal government is taxing that 1%. It's really not taxing income but liquidating my assets, my property.
Now say I purchased some mutual funds 30 years earlier. The fact of the matter is that the dollar has greatly deflated over those last 3 decades. It's grossly unfair to tax the proceeds on an ordinary income basis; in fact, the Fed has contributed to the problem with dysfunctional easy money policies.
What is clear here is that taxing nominal income--which Obama has ZERO problem doing--is grossly unfair. And right now, federal law taxes capital gains on assets held less than a year as ordinary income (not qualifying for the 15% tax rate).
The second point is the problem of double taxation. Most of Buffett's income is based on investment income, which is mostly taxed at the 15% level, not his top 35% tax rate. But keep in mind, other than personal money he invests outside his company Berkshire Hathaway, his company is already paying a top tax rate, so Warren Buffett is really paying, say, a top corporate rate, 35% plus a 15% personal rate. Obama is hoping that people don't know about the concept of double taxation--he simply hopes that people will accept his charge of a "loophole" at face value.
Finally, I want to challenge Obama's implicit assertion that he knows how to spend the money (increased marginal tax rate or income tax surcharge) better than the higher-income people whom earned it. First of all, as I've noted before, increasing tax rates lowers the tax base. Second, well-compensated people may very well not need the income in question for the cost of living, but they will typically spend or invest the money. Saving or investing the money is bullish for economic growth. I certainly trust the judgment of the economically successful on how to spend or invest money to facilitate the economy more than this President
FELLER/AP: "The American people are sick of games -- and you mentioned games in your comments. They want results. Wouldn't it be more productive to work with Republicans on a plan that you know could pass Congress as opposed to going around the country talking about your bill and singling out -- calling out Republicans by name?"
OBAMA: And we did not help here in Washington with the debt ceiling debacle that took place, a bit of game-playing that was completely unnecessary, completely unprecedented in terms of how we dealt with our responsibilities here in Washington....I think it's fair to say that I have gone out of my way in every instance, sometimes at my own political peril and to the frustration of Democrats, to work with Republicans to find common ground to move this country forward...I think it's fair to say that I have gone out of my way in every instance, sometimes at my own political peril and to the frustration of Democrats, to work with Republicans to find common ground to move this country forward...what we've seen is games-playing, a preference to try to score political points rather than actually get something done on the part of the other side. And that has been true not just over the last six months; that's been true over the last two and a half years....It is now up to all the senators, and hopefully all the members of the House, to explain to their constituencies why they would be opposed to common-sense ideas that historically have been supported by Democrats and Republicans in the past. Why would you be opposed to tax cuts for small businesses and tax cuts for American workers?"A series of comments is necessary:
- Game-playing? This coming from a man whom said on March 20, 2006 on the Senate floor: "The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that 'the buck stops here.' Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better." What part of that critique does not apply to Obama, only more importantly now that he has pushed the national debt past the size of the economy?
- "I think it's fair to say that I have gone out of my way in every instance, sometimes at my own political peril and to the frustration of Democrats, to work with Republicans to find common ground to move this country forward." What a load of cow pies! He is making himself a martyr because he waited until 3 weeks before the expiration of the Bush tax cuts to finally agree to extend ALL of the Bush tax cuts for 2 more years. He only did so because 42 GOP Senate votes FORCED him to compromise. He had to make a decision whether to allow ALL the Bush tax cuts to expire--including the 75% going to the middle class. The GOP was saying--look, the 2001/2003 tax cuts were a political compromise to begin with. We believe that singling out the investor/job creator class out for tax hikes is bad economic policy. The $70B incremental higher-income tax hike was never about a balanced budget when we are talking trillion dollar deficits. His 'political peril' was more about pushback from radical left-wing ideologues whom never liked tax cuts to the well-to-do because they think it's THEIR money, not the people's whom earned it. Obama has NEVER gone out of his way--he didn't do it on the stimulus bill, the finance reform bill, or ObamaCare. He had maybe a handful of public relations gimmicks, like a health care summit, after he had already decided to push forward on ramming the Senate bill down the Republicans' throats. He even failed to rally behind the recommendations of his own bipartisan deficit reduction commission. So give me a break, President-In-Name-Only Obama!
- "It is now up to all the senators, and hopefully all the members of the House, to explain to their constituencies why they would be opposed to common-sense ideas that historically have been supported by Democrats and Republicans in the past." Um, Mr. President, you have a very short memory. There was an election last November where the American people make it clear where they stood on the "accomplishments" of the 111th session of Congress. The Republicans made it very clear in 2009 where they stood on the Democrats' toxic brew of "shovel-ready" infrastructure boondoggles, state bailouts, overextended, inflated, morally hazardous unemployed compensation checks, etc. Obama is being totally disingenuous by terming elements of the new stimulus ("jobs") bill "common sense": he's trying to assert that there are no differences of opinion on these program proposals, which is contradicted by the fact of GOP opposition. The "common sense" ideas he's referring to are window-dressing gimmicks like payroll tax cuts and allowing businesses to try out prospective workers drawing unemployment compensation. There are things to like about payroll tax cuts. But there are drawbacks, which on balance have led me to now oppose them: unless they are made permanent: it distorts the economy, and taxpayers are more likely to hoard any extra income if they believe the tax cut is temporary vs. permanent in nature. At what point is it politically feasible to increase payroll taxes by 2 or 3 points?
- The President is being disingenuous throughout this discussion. His tone is objectionable, he dismisses legitimate, substantive differences as "game-playing", he he exaggerates his alleged "bipartisanship" and his political "courage", and he refers to his approach as "balanced" and "common sense", which essentially begs the question. His is the politics not of compromise, but of capitulation on his own terms.
If it turns out that there are Republicans who are opposed to this bill, they need to explain to me -- but more importantly, to their constituencies and the American people -- why they're opposed and what would they do.You have got to be kidding; Congressmen are accountable to their constituencies, not to some petulant demagogue in the White House. To what extent is Obama not aware of the arguments forwarded by the Republicans against the first stimulus bill, the moral hazard arguments against his approach to unemployment compensation? Obama, of course, is aware of the GOP reasons for opposing this bill; he simply refuses to acknowledge them as acceptable, because he disagrees with them. He's the self-appointed arbiter of what constitutes acceptable reasons; what we do know is if you agree with Barack Obama, you're covered. This condescending elitist attitude is morally unacceptable, unworthy of a legitimate American President.
And at a time when so many people are having such a hard time, we have to have an approach, we have to take action, that is big enough to meet the moment. And what I've heard from Republicans is, well, we're agreeing to do these trade bills. That's great. I'm in favor of those trade bills and I'm glad they're passing, but that's not going to do enough.First, the trade bills with South Korea, Panama, and Colombia were negotiated during the Bush Administration; the Democrats were against it due to their union constituency. But Obama once again is evading true leadership: his own efforts at super-regulation (i.e., environmental, finance, labor and health care) have created huge uncertainty in the economy. The idea that he can bribe employers with little more than a down payment on new employee costs is ludicrous.
As you said, during the debt ceiling debate, a very solid majority -- I think maybe even higher than 70 percent -- agreed with the approach that I talked about, which was we should have a balanced approach to deficit reduction. And what the American people saw is that Congress didn't care -- not just what I thought; they didn't care about what the American people thought.Isn't how amazing progressives suddenly discover polls but only after the polls agree with them (e.g., on Iraq, where the public was initially in favor)? Sorry: I don't care if you find 98% of the American people in favor of doing something unconstitutional; political spin is no substitute for substantive policy. The fact of the matter is this President has failed to make a single good faith effort to cut down on spending--not even a modest across-the-board spending cut. . "Balanced approach" means Obama's toxic brew of immediate class warfare tax hikes and gimmicky down-the-line spending cuts.
The one persuasive argument that the Republicans previously had made against a bill like this is the deficit is growing -- we can't afford it. Well, we can afford it, if we're willing to ask people like me to do a little bit more in taxes. We can afford it without affecting our deficit. Our proposal is paid for. So that can't be the excuse.What a pathetic piece of work. HOW STUPID DOES THIS MAN THINK THE AMERICAN PEOPLE ARE? There are two general ways to close a budget deficit: raise revenues, cut spending. Assuming this bill is intrinsically worthy, the President should find the money elsewhere. Paying for it by stealing money out of another person's pocket may be popular, but it's immoral and unworthy of a true American. Targeting the job creators is penny-wise, pound-foolish. The deficit can't be the excuse? How much of an economic illiterate is this man? What about dysfunctional tax hikes contracting the tax base and adversely affecting economic growth does he fail to understand?
What they've seen is that the Republicans in Congress, even when the American people agree with me, oftentimes will vote against something I'm proposing. So there may be some skepticism that I personally can persuade Republicans to take actions in the interest of the American people.The Peter Principle is ultimately proven in the Presidency of Barack Obama: he has risen to his highest level of incompetence. Obama's hyper-partisan attack alleging that Republicans aren't acting in the interest of the American people is probably the most uncivil thing I have ever heard from a sitting President. I do not know how Boehner or McConnell can negotiate with this piece of work.
I think [the Wall Street protester phenomenon] expresses the frustrations that the American people feel -- that we had the biggest financial crisis since the Great Depression, huge collateral damage all throughout the country, all across Main Street, and yet you're still seeing some of the same folks who acted irresponsibly trying to fight efforts to crack down on abusive practices that got us into this problem in the first place.First of all, Mr. President, if you want to start pointing fingers, I strongly suggest you start with the man in the mirror: the one whom supported pressuring the GSE's (which, by the way, heavily contributed to your Presidential campaign in 2008) to purchase risky mortgage notes, hence covered by the implicit government guarantee. The fact of the matter is that banking was and continues to be a heavily regulated industry, both at the federal and state level. There was also the Fed which not only stoked the housing bubble with easy credit but failed to be proactive during the bubble years; we have credit bureau, accounting, and other failures. The fact of the matter is that the principal beneficiaries of TARP were the GSE's, AIG, and the car companies, not the banks. In fact, the banks were forced to accept TARP money, which many, if not most did the first time they had the opportunity.
But I have nothing but contempt for a "leader" whom attempts to identify with a motley crew of dissidents whom try to scapegoat the economically successful. Instead of projecting constructive, positive leadership in a difficult environment, the President once again "leads" from behind. Pathetic!
In order to make sure that we prevented a financial meltdown, and that banks stayed afloat. And that was the right thing to do, because had we seen a financial collapse then the damage to the American economy would have been even worse.Oh, yes, let us hear one more time how a President whom can't balance the nation's checkbook and has never met a payroll in the private sector saved the day! Commercial banks weren't the problem; investment banks did have some issues.The fact is that TARP was never used as intended and the Fed was able to address liquidity concerns. Government was part of the problem, not the solution. Government failed to stress test, government failed to question how housing prices could expand beyond the income of people buying them, and government thought extending mortgages to high-risk people during the housing bubble was not only safe but to be encouraged.
That's what Dodd-Frank was designed to do. It was designed to make sure that we didn't have the necessity of taxpayer bailouts.Nice try, but no sale. Talk about putting lipstick on a pig! All Dodd-Frank did was set up a whole new layer of bureaucracy and pushing-on-a-string, unnecessary, overly expensive regulations which in fact do not replace the need for prudent, competent regulators. The common sense way to avoid taxpayer bailouts is to get out of the business of guaranteeing bank instruments.
One of the biggest problems about the collapse of Lehmans and the subsequent financial crisis and the whole subprime lending fiasco is that a lot of that stuff wasn't necessarily illegal, it was just immoral or inappropriate or reckless. That's exactly why we needed to pass Dodd-Frank, to prohibit some of these practices.No, the reason we conservatives want to repeal Dodd-Frank has to deal with super-sized, ill-defined regulatory scheme with the government taking over certain functions better left to the private sector. The issue we had was ineffective performance by existing regulatory agencies. We can never legislate away bad business decisions by banking or any other type of management. But others have questioned its effectiveness, e.g., the more concentrated financial services firms after the economic tsunami and international banking entities (beyond the scope of US regulators).
Musical Interlude: My Favorite Groups
Moody Blues, "Tuesday Afternoon". How does a group avoid becoming just another one-trick pony? "Nights in White Satin" alone was enough to establish the Moody Blues in rock 'n roll history. The true genius is in the follow-up, e.g., how could The Beatles follow up the monster hit "I Want to Hold Your Hand"? This song is a worthy successor; I studied for many tests with this classically arranged song playing in the background...
