I was going to write a more targeted article even before this weeks issue of The Economist
arrived at my doorstep, but after reading the magazine(and their view on Democratic Economic Policy) I've decided to expand my frame of reference. Because well, they're right.
Miserabilism as Democratic Policy
I'm sure everyone has heard about Hillary and Barack threatening to withdraw from NAFTA in an attempt to woo Ohio voters.
They both, but especially Barack Obama, portray the United States as a place where a mother must compete with her child for minimum wage employment - at a time when unemployment is low by historical standards.
They've been quick to blame NAFTA for job loss that is probably better attributed to the Chinese or Indians. NAFTA definitely isn't the demon they've created in the minds of the American voter; free trade allows consumers to get better items at cheaper prices. This increased purchasing power is exactly what we need at a time when the dollar is ruined and we're heading into a recession.
Mr. Obama has sponsored two bills in his short history that seem to indicate he's thrown away his common sense. The failed Fair Pay Act would have ensured that women and men get the same pay, not for the same work, but for what the government deems equal. His second bill is called the Patriot Employers Act which would reward American companies for NOT expanding overseas.
Naturally, the rich (who already bear nearly all America's tax burden) will not be voting for a Democrat in 2008. But if Mr. Obama is to be believed he intends to raise their tax burden to around 62.3%. Hope - but not for all americans.
Luckily for us, the Democrats always veer populist during the primaries. It is merely a question of how much they do in the Presidency.
Parallels to the Great Depression
Recently I've compared Barack Obama to FDR. Their "Change" and "New Deal" programs sound similar - both are very vague during the race for the White House. And both men are silver tongued and charismatic. The problem with that comparison is that FDR had the experience(as governor of NY) to cobble together a policy on the fly, and I doubt Obama will be able to do the same.
The whole era in general has stark similarities to the depression: the United States is burdened by war debt(WW1 in the 20's), people have mortgages that they can't pay(buying stock on margin in the 1920's), a depreciated dollar might have the same effect on purchasing power as overproduction and subsequent unemployment of farmers in the 1920's; the straw that may break the Camel's back is electing a protectionist president(the tariffs in the 20's were the highest in peacetime history).
For many, this is unsettling - and unfortunately it gets worse.
If Barack Obama truly has become the demagogue that his new speeches indicate then he seems to resemble not FDR but one of the fascists that arose in the Europe during the same period.
- Spero
http://www.economist.com/opinion/displaystory.cfm?story_id=10766009
Sunday, March 2, 2008
Democratic Economics and Parallels to the 20's
Posted by Gnarlsbad Blog at 7:24 AM
Labels: America Votes, Barack Obama, Economics, Election, Hillary Clinton, Politics, Populism
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7 comments:
Okay so tell me, why SHOULDN'T the rich bear most of the tax burden of the United States? If they are making their millions off the sweat and toil of the working classes then why shouldn't they give something back?
62% of 10 billion dollars still leaves you with a few billion in the bank.
You expect us to pity those people?
I take issue with two parts of your statement.
"why SHOULDN'T the rich bear most of the tax burden of the United States?"
Because 1. the taxes don't benefit them and 2. it's punishing ingenuity. Granted, the rich should pay large amounts of taxes up until we give the middle class strong purchasing power for the economy to work. What we now see(and will see more so with Obama) is one group punishing another more successful group.
American society is libertarian, it functions on the belief that adults can fend for themselves. European society and philosophy(which you subscribe to) is a product of a weltschmerz, downtrodden, defeatist outlook on the world. They expect society to look after them, and they do this by forcing the successful to relinquish their hard earned gains.
Americans in the top five percent(150K+) can expect to take home less than half of what they earn. That's not a billion in the bank.
"the sweat and toil of the working classes then why shouldn't they give something back?"
Thanks for invoking a pathos argument. If you want to go there I can call the poor lazy, crude, uncivilized and stupid. I can also call the rich intellectual, creative and innovative.
It doesn't prove my point though, nor is your's proven.
Poverty is generally a product of complacency.
You take issue with two parts of my statement? I take issue with pretty much all of your reply.
1. Of course taxes benefit the rich! The whole point of tax is to subsidize the community. You know, better roads, transport, education, health. As in, let's all work together to make the world a better place you know? And then we can all be fitter, happier, more productive...
2. Taxing the rich is not 'punishing' them. Now I will agree with you that 62% is too high a tax bracket. But I seriously doubt that Obama will raise any taxes to this level. I think you are being an alarmist here. However its all about how much tax one can pay before it becomes a burden. So an advertising copywriter who makes 200k a year to pay 80k in taxes will still feel less tax pain than a council worker who earns 35k and pays 7k. Please note my figures are extremely approximate here.
3. I don't subscribe to a downtrodden view of the world at all. I do believe that we are all partly responsible for each others well being though. I don't expect anyone to "look after me". But I do expect people who earn more than me to pay more tax than me. Likewise, I am also quite prepared to pay more tax than those less fortunate than I.
4. Adults can fend for themselves, yes, but you cannot deny that some have a headstart. Luck and status have as much to do with success as hard work and intellect.
5. lazy, crude etc. That's just plain mean. How are poverty stricken parents meant to fork out for an education for their kids? Can you really not see the viscous cycle at play here? There are countless studies done on this sort of thing. Basically, humans will take after parents. If you dad is a successful businessman, then you stand a good chance of being one too. If your mum cleaned toilets for a living then, get those rubber gloves on girl. Some people do manage to break out of this cycle
it's true. I know because I am one of them but-and I have no shame in admitting this-I had to break the law on several occassions to get myself through university. Could not have done it otherwise. And I would do it again if I had too. Both my parents were factory workers and I'll be damned if I was going to settle for that.
6."Poverty is a product of complacency". No, it is a product of the combined effects of the despair of the poor and the greediness of the ruling classes.
Just take a look at the sweatshops will you?
"Of course taxes benefit the rich! The whole point of tax is to subsidize the community. You know, better roads, transport, education, health. As in, let's all work together to make the world a better place you know? And then we can all be fitter, happier, more productive..."
Let's not go to extremes here. I never proposed that the rich should not pay basic infrastructure taxes. Most new programs that Mr.Obama proposes will not benefit them though.
>But I seriously doubt that Obama will raise any taxes to this level.
Actually he wants to repeal the tax cuts so they will be at that level. This is statistical fact.
>However its all about how much tax one can pay before it becomes a burden.
Because we should take as much away from people as possible?
>Luck and status have as much to do with success as hard work and intellect.
I'd say hard work and intellect have more to do with it than luck and status.
>That's just plain mean.
You missed the point.
"There are countless studies done on this sort of thing. Basically, humans will take after parents."
Ah the ability society has to magnify good genes and intellectual capability is quite marvelous isn't it?
You seem to prove my point, people generally were satisfied with what they had and took after their parents. If you want something better look no further than the American Dream; don't take things from other people.
>No, it is a product of the combined effects of the despair of the poor and the greediness of the ruling classes.
Just take a look at the sweatshops will you?
Hahaha. Let's try to limit this to a first world frame of reference please.
You obviously have a bone to pick with the rich. Denying that people have any responsibility for their own situation is ridiculous!
A good country tests you, it finds out exactly what you are made of and puts you there. There is no denying that many poor people are honest and hardworking - what we face today is a new phenomenon of self entitlement and lack of lust for social mobility.
Our poor do not face industrial revolution like conditions, being poor in America is having a three bedroom house with at least two TV's and a car.
No I am not making that up. That is the standard living condition for America's poor. Factual.
1.“Most new programs that Mr. Obama proposes will not benefit them though”.
Once again I will say that I think part of the success of a functioning society is that we look out for each other in a manner of speaking. If higher taxes for the rich mean that a housekeeper can get braces for her teenage daughter, is that really so much to ask? She cleans your bathroom, you clean her teeth. Not such a bad trade.
2.“repeal tax cuts to 62%”
Please tell me where you saw this. I have looked and cannot find it. The Economist article had tax levels at 49% under Obama.
3. “Because we should take as much away from people as possible?”
No. I don’t think anyone should have to give up most of their income in tax but, to a low income earner paying 20% in tax is just as burdensome as paying 49% in tax is to a high income earner. Once again, I will say: IT’S ALL RELATIVE! You know, they don’t call Einstein a genius for nothing.
4.“I'd say hard work and intellect have more to do with it than luck and status.”
No, I disagree. I’m not saying that hard work and intellect are not needed. But sometimes it is not enough. Two examples:
i). I’m just starting out as filmmaker and I can tell you in this industry it’s who you know, not what you know. Nearly every job I have ever gotten has been passed onto me by a friend. I am making my own film later this year and most of my crew will be friends. Now I don’t think my friends are more talented or hardworking than anyone else…but I know them so I will give them the job. It’s shit and I admit it, but that’s the way it goes.
ii). One of my sisters married an extremely wealthy man. All her kids go to private schools. They will inherit their father’s business and each will have more money than they could ever spend. Now, is it intellect or luck that put these kids in this position?
5. "Ah the ability society has to magnify good genes and intellectual capability is quite marvelous isn't it?"
Smug aren’t we? But it is you who missed my point here. I don’t mean kids will inherit their parent’s genes. I mean that their lives will follow the same cycle as their parents. Not because they are satisfied with it, but because they don’t see any way out.
6. “don't take things from other people”.
Yeah, someone needs to tell the rich that. I don’t think I have had a single employer who has not ripped me off in some way. From skimming my tips when I was a waitress to not paying my superannuation to paying me below minimum wage when I was too young and naïve and stupid to stand up for myself.
7.“Hahaha. Let's try to limit this to a first world frame of reference please”.
Haha. If you don’t think there are sweatshops in the first world then it is you who is being naïve. Just a few months ago a sweatshop racket in inner city Melbourne was raided by police. Anyway, sweatshops in the third world are just an example of the lengths corporate arseholes will go to when they know they can get away with it. And since the owners of these sweatshops are western and mostly American then I AM keeping it in a “first world frame of reference”.
8. “You obviously have a bone to pick with the rich”.
Yes, I hate you all and come the revolution, your backs will be first against the wall!
No, I don’t hate the rich, but I do get annoyed when they start complaining about how hard done by they are. When you say things like “ the rich already shoulder most of the tax burden”, you sound like a whinger. And nobody likes a whinger, especially not us Aussies.
9.“being poor in America is having a three bedroom house with at least two TV's and a car”…
…And being a slave to your mortgage and being unable to put your kids through Uni and working two jobs to make ends meet but still dying in a mountain of debt and never being able to spend time with your kids. It’s still a struggle. Not by third world standards but by our own.
The Great American Dream is like the Great Australian Dream: a great lie. And I’m not making that up. Factual.
I know you are bored of me but can't resist giving you this link. Since you claim that rich people become that way through their own brilliance and not by exploiting and and just plain ripping of their workers. Sweat and toil of the working classes indeed.
http://news.bbc.co.uk/2/hi/americas/7308233.stm
In a nutshell, it's about starbucks stealing $100m in tips from its baristas.
...man, I was enjoying that conversation...
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