Sit in on a corporate board room struggling to come to grips with the new economic climate Obama has created. Do we expand? Create more jobs? Launch a new product line? Step up our marketing efforts? Ratchet up production?
But, wait a minute. The bigger our company gets, the closer we come to being "too big to fail," a "systemic risk." The nearer we are to intrusive government oversight, limits on executive pay, and regulators breathing down our necks. We better watch out. We may even get taken over. Stay small. Forget the new jobs.
An investor ponders where to put his 401 (k) retirement money. Should he invest in robust, growing companies? Firms with a bright future? But, be careful, they could get so big that they get taken over by the government and you lose your entire investment. Don't invest in firms that will fail, but stay away from those that will succeed too.
Meanwhile, at the kitchen table, a middle class family discusses their career moves. Should she go back to school to pursue a better job at higher pay? Should he put in overtime? Move up in the company?
Hey wait a minute. Our combined income is just under $200,000 a year. If we go any higher, our tax bracket goes up, we start having Social Security withheld on our new income, we lose our current deductions for our mortgage, and state and local taxes, and charitable donations.
Forget the promotion. Forget the new job.
Downtown, investors in a hedge fund are meeting to consider participating in the bank bailout scheme by buying toxic assets from failing institutions. We could make a killing. The investments could pan out big time. It's a risk, but the reward could be great.
But hold on a second. If we make tens of millions, hundreds of millions, while taxpayers have to pay for failed banks, won't we get hit with a 90 percent tax? Won't we get to see our pictures on the front page with the president shaking an angry finger in our faces? Yes, now he wants us to invest, to help him rescue the banks, but once we do, won't he be on our case like he was on AIG's?
The Japanese have a saying that, thankfully, has no English equivalent: The highest nail gets hammered down first. Obama's perverse view of fairness threatens to create reverse incentives, militating against growth, jobs, expansion, and upward mobility.
For decades, astute observers of national welfare policy warned of the perversity of the incentives which kept the poor on welfare and discouraged them from taking jobs. Employment meant that their slightly higher income would be more than offset by the loss of other benefits like food stamps, day care, rent supplements, and Medicaid. Work didn't pay.
Now Obama is applying the same crazy policies to the upper end of the economic spectrum.
Upward mobility is alive and well in the United States, at least until Obama took over. A study conducted in the late 1990s examined the economic fate of those consigned to the bottom 20% of incomes in 1980. The analysis concluded that more than four out of five had left the bottom quintile and one in five was now in the top 20%! It is true that the top quintile is getting richer while the bottom is getting poorer, but the bottom is not the same people. There is, fortunately, a constant churning at the bottom as new immigrants move in and those who used to be on the bottom begin their long, thrilling, upward climb to the American dream.
But Obama does not believe in individual upward mobility. He would penalize it, tax it, regulate it, inveigh against it, and disincentivize it. We will be like salmon swimming upstream to mate. We will overcome the currents, the waterfall, the rocks, the predators and will grapple our way up the stream. Then, at the top of the waterfall, will stand Obama the Bear, waiting to scoop us up and have us for dinner. The taxman cometh.
Rich, Why can't you look at something critically and evaluate it on the merits of the article? You constantly post that elitist drivel from your Pravda favorites yet can't see that governmental policies influence behavior.
Did you know that people are starting to buy SUVs again? I am sure you are wondering why would they do something like that when our almighty Obamamessiah is railing on about global climate change (used to be global warming until it was shown that we are actually cooling)and the need to move to alternative energy sources. The answer is that a Democratically controlled Congres passed legislation that allows a business to depreciate 50% of the value of the asset in year one. Whallah, you buy a $50,000 vehicle, depreciate 25,000 under section 179 another 12,500 of the remainder under the 50% bonus depreciation, 2,500 more under the current year Macrs depreciation and what do you know you wrote off 40,000 of a 50,000 purchase the year you bought it. Just a small lesson in how governmental action meant to help business invest also has an impact that they did not consider. With the alarming speed and lack of thought that this administration is moving forward we are all going to be shocked when the full impact is felt and it will not be a good shock. They are making decisions involving trillions and putting hardly any serious long term thought into the possible behavior changing impact thier policies will wreak on our society.
Mark - I completely recognize that government policy effects behavior. That is why I want widespread carbon taxes.
I drive a Range Rover Sport and I bought it specifically for the tax advantage that you described. I actually preferred something smaller, but it didn't qualify.
The alarm poppycock that I described was relative to the scope of the tax changes. The very modest changes will not effect the behavior as described. The Good Doctor - one of this board's Pitchfork Republicans - will continue to see patients and make as much money as he can whether he is taxed at 35% or 39.6%. If he "slowed down" it would be a political decision, not an economic one.
America enjoys low taxes relative to our first world industrialized peers. That's a fact and if you do not know it, you should.
You again miss the point of the Teabag demonstrations. They are not as much about the tax rates as they are about wasteful government spending and socialistic policies that are contrary to the principles that this country was founded upon.
Remember one of the greatest lights when you ask Democrats, especially Irish Americans, is John F. Kennedy. Arguably his most famous remark was "ask what you can do for your country not what your country can do for you". A large percentage of people who voted for our current President strongly believe in the latter part of that statement being "ask what more my country can do for me without me having to do anything in return".
That is the major issue. People don't want to pay higher taxes so that the government can just flush the money down the toilet. All of the earmarks in the spending bill that Obama signed. There are a lot of people that are reaching the point where thay are sick and fed up with the federal government and that includes large parts of both parties.
Oh, right you are Mark. The private sector used capital very wisely over the past eight years. Much better to finance sub-prime loans than pay higher taxes pursuant to retiring debt or building infrastructure.
Where were the Teabaggers the past eight years? They stayed home - there party had the White House and Congress (for six of eight years). The Teabagger movement is nothing but sour grapes. All their complaints could have applied last year, except there were no rallies.
Again you defend present bad behavior by comparing it to the past. This must be the liberal 101 required class. It certainly is on display daily by this administration. I believe that the people who are upset today were also upset by the rampant spending during the Bush administration as well. I also believe that they were really upset by all of the bailouts at the end of his Presidency. I know that Jim and I have voiced this opinion many times. But that spending pales in comparison to what is going on now. It is not just about Democrat versus Republican anymore. This is where you and your buddy the former Enron advisor are misreading the tea leaves.
You being the self labeled Deficit Hawk should be able to recognize wasteful spending right away. Yet we are all still waiting for you to start demonstrating some type of behavior that even begins to question the spendapalooza that is occuring under a heavy Democratic majority Federal Government.
its the damn spending, the ongoing, ever increasing, always expanding, going to bankrupt us soon, spending. And mostly it is entitlement spending, and as Mark just said, the accompanying entitlement mentality.
9 comments:
THE ANTI-SUCCESS PRESIDENCY
By DICK MORRIS & EILEEN MCGANN
Published on DickMorris.com on April 15, 2009
Printer-Friendly Version
Sit in on a corporate board room struggling to come to grips with the new economic climate Obama has created. Do we expand? Create more jobs? Launch a new product line? Step up our marketing efforts? Ratchet up production?
But, wait a minute. The bigger our company gets, the closer we come to being "too big to fail," a "systemic risk." The nearer we are to intrusive government oversight, limits on executive pay, and regulators breathing down our necks. We better watch out. We may even get taken over. Stay small. Forget the new jobs.
An investor ponders where to put his 401 (k) retirement money. Should he invest in robust, growing companies? Firms with a bright future? But, be careful, they could get so big that they get taken over by the government and you lose your entire investment. Don't invest in firms that will fail, but stay away from those that will succeed too.
Meanwhile, at the kitchen table, a middle class family discusses their career moves. Should she go back to school to pursue a better job at higher pay? Should he put in overtime? Move up in the company?
Hey wait a minute. Our combined income is just under $200,000 a year. If we go any higher, our tax bracket goes up, we start having Social Security withheld on our new income, we lose our current deductions for our mortgage, and state and local taxes, and charitable donations.
Forget the promotion. Forget the new job.
Downtown, investors in a hedge fund are meeting to consider participating in the bank bailout scheme by buying toxic assets from failing institutions. We could make a killing. The investments could pan out big time. It's a risk, but the reward could be great.
But hold on a second. If we make tens of millions, hundreds of millions, while taxpayers have to pay for failed banks, won't we get hit with a 90 percent tax? Won't we get to see our pictures on the front page with the president shaking an angry finger in our faces? Yes, now he wants us to invest, to help him rescue the banks, but once we do, won't he be on our case like he was on AIG's?
The Japanese have a saying that, thankfully, has no English equivalent: The highest nail gets hammered down first. Obama's perverse view of fairness threatens to create reverse incentives, militating against growth, jobs, expansion, and upward mobility.
For decades, astute observers of national welfare policy warned of the perversity of the incentives which kept the poor on welfare and discouraged them from taking jobs. Employment meant that their slightly higher income would be more than offset by the loss of other benefits like food stamps, day care, rent supplements, and Medicaid. Work didn't pay.
Now Obama is applying the same crazy policies to the upper end of the economic spectrum.
Upward mobility is alive and well in the United States, at least until Obama took over. A study conducted in the late 1990s examined the economic fate of those consigned to the bottom 20% of incomes in 1980. The analysis concluded that more than four out of five had left the bottom quintile and one in five was now in the top 20%! It is true that the top quintile is getting richer while the bottom is getting poorer, but the bottom is not the same people. There is, fortunately, a constant churning at the bottom as new immigrants move in and those who used to be on the bottom begin their long, thrilling, upward climb to the American dream.
But Obama does not believe in individual upward mobility. He would penalize it, tax it, regulate it, inveigh against it, and disincentivize it. We will be like salmon swimming upstream to mate. We will overcome the currents, the waterfall, the rocks, the predators and will grapple our way up the stream. Then, at the top of the waterfall, will stand Obama the Bear, waiting to scoop us up and have us for dinner. The taxman cometh.
Bingo!
Rich,
Why can't you look at something critically and evaluate it on the merits of the article? You constantly post that elitist drivel from your Pravda favorites yet can't see that governmental policies influence behavior.
Did you know that people are starting to buy SUVs again? I am sure you are wondering why would they do something like that when our almighty Obamamessiah is railing on about global climate change (used to be global warming until it was shown that we are actually cooling)and the need to move to alternative energy sources. The answer is that a Democratically controlled Congres passed legislation that allows a business to depreciate 50% of the value of the asset in year one. Whallah, you buy a $50,000 vehicle, depreciate 25,000 under section 179 another 12,500 of the remainder under the 50% bonus depreciation, 2,500 more under the current year Macrs depreciation and what do you know you wrote off 40,000 of a 50,000 purchase the year you bought it. Just a small lesson in how governmental action meant to help business invest also has an impact that they did not consider. With the alarming speed and lack of thought that this administration is moving forward we are all going to be shocked when the full impact is felt and it will not be a good shock. They are making decisions involving trillions and putting hardly any serious long term thought into the possible behavior changing impact thier policies will wreak on our society.
Mark - I completely recognize that government policy effects behavior. That is why I want widespread carbon taxes.
I drive a Range Rover Sport and I bought it specifically for the tax advantage that you described. I actually preferred something smaller, but it didn't qualify.
The alarm poppycock that I described was relative to the scope of the tax changes. The very modest changes will not effect the behavior as described. The Good Doctor - one of this board's Pitchfork Republicans - will continue to see patients and make as much money as he can whether he is taxed at 35% or 39.6%. If he "slowed down" it would be a political decision, not an economic one.
America enjoys low taxes relative to our first world industrialized peers. That's a fact and if you do not know it, you should.
You again miss the point of the Teabag demonstrations. They are not as much about the tax rates as they are about wasteful government spending and socialistic policies that are contrary to the principles that this country was founded upon.
Remember one of the greatest lights when you ask Democrats, especially Irish Americans, is John F. Kennedy. Arguably his most famous remark was "ask what you can do for your country not what your country can do for you". A large percentage of people who voted for our current President strongly believe in the latter part of that statement being "ask what more my country can do for me without me having to do anything in return".
That is the major issue. People don't want to pay higher taxes so that the government can just flush the money down the toilet. All of the earmarks in the spending bill that Obama signed. There are a lot of people that are reaching the point where thay are sick and fed up with the federal government and that includes large parts of both parties.
Oh, right you are Mark. The private sector used capital very wisely over the past eight years. Much better to finance sub-prime loans than pay higher taxes pursuant to retiring debt or building infrastructure.
Where were the Teabaggers the past eight years? They stayed home - there party had the White House and Congress (for six of eight years). The Teabagger movement is nothing but sour grapes. All their complaints could have applied last year, except there were no rallies.
Hhmmmm...
Again you defend present bad behavior by comparing it to the past. This must be the liberal 101 required class. It certainly is on display daily by this administration. I believe that the people who are upset today were also upset by the rampant spending during the Bush administration as well. I also believe that they were really upset by all of the bailouts at the end of his Presidency. I know that Jim and I have voiced this opinion many times. But that spending pales in comparison to what is going on now. It is not just about Democrat versus Republican anymore. This is where you and your buddy the former Enron advisor are misreading the tea leaves.
You being the self labeled Deficit Hawk should be able to recognize wasteful spending right away. Yet we are all still waiting for you to start demonstrating some type of behavior that even begins to question the spendapalooza that is occuring under a heavy Democratic majority Federal Government.
Rich:
Its not the taxes (it is, but it isn't).
its the damn spending, the ongoing, ever increasing, always expanding, going to bankrupt us soon, spending. And mostly it is entitlement spending, and as Mark just said, the accompanying entitlement mentality.
And the "O" is spending in hyper-drive.
That is the point of the "tea party's"
Don't be a Teabagger!
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