Joined: Jan 2009
Location: Ann Arbor, MI
Obama's Social Justice Capitalism
By Jesse Weed
Unlike the mercy-killing "vulture" capital firms, venture capital firms invest in start-up companies. Take a quick look at a venture capital firm like Atlas Venture Capital and you will see a list of firms that are not exactly household names. The sole criterion venture capital firms use to select start-ups for initial financial backing is whether, in their view, the firms can eventually succeed in the free market, prosper, and grow. Moreover, venture capital firms use their own money and line of credit to get the companies started.
The Obama team, by contrast, uses taxpayer money to inject capital into select firms to help them compete in the supply-demand market. Their criteria for selection, moreover, are centered not on whether there is a good chance that the firm can prosper and grow on its own, but whether the firm is engaged in fields that further Obama's vision of environmental justice. The companies of the green economy, so the story goes, will create jobs which will open the door for minority training and employment. This dovetails nicely with Obama's stated goals of social and economic justice.
Much has been made of the firms that get government capital having made contributions to the Obama campaign. That misses the point. Obama is motivated not just by kickbacks. His actions are consistent with his rhetoric. He states that the overarching principle directing his personal and political life is his sense of social justice. There is every reason to believe him. His actions and demeanor are consistent with a man who believes that his goal is of such high purpose that it justifies all manner of subterfuge and end-runs around Congress and the Constitution.
One cannot peer into the soul of one's fellow man, but certainly Obama's demeanor, rhetoric, and actions are consistent with an understanding of Obama as a man who is convinced that he has a superior vision for America. Obama seems every bit the moralist. He works for his just society with what appears to be moral conviction. During his years as a community organizer in Chicago, he saw the great inequities in American society -- inequities which, along with bigotry, he attributed to the American capitalist system. The people on the bottom rung, and especially their children, don't have a chance. Couple that moral conviction with the ruthlessness of Chicago politics, and you have a potent force. Add a suave, urbane, and articulate persona, and Obama is a formidable package.
Certainly the Obama administration will stoop to anything to get votes for the next election. The latest outrageous example is using the U.S. Export-Import bank (taxpayer-funded) to channel funds to attract business to the swing states of North Carolina, Michigan, Ohio, and Virginia.
So, yes, from crony capitalism to vote-buying capitalism, the Obama administration will use any siphoning of taxpayer funds to pump capital where it sees political advantage. But to leave it at that -- self-interest -- is to miss the narcissistic sense of moral superiority. Moreover, it is a narcissistic sense of moral superiority that is coupled with a disdain for the actual grunt work of implementing his moral vision. It is an aloof sense of moral superiority in which he provides the rhetoric and his minions do the work.
Obama may think he is on the right side of morality, but he is on the wrong side of reality. For Obama the cure is more government, more regulation, more intervention, and less individual freedom. The invisible hand of laissez-faire capitalism is just that for Obama -- invisible. Capitalism needs the Obama hand of social, economic, and environmental justice. But what do we see? Less opportunity -- not only on the economic front, but also on the educational front -- and increased class and racial hostility. During the Obama ("Spendulus Maximus") administration, the economic freedom rank for America has dropped from 9th to 10th. Our educational rank has also dropped.
It is important to close the opportunity gap between the haves and have-nots, and especially the latter's children. But taking money out of the competitive capitalist enterprise system and pouring it into firms to assuage carbon guilt has been a disaster ("Solyndra Just Tip of the Iceberg"). Misallocation of capital cannot help any policy of economic/job growth, much less social justice.
It is time for Congress to call a halt to the Obama's venture into social justice capitalism. And it is certainly time for voters to put an end to Obama hamstringing and sapping the good ship Enterprise by regulations and misallocation of capital under the guise of social justice capitalism. We need a new skipper.
Yessireeee, social justice is far more important than the ever growing deficit. Pressing need "to be fair".
Joined: Jan 2009
Location: Ann Arbor, MI
Buffetted by Tax Hikes
Speaking in Florida (unemployment rate 9.6 percent, No. 1 in the nation for foreclosures), President Barack Obama reiterated his demand for a tax increase based on the so-called Buffett Rule, a non-solution to a non-problem intended mainly to distract from the administration’s non-solutions to real problems.
The Buffett Rule would function as a secondary alternative-minimum tax, putatively to accomplish what the primary alternative-minimum tax has failed to do: sock it to billionaires (“billionaires” here being defined in some instances as “individuals making $250,000 a year,” which is mathematically suspect). The case for the Buffett Rule is built upon a myth cultivated by President Obama, by Warren Buffett, and by many of their supporters and admirers: that high-income Americans pay lower tax rates than middle-class Americans. This is a falsehood, one that has been amply documented with data from the tax experts at the IRS and by the nonpartisan Congressional Research Service.
Legend has it that Mr. Buffett, most of whose income is taxed at the 15-percent long-term capital-gains rate, pays a lower percentage of his income in taxes than does his modestly paid secretary. This is almost certainly untrue. Even if Mr. Buffett were paying half that 15-percent rate — 7.5 percent — he still would be paying a higher rate than does the typical family in the $40,000-$50,000 range, whose effective rate is just 3.2 percent, according to the Tax Policy Center. Wealthy investors such as Mitt Romney and private-equity managers typically pay a rate of about 15 percent, since most or all of their income is derived from investments, which are treated preferentially. But even so, 80 percent of U.S. households pay a rate that is less than 15 percent, and about half of U.S. households pay no federal income tax at all.
Among U.S. taxpayers with incomes in excess of $1 million, most pay about 30 percent in taxes — the very rate proposed by the president under the Buffett Rule — while about 10 percent pay a considerably higher rate and another 10 percent pay 24 percent or less, according to the Congressional Research Service. That latter group is composed mostly of retirees and professional investors whose incomes take the form of capital gains rather than salaries and bonuses.
In absolute terms, high-income Americans pay practically all of the federal income taxes, and they pay a higher percentage of their incomes than do typical middle-class Americans. These facts are indisputable.
The president’s proposal is a dishonest one in that it relies in a popular falsehood to covertly pursue a separate policy goal: raising the capital-gains tax rate for professional investors. Seeking to encourage Americans to save and invest more of their incomes, Congresses and presidents of both parties have for years supported taxing income from long-term investments at a lower rate (usually 15 percent) than ordinary salary income. This policy reflects three important economic truths: 1.) investment is the lifeblood of the U.S. economy; 2.) long-term investing is the surest route to economic security for individuals and families; 3.) in most cases, the money used to make these investments already has been taxed as ordinary income, with a current top rate of 35 percent. That lattermost is significant: Even if you have any income left over to invest after paying the 35 percent federal income tax, the additional 15-percent tax is yet another disincentive to save.
According to congressional estimates, this tax hike would produce a grand total of about $5 billion a year in new tax revenue for the next ten years — or about four-tenths of 1 percent of the deficit President Obama and his congressional enablers ran up last year. Given that it would do practically nothing to reduce the deficit, and given that most high-income Americans already pay nearly 30 percent in taxes, and much more than the middle class in any case, what is the point? The only result will be to punish those Americans who earn most of their income through investing rather than through salaries.
If the Democrats wish to revoke the tax benefits given to long-term investments — say, on Americans’ retirement accounts — then let them do so openly, in the light of day, rather than furtively, based on a platform of what we might charitably call myths, if not outright lies. That reducing Americans’ ability to invest and save for their own futures would leave them more dependent upon Social Security, Medicare, and the like surely is not lost on Democrats, who profit from the increasing servility of the electorate. Americans should not be distracted by the Democrats’ class-warfare sleight-of-hand from the fact that the Democrats here are contemplating a purely punitive measure that will add yet another level of complexity to the tax code and create a new arterial blockage constricting the flow of the lifeblood of our economy.
Democrats don't get elected through open debate. They get elected through demogoguery, and that's what Obama is doing right now. "Look at them there fat cat millioinaires only paying 15%...." Yeah, and their 15% accounts for some 40% of all income tax revenue collected. Did anyone hear him mention that little fact? (no that's not a fact, it is a republican talking point lmao).