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What we saw during the bus tour of the Mid West was the president accusing the GOP of wishing failure for the country so they would have political success. Charles Krauthammer has some thoughts about that charge. Perhaps in his old career he would have called it projection.
… The charge is not just ugly. It’s laughable. All but five Republican members of the House — moderate, establishment, Tea Party, freshmen alike — voted for a budget containing radical Medicare reform knowing it could very well end many of their careers. Democrats launched gleefully into Mediscare attacks, hardly believing their luck that Republicans should have proposed something so politically risky in pursuit of fiscal solvency. Yet Obama accuses Republicans of acting for nothing but partisan advantage.
This from a man who has cagily refused to propose a single structural reform to entitlements in his three years in office. A man who ordered that the Afghan surge be unwound by September 2012, a date that makes no military sense (it occurs during the fighting season), a date not recommended by his commanders, a date whose sole purpose is to give Obama political relief on the eve of the 2012 election. And Obama dares accuse others of placing politics above country?
A plague of bad luck and bad faith — a recalcitrant providence and an unpatriotic opposition. Our president wrestles with angels. Monsters of mythic proportions.
A comforting fantasy. But a sorry excuse for a failing economy and a flailing presidency.
Warren Buffett, wise investor, is campaigning for higher taxes for the “rich.” Pickerhead thinks if Buffett cared so much about public service, he might have issued some warnings about Fannie Mae’s and Freddie Mac’s dangers to our economy. These were organizations he knew well. Berkshire Hathaway first bought heavily into them in 1988. At that time he owned 3.2% of Freddie Mac. The maximum allowed by law according to notes in the 1988 statements. Then in 1992 the holdings went up to 8.2% without any apparent note on how the law was changed. In 2000 that position was liquidated for a profit in the range of $3 billion. During 1988, Berkshire also started investing in Coca-Cola. A holding now worth $13 billion. So Buffett unloaded Freddie and Fannie while he let profits ride elsewhere. What did he know? And why didn’t he share that with the country from 2000 to 2006 when there might have been a chance to prevent the worst excesses of the real estate bubble?
Peter Ferrara in Forbes points out the folly of Buffett’s present campaign for higher taxes. Like they say, no fool like an old fool. Then again, maybe he’s just continuing to be greedy, since his large holdings in insurance companies would benefit from higher taxes on income and estates.
And another thing; every time a hurricane hits and some enterprising soul gathers up and sells generators and the like in the stricken area, they are routinely maligned by the media for profiting from other’s misery. Yet Buffett was roundly admired in 2008 for his usurious investment in Goldman Sachs. ($5 billion of perpetual preferred stock with a juicy 10% coupon, as well as warrants that give it the right to buy $5 billion of common stock at any time in the next five years for $115 — 8% below Goldman’s closing stock price) Goldman stock spent the better part of the last two years north of $150 per share. You do the math. Sorry for the rant, here’s Ferrara;
Warren Buffett is performing a gross public disservice in creating urban myths about the nature of the tax system in America. Those myths will mislead millions of Americans about the fundamentals of their own country.
Buffett began his media offensive with an op-ed in the New York Times on Sunday, “Stop Coddling the Super Rich,” where he complained that taxes need to be raised on “the rich” so they can pay their fair share. He reported that he paid 17.4% of his income in federal taxes, and claimed “If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.” That is inaccurate.
Official IRS data shows that for 2007, before President Obama was even elected, the top 1% of income earners paid more in federal income taxes than the bottom 95% combined. That top 1% paid 40.4% of all federal income taxes, almost twice their share of income. When Ronald Reagan entered office, the top 1% paid 17.6% of all federal income taxes. That is why Jack Kemp always used to say if you want to soak the rich, cut tax rates. …
… A central factor that Buffett doesn’t understand is the multiple taxation of capital. He complains about the 15% capital gains tax rate as unfair, since his secretaries pay higher income tax rates. But the capital gains tax is only one layer of taxation on capital income. Capital income is also subject to the corporate income tax, the individual income tax, and the death tax. As the Wall Street Journal explained yesterday,
“Mr. Buffett makes most of his income from his investments, particularly from dividends and capital gains that are taxed at a rate of 15%. What he doesn’t say is that much of his income was already taxed once as corporate income, which is assessed at a 35% rate (less deductions). The 15% levy on capital gains and dividends to individuals is thus a double tax that takes the overall rate on that corporate income closer to 45%.” …
… The Journal started its editorial yesterday on Buffett’s tax confusions by saying, “Barry Kilgore, the man who made the Wall Street Journal into a national publication, was once asked why so many rich people favored higher taxes. That’s easy, he replied. They already have their money.” But my own son, soon to graduate from college, who understands people and their motivations better than most, had a better insight. “Buffett just likes the attention,” Peter Ferrara, Jr. explained.
Remember Chauncey Gardner from the movie Being There. The character played by Peter Sellers said many soothing yet meaningless things. The president did his best imitation last week. Politico has the story of a reporter who followed Obama’s advice.
At Wednesday’s town hall in Atkinson, Ill., a local farmer who said he grows corn and soybeans expressed his concerns to President Barack Obama about “more rules and regulations” — including those concerning dust, noise and water runoff — that he heard would negatively affect his business.
The president, on day three of his Midwest bus tour, replied: “If you hear something is happening, but it hasn’t happened, don’t always believe what you hear.”
When the room broke into soft laughter, the president added, “No — and I’m serious about that.”
Saying that “folks in Washington” like to get “all ginned up” about things that aren’t necessarily happening (“Look what’s comin’ down the pipe!”), Obama’s advice was simple: “Contact USDA.”
“Talk to them directly. Find out what it is that you’re concerned about,” Obama told the man. …
Craig Pirrong at Streetwise Professor catches the ignorant One yet again.
Whoops! He said it again.
Several weeks ago Obama blamed high unemployment on ATMs and the like. He was widely ridiculed for those remarks, and rightly so. But apparently he believes it, because he said virtually the same thing yesterday:
“One of the challenges in terms of rebuilding our economy is – businesses have gotten so efficient, that, uh, when was the last time somebody went to a bank teller? Instead of using an ATM. Or, used a travel agent instead of going online. A lot of jobs out there that used to require people now have become automated.”
And the world is supposed to wait with bated breath for his jobs proposal? What will it be? To ban the internet?
This reminds me of the famous Milton Friedman story:
‘ There’s a story about Milton Friedman in China that may be apocryphal but illustrates this point. In observing hundreds of Chinese workers clearing land for a new building using shovels, Friedman asked his hosts “Why are they using shovels? Why not use heavy equipment like an earth-mover?” The Chinese official said “If we did that, we’d lose all of those jobs!” Supposedly Friedman said “Oh, you’re trying to create jobs! I thought you were trying to build a building. If you want to create jobs, why not take away their shovels and give them spoons?” ‘
So maybe the jobs program won’t be based on shoveling money to shovel ready projects, but to spoon ready ones.
I have little patience with those who label Obama as a Marxist. However, his economic conceptions do seem to be little more than warmed over crypto-Marxist drivel; he looks at the nation’s poor employment picture and sees a modern day version of Marx’s description of the plight of the handweavers. This is not evidence of hardcore Marxism, just the kind of thing one picks up in the intellectually miasmatic swamps of progressivism that Obama has inhabited the last 30 odd years. Abject ignorance of real economics is the default condition in those swamps, as we find out whenever Obama chooses to bless us with an exegesis on the subject.
Jonah Goldberg posts a letter from a reader who farms tobacco and employs migrant workers.
… Recently, the USDA inspectors show up and pull our workers out of the fields for hours of questions (while we still are paying them). They inspect our houses. Several items just not up to code say these inspectors in an accusatory and snide tone. Threw a stack of regulations literally 8 inches high, small type, saying we are responsible to know and to account for each and every one.
Now we treat our workers very well, but we treat them like men, not children. The house was “messy.” My goodness, we need to hire a maid! The screen door was not exactly square with the frame by an 1/8th of an inch. Well many folks around here live in older homes that have settled. The list goes on, but no item was such that our workers thought there was a problem. The worst part is we were treated like criminals. We are awaiting our fine for our failing to memorize every federal regulation applicable to us.
My dad is 67 and told the feds that he was out of farming due to this ridiculous bureaucracy and storm trooper treatment. Their arrogant reply, “well the law lets us inspect your land and homes one year after you have left farming, so you can’t keep us off your land next year either.” …
Toby Harnden posts on the Vineyard vacation.
In some respects, you’ve got to give Barack Obama some credit. People would rightly criticise Bill Clinton for poll testing everything he did, including, famously, his 1995 vacation. But Obama? He wants to go to Martha’s Vineyard with his family, he knows that it’s a politically insane thing to do but he’s damn well going there anyway.
If you were a Republican campaign operative drawing up Obama’s programme, you’d be hard pressed to come up with something better than sending him to this exclusive island that is the playground for the east coast social, intellectual and financial elites.
Here in the United States, there isn’t the resentment of money and success that is so prevalent in Britain. Nevertheless, a sojourn on Martha’s Vineyard is the kind of thing that is available to very, very few Americans, a break that ordinary voters cannot imagine having.
Oh, there is perhaps one thing that GOP operative could add to the programme. Just before leaving for “the Vineyard” (as its habituees call it), how about a three-day presidential bus trip through the Mid-West in which Obama’s message is that he will not rest for a minute in tackling America’s jobs crisis? …
Yet another bubble burst is sneaking up on us. The Atlantic has the story of student debt. It has passed credit card debt, and is approaching $1 trillion.
How do colleges manage it? Kenyon has erected a $70 million sports palace featuring a 20-lane olympic pool. Stanford’s professors now get paid sabbaticals every fourth year, handing them $115,000 for not teaching. Vanderbilt pays its president $2.4 million. Alumni gifts and endowment earnings help with the costs. But a major source is tuition payments, which at private schools are breaking the $40,000 barrier, more than many families earn. Sadly, there’s more to the story. Most students have to take out loans to remit what colleges demand. At colleges lacking rich endowments, budgeting is based on turning a generation of young people into debtors.
As this semester begins, college loans are nearing the $1 trillion mark, more than what all households owe on their credit cards. Fully two-thirds of our undergraduates have gone into debt, many from middle class families, who in the past paid for much of college from savings. The College Board likes to say that the average debt is “only” $27,650. What the Board doesn’t say is that when personal circumstances go wrong, as can happen in a recession, interest, late payment penalties, and other charges can bring the tab up to $100,000. Those going on to graduate school, as upwards of half will, can end up facing twice that.
A fact of academic life is that the tuition-debt nexus keeps most colleges going. At Loyola University in Chicago, 77 percent enroll with loans, as do 85 percent in New Hampshire’s Franklin Pierce. At historically black colleges, where endowments are low and students are often poor, it’s usually 90 percent. Nor is soaring private tuition the only reason. At public Kentucky State University, with only $6,210 in charges, 76 percent sign up for loans; so do 85 percent at the University of North Dakota, where state residents pay $6,934. What these figures suggest that borrowing is as much to finance living away from home as for bursars’ bills. …