Tag: Barack Obama

Obama vs History: Taxing the Rich

If, as Sam Johnson and Bob Dylan maintain, “patriotism is the last refuge to which a scoundrel clings,” then taxing the rich is the first option of a faltering politician.  It doesn’t take a lot of planning; it’s easy to sound byte, and it makes good copy.  Journalist love tax stories because, since nobody likes taxes, they don’t need to waste a lot of time explaining economics to the iGeneration.  It’s either “tax breaks for wealthy friends [cronies in Canada]” or “making the rich pay their fair share.”  All journalists have to do is point to who’s getting screwed and go back to their Blackberries.  They don’t even have to look up.

When a faltering politician pulls the tax-the-rich rabbit out of his hat, he knows his days are numbered and he needs a ballot box bounce at the next election.  So when President Obama cranked up the teleprompter today, he wasn`t offering a bold strategy for economic recovery; he was starting his 2012 election campaign.

Actually, taxing the rich has a long and noble history.  It goes back to the days when Robin Hood and Maid Marian were playing Bonnie and Clyde with King John`s tax money.  In actual fact, though, Robin and his boys were a minor annoyance to King John; it was the rich northern barons who were the real problem.  John had been “making the [Saxon] rich pay their fair share” for years to cover the costs of his stupid wars.  Eventually, they got fed up with it.  In 1215, they raised an army, marched on London and finally cornered the King at a place called Runnymede.  Faced with involuntary abdication, King John signed the Magna Carta, a document that strictly limited the power of the monarchy.  The Divine Right of Kings was dead, western democracy was born and everybody (except John) went home happy,.  The Robin Hood story came centuries later and never really clarified just which rich Robin had been robbing.  Apparently, historically, taxing the rich has its disadvantages.

In the late 18th century, another British King, George III, was busy “making the [American] rich pay their fair share” to cover the cost of his stupid wars — and along the way maybe pay for their own defence.  This did not sit well with the local moneyed class of The Thirteen Colonies.  They got together in Philadelphia and decided to limit the power of the British king and the British Parliament — by getting rid of them.  On July 4th, 1776, they signed the Declaration of Independence, everybody went home to get their muskets, and the United States of America was born.  Meanwhile, George was left wondering if it was better to have taxed and lost than never to have taxed at all.

The modern version of “making the rich pay their fair share” first showed up in Britain, in 1909, when two wily Liberal politicians looked over to the left and saw the new Labour Party capturing the hearts and minds of British voters.  David Lloyd George and Winston Churchill decided it was time to redistribute the wealth of the Empire — and perhaps take a few votes away from the burgeoning socialist movement.  They concocted a People’s Budget which proposed an escalating Income tax, an Inheritance tax and a Land tax.  After a couple of years of political bickering and compromise, the budget passed.  Lloyd George described it thusly:

“This is a war Budget. It is for raising money to wage implacable warfare against poverty and squalidness. I cannot help hoping and believing that before this generation has passed away, we shall have advanced a great step towards that good time, when poverty, and the wretchedness and human degradation which always follows in its camp, will be as remote to the people of this country as the wolves which once infested its forests.”

Unfortunately, their scheme didn’t work.  Despite Lloyd George’s optimistic oratory, taxing the rich didn’t lift the poor out of poverty within that generation or even the next one.  It would take two World Wars and a worldwide Depression to eradicate the worst poverty from the slums of Great Britain, and even then not completely.  The only real result of the Liberal Party’s People’s Budget was within a generation the Liberal Party itself was wiped off the political map and is now “…as remote to the people of [Britain] as the wolves which once infested its
forests.”

Today, President Obama is playing a losing game with history by introducing the Buffett Tax on millionaires.  He might get away with it for a while because most ordinary people truly believe that the rich aren’t really “paying their fair share.”  It’s a common myth that no amount of reasonable arguments have ever been able to dislodge.  Let me bore you with some numbers, though; these are figures from the American Treasury Department.  In 2005, the top 50% of American taxpayers paid approximately 94% of all taxes collected, while the bottom 50% paid the rest – a mere 6%.  Obama knows that politicking with these numbers is not very smart.  However, “making the rich pay their fair share” is a far more palatable catchphrase.  It’s probably the first sound byte of the 2012 presidential campaign.

Luckily, the minute Obama opened his mouth, this morning history was on our side.  Despite its tempting appearance, taxing the rich has never been the best political strategy for staying around the halls of power — especially not in the long term.

It’s starting to look like the White House might get a new tenant next year.

How to Ruin a Debt Crisis: Part III

To put it mildly, America is in the middle of an economic crisis… again.  However, there’s a difference between this one and the crisis of 2007-08 or even 2000.  This time, instead of faceless, nameless corporate executives, Americans have somebody real they can blame — and it just might be Barack Obama.  If this credit downgrade by Standard and Poor’s sticks to the President and the crisis turns political, America is in for a ride right out of Roller Coaster Tycoon, and the rest of the world better buckle up ‘cause they’re coming, too.

Before we discuss the mayhem that’s about to ensue we need to get a few facts straight.  First of all, there’s nothing wrong with the American government’s credit.  If anybody would take even a brief panic pause, they’d notice that most people who are getting out of the stock market are putting their Yen, Yuan and Euros into US Treasury Bills.  So much for America’s inability to pay its debts!  Secondly, the US economy is in trouble, but it’s not on the verge of collapse.   Of the twenty largest corporations in the world, ten are American — and that doesn’t include Disney, Coca-Cola or McDonald’s.  Visa and Mastercard are American companies, as are Facebook, Google, Microsoft, Intel and Apple.  Your physical laptop may be made in China, but the guts that run it are American.  Also, there are two essential concepts you need to understand.  One: every single American, from birth, knows that, unless it’s your team, nobody cares who didn’t win The World Series.  It’s in their DNA somewhere.  To reiterate, they believe that there are champions and then there are the other guys; you don’t get points for close.  Two: in general, ordinary Americans don’t know anything about the rest of the world, and they don’t care.  It’s not arrogance; it’s a simple fact.  Why don’t they care?  They don’t have to.  This isn’t bashing “stupid” Americans.  Think about it, objectively.  What difference does the rest of the world make to them?  The reality is not much.  Former Speaker of the House, Tip O’Neill, once said, “All politics is local.”  For Americans this is true.  That’s why Barack better shape up, or in 2012, the locals are going to go Jimmy Carter on his ass and he’ll be spending the next four years planning the Obama Library.

Here’s the scenario.  Last November, the Republicans may have taken control of the House, but it’s the Tea Party caucus that owns it.  They proved that during the debt ceiling fiasco.  As it stands now, in 2012, there’s more than an even chance the Senate could go the same way – a Republican majority with Tea Party control.  Now, as of last Friday, Standard and Poor’s threw the White House into the mix.  Obama’s approval rating is at 40%.  That’s not enough to win re election.  If a Republican – any Republican – gets to redecorate 1600 Pennsylvania Avenue next year the Tea Party is going to be running the show.

Tea Party people are fed up with playing nice with the rest of the world.  They see America as getting kicked around by every two-bit country with a vote at the UN, and they’re tired of paying for that privilege.  This credit downgrade is just another example to them.  They look at the billions spent in Iraq and Afghanistan and say, “Hey, wait a minute!  We could have used that money.”  They want to stop wasting lives and dollars on foreign adventures and get their own house in order.  They want to protect their own borders, their own jobs and their own industry — before they start tackling other people’s problems.  They want to feed and educate their own children first.  In short, they’re old-fashioned Isolationists.  But before the anti-American choir starts gearing up for the Hallelujah Chorus, let’s look at what this means.

Admit it or not, America has been doing the heavy lifting — economically and militarily — around this planet since 1945.  American military spending has allowed Europe to spend their money on social programs and Canadians to buy Health Care.  The foreign aid they gave Asia established global industries that turned Pennsylvania, Ohio and all points northwest into the Rust Belt.  They’ve paid for schools and hospitals across South America and Africa.  And it goes on and on.  There is no part of contemporary society that hasn’t benefited from American dollars.  Pax Americana has given our world the time, space and peace to grow scientifically, medically and culturally.  Anti-American gasbags don’t realize the USA is the most benevolent Superpower in history.  They never mention the trillions of dollars worth of free food Americans have sent around the world, or the free medical aid or industrial assistance.  They don’t talk about things like the Center for Disease Control in Atlanta, or the American Red Cross or the IMF or the World Bank or any of the other goodies Americans have been paying for — for two generations.

So what happens if an America First Congress starts turning off the money tap?  Every country west of the Bosphorus is going to have to up their military spending by at least 20%.  Europe doesn’t have that kind of money, but they’re going to have to find it.  Canadian Arctic sovereignty will become an expensive proposition.  South Korea will have to do some serious sucking up to Kim Jung-il.   Japan had better invest in missile defence, and China’s lost province of Taiwan will probably be reunited with the mainland, at long last.  The Middle East is too disastrous to even contemplate, but Iran’s neighbours should consider stocking up on bomb shelters and HazMat suits.  And the military spending isn’t even the half of it.

If America erects protectionist trade barriers and shuts the world’s biggest economy out of the free trade loop, the Great Depression is going to look like a walk in the park.  World trade will collapse, just like it did in 1929 — but the fall will be further because billions more people depend on it.  Modern Asia’s prosperity is built on exports; and without them they’re burnt toast.  The Yuan, China’s much-manipulated currency, won’t be worth the time it takes to print it – never mind Asia’s lesser economies.

Then there are all the other non-threatening by-products of American isolationism.  Frantic calls from places like Haiti, Somalia and Indonesia will still be there, but they’ll be put on hold.  Relief efforts in non-big-media areas will wither and die.  The UN, not a Tea Party favourite, will be looking around for lunch money, and Unicef, Unesco, WHO and all the other alphabet agencies will be having bake sales to pay the bills.

The last time America shut the doors and went about its business, there was a global economic disaster and a world war.  In the 21st century, American voters are not going to complain if their government stops spending money in places like Eritrea; most of them don’t even know where that is.  No pressure, but Americans don’t like a loser either; so, Barack, you’d better come up with some economic answers pretty quick — or the political fallout is going to be heard around the world.

Barack Obama: Partying like it’s 1967

I’ve never seen the movie Dumb and Dumber; I don’t have to.  All I have to do is sit back and watch President Barack Obama and the US State Department stumble around, stomping on the flowers of the Arab Spring, and I’ve pretty well got the storyline.  These guys make the Keystone Kops look like Sherlock Holmes.  Obama’s most recent foray beyond the Beltway, on May 19th, was one of the oddest speeches I’ve ever heard.  Apparently, it was a major policy statement.  Who knew?  From my point of view, Barack Obama’s Middle East policy sounds, looks and acts like a 2011 cut rate rerun of the much despised Bush Doctrine.  To be sure, Obama stuck to his guns and threw in a lot of rhetoric about change, but that was probably just force of habit.  After all, he’s been yipping about change for nearly four years now — without very much of it actually happening.

Anyway, according to Obama, the way America will effect change in the Middle East is by throwing a couple of billion dollars at the Egyptians, starting a civil war in Libya and ignoring Tunisia and Yemen altogether.  Furthermore, if Bashar al-Assad in Syria doesn’t quit shooting people in the streets America is going to get really, really angry.  And, if Ahmadinejad in Iran continues his reckless pursuit of nuclear weapons, Barack will personally denounce him and call on the world to apply more sanctions, more often.  None of this is new or even news.

After that, the speech was padded out with some fancy footwork, dancing around the situation in Bahrain, where, it seems, there are several different ways to ruthlessly suppress political opposition — and America recognizes all of them.  There were some further admonishments of Iran – like Ali Khamenei cares what Obama thinks – and a friendly wave to the women in the crowd.  However, absolutely glaring by its absence from the Obama Doctrine was any mention of Saudi Arabia and Pakistan.  To be fair, Pakistan is not technically in the Middle East, and perhaps Obama will get around to them later, but Saudi Arabia is smack dab in the middle.  In fact, its importance in the area is what most presidents have called “paramount.”  Talking about the Middle East without talking about Saudi Arabia is like singing the Old Macdonald song without any of the animals: it doesn’t make any sense.  I hate to resort to rhetorical questions but: Is the Kingdom so perfect as to resist the forces of change and self-determination Obama’s talking about?  Or did they just get lost in the desert?   Don’t get me wrong: I don’t mind the realpolitik that says leave the Saudis alone; I just distrust the motivation.  After all, those are Saudi troops in Bahrain.

Of course, Obama saved the best for last – Israel — and the guy was on a roll.  He started off by saying “the status quo is unsustainable” then went on to say “The borders of Israel and Palestine should be based on the 1967 lines…”  I’m not even going to grace this with an argument.  Obviously, the people in the State Department have never seen a map of the Middle East.  Israel’s pre-1967 borders were indefensible; that’s why they had a war!  Granted, it only lasted six days, but it was pretty memorable.  Who, in their right mind, would think those same borders could be defended any better in 2011?  Wild guess?  Nobody!

The world has changed since 1967.  For example, back then, Elvis was a newlywed, Che Guevara was still alive and a guy by the name of John McCain had just got himself shot down over North Vietnam and was checking in for an extended stay at the Hanoi Hilton.  We were watching Get Smart, The Beverly Hillbillies and Gilligan’s Island on TV and Aretha Franklin was about to record “Respect” – the first time.  Personal computers were unheard of, phones were attached to the wall and most cars got three miles to the gallon.  Hell, we didn’t even have the metric system!  If “the status quo is unsustainable,” how does turning the clock back 44 years help the situation any?

The problem is that it’s not Obama’s fault.  He doesn’t know anything about foreign relations.  Niall Ferguson, a well known British historian, has said — on more than one occasion — that the guy’s clueless.  He’s depending on the State Department to treat him right; this is where you get the dumber part of the equation.  The US State Department has never been the brightest bulb on the Christmas tree, and recently they’ve been spending most of their time unplugged.  This latest adventure in the world of the unknown is just a continuation of the stumble/fumble in the Middle East that started last December.  For example, now that the Egyptians are going to try Mubarak for murder, do you think Gaddafi’s is going to go quietly?  Sometimes I think Hillary’s recruiting her researchers and diplomats at WalMart.

Luckily, Hezbollah and Hamas are still going way too fast on the Crazy Train to let the Palestinians take advantage of the situation.  Nothing is going to happen
for a while, and by that time maybe the American people will quit relying on Hope and Change and take a look around them.  Me?  I’m going to give up
downloading movies and just watch CNN for laughs.