Obama’s Bumbling Class Warfare Agenda – Daniel J. Mitchell – Townhall Finance Conservative Columnists and Financial Commentary

Obama’s Bumbling Class Warfare Agenda – Daniel J. Mitchell – Townhall Finance 

We know that President Obama’s class-warfare agenda is bad economic policy. We know high tax rates undermine competitiveness. And we know tax increases will lead to even more wasteful and destructive government spending.

But analytical arguments won’t necessarily bring us victory. Let’s also mock the President’s divisive agenda with some amusing cartoons.

Our first contribution comes from Lisa Benson. This cartoon sort of reminds me of this Chuck Asay gem, presumably because of an engine that is overburdened by bad government policy.

You can find some of my favorite Benson cartoons here, here, here, herehere, and here.

Next we have one from Michael Ramirez. He’s used elements of this theme before, as you can see here and here.

More Ramirez gems can be found here, here, here, here, here, herehereherehereherehere, and here.

Our next contribution comes from Henry Payne. I’m not even sure why I like it, but I do.

More clever Payne cartoons can be seen here, here, here, here, and here.

Last but not least, we have one from Jerry Holbert.

This last one isn’t specifically about class warfare, but I liked it so it earned its way into this post. Holbert is new to me, but this is a good introduction.

Now let’s take this opportunity  to discuss one serious point. Obama presumably wouldn’t be pursuing a spiteful tax agenda if he didn’t think it was a political winner. Is it possible – notwithstanding the title of this post – that he’s right?

Ezra Klein makes that case in a column for Bloomberg.

…polls consistently show that increasing taxes on the wealthy is hugely popular. …Obama’s announcement on Monday was an effort to publicize one consequence of inaction: If Republicans refuse to extend the Bush tax cuts for only the bottom 98 percent of taxpayers, insisting instead on extending them for the top 2 percent as well, the resulting gridlock could trigger a tax increase for everyone. Obama wants to saddle Republicans with two unpopular tax positions simultaneously: Republicans are so intent on not raising taxes on the rich that they’re willing to raise taxes on everyone else.

In addition to arguing that the no-tax-hike-for-anyone position will actually lead to a tax-hikes-for-everyone result, Klein suggests that an anti-tax-hike agenda is a pro-spending-cut agenda.

 In the New York Times Magazine, Robert Draper reported what happened when a focus-group moderator for Priorities USA, the pro-Obama super-PAC, explained to voters that Romney and the Republicans want to cut deeply into Medicare while cutting taxes on the rich: “The respondents simply refused to believe any politician would do such a thing.” As in any game of poker, once the cards are down on the table, you usually find that one side actually holds the winning hand. The question is whether Democrats can call the Republicans’ bluff before November.

That passage includes factual mistakes (Medicare spending would continue to grow under the GOP reform plan, for instance, just not as fact as currently projected), but that’s not relevant in the world of politics. The real issue is whether the pro-tax agenda is a political winner. Or, to be more specific, is a class-warfare tax agenda politically popular?

I hope not, though it is possible.

For what it’s worth, I think the key is whether the GOP maintains a firm no-tax-hike stance. Here’s some of what I wrote last year about this topic.

…the no-tax-increase pledge helps the GOP because it sends a signal to all voters that they will not be raped and pillaged (at least in excess of what is happening now). This puts Democrats in a tough position. They can play the politics of class warfare (as Obama likes to do) and say only the “rich” will pay higher taxes, but voters don’t dislike their upper-income neighbors. Moreover, they probably suspect that Democrats have a very broad definition of what counts as rich, so they instinctively gravitate to the GOP position. After all, the only sure way of avoiding a tax hike on yourself is to oppose tax hikes for everyone. If Republicans put tax increases on the table, however, the politics get turned upside down. Instead of being united against all tax increases, voters realize somebody is going to get mugged and they have an incentive to make sure they’re not the ones who get victimized. That’s when soak-the-rich taxes become very appealing. Democrats, for all intents and purposes, can appeal to average voters by targeting the so-called rich. And even though voters will be skeptical about what Democrats really want, they don’t want to be the primary target of the political predators in Washington. Think of it this way. You’re a wildebeest running away from a pack of hyenas, but you know one member of your herd will get caught and killed. You despise hyenas, but at that critical moment, you’re main goal is wanting another member of the herd to bite the dust.

I’d also call attention to this polling data, which suggests some additional effective ways to fight class-warfare policy.

P.S. Supporters of limited government also should explain that the left wants higher taxes on the rich as a prelude to higher taxes on everyone. The New York Times accidentally admitted this was their agenda, and there’s plenty of evidence from Europe showing that screwing the middle class is the only way to finance big government. Simply stated, the Laffer Curve limits the degree to which the rich can be raped and pillaged so the politicians have no choice but to eventually target the rest of us.



Lit Exxon sign logo

Image via Wikipedia


Posted by W. Michael King, Ph.D.

Recognition of media distortions started for me back in the 1970s when strife over oil supply and demand came roaring to the surface. Seemingly (almost) overnight, gas prices at the pump doubled. The media cried out “Oil Company (fill in the blank) profits soar 100%!” and in some cases, 200%!!

The public was outraged at both the price of gasoline and the supply shortages. Teddy Kennedy wanted to “nationalize” the oil companies. The media missed the context. To the “profits soar 100%” shout, it happens to be true: The Return of Equity of the typical oil company did double – from 2% to 4% – and that is, in fact, a 100% improvement. Thanks to media distortions, if you stuck a microphone in front of most people on the street and asked what the profit of oil companies were at the time, I suspect you’d heard 100% or even 200% angrily said with outrage, concealing the truth that the ROE was among the lowest of any industry at that time. The other part the media missed is that the Arab-American Oil Company (ARAMCO) price-fixed the price of oil and OPEC decided they should control the market to the market-price, not by bureaucrats influenced by the US government. Also missed was that the tax and the growing pernicious environment policies made it less expensive to import than to develop and produce domestically.

The distortions happened again during the oil price run up that was unleashed by speculators circa 2008. Once again the media cried out: EXXON PROFITS $15 BILLION in the quarter. The $15 BILLION cry was shouted, and even the normally rational Chalie Gibson during an interview with the CEO of Exxon, followed the call like an automaton on a mission never putting the number into context. In fiscal quarter, Exxon’s profits were a tad over 8% of sales. In the quarter before and in the quarter after, Exxon’s profits were between 5% and 6% – not exactly ripping off anyone.

Recently, it was a case of “here we go again!” The new cry was GENERAL ELECTRIC PAID NO TAXES. A more accurate headline would be “General Electric Suffers Huge Losses from financial division, and investments in “green energy” and profits slammed!”

The media and much of the public seems convinced that “taxing the corporations” is salvation, completely missing the fact that taxing corporations is only a sales tax because that cost of doing business (taxes) is passed down to the consumer like any cost of business. The continuing cry of “increase taxes on the wealthy” misses the context of two points: the top 1% of income earners already pay 38% of the taxes, yet they call this “the fair tax” and that if the net wealth of all the 1% were to be confiscated, it would not dent the squandering debt of the current administration.

Collectively, all of these media indignations only fuel the class war to those who do not study the details and profoundly miss the greatest indigation of them all: the media bias by itself.