President-elect Obama has learned closing Gitmo isn’t easy, likes Dick Cheney’s advice and is planning on continuing Clinton and Bush 43′s policy toward Israel. This is change? No, but it’s very smart and will garner him praise from everyone but the netroots.
And I fail to understand why conservatives mock the President-elect for suggesting we need some shared sacrifice. Aren’t Republicans in favor of limiting spending, ending the bailouts and denying aid to faltering auto companies, for example? That’s spreading the pain. I think the tone and approach of the Right needs some fine-tuning. Leaping on the President-elect when he says something entirely reasonable is self-defeating and off-putting. It is a good thing when he says things like: “I want to be realistic here, not everything that we talked about during the campaign are we going to be able to do on the pace we had hoped.” (Ed Morrissey didn’t fall into the trap of knee-jerk criticism.)
Jeffrey Goldberg tries his level best to educate his fellow blogger about who George Bisharat is.
Marty Peretz reveals the deepest, darkest secrets of the Jewish Lobby. Not really, but it is nice to know how many non-Jews are members.
“With every image of the dead in Gaza inflaming people across the Arab world, Egyptian and Jordanian officials are worried that they see a fundamental tenet of the Middle East peace process slipping away: the so-called two-state solution, an independent Palestinian state coexisting with Israel.” They are kidding, right? Everything was just humming along on the path to peace before this. Yeah. ( Maybe John Bolton was right — it’s time for a three state solution.)
What will Maureen Dowd have to write about and where will all that random venom go when Bush and Cheney leave office?
Mike Duncan leads in publicly pledged votes for the RNC slot. Hey, I suppose if Rick Wagoner can keep his CEO job at GM, Duncan can keep his RNC chairmanship. Come to think of it, which one had a worse year?
The A.P. mimics People magazine with “a rare look inside the private world of a woman America fell in love with decades ago as she rode her pony over the White House lawn.” Ooooh, she rides the subway! Ahh, she books her own airline flights! So do a majority of New Yorkers, but I bet they don’t consider those as reasons to appoint them senator.
Is Sen. Chris Dodd in trouble — that is re-election trouble (we know about the legal problems)?
This headline seems confused: “Will Mitch McConnell Rain on Obama’s Parade?” I think it’s Harry Reid who has been giving Obama the most difficulty, beginning with sending Roland Burris out into that rain.
How long will the new President be able to blame George Bush for the recession? Not so long, according to Charles Krauthammer: “By mid-year it becomes his. I mean, everything is blamed on the predecessor at the beginning, as you should. And this always happens. By summer it will be his recession and, of course, even by his own estimates, it will be getting worse. Unemployment will be climbing. It probably will be at 9 or 10 percent probably all the way into the midterm elections in 2010. ”
Meanwhile, Bill Kristol takes comfort from Time magazine’s gloomy prediction about Israel’s Gaza incursion: ” I was cheered up by that Time Magazine cover. This is the same magazine that in 2002 said Israel’s incursion into the West Bank couldn’t possibly succeed in crushing the intifada and reducing terrorism and that said that the U.S. surge in Iraq — I remember this vividly — in January 2007, the surge can’t succeed. Look, I think Israel is pursuing a diplomatic and military strategy on two tracks. That may work. No guarantees. All this talk about world opinion — they’re negotiating with Egypt. Senior Israeli defense officials were in Egypt and they’re going back to Egypt Monday to try to get Egypt to be serious about cutting down on the smuggling.”
More on what to expect at the Eric Holder hearing: “Pennsylvania Sen. Arlen Specter, the top Republican on the Senate Judiciary panel, said he is awaiting Mr. Holder’s responses at the hearing before deciding on his vote on confirmation. In a Senate speech last week on Mr. Holder’s nomination, he said, ‘Sometimes it is more important for the attorney general to have the stature and courage to say ‘no’ than to say ‘yes.’ ’ Even one of Mr. Holder’s prominent backers, James Comey, a former deputy attorney general appointed by Mr. Bush, criticized Mr. Holder’s ‘huge misjudgment’ on the pardons in a letter to the Senate panel expressing support for confirmation.” Hmm, perhaps Holder could use fewer letters. Still, with some prominent Republicans coming forward to support him, Holder may get through — provided the Democrats can explain why politicization of the Justice Department to extract undeserving pardons for fugitives and terrorists is no big deal. This is one place where less continuity and more change would be a good move.
It’s simple. If taxes on businesses and individuals making over 250k rise, then these businesses and individuals will pass along the tax hikes to their customers. In essence, a tax hike becomes a tax on customers and consumers.
With Obama, it’s “…words, just words.”
There’s a related point: when a company’s taxes are increased, and it has no way of raising the prices of its products correspondingly due to a highly competitive market, it is less likely to embark on new projects where addional capital spending is required, since there is less cash flow available. Obama wants to end tax breaks for the energy industry, which means fewer oil exploration and drilling projects and therefore less oil and gas. On the local American level, this would mean gasoline prices heading upward.
Just as Obama is threatening the energy industry, the local news in the DC area is full of stories of outrageous electrical bills in the Maryland suburbs. I mean electric/heating bills that jumped from $300/mo to $1,000/mo year over year. Stories tell about widows who have to decide between paying their electric bills or buying their prescription medications.
No one seems to connect the dots between the Obama Administration’s energy policies and the related dislocations to ordinary people.
On the bright side. Today Greenpeace led a “Civil Disobedience” demonstration to disrupt operation of the Capitol’s coal fired power plant. Nancy Pelosi, and Rep Malarkey (sic) D/Ma were supposed to speak to those heroes, but had to cancel because they could not get back from their weekend travels due to the snow storm in the DC area. The wind chill at the time of this illegal, government sanctioned, action was reported to be 7 deg. Is it too much to hope for multiple cases of frost bite?
Hmmm.
1) No Republican president since Eisenhower has balanced a budget
2) Government spending as a fraction of GDP has been higher under Republican administrations
3) Returning to the tax rates of the 90s is not socialism, no matter how hard you squint.
During the weekend on various political programs, the new administration paraded their spokespeople telling how they had inherited this dire situation from Bush. Yet much of this year’s market downturn can be traced to President Obama’s anti-free market policies and refusal to inspire confidence in the markets.
Me thinks it’s time to remind Mr. Obama and the Democrats of the Sec. Colin Powell’s Pottery Barn rule: You break it, you own it.
Sure, President Obama inherited an economy in trouble. But what Margo describes here is what many experts, including those on Wall Street, are saying. These “fixes” being proposed by the new President will break our economy.
President Obama will and should start owning the blame now.
Franglo is setting up a straw man by saying that returning to tax rates of the 90s is not socialism. Taking control of the entire economy, nationalizing banks and building entirely redistributionist systems like the mortgage program are totally socialistic…and the methods Marxist.
Just how much does he think the top 2% of taxpayers can bear?
If the future is so inspiring, why are not the 62% of voters who supported Obama buying into the fire sale taking place on Wall Street. After all, if the future is bright, now is the time to buy…the Obama Rally has given us fire sale prices in the market. I don’t see any of my Obama supporting friends investing a dime in the promise of Hope and Change.
TG…Obama will never own the blame for anything. It’s not the Chicago way.
Maybe the markets are tanking because the America as a whole spent a decade racking up debts at levels not seen since 1929. Living high on the hog, on credit. Or maybe it’s the collapse of the world economy.
Nah, on second thought it’s definitely all Obama’s fault. He’s been president for 100 years.
franglo,
1) Congress is in charge of the national budget, not the President.
2) Government spending as a fraction of GDP rises every year, but the upward spike Obama and Co. have created dwarfs any previous boondoggle.
3) Raising taxes on the wealthy to redistribute wealth is socialism, no matter how tightly you close your eyes.
4) Obama’s budget proposal will harm the people it’s supposed to champion if its passed.
5) You are an idiot.
You guys are looking at it all wrong.
The absolute last thing the Democrats want to see is the black community escaping the slums, escaping the inner city, escaping their hourly wages, escaping the lives of lower class penury the Democrats take advantage of for their own political gain.
You guys are looking at it as who is going to be hurt.
What you should be doing is really seeing the inability for those in the lower class to move up to the middle class, and for the middle class to move upwards to the high middle class, and lower class rich.
This is all about STATUS QUO, which the Democrats use to maintain their political power. GW was almost made to order for the Democrats, for he’ll be the one that Democrats remind people of for generations to come, —————– and they should.
GW is loathed, as the years unfold, he’ll probably be more loathed, especially when the narrative sets in concrete.
Obama intends to bring low as many as he can, so as to insulate them from the Republican message.
When one acquires wealth, even middling wealth, one desires to conserve it, and see it grow. Such a development opens one to the message of the GOP.
The Democrats desire to forestall that by wiping out many who were slowly but surely building wealth.
The last thing the Democrats want to see is a healthy and wealthy, non-neutoric citizenry, for such a citizenry would peer through the Democrats and see the pathology that governs them.
Hey, I have a nifty idea for transferring more of the tax burden to the “rich.” Let’s say your state has a sales tax of 8% So when you buy a $100 item, it costs you $8 in taxes. Well, we could make the “rich” store pay that $8, instead of the “poor” consumer. Of course, the item will now cost $108, but we have given a “tax cut” to 95% of the people, and increased taxes on the “rich.” Wheeeee! Obamanomics in action. Next, we raise the tax rate to 12%, so now the item costs $112, but the average American isn’t paying any taxes, and the “rich” are paying even more – their patriotic duty. See how this works? Isn’t it fun? Vote for Obama and get tax cuts for everyone! Wheeee!
“I don’t see how it can be repeated too often: A tax on business is a tax on the customers of that business.”
This is junior high economics at its most ignorant.
Hasn’t anyone here taken an undergrad course in price theory/microeconomics? You know, where you disaggregate tax-driven price increases into their substitution effects and income effects? Where you examine elasticities of supply/demand to see how much of a tax is borne by consumers in the form of higher prices and how much is borne by the seller in the form of lower revenue? Where you estimate the excess burden (society’s deadweight loss) if the drop in sales (causing both consumers and sellers to lose) because of higher taxes is not captured by the government in the form of greater revenue?
This material gets covered before the first midterm exam.
You know, don’t you, that the economic literacy here at Contentions lags that of the most math-challenged art history major at Chicago or Princeton forced to take intro economics as part of a distribution requirement?
Yes, Cash. When you “examine elasticities of supply/demand to see how much of a tax is borne by consumers in the form of higher prices and how much is borne by the seller in the form of lower revenue,” you are positing that consumers will bear some of those taxes, aren’t you? Or are you arguing that business never passes tax increases along to customers?
When consumers are to a great extent “sellers” also, either employees of sellers who must expect lower wages, or owners of sellers who must expect lower profits, the effect is even stronger.
The possibility of these revenues not actually materializing is a very good point. However, if the spending is committed, and the revenues don’t materialize, then everyone pays through inflation.
Cash asks: “Hasn’t anyone here taken an undergrad course in price theory/microeconomics?”
I think Margo has, as have many others here. The mistake you make in your well articulated post (which you deserve an “A” grade for, by the way), is that this discussion is about macro, not micro, economics. This is more than some study on the effects of excise taxes on cigarettes or liquor.
The tax policies being proposed by the new President have far reaching implications on long term capital formation and investment rates. The stock markets are considering this and are responding disapprovingly. I wish macroeconomics and stock markets were taught in junior high school, then maybe more Americans would understand the dangers that these tax policies pose.
Margo,
In some cases, a tax increase on business gets passed through penny for penny to consumers. In other cases, the business absorbs the entire hit. In most cases, consumers and producers find ways to share the pain.
It all depends on things like elasticities, whether we’re talking normal goods or inferior goods (that’s the jargon) in which an answer requires well-defined assumptions.
Which is why economists spend so much time manipulating the variables to make this or that point about the effect of a tax increase.
So a blanket statement that a tax on business is a tax on consumers is simply wrong.
The macro issue, however, is society better off wiht a tax? Again, the elasticities of supply and demand determine the answer, at least in a narrow, dollars-generated sense. Economists on either side of the issue make their assumptions and build their models.
And ordinary citizens weigh in (rightly so) on the ethics and social justice of a particular tax. Should certain items (groceries) or groups (the poor) be exempt? Do we tax certain activities (gambling, tobacco) or transactions (rapid-fire buying/selling of securities) to show our disapproval? Isn’t inherited money the ultimate in unearned income and ought therefore be subject to higher taxes than money earned by the janitor who rides a bus to his night job mopping floors and cleaning toilets?
It’s dopey categorical statements by people who talk as if they’ve never seriously thought about taxes that are so irritating.
Crash,
no, I don’t think any conservatives here have pasted economic clap-trap from moonbat websites into their comments. That’s what you really meant when you asked if anyone here had “taken an undergrad course in price theory/microeconomics.”
Tax increases on businesses ALWAYS get passed on to the consumer, which in turn affects sales and harms the sellers. That’s why you cant cite a single example where “the business absorbs the entire hit.”
Are you aware that art history majors at Chicago’s universities and Princeton are NOT forced to take intro economics as part of a distribution requirement? Neither are constitutional law students. (Judging by Obama’s constitutional ignorance, they aren’t required to study the Constitution, either.)
Maybe you should actually attend one of those economics courses you mentioned, instead of sneering about fictional academic achievements.