Obama and Economics
May 1, 2008
Here is a sampling of what is in the full article:
You say, "The insurance companies, the drug companies, they're not going to give up their profits easily when it comes to health care." Why should they? Who will profit from making those industries unprofitable? When pharmaceutical companies have given up their profits, who will fund pharmaceutical innovations, without which there will be much preventable suffering and death? What other industries should "give up their profits"?
ExxonMobil's 2007 profit of $40.6 billion annoys you. Do you know that its profit, relative to its revenue, was smaller than Microsoft's and many other corporations'? And that reducing ExxonMobil's profits will injure people who participate in mu-tual funds, index funds and pension funds that own 52 percent of the company?
You say John McCain is content to "watch [Americans'] home prices decline." So, government should prop up housing prices generally? How? Why? Were prices ideal before the bubble popped? How does a senator know ideal prices? Have you explained to young couples straining to buy their first house that declining prices are a misfortune?
Telling young people "don't go into corporate America," your wife, Michelle, urged them to become social workers or others in "the helping industry," not "the moneymaking industry." Given that the moneymakers pay for 100 percent of American jobs, in both public and private sectors, is it not helpful?
You favor raising the capital gains tax rate to "20 percent or 25 percent." You say this will not "distort" economic decision making. Your tax returns on your 2007 income of $4.2 million show that you and Michelle own few stocks. Are you sure you understand how investors make decisions?
During the ABC debate, you acknowledged that when the capital gains rate was dropped first to 20 percent, then to 15 percent, government revenues from the tax increased and they declined in the 1980s when it was increased to 28 percent. Nevertheless, you said you would consider raising the rate "for purposes of fairness." How does decreasing the government's financial resources and punishing investors promote fairness? Are you aware that 20 percent of taxpayers reporting capital gains in 2006 had incomes of less than $50,000?
You want "to reduce money in politics." In February and March you raised $95 million.
When looking at this, it would seem that Obama doesn't understand that much when it comes to macro-economics.