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  • The Buffett Rule is a Calculated Distraction from Obama’s Failed Leadership

    What do you do when you’re losing a debate?  Change the subject.  That’s really all you need to know to understand President Obama’s resuscitation of his infamous “Buffett Rule” that would impose a minimum 30 percent effective tax rate on businesses and families earning $1 million.

    The Supreme Court gave Obamacare a nasty audition two weeks ago, leaving even staunch defenders of the law grasping for straws while the former constitutional law professor now in the White House outrageously flailed the court for doing exactly what the Constitution intends.  So what is the President’s response? Change the subject, of course.

    After releasing a non-budget that completely ignored the nation’s near-term, medium-term, and long-term fiscal plight – an extraordinary trifecta not easily achieved – the President then tried to take the House Republicans to task for their proposed real solutions on all three. Nothing highlights irresponsibility like responsible behavior, and so Obama found sharp rhetoric and a frowning visage to be thin gruel when you’ve no policies of your own. Response? Change the subject.

    Soaring gas prices have put enormous strains on family budgets and business plans. The President might deflect some of the resulting popular anger if he actually had an energy policy that might produce more energy. Instead, his policies have produced only more examples of why government should not be in the business of picking winners and losers (Solyndra). When your most notable policies relating to gas prices is to kill a major oil pipeline like Keystone, propose algae as an energy source and seek to raise taxes on oil companies, you’ve nowhere to hide. Response? Change the subject.

    Then came last Friday’s jobs report, which was universally acknowledged as disappointing: job growth cut in half from the modest levels of previous months, and an unemployment rate that fell only because thousands of Americans just gave up looking.  If Washington had merely left the economy to heal itself, performance today would have been much stronger and unemployment markedly lower. Instead, almost everything this Administration has tried has failed noticeably, and voters have noticed. Response? Change the subject.

    With nowhere else to go, Obama has fallen back to his most comfortable setting – class warfare. Now that it is painfully obvious the Buffett Rule is the President’s chief policy priority and the centerpiece of his reelection campaign, it is fair to ask, what would the policy do to address any of the nation’s problems?

    The answer is – absolutely nothing.

    Strengthen the economy? No, when it comes to economic growth the Buffett Rule would weaken the economy. The tax would fall most heavily on job creators like businesses that pay their taxes through the individual income tax, investors, and entrepreneurs. The higher levy would confiscate from them resources they would otherwise use to start new businesses, grow existing businesses, and hire more workers. This will slow economic growth, job creation, and wage increases.

    Reduce the budget deficits? More like “budget pixie dust” in the words of House Budget Chairman Paul Ryan (R-WI). According to a recent analysis by the congressional Joint Committee on Taxation, the Buffett Rule would raise $47 billion over ten years. And that assumes no negative economic effects, which are certain to reduce the revenues gained. For perspective, during that period President Obama’s budget calls for adding $6.7 trillion to the national debt. The Buffett Rule would reduce the increase in debt in Obama’s budget by about one half of one percent.  No joke.

    The Buffett Rule debate is desperate political prestidigitation. President Obama is losing the fight over Obamacare, which remains intensely unpopular. Gas prices show no sign of descending. The economy at best is muddling. And the nation is looking for answers on the budget and the President has none. The President needed a change of subject. For Obama, what better time for a distracting, divisive fight over fairness?

    When a President refuses to address the issues the country cares about, they tune out.  Obama’s fairness fight is likely to fare about as well as the rest of his policies.

    Posted in Economics [slideshow_deploy]

    13 Responses to The Buffett Rule is a Calculated Distraction from Obama’s Failed Leadership

    1. kverdeck says:

      This post raises some very good points on which, even as a liberal, I can't much defend Obama. The main reason I can't defend him is because his 'failed leadership' so far has been largely a continuation of the policies of the Bush administration. He hasn't done enough to stimulate the economy. Obamacare is a watered-down joke of a reform that primarily benefits the private insurance industry without addressing the real issue of runaway health care costs. Gasoline prices aren't and have never been the fault of whoever resides at the White House, but that's not to say Obama couldn't have done more to enforce the regulation of the commodities speculation market which contributes (according to Exxon's CEO in testimony before Congress last year) about 40% to the cost of each and every barrel of crude oil. The Keystone XL pipeline remains a red herring, as it would have created very few permanent jobs, and the oil it would carry would merely end up on the world market anyway, giving us no benefit in terms of the price of oil. This piece made no mention of the beleaguered housing market, which remains a huge source of economic pain for the middle class–who are, it is critical to remember, the true engine of our economy, and the true job creators.

      All that said, the question being posed here is whether the GOP has any solutions that would work where Obama's performance thus far has been too little. Exhibit 1 would appear to be the latest iteration of the Ryan budget proposal, which does nothing to combat deficits, accelerates the transfer of wealth from the 99% to the 1%, and promises to further shred the social safety net that keeps millions from sinking further into poverty.

      Yes, Obama has done too little, but the economy has at least improved under his administration, despite the best efforts of the GOP to hamstring his efforts–the improvement has been too slow, and nearly imperceptible to everyone outside of the top 1% (who took home 93% of all new income generated in 2010). But at least we haven't slipped back into recession or worse. The path the GOP would like to take us down, on the other hand, would shatter the middle class even further, making even this meager recovery seem like a veritable golden age. Be careful what you wish for, friends.

      • MJacbos says:

        99% v 1% is just demagoguery used to incite those that lean towards the social justice agenda. Fact in life. Some people get rich and others don't. Some play in the NBA and others don't. Some get hit by huricanes and others don't. And government has not ONCE demonstrated they can effectively, efficiently and through blind-fairness change any of that. The American culture of individual independence including earning whatever wealth they can achieve (without interfence by some self-appointed panel of judges…ie. progressives, statists, occupy, Obama admin) has driven us to tremendous innovations, increases in productivity and overall standard of living. While true some have experienced that better than others that's just how life works as mentioned above. Our poverty levels have a much higher standard than other countries. Why? Because a rising tide floats all boats. Lastly, by nearly all reasonable measures the economy has not improved. Some measures yes but by the most important ones – unemployment, debt, GDP, it has not.

        • kverdeck says:

          You're right, the 99% vs. 1% thing is a misnomer, or oversimplification–it's actually the top 0.1% or so that's actually running the show. But anyway.

          We've been trying the neo-cons' trickle-down theories for 30 years now. It hasn't worked. Is that a reason to keep trying it? What's that definition of insanity that gets tossed around, doing the same thing and expecting different results? Most of the 20th century did indeed see the sort of growth you indicate–but it didn't happen by trickle-down policies, it happened by creating a broad and robust middle class–the same middle class that has been under attack by conservative policies for 30 years now, and which bore (and continues to bear) the brunt of the impact of the 2008 downturn. The higher standard of living you mentioned? That was a result of *reining in* unfettered capitalism, not of letting it run on its own, trampling over workers, consumers, and the environment in the name of maximum profits. It was a result of entrepeneurs like Henry Ford who realized that paying his workers well would result in increased demand for the products they made. It was a result of limiting the risky financial instruments and reducing the income and wealth inequality that all contributed to the Great Depression. The economic growth we saw in the mid-20th century happened under top-bracket tax rates of 50-70%. Conservatives repealed those regulations, and slashed those tax rates, and encouraged the increase of inequality. And what did we get from all that? Only the mess we're in–unless, of course, you're one of the top 1% (and especially the top 0.1%), in that case you did pretty darn well indeed.

          Obama has, really, offered only more of the same. But at least, unlike the GOP, he doesn't promise to make it worse.

          • MJacbos says:

            Who's running the show is the expanding government and their supporters of which I'd agree consists of many on both sides of the aisle that are wealthy. But the key is not to demonize those that are wealthy but to instead focus constraints on those that actually make public policy. Hedge fund managers don't. Politicians do. Government did virtually nothing to "build a strong middle class". Rather, they kept out of the way except for limited regulations which allowed innovation and incentive to thrive. Regarding the continual reference to higher tax rates it's interesting how the associated amount of tax-avoidance is conventially left out. Higher taxes essentially means one believes the government can more effectively invest than can private investors which has proven to be incorrect and is absurd simply on it's face given the history of failed government run entities. Capitalism isn't the problem as evidenced by a long history of innovation, ecomonic growth (across the entire population even if at dispare levels) and increases in standard of living for everyone relative to other countries.

          • MJacbos says:

            I've found the discussions usually boils down to having faith primarily in individuals to best manage their own lives regardless of the external factors in this world compared to a statist philosophy that the politically powerful knows what's best for us and through tinkering will pick winners and losers based upon their idealogy. Identify one successful economic system that is government-driven (even Western Europe is crumbling under the debt they've created as they created their utopian nanny-state caring for their subjects). Obama just promises to make things better but in reality makes things worse all in support of his agenda to transform this country into the progressive vision of a powerful centraly government through seizing power/liberty from the individual. It hasn't worked elsewhere, isn't working here and will cause us way more damage than any downsides to allowing free markets.

          • Stirling says:

            Your understanding shows the liberal education not the actual facts.
            *reining in* unfettered capitalism was a progressive idea brought over from Europe from people like Woodrow Wilson who saw Captialism as a threat to government's (socialist agenda) ability to keep it's population controlled.. He was by all means a Goverment Statist (elitist).

            "Growth we saw in the mid-20th century" – The roaring 20's (Calvin Coolidge president) that was hands off government policy, did drop the top bracket down and everyone benefited, it WAS 50-70% under the progressive president Woodrow Wilson that strangled the country's economy. Coolidge is never given credit in the Liberal media because he did prove the success of less taxes, and less government during that period.. The 30's usered in annother progressive (Franklin Roosevelt), which went back to the failed policies of Woodrow Wilson causing the great depression due to his polcies. Henry Ford was a capitalist plain and simple, and had nothing to do with limiting the freedom of the rich at the time.. Most of the Rich at the time gave great deals of money to chairity like Andrew Carnegie, even under the opressive progressive administrations.

      • Stirling says:

        You liberals just can't stop blaming Bush… (comon man it's been 3+ years) own up to the fact that Obama OWNS this.. (he had super majorities in congress from 2008-2010) and could of changed ANYTHING (whithout a single vote from the GOP).. Anytime I hear Bush as an "excuse" you've lost all my respect, and you are in denial as to the truth.

    2. lesliemj says:

      Obama's Re-Election: A Stake in the Heart of the American Spirit
      By Lloyd Marcus

      …Frankly, I cannot relate to those who are eager for Obama, "King of the Trifling," to reign in his new American kingdom, in which government harvests the crops of risk-takers to be redistributed equally to the masses. Obama's re-election campaign is targeted to hypnotized voters, to products of liberal indoctrinated education, making them clueless regarding the tremendous cost and value of freedom. Consequently, Obama voters will eagerly surrender freedom, which is their God-given birthright, for a "free" crust of bread or a bowl of soup.

    3. Bobbie says:

      Whatever Obama raked in 4 years over the budget affordable, should take 4 years to balance the budget back.

      It's getting old this "take down the rich because I can make a big scene and take from everyone I want and give it anywhere and to anyone I see fit!" It's so unfortunately juvenile. What's the excuse to single out the privacy of people who use their (not government given) God given abilities to establish their own livelihoods without government dependency and it's expense? When need be, a strong leader would be encouraging this for all Americans. But Obama isn't willing to teach or encourage men to fish for their own, so they wait around for Obma's big moment because they, like Obama won't give people a chance when skin color is so defined by ignorance of the feeble mind. he (and his like minded of many) want all money and control and once he gets his foot in this door, (t)he(y'll) bash through the rest!

    4. Stirling says:

      Buffett owes 1 Billion in back taxes by the way.. Methinks he (buffet) should shut his trap and pay the government before he (buffett) campaigns for those who succeed legally shell out more to an arogant overspending regeim. Comon Occupy, start showing up on Buffett's front door (it's only fair).

      • kverdeck says:

        Misinformation, unsurprisingly. Berkshire-Hathaway owes those back taxes, not Warren Buffett personally. Po-tay-to, po-tah-to, you might say, and I agree that it's hypocritical either way. But at least they admit they owe the taxes and plan to resolve the situation, unlike a lot of firms who manage to game the system to avoid federal income taxes altogether.

        • Stirling says:

          When Mr. Buffett resolves the 1 Billion issue (which he does have control over) then maybe someone might belive his sincerity, not before then sorry.. The "Buffett Rule" is dis-ingenuine, and actually not "FAIR" since it penalizes one group (class warfare), rather then everyone equally. If Buffett came out and said the 48% that don't pay any federal taxes should pay their "Fair Share" then I might get behind his thinking.. but to put an Unfair burden on one group over annother devides a country rather then unites one.

          The companies that you claim to "game the system" are just abiding by the existing laws on the books.. and keeping monies in the private sector (which creates jobs), not the public sector (which destroys the private sectors wealth). Those companies that can pay 0% should be applauded since they are making better use of their limited money then the government's reckless spending (which shows they are unwilling to respect the taxpayers).

    5. Bobbie says:

      Obama capitalized on any mistakes from the past, by trillions. He's protecting government and all it's entities without a second thought of the ones footing the irrational bill of his unconstitutional acts while his consisting lies drain the brain of his public.

      No one is stopping the selfish Warren Buffet or the President himself from freely redistributing their wealth without government force! Warren won't give unless the President taxes him while all of his giving goes through government to who knows where? And the people obama belittles think Obama is going to give them any? He's taking advantage to exploit them or he wouldn't be forcing government intervention!

      The GOP has put forth necessary corrective actions of the democratic failures tearing America and her people down, that the good of the American people have been forced to sacrifice under where the good of the American people continue the concept to live the American dream of freedom and independence from government control.

      The GOP shows respect for the American peoples' constitution and the peoples' fight to maintain it as they work with the American people! We all know democrats can't even comprehend the true meaning of the American constitution, calling everything democrats say is "what America wants" with the word democracy behind it. Pretty low and disingenuous that they'd call themselves American!

      If you're able bodied but dependent on government, no you're not going to acknowledge your own self abilities and the personal responsibilities freedom takes on or the principles and common sense of the hard work and efforts of the GOP.

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