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Time to Dust Off the Old Button:
Viceroy:
I think I saw the bailout czar with one of those.
10.17.2008 6:39pm
J. Aldridge:
Dust off Article I, clause 8 while at it.
10.17.2008 6:45pm
Who are the real judicial activists? (mail):
my goodness, supporting a progressive income tax code is hardly socialism. it's called the history of the federal income tax. grow up.
10.17.2008 6:50pm
smitty1e:
@Aldrige:
But Amendment X probably remains neutered. Fed bread and circuses for all my friends!
10.17.2008 6:51pm
PC:
The Chicago Tribune endorsed Obama. My god, has Obama lost all sense of decency? Does Obama's Muslim mind control ray know no bounds?
10.17.2008 6:53pm
FWB (mail):
Since you have more than I, I will send you my address so you can send me some of your wealth.
10.17.2008 6:55pm
Federal Dog:
Yes: It's been such a long time since a federal income tax has been levied that it's high time to "dust off" section 8.
10.17.2008 6:55pm
Steve:
When I was a kid during the Cold War, I believed that we were in the middle of an epic struggle between good and evil, between freedom and its mortal enemies.

Turns out the difference between capitalism and socialism was nothing more than a matter of a couple percentage points in the marginal tax rate. How foolish I was.
10.17.2008 7:03pm
jrose:
What Obama actually said to Joe:

"My attitude is that if the economy's good for folks from the bottom up, it's gonna be good for everybody. If you've got a plumbing business, you're gonna be better off if you're gonna be better off if you've got a whole bunch of customers who can afford to hire you, and right now everybody's so pinched that business is bad for everybody and I think when you spread the wealth around, it's good for everybody."

He wasn't arguing for income redistribution. He was making the same argument that noted socialist Henry Ford made when providing decent wages to his employees: if the middle class can't afford to pay for cars, we are all screwed.
10.17.2008 7:04pm
pluribus:
If you are hinting at a comparison to Huey Long, I can see it, too. Charm, charisma, a perpetually smiling face, and the willingness (and ability) to say whatever an audience wants to hear. Always running against the establishment and for the little guy. Only this time ol' Huey is wearing a skirt and a pair of designer glasses. Huey was smart and cunning. He scared the you know what out of FDR. Don't accuse me of smearing. I wasn't the first to see the resemblance, or to put the buttom up here.
10.17.2008 7:04pm
genob:
I can still remember, growing up in Louisiana in the 70's, the state history books and classes that made Huey Long into a god. But this was during gas lines and Jimmy Carter, so my parents did a good job of setting me straight.

But I still have burned in my head the image and sound of a grainy film of the Kingfish singing this song.
10.17.2008 7:07pm
David M. Nieporent (www):
He wasn't arguing for income redistribution. He was making the same argument that noted socialist Henry Ford made when providing decent wages to his employees: if the middle class can't afford to pay for cars, we are all screwed.
Henry Ford made no such argument; it makes no sense to claim that he did. (Yes, I know what they teach in 10th grade social studies.) How can giving money to people so they give some of it back to you be a good deal? Ford paid employees more to reduce turnover, not so they could afford his cars.
10.17.2008 7:14pm
byomtov (mail):


You make it up in volume.
10.17.2008 7:18pm
commontheme (mail):
Does your button refer to the massive 700B bailout?

Or are you just a day late with your "Joe the Plumber" talking points?
10.17.2008 7:18pm
iamcool388:
jrose,

Henry Ford's workers were paid WAGES. No one's stopping Joe the Plumber, or anyone else, from increasing/decreasing the wages they pay to their employees... Too high, and you price yourself out of the competition... too low, and you dont get good quality workers. What role exactly did the Government play in fixing the wages of the Ford Motor Company's wages?

There is doing something because you think its a good idea, and then there is being forced to do something because the government thinks its a good idea.
10.17.2008 7:24pm
Dr. T (mail) (www):
The button has a typo. It should read:
Share Our Wealth Society
Every Man a Pauper.
10.17.2008 7:31pm
Oren:

A business that makes nothing but money is a poor business.
~Henry Ford




There is one rule for industrialists and that is: make the best quality of goods possible at the lowest cost possible, paying the highest wages possible.
~Henry Ford

10.17.2008 7:45pm
Hoosier:
I'd say that I am now dusting off my "I Like Ike" buttons. But they are not dusty.

Dr. T--I thought the typo was that "share" should be "shave." And "our" should read "your."
10.17.2008 7:52pm
jukeboxgrad (mail):
nieporent:

Ford paid employees more to reduce turnover, not so they could afford his cars.


I don't know if Ford said that higher wages would specifically allow his workers to buy cars, but he did say that higher wages would lead to higher sales, because they would support the development of a prosperous middle class:

I have learned through the years a good deal about wages. I believe in the first place that, all other considerations aside, our own sales depend in a measure upon the wages we pay. If we can distribute high wages, then that money is going to be spent and it will serve to make storekeepers and distributors and manufacturers and workers in other lines more prosperous and their prosperity will be reflected in our sales. Country-wide high wages spell country-wide prosperity…


From "My Life and Work" by Henry Ford.
10.17.2008 7:59pm
David M Zuniga, PE (www):
Steve says:

"Turns out the difference between capitalism and socialism was nothing more than a matter of a couple percentage points in the marginal tax rate. How foolish I was."

Distinguo. My American Retrogression Thesis holds that in the 4-year political comedy cycle, one constant has held since Woodrow Wilson: every generation of Americans is more ignorant than their parents.

As a student of the Tax Code and income tax history for over a decade, I find this discussion (legal practicioners and their ilk, no less!) perfectly supports my thesis.

Being a member of that minority (estimated 67 million as of 2005) called 'non-filers' places me among the one-in-three people you pass in the store who does not file. But being a professional in private practice, I find the income tax food fight among other professionals simply fascinating.

It's like engineers discussing the alien physics of the government's 911 WTC collapse story...a delicious idiot savant quality to the thing. Whichever side's story proves out in the end, the practical purpose in the heated argument (as all wise mercantilists know) is to keep the chimps at one another with the water hose until you've finished building their cage.

This present game is $700 billion, first tranche; and the chimps don their buttons and grab their hoses!

I'm enjoying this site.
10.17.2008 7:59pm
Joshua:
Dr. T: The button has a typo. It should read:

Share Our Wealth Society
Every Man a Pauper.


No, the "king" is correct, but the button is missing a few letters and one whole word:

Share Our Wealth Society
Every Man a F**king Idiot
10.17.2008 8:00pm
jrose:
What role exactly did the Government play in fixing the wages of the Ford Motor Company's wages?

None, but that misses my point. The analogy is Obama's "spreading the wealth" support of progressive taxation isn't motivated by socialism, but rather Ford's philosophy of the importance of a healthy middle class.

How can giving money to people so they give some of it back to you be a good deal?

If employees aren't paid enough to be consumers, business suffers. You can argue against the theory, but then argue Obama is misguided in trying to help the economy by assisting the middle class. Don't make the dishonest argument that his "spread the wealth" comment means he is a socialist.
10.17.2008 8:01pm
Nunzio:
Higher wages can also lead to higher prices.

Anyway, does anyone think Obama's fiscal policies are a good idea? Raising taxes in a recession is a good idea?

Huge deficit spending during economic growth is a good idea?

Obama disingeniously criticizes W. for huge deficit spending. Obama also plans to spend far more on his "vision" than he receives in taxes. His real criticism of W. is that he didn't spend enough on NCLB and the Medicare prescription drug bill. Obama also has no answer for why a capital gains tax cut produced an increase in capital gains taxes.

Obama's tax policies are about his vision of what's "fair," not what's best for economic growth.

The historic average of federal tax revenues for the past 40 years is 18.4% of GDP (while federal spending is 20% of GDP), which has had strong growth. The economy has also seen strong growth under W., but his spending was out of control.

Obama wants to continue W. spending and has no idea if his tax proposals will bring in the necessary revenue or will help grow the economy. He's completely indifferent to it.

Obama
10.17.2008 8:36pm
Bob from Ohio (mail):
HENRY FORD in (The Dearborn Independent, 12-19 February 1921

"Jews have always controlled the business... The motion picture influence of the United States and Canada... is exclusively under the control, moral and financial, of the Jewish manipulators of the public mind."
10.17.2008 8:56pm
PC:
Bob from Ohio, that sounds like the guy Hannity had on to attack Obama.
10.17.2008 9:07pm
Podunk (mail):
While I can't guess at DB's motivation for posting the button, in my opinion one can make a distinction between a progressive tax system used to pay for services that only the government can provide (national defense, infrastructure, etc.) and a progressive tax that simply transfers wealth directly to lower income individuals. I'm in favor of the former, but I see problems with the latter.

The trouble with Obama's "tax cut for 95% of America" is that, since approximately 33% of American's pay no income tax, this necessarily involves not reducing their tax burden but rather sending them checks. In some cases this can offset payroll taxes, but already various deductions and tax credits can net you more than you pay, and it will get worse if Obama's plans are enacted. Some of us simply think this is a bad business model for a country, for reasons that I'm not going to get into but have a lot to do with perverse incentives and moral hazards.

Incidentally, lest you think that only rich people can feel this way, I'm currently a grad student with kids. Low income + high deductions = $$$ for me every April. I suppose you could still call me selfish, since I plan someday to meet Obama's definition of "rich". But I doubt I'm particularly unique in this goal.
10.17.2008 9:13pm
Jay Myers:

The analogy is Obama's "spreading the wealth" support of progressive taxation isn't motivated by socialism, but rather Ford's philosophy of the importance of a healthy middle class.

Then Obama is free to start his own business and pay his workers whatever he likes. Spreading your own wealth is commendable but spreading others' wealth at gunpoint is counterproductive and should be illegal. His plan of increasing taxes on businesses and high earners is going to mean that they have less money to give to workers. That means fewer jobs and lower wages.

There are a number of smart reforms that could be made to the tax code but this restructuring of the burden isn't one of them.

As an addenda, has anyone noticed the Obama TV ad where he claims McCain's tax plan has "nothing" for most Americans but Obama's plan has three times the amount of cuts for the middle class as McCain's plan? What's three times "nothing"?
10.17.2008 9:23pm
Grant Gould (mail):
Is there anything that Henry ford didn't say at one time or another?
10.17.2008 9:34pm
pluribus:
Grant Gould:

Is there anything that Henry ford didn't say at one time or another?

I can think of a few things:
1. Get a horse.
3. The automobile is just a passing fad.
3. The Japanese make better cars than we do.
4. I really respect Jews.
10.17.2008 9:45pm
Lev:
5. The government should spread the wealth around through progressive taxation.
10.17.2008 10:01pm
Hoosier:
6. I hope the Negro comes to Detroit, and in great numbers. He is the future of this city, and I am anxious to employ him.
10.17.2008 10:16pm
David Warner:
7. Don't fire Matt Millen.
10.17.2008 11:47pm
benji (mail):
I think David Warner wins that one.
10.18.2008 2:58am
Splunge:
You can argue against the theory, but then argue Obama is misguided in trying to help the economy by assisting the middle class. Don't make the dishonest argument that his "spread the wealth" comment means he is a socialist.

You should listen to some socialists some time. What do you think they intend with all their spreading of the wealth? They intend to help the middle class. Or the proletariat, or whatever you want to call it.

The question is not one of motive. Everyone wants to "help the middle class." Why not? Everyone wants to be re-elected, and that takes votes, and the middle class is where the votes are.

Where folks differ is on what, exactly, helps the middle class. Frank socialists -- including Obama and much of the 21st century Democratic Party -- believe it's simple Robin Hood calculation. Take the money from those that have it, and give it to those who don't. Easy.

The other side makes a more complicated argument, which roughly boils down to the fact that when Robin Hood is king, pretty much everyone stops working so hard, so as not to be caught riding through Sherwood Forest and stripped of everything you have. We all have the choice to enjoy life or work hard. When working hard enough to get richer than average is punished, we choose to enjoy long vacations instead.

From this point of view, the best way to "help" the middle class is to leave the rich folks mostly alone. After all, what does a rich person do with all that money? It's no fun if it's just coin in the vault. No, they spend it -- that is, they hire the products and services provided by that "middle" class, so their wealth gets "spread" out anyway. Only difference is, it gets spread in direct proportion to how creatively and hard people work for it, rather than on how pathetic a victim they present to the government deciders. It's clear which motivational structure produces a nicer society. (Or if it's not clear, read up on the differences between East and West Germany.)
10.18.2008 4:46am
LM (mail):
Splunge,

Both ends of the Laffer curve yield no tax revenues, and thus no public services. At a time when the percentage of GDP collected in taxes is the lowest in a generation, calling people socialists for proposing marginal rate increases to a level below those in effect under Ronald Reagan is neither accurate nor constructive.
10.18.2008 6:39am
Arkady:
The Huey Long story I've always liked is this one. He was out on the hustings in rural Louisiana and came upon a toll bridge. If you didn't go over the bridge, the nearest crossing was some 20-30 miles away. The local farmers had to use bridge or make the long trip to the other crossing. The owner of the bridge charged the farmers, what was in those days, a hefty sum. Huey was talking to the owner of the bridge, and in the course of the conversation he picked up a rock and threw it up the bank of the river a piece. At that place, he told the bridge owner, I'm gonna build a free bridge so you can't screw these farmers anymore.
10.18.2008 8:14am
Opher Banarie (mail) (www):
@jrose: You are missing the point that Obama (and the government) have no wealth to spread around. When Henry Ford decided to pay his workers more (regardless of the underlying reasons) it was his own money he was spending.

Obama wants to spend tax money - money the government takes from "the wealthy" with the threat of incarceration - in an attempt to improve others (I won't say middle class because I don't think Obama can define the middle class). (In California, "the wealthy" make more than $44,000 a year, since that is where the top tax bracket starts.)

These are not the same acts: Paying workers who produce goods and services is a recognition of their productivity. Giving hand-outs to people has nothing to do with productivity, and it can be argued that they become LESS productive because they anticipate the next hand-out.

That is the very core of Socialism.

It should be noted that one reason the Founders wanted to limit the role of the Federal government to those tasks that needed to be centralized (e.g., providing national security, control of the currency and making treaties, etc.) is that by having a minimal government there would be no need for massive taxation programs to fund the bureaucracy of the government. This lesson has been lost since FDR and LBJ created the alphabet soup of agencies and programs, but the rules are still in our Constitution.
10.18.2008 10:39am
MJG:
News flash: neither Ronald Reagan nor George Bush's tax cuts repealed the progressive income tax. Was that really the hope still?
10.18.2008 11:37am
A. Zarkov (mail):
The idea behind a progressive income tax is to take equal amount of "utility" (in the sense economists the term) from all the tax payers. Since marginal utility of money diminishes with increasing income (think log function) the amount of tax collected should accelerate. In theory this how you get to progressive taxation.

We levy taxes to pay for the operations of government, at least in theory. Those "operations" should act to the benefit of the whole nation. Only now Obama explicitly proposes to use progressive taxation to directly transfer money from higher to lower income people as a goal in itself. This has nothing to do with funding government operations unless you think wealth transference is a desirable government operation.
10.18.2008 1:06pm
A. Zarkov (mail):
What are the likely economic consequences of Obama's "spread the wealth" policy? It would increase consumption and decrease investment. Higher income people save more than lower income people, and those savings go into investment.

An increase in consumption is pretty much a jobs program for China. Is this what you Obama supporters really want? I think that anyone with any sense would realize we need more investment and less consumption. The US economy needs to shift towards capital investment. For example, we need buy less flat screen televisions and more earth moving equipment. Look at the mess we have gotten into with this obsession with real estate. Real estate is a pure consumption item-- it produces no wealth. Mortgage rates need to go up and the tax benefit for mortgages should be canceled.

Is a shift towards "infrastructure" spending a good idea? Perhaps. At this point I'm inclined to think this should not be our first priority. Construction of coal to liquid fuel plants seems like a better idea. Roads are of no use if you can't afford to drive on them. What's the sense of having a new shiny bridge if gasoline is $10 a gallon?
10.18.2008 1:22pm
jukeboxgrad (mail):
pc:

Bob from Ohio, that sounds like the guy Hannity had on to attack Obama.


It also sounds like Palin's witch-hunter, who talked about "the wealth of the wicked," and about "the Israelites, that's how they work. And that's how they are, even today."
10.18.2008 2:07pm
PC:
Interesting. Michael Smerconish is voting for Obama. I wonder if conservatives have to ask themselves why conservatives are voting for a "socialist"?
10.18.2008 2:33pm
Bob from Ohio (mail):
I thought Ford sounded like more like Tony McPeak.
10.18.2008 3:46pm
Angus:

Is this what you Obama supporters really want? I think that anyone with any sense would realize we need more investment and less consumption. The US economy needs to shift towards capital investment.
There's an argument to be made, and it has been, that part of the crisis of the 1930s and the current crisis was an excess of money at the top looking for investments and not able to find any good ones due to inadequate consumer spending. So wealthy people poured money into the real estate market (stock market in the 1920s) for lack of better options and helped drive a speculative bubble. Yes, there are always some level of investment opportunities in the economy, but if the amount of capital flowing around exceeds the amount of investment opportunities, then that money isn't contributing to economic growth in any meaningful way.

In short, the wealthy and large corporations have gotten under recent tax policy massive amounts of money that they can't find reasonable investments for. On the other hand, households have gone into deficit spending because of stagnating incomes and higher costs of living.

If that is true, the answer would be to rejigger government tax policy so that it favored expanding middle class household incomes and therefore consumer spending. Here is one argument for this case, which includes statements from prominent conservative economists. Link
10.18.2008 6:34pm
DanO29 (mail) (www):

Michael Smerconish is voting for Obama.[?]


A single "A" bush league radio hack makes a lame ass bet that his pot of gold is on the other side of the political dial now, what a coup for the left. Hell I hope he goes to Air America... oh yeah there is no Air America.
10.18.2008 8:00pm
PC:
DanO29, the Chicago Tribune also endorsed Obama. In its 161 year history the Tribune has never endorsed a Democrat. Until now.

Also, 100,000 America hating socialists show up at an Obama rally in St. Louis.
10.18.2008 8:24pm
Splunge:
At a time when the percentage of GDP collected in taxes is the lowest in a generation,

Mmm, yes, and we're at the end of the longest stretch of steady economic growth in a generation. Coincidence? Would you like to find out? I hope you're young, then, and in good health.

calling people socialists for proposing marginal rate increases to a level below those in effect under Ronald Reagan is neither accurate nor constructive.

No doubt, but that wasn't the proposal made. If the argument were being made that taxes need to be higher because we need more government because (for example) we're fighting a war and the soldiers need armor and bullets, or because weeds are growing between the massive potholes on the Interstate, or because the inner cities are turning into war zones what with the lack of police and firemen, then that would be a straightforward social utility proposal. You could go on to propose that the rich pay more taxes, of course -- but you would certainly insist that the poor pay no less. If the country needs more tax money to spend, you can't be reducing anyone's tax burden. That's illogical.

The proposal actually being made, however, is, according to the man himself (Obama), supposed to be roughly revenue neutral. Furthermore, he proposes openly to tax the rich more in order to give money away (through "refundable tax credits") to the poor.

That's not a proposal to tax the citizenry for the purposes of achieving public goods (national defense, infrastructure). That's using the tax code to simply redistribute wealth from the rich to the poor. The "social good" here is no particular government service, it's simply Robin Hood stealing from the rich in order to service the poor.

I'd call that frank socialism, yes. You're stuck on the idea that it's the amount of taxes that determine whether a scheme is socialist or not. That's like arguing that stealing is only stealing if you steal a car, and not if you steal a candy bar.
10.18.2008 9:45pm
DanO29 (mail) (www):

DanO29, the Chicago Tribune also endorsed Obama. In its 161 year history the Tribune has never endorsed a Democrat. Until now.

Also, 100,000 America hating socialists show up at an Obama rally in St. Louis.


200,000 America hating socialists showed up at an Obama rally in Berlin, and so your point?

The Tribune Company has endorsed Democrats for years. Maybe corporate send the endorsement from down high. The only writer on the Trib worth reading is John Kass and he sure as hell isn't in the bag for Obama.

'Joe the Plumber' in media cross hairs
10.18.2008 10:53pm
Angus:
Mmm, yes, and we're at the end of the longest stretch of steady economic growth in a generation. Coincidence? Would you like to find out? I hope you're young, then, and in good health.
We are also ending the longest period in American history where average household income did not increase along with productivity. In other words, middle and working class families benefited relatively little from the prolonged growth.
10.19.2008 12:05am
David Warner:
Angus,

"We are also ending the longest period in American history where average household income did not increase along with productivity. In other words, middle and working class families benefited relatively little from the prolonged growth."

Make sure to correct for the flood of illegal immigration and households headed by a single parent, even if you don't look too closely at whose policies encourage such things. Just for, you know, accuracy and stuff.
10.19.2008 1:21am
Splunge:
We are also ending the longest period in American history where average household income did not increase along with productivity.

Uh, say what? That's a bizarre statement on several fronts. First, average household income is equal, assuming household size doesn't change, to per capita GDP. So if per capital GDP has been growing -- which it has -- then average household income has been growing. To the extent household size has been shrinking, which it has, the trend will be slightly weaker, of course.

Nor can you be arguing that, yes, per capita GDP has gone up, but it's all being raked in by the rich, because this isn't true. Every segment of the economy, from the poorest to the wealthiest, has gotten objectively wealthier over the past 20 years.

So...you're arguing that the benefits of technology have not flowed equally to all segments of the population? That (for example) those who invested their own time and energy, took the risks, and invented and deployed that technology -- folks like the founders of Microsoft, E-Bay, Amazon -- have reaped a disproportionate share of the wealth their own invention caused, and the regular line employees who merely work for them did not?

Oh boo hoo. Such unfairness. Next you'll be telling me that those unfair meanies at the Olympics preferentially award gold medals to the athletes who train harder.
10.19.2008 3:41am
Grover Gardner (mail):

Henry Ford made no such argument; it makes no sense to claim that he did. (Yes, I know what they teach in 10th grade social studies.) How can giving money to people so they give some of it back to you be a good deal? Ford paid employees more to reduce turnover, not so they could afford his cars.


Henry Ford quoted bvy Samuel Crowther in 1926:


The more well-paid leisure workmen get, the greater become their wants. These wants soon become needs. Well-managed business pays high wages and sells at low prices. Its workmen have the leisure to enjoy life and the wherewithal with which to finance that enjoyment.

The industry of this country could not long exist if factories generally went back to the ten hour day, because the people would not have the time to consume the goods produced. For instance, a workman would have little use for an automobile if he had to be in the shops from dawn until dusk. And that would react in countless directions, for the automobile, by enabling people to get about quickly and easily, gives them a chance to find out what is going on in the world-which leads them to a larger life that requires more food, more and better goods, more books, more music -- more of everything. The benefits of travel are not confined to those who can take an expensive foreign trip. There is more to learn in this country than there is abroad.

Just as the eight hour day opened our way to prosperity, so the five day week will open our way to a still greater prosperity.
10.19.2008 3:59am
Angus:
So...you're arguing that the benefits of technology have not flowed equally to all segments of the population?
Equally? That's a pipe dream. What I am saying is that while the top 10-15% saw their incomes rise dramatically, the middle class has seen their incomes remain basically where they were in 1978 (adjusted for inflation).
10.19.2008 1:53pm
LM (mail):
Splunge:

At a time when the percentage of GDP collected in taxes is the lowest in a generation,

Mmm, yes, and we're at the end of the longest stretch of steady economic growth in a generation.


I believe the tax revenues dipped to historically low levels when the first round of GWB's tax cuts went effective.
10.20.2008 12:27am