Dear Ms. Maria Bartiromo: Some Basic Economics
Dear Maria Bartiromo,
I am writing to ask you to reconsider some of your statements about Barack Obama, taxes, and the economy.
Firstly, your warning that Obama would likely raise taxes is correct. Your warning that this would have a negative impact however, is simply ridiculous. You are a decent economist, so you should know better.
Blanket statements like this have nothing to do with serious debate. Obama does not want to tax people who cannot afford it, and is aiming his cuts at those who can. The neo-liberal orthodoxy that you repeat about taxation has been proven wrong quite spectacularly. The unprecedented tax cuts by the Bush Administration have led to poor economic growth, massive deficits and now recession. Tax cuts do not necessarily mean economic growth, an economic fundamental you seem to be unaware of.
Secondly, your statement that Americans who earn over $200,000 are not rich is simply offensive. 35 million people deemed 'food insecure' in the United States, and there are poverty levels that exceed every modern industrialized nation on earth. The U.S Department of Health and Human Services states that the Federal poverty threshold for a family of four is $21,200 per annum. $200,000 would therefore feed and house almost 10 families. Last year, 36.5 million people lived under that poverty threshold, so the $200,000 you claim does not make someone rich could ostensibly provide for even more.
In an interview with Barack Obama back in March, you made a number of assertions that again, were disingenuous and highly biased. You asked:
"Why raise taxes at all in an economic slowdown? Isn't that going to put a further strain on people?"
Again, let's go back to some basic economics. As corporations and the mega wealthy avoid paying their fair share of taxes, the government has less money to spend on vital services like health care, education, public transport and infrastructure, despite the business communities (ie. you) profession that it does. As wages stagnate and costs go up these services are absolutely crucial for the majority of the population. Cutting taxes for the rich does not provide more tax revenue, just more debt and less services for the poor who work for them. So, contrary to your assertion, increasing taxes for those who can afford it will significantly ease the strain on working people rather than add to it.
Most disturbingly in your question and answer session, you asked him:
"You want to index the minimum wage to inflation, we'll see the minimum wage go up every year. You are looking to strengthen the unions. Basically, making costs go up for small business. Why put a further strain of expenses, higher expenses, on the one place in the economy that's actually creating jobs?"
As someone earning a six-figure salary, you don't really have a right to be talking about the minimum wage. No one can survive living on the federal minimum wage, and the argument that it would hurt business by raising it is just not true. The people whose lives you speak about so blithely are deeply affected by even the smallest increment of change, and an extra dollar an hour can mean the difference between eating or not.
You also stated in regards to Obama's proposed increase of the capital gains tax that: "It's not just the Buffets of the world who own stocks ... You are impacting a lot of people ... A hundred million people own stocks today."
This may be correct, but it is highly misleading. As of 2001, 90% of the population owned 15.5% of stocks and mutual funds. 84.5% was owned by the remaining 10%. Stocks and bonds are not a major concern for the majority of Americans, as they derive most of their income from labor.
The capital gains tax mostly affects people like yourself -- those with disposable income and inherited wealth. Most Americans are not afforded those luxuries, so the debate is irrelevant if you are talking about regular people. But then again, you are not.
I look forward to hearing your response,
Ben Cohen
Ben Cohen is the editor of www.thedailybanter.com and a contributing Mixed Martial Arts writer to www.espn.com. He can be reached at thedailybanter@gmail.com
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It is ironic that these same people who were for this war dont seem to want to pay for it.They seem oblivious to the fact that we are going deeper into debt to china who is a major competitor but that o.k./how is that sane economic policy?
It is not just the $9.5 TRILLION DOLLAR NATIONAL DEBT!!!!!!!!
ADD TO THE $9.4 TRILLION DOLLAR DEBT THE CUTS TO INFUSTRUCTRE LIKE THE ARMY CORP OF ENGINNEERS AND THE STATES FOR BRIDGE REPAIRS.
SINCE REGEAN THOSE AND OTHER IMPORTANT PROGRAMS HAVE BEEN STRARVED OF FUNDS. EXCEPT FOR CLINTON WHO RESTOPRED THE FUNDS. BUSH HAS SINCE CUT THEM AND MORE!!!!!!!
Someone please ask her why the wealthy are so adverse to paying taxes. Taxes are an investment in this country. Think of it as dollars spent on capital improvement. You may disagree on how tax revenues are spent (I personally do not want to support war), but that is a political issue to be taken up with your representatives.
Thank you. That is one of the fundamental arguments for why the rich should pay more taxes. Since they own most of the businesses, real estate etc these improvements benefit everyone, but them the most. Finally government's don't run on air. They need money. And while there was a time in my life where I can spend that dollar a whole lot better than the government can argument kind of worked, it sounds trite now. Pathetic actually. It's time for a reality check. Now that the boomers are retiring (and I am one) let's raise the retirement age. We missed it on the so-called "greatest generation" , so let's do it now. Raise it to 70 immediately. The so called "greatetst generation" left us totally in hock becasue they rode the gravy train as long as they could, took out WAY more than they put in, and frankly don't care. I say let em rot. And no way repeal the estate tax. They ain't dodging that responsibility as well. Cheapskates all of them.
If you are an older single person and are planning to sell your home of many years to move into a retirement home, better do it this year. Your Federal capital gains tax could go up significantly in 2009 under the Obama tax changes. Unrealized housing capital gains of $500,000 or more are not unusual in high cost areas of the country, even for middle class homeowners. After you pay the capital gains tax, you may have to move into something a lot smaller because you can't afford anything else.
Sorry Ben, I don't want my taxes raised to pay for US Imperialism. The US should shut down all overseas military bases from Japan to The Netherlands and withdraw all US troops from Iraq NOW.
I agree.
Everyone please, leave the sugar baby- er, I mean the money honey alone.
If you made a 7-figure annual salary, and got a half-million-dollar advance to write a book, $200 K a year wouldn't look like much to you either. . .
When Bill Clinton left office there was a surplus of capital in our nations deficit. When Bush took over he enacted these tax breaks for the rich.
Now we have the biggest deficit in our countries history.
McCain said that getting rid of these tax credits to the rich corporations will be a tax on all Americans. How? I say its nothing more than lies thats coming from the republican party.
Getting rid of tax breaks for the rich won't hurt us with more taxes. How could that be when they never had those tax breaks back then? Did it hurt us?
This is a complex topic, and while both the "soak the rich" crowd and the "no new taxes" refuseniks have valid points, neither has the final answer. Taxes do need to be raised, because massive deficits are bad for the long-term economy (as John McCain argued eloquently in 2001 - too bad that guy got kidnapped by the pod people) and because America desperately needs a significant investment in its public infrastructure. Above a certain level, however, tax rates really can become self-defeating - they encourage tax avoidance, for example, and they tend to skew investment decisions in often irrational ways. The best policy for the next President to follow would be to simply allow the Bush tax cuts to expire, end the war in Iraq and use half of the cost savings for domestic investment while scaling back the massive pork-barrel spending which our corrupt Congress has mandated (primarily thanks to Tom DeLay & Co.)
Texvol I agree totally. We have to make hard choices about what this country's priorities should be, end this black hole of waste called the Iraq War, and start investing tax dollars in America. Tax & spend, but do so wisely.
Divide, Conquer, Rape and Pillage.. This is our platform here and abroad..
All one has to do re CNBC business news is listen to them for a while. Helps to have some acquaintance with the economy/business background/common sense. Most are shills for the ideological republican brand of economics. Bush good/taxes bad/republicans good/democrats bad, etc. Have you ever heard from them that Reagan/Bush 1&2 created more deficits than all other Presidents combined? You will get little help in learning to listen to her/Kudlow/melissa whatever/Neely whatever (ugly guy with glasses)/etc. They can't help you earn honest money money in the market. You will just get a political point of view parading as market insight.
Listen to Rick Santelli/Joe Battapaglia/ the balding guy and few others to get some modicum of truth. Better yet tune into Bloomberg for straight information without the drama.
It should also be asked of the Madam is she a Milton Friedman style economists, as are Rumsfeld, Bush, Cheney, Nixon, Reagan, Kissinger, et al.,
Or if she believes at all in any Kenyesian style economics, as has been branded on FDR, with the New Deal.
The New Deal was what Friedman considered a true nightmare.
The big reason why this style of economics is such an absolute failure is because these Friedmanists always seem to ignore, probably for intentional purposes, one colossal ingredient that damages the idea every time, without fail: Greed.
It is why our economy is in absolute shambles, although you would never hear any corporate schill attest to it. It is what has put in place , at this moment, the largest transfer of wealth happening right now, in our lifetime, in history.
So why in the hell should we worry what this woman has to say? Just ask her where her indocrination lies, and let's get on with it, and move on.
Is the poverty level equal to the median income in France? Why do we want to emulate European taxation and welfare policies when unemployment and standard of living is lower there?
And the question is not whether someone making 200,000 is rich or not. The question is what did they do or are doing to get the 200,000. If someone studied hard, worked hard, made many compromises, and gave up many pleasures in their early life to get to a point of maing 200K or more while a person making 50K goofed off and enjoyed life, took on debt, lived beyond their means instead of focusing on the future, taking money from the first to give to the second is blatantly unfair and morally wrong nogt to mention handing money to those who have not earned it.
The fairest way is to maintain and perhaps increase the inheritance tax so no one can get an unfair start. I am all for taxing inheritance but not taxing work whether the income is 20,000 or 20 million as long as they are largely made without relying on inheritance. Redistribution of wealth does not work!!
no sale on the old testament i earned mine stuff. did $200k put in his own water and sewer system? is he inspecting his food and products for safety? did he build his own roads? did he invent the pharma he's taking. does he have a private police force?
sorry, we're in it together- he's got more- he pays more.
Ya even if you goofed around and wasted your life you should pay less!!! Taxing for the infrastructure is a just cause which includes police etc. But taxing to redistribute wealth, i.e., welfare except for the truly needy and unfortunate is not.
The problem is the definition of "work". Labor is taxed while investment and capitol are not (to nearly the same extent.) I would agree with you if labor were at all valued in this country. It is not. It is deamonized and blamed for every mistake capitol makes. Why? Simply because capitol has become so huge that it not only controls the means of production but also the means of communication. Until there is a truly open marketplace for ideas there will be no economic, political or ethical equality. We have returned to feudalism under the the misnamed "free market." It is a monopolists wet dream come true.
The value of labor should be determined by the market. Government dictated value equalization of labor was tried in the Soviet Union and failed miserably even with dictatorship. Any other method of determining value of labor would fail even if the markets are imperfect which they are and will be. As for capital, the cost of failure of capital is very high and low taxation encourages risk taking which causes the need for labor in the first place. You have it backwards - this is a typical mistake made by socialists.
Redistribution of wealth as the primary guideline in creating a government does not work, I grant you. But how in the world does that write off the billions of people living in the modern 'welfare states'? Progressive taxation is a method of redistribution of income that we've practiced since our tax system was founded (when, according to conservatives, taxing wages was unthinkable - they taxed income from land, owned only by the rich).
It's worked relatively well in the past - along with our newfound post-WW2 empire and oil wealth, aggressive taxation (more than 90% at its maximum) built the middle class that the Republicans still havn't managed to eliminate.
We don't have to be a nation that worships the plucky, innovative 0.001% who managed to emerge from the dregs of self-reinforcing poverty to become billionair
Ok - redistribute some, may be to the poverty line. The fact is those who work hard and make the right choices (requiring a lot of compromises), do not end up in the wrong side of the welfare equation except for some unfortunate few who may be struck with bad luck such as illness or natural disasters. They are not becoming billionaires and constitute the large majority. The can take care of themsleves or can improve upon their state themsleves if they chose to instead of receiving handouts from redistribution.
In France 6.1% of people are below the poverty line. And all of them get state-provided medical care and other benefits that aren't typically enjoyed here.
But where is the poverty line? Is it much lower than here? And people below that will need a lot of government support because things are 3 times more expensive there.
BTW, the French also generate 80% of their energy from Nuclear - let's do that here.
Tell it to the cops firmen, truckdrivers,coal miners how hard you work for your money.
Hi All!
Maria shouldn't apologize . . . she should get an award for speaking the truth!
You all must be suffering from some of that good-ole Global Warming CO2!
Besides . . . Maria is nice!
Yours,
Rock Solid
Let Maria answer by speaking for herself. In the meantime, you could take Economics 101.
Hi Sixtwo . . . good point . . . I injected too much!
As to economics . . . have had more than a few of those courses . . . guess they didn't provide a "liberal" version of math, physics, science, human behavior and finance.
Shame on me!
"remember the alamo"? i suppose "forgot my car keys" was taken.
Clever!
spoken like a true "bushie",
obama '08 & 2012
Absolutely!
let's see, bushie economics.
obama '08 & 2012
Any response?
"You are a decent economist, so you should know better." She is no economist. She is journalist with a minor in economics. She and Larry Kudlow (economist) are cut from the same cloth - Republicans. She is most definitely a corporate cheerleader perhaps more so than any other journalist on CNBC. Her younger counterpart Erin Burnett studied political economy and offers more cogent and substantive analysis than "Citibank" Bartiromo.
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