Obama's Economic Plan

In a stunning about face this week, Barack Obama announced that "I've got an economic plan that is similar to Bill Clinton's." On its face, this would mean that, if elected, Barack Obama would raise taxes on all taxpayers, support NAFTA and reduce welfare, three cornerstones of the Clinton economic legacy. This would be a serious reversal of Senator Obama's campaign promises and his stated policies. Other than a crass attempt to hitch his fate to the Clinton star, the comment highlights the serious risk to our current economic situation that is posed by Barack Obama's pledge to raise taxes on the producers of jobs and capital, increase welfare and abrogate our commitment to NAFTA. These policies create a serious probability of leading our economy into further economic dismay.

Barack Obama is wholly disingenuous in implying that his tax policy will have the same success as the Clinton policy when, in fact, the economic environment inherited by Bill Clinton was vastly different from today's economy. Obama's assertion is similar to saying that because an aspirin cures a headache it will do the same for cancer. President Clinton benefited from an economy that grew by 4.2% in the first quarter of his Presidency, the Dow was up 5.8% for the year prior to his election, total national debt was 54% of national output and information technology was in its infancy. Tax rates inherited by Clinton had been reduced by 60% under Reagan and Bush Senior since the Carter years. When President Clinton increased taxes, he simultaneously brought our national budget into balance in sixteen months. He signed NAFTA against the will of his own party.

Yesterday, the country's growth contracted by .3%, providing one-half of the technical verification of the recession being felt around the country and certain to be inherited by the next President. The Dow is down 32.5% for the year, our national debt is at nearly 70% of total GDP (after WWII national debt was 102% of GDP and America was at the beginning of its stunning economic success). Currently, unless investors are able to forcefully advance new energy technologies, there is no analog to the 1990's information revolution which can give us the necessary economic stimulus for innovation and job growth. Supporters of the Illinois Senator not only ignore the current fragile economy, but also the obvious consequences of Obama's opposition to NAFTA and his destructive economic philosophy. In fact, Senator Obama's policy of higher taxes and higher tariffs for our fragile economy at this time is exactly the wrong direction for the country.

One of the reasons that Barack Obama could well lose on Tuesday is because voters are beginning to realize that his policies will tank the economy and the markets. The stock market looks forward, not backward, and there is a direct correlation between the declining Dow and the increasing poll numbers for Barack Obama. According to the June Gallop Poll, by a margin of 87 to 13, Americans care more about improving the economy than they do about redistributing wealth.

According to his rhetoric, Barack Obama is helping working Americans. In fact, John McCain offers bigger tax breaks to the working class than Barack Obama. (The only reason you do not know this is because you have not looked at the fact that no one earning under $50,000 will pay any tax under John McCain and, on the famous "Obama Taxometer", the untruthful Obama campaign does not include the $5,000 health care tax credit that John McCain in giving to every American). Moreover, almost 75% of Americans making $100,000 have some capital gains. As the value of their investments turns negative they will suffer badly, even if Barack Obama does not raise their taxes. A declining economy is bad for everyone.

It is dishonest for Senator Obama to claim he will fix this economy by taxing the top 5%. His spending increases on programs alone amount to $300 billion per year. The dishonesty is to say that this will be paid by his tax on the top 5%. It is simply not possible. As the Obama plan makes clear, the additional taxes of the "rich" have already been committed to his "refundable tax credits". According to the Tax Policy Center, the Obama tax plan will take $70 billion from the top 5% of earners in the country and redistribute it to the 60 million Americans who pay no tax.

Senator Obama's economic philosophy will make America neither stronger nor fairer. Today, the top 1% of earners contributes 40% of the nation's $2.6 trillion tax intake and the bottom 50% pay 2.9% of our nation's total needs. This is in contrast to the 17% of total tax paid by the top filers under the Carter Administration when the top marginal rate was 70%. It has been shown that reductions in tax rates increase tax revenues because incentives to private enterprise strengthen the economy and create jobs and a larger tax base.

As he exploits the current widespread economic uncertainty in the nation and blames the richest, Barack Obama not only ignites an insidious class war, but also ignores the inconvenient fact that America's top earners have paid double in taxes since the reduction of their tax rates under George Bush. Namely, in 2003 the richest Americans paid $136 billion in taxes and after the tax cut in 2006 they paid $274 billion. Times of economic uncertainty are exactly when our government needs to cling to business and the generators of wealth and jobs, not use them as scapegoats.

Along with my Democratic "friends," I used to make fun of Republicans by saying that they lived in an "evidence-free zone." Well, I now see that it is the Democrats, swept away in the "narrative" and "transcendence" of Barack Obama, that are refusing to look at the facts about the likely consequences of electing Barack Obama. The same media outlets that failed to vet the Iraq War are now failing to vet Barack Obama. Unfortunately, they will never accept responsibility; it will be our country that takes the hit. For me, that is very sad.

John McCain may not be the most eloquent or sexiest candidate in this race, but he is the candidate who will best serve this nation for the next four years. He is reducing taxes for all Americans further than Barack Obama, cutting federal spending and encouraging free trade and energy independence as engines for domestic economic growth. More importantly, he and Sarah Palin actually have a record of taking on the vested interests and their own party (while working with Democrats) to make tough decisions. I have yet to be shown the same evidence of the junior Senator from Illinois.

Regrettably, the road kill of Obama's reckless rhetoric and policies is not the rich taxpayer, but the entire American economy. The pain will be felt mostly by those who lose their jobs in the economic downturn and are the owners of 401ks and other savings who suffer at the stock market continues to decline. Barack Obama has not been held accountable for the obvious consequences of his tax and trade philosophy and policies. If elected, it will be all Americans who will suffer.

PS. Most readers have probably not read this far into the piece, but if you have, I have one more comment.....Since speaking out about this election, I have seen the Obama response is to attack me personally, particularly on the Internet. Fine, but just to let you know, eighteen months ago my husband wrote in the Financial Times that capitalism was in retreat because of the greed on Wall Street. We have subsequently invested only in tax-free government securities. So, my opinion is not driven by my economic interests. I am driven by what I said in the New York Times in June, "I love my country more than my party" ......and it is ok with me if you hate me. xoxoxo

Related: Lynn Forester de Rothschild: Barack Obama's America

Comments

[MyTake]

Hello Lady.

Did you get a chance to take to the streets and celebrate Obama's victory like other people did.

But check with your hubby to see if his Bilderberg Group have full control over Obama, I would like to know!

[Rule Of Law]

This has been up since the 1st. Obama has won! Time to take this misbegotten post down and move onto more carefully considered writing.

[mollie100]

Hi, Lady de Rothchilds. Guess who's coming to dinner?

[research]

You sank your own argument dear:

"The Dow is down 32.5% for the year, our national debt is at nearly 70% of total GDP (after WWII national debt was 102% of GDP and America was at the beginning of its stunning economic success)."

From 1934 to 1962 the top marginal income tax rate was 72-92%...

AND WE THRIVED.

Please read up on the Great Depression with this useful time line:
http://www.hyperhistory.com/online_n2/connections_n2/great_depression.html

[ArturoYee]

From your history link:
(conclusion - spending by itself does not work - building industries does - as WWII caused)

1938
No major New Deal legislation is passed after this date, due to Roosevelt's weakened political power.
The year-long recession makes itself felt: the GNP falls 4.5 percent, and unemployment rises to 19.0 percent.

1939
The United States will begin emerging from the Depression as it borrows and spends $1 billion to build its armed forces. From 1939 to 1941, when the Japanese attack Pearl Harbor, U.S. manufacturing will have shot up a phenomenal 50 percent!

The Depression is ending worldwide as nations prepare for the coming hostilities.

Roosevelt began relatively modest deficit spending that arrested the slide of the economy and resulted in some astonishing growth numbers. (Roosevelt's average growth of 5.2 percent during the Great Depression is even higher than Reagan's 3.7 percent growth during his so-called 'Seven Fat Years!')

When 1936 saw a phenomenal record of 14 percent growth, Roosevelt eased back on the deficit spending, worried about balancing the budget. But this only caused the economy to slip back into a recession in 1938.

World War II starts with Hitler's invasion of Poland.

[research]

Cherry picker!

1934

* Congress authorizes creation of the Federal Communications Commission, the National Mediation Board and the Securities and Exchange Commission.

* The economy turns around: GNP rises 7.7 percent, and unemployment falls to 21.7 percent. A long road to recovery begins.

* Sweden becomes the first nation to recover fully from the Great Depression. It has followed a policy of Keynesian deficit spending.

No doubt, the war helped, but high taxes didn't hurt did they? And the economy had already started to recover.

From the end of WWII to 1962 also had high taxes and public works spending.

[DuganS1]

The percentage growth rates during the 30s aren't telling. Because even with solid GDP growth in 1936 on a percentage basis, it was still much lower than in 1929 in nominal terms. GDP wasn't higher than 1929 levels until 1941-- so the economic policies of Hoover and FDR in the 30s were completely ineffective in getting the economy back on track. Without the war, who knows how long many years it would have taken to regain 1929 production levels? 1945? 1950? longer?

[US Patriot]

Why put a limit on success?

US businesses create US jobs. obama wants to limit the growth of US businesses, which is limiting the growth of US jobs.

If you increase tax on US businesses they will either just relocate to a lower tax country taking American jobs with them, pass the added tax cost to consumers or go bankrupt.

GM and Ford can barely compete globally and obama wants to tax them more. The smaller businesses that are reliant on GM and Ford will also be greatly affected, destroying more US jobs.

The US is the land of opportunity not the land of equal outcome. Why should government take your money and give it to people who are already on welfare to spread the wealth??

[ConcernedAboutRFuture]

Yeah, and it really worked the past 8 years. Gimme a break.

So with Bush's tax cuts, why DID all the companies move to India or Asia..... and took those jobs with them?

[CTariannaFan]

Thank you for the permission to hate you, your Highness, but I already took that liberty when you (who met your then-married husband-to-be at the Bilderberg Conference) could call Obama "elitist" with no sense of irony.

And of course it's okay for us to hate you. It has absolutely no bearing on your life. In fact, after tomorrow, we will cease to even exist to you. It is only in an attempt to sway us to elect the candidate who will appease your ego and cut your taxes that you even bother to acknowledge those of us who are not royalty. After tomorrow, we will again be just that much more gravel underneath your gilded carriage wheels.

[spiffarino]

Lady Lynn, I don't hate you, but I do believe you are simply acting in your self-interest whether or not you realize it. That's fine. I'll do exactly the same and we'll see who comes out ahead in this election. If it's you, enjoy it. We'll still be "down here" wishing we could see a doctor, pay for a full tank of gas, and heat our houses sufficiently over an especially nasty winter.

[dagnome27]

Is there some reason you think you still have credibility with any of us in the "middle class"? or that we care what you think?

[CaptainStormfield]

I posted this on my blog along with a toon about the pot calling the kettle black.
http://captainstormfields.blogspot.com/2008/09/those-pesky-elitist-democrats.html

"Elitism," Forrester assures us, "is a state of mind, a view of the world that cannot be measured simply by one's net worth, position or number of houses." That definition conveniently excludes Forrester, a millionaire businesswoman who became a billionaire socialite when she married into the Rothschild banking fortune. (Lloyd Grove has called her the "flashiest hostess in London," a position which I'm sure she attained due to her close touch with working-class mores.)
http://blogs.tnr.com/tnr/blogs/the_plank/archive/2008/09/11/more-rothschild-populism.aspx

[itmaybetoolate]

"I've got an economic plan that is similar to Bill Clinton's." You did not mention that it also means a return to pre-bush tax rates for folks like you.

Why would Obama need to raise taxes of any kind? Let's see: an unfathomable federal deficit caused by bush; a disaster of an unnecessary way started and conducted by bush that costs billions monthly; a wall street out of control due to the deregulation splurge supervised by bush. And you want us to elect someone who voted with bush 90% of the time? Someone who wants to continue bush's economic policies (and his foreign policy approach). I hope Americans are smarter than that!

[Robert59]

You don't like Obama's plan because it's opposite of what you philosophically worship: trickle down.

I would worship at the same altar if there were proof it works; sadly the proof is it doesn't. Giving more money to the top 1 percent has not meant real wage growth, more better paying jobs, and a better standard of living for the average American. All indicators point out average Americans are doing worse economically.

Since Bush dug us into this hole (the paranoiac in me believes on purpose to destroy what FDR and LBJ created) there is only one way to dig us out. Bring manufacturing jobs back to this country by renegotiating or abrogating unfair trade agreements, ending incentives that moved those jobs overseas, and returning to the philosophy that benefited all Americans, a rising tide lifts all boats.

Put money back into the wallets of the bottom 95 percent and you'll see it dumped back into the economy creating jobs. You write about how those taxes rob the wealthy, but what about the wealthy robbing me and other middle class Americans by using my tax dollars to send jobs overseas, impoverishing me and millions of others, while taking handouts ad nauseum (sports stadiums are one example, coastal development is another, and now bailing out the financial sector).

Reagan's philosophy is alot like communism, sounds good in theory, but sucks in practice whereas the Democratic Party's economic philosophy has proven itself again and again as fostering the greatest growth in GDP.

[tazdog]

"Giving more money to the top 1 percent has not meant real wage growth, more better paying jobs, and a better standard of living for the average American."

Are you talking about taxes? If so keeping the top marginal rate where it is doesn't qualify as "giving". The super-rich will shelter their wealth just fine with Obama as they did with Bush, Don't forget that it was a democratic congress that voted for this bailout. Raising the top marginal rates won't bring back jobs nor will increasing union rolls. The only thing that will do that is becoming economically competitive and raising taxes or raising tariffs won't do that. We've degenerated in this country over arguing who gets the best handouts instead of how to create the physical and educational infrastructure to compete with the rest of the world,

[DuganS1]

Renegotiating trade deals won't bring any jobs back. Abrogating unfair trade agreements depends on someone's definition of unfair, which to most laymen is determined by companies that are fairing the worst from foreign competitors. The "ending incentives that moved jobs overseas" ignores the fact that those "incentives", whatever those are, rarely if ever were the reason companies moved operations overseas in the first place. What does all this have to do with Ronald Reagan?

[FreedomCorpse]

I don't remember any republicans balking at more free trade agreements with the exception of Ron Paul. It are these 'agreements' coupled with deregulation and privatization that have led directly to the circumstances today. Phil Gramm is or was McCain's economic advisor....you know .. Gramm-Leach-Bliley Act that has cost US tax payers $5 trillion in additional debt in the past 3 months (Fannie Mae, Freddie Mac among the plethora of teetering financial cyclops' out there).

I can agree with you Lynn, that there are things that Obama has said that disturb me deeply, some of which you have pointed out but I've heard nothing from McCain but general statements about the economy being bad and jobs being needed...which, IMO, means nothing when it doesn't point at the massive trade deficit.

Your hubbies comments in the financial times may be partly correct but we've had 3 massive economic bubbles in a row: dot.com, housing fiasco selling off mortgage's to the derivatives time bomb, and a commodities bubble (currently selling off to cover margin calls). The end result of each will be equally bad and have no semblance to a real economy (a producer economy), with the derivatives WMD's poised and aimed straight at the economy. Watch...you WILL see what 'free markets' do in a bogus monetary system with paper called money printed out of thin air at ever increasing rates. Ever seen a Black Swan ... unfortunately we'll all be seeing it perhaps sooner than later.

[DuganS1]

There are many Republicans against trade agreements. Duncan Hunter and M Huckabee are two. Although neither of those two are versed on economics, and anyone that is supports increased trade, which benefits a much larger number of people than it hurts.

[RoloTomassi]

"Although neither of those two are versed on economics, and anyone that is supports increased trade, which benefits a much larger number of people than it hurts."

Oh yes, anyone who has been sucked into believing in the purity of free market fundamentalism does believe that...and it is a complete LIE.

The WTO, IMF and World Bank and their corporatist-driven policies have wrought terrible tolls on developing countries; it doesn't appear that way to idiot economists, as they sit back in offices and view the effects of the required dictatorships and universal oppresion as mere "externalities," figures that are unfortunate yet unavoidable.

[DanBest]

"Regrettably, the road kill of Obama's reckless rhetoric and policies is not the rich taxpayer, but the entire American economy."

Really? Please ask the rich taxpayer to stand back in the middle of the road. I'll drive a little faster this time.

[coloconnect]

This article is on the money so to speak....and the comments indicate the "class warfare" campaign that Obama is running is working.

Anyone should be able to take a calculator and and a little common sense and they should be able to see that Obama's economic strategies, though appealing will not work.

[MyTake]

And the Bush Doctrine of Trickle Down Economics worked, I presume!

Why don't you just call for a TWO LINE income tax code. One for a personal rate, one for a business rate with zero exceptions. Then the Lady and hubby would not be so rich and everyone would have food, shelter and clothing!

[realpolitic]

Trickle down economics works by really trickling up!

[swift goat pet for truth]

Obama is probably inspired by Warren Buffett, who said (paraphrasing) that there was class warfare, and the rich won.

I choose to believe Buffett.

[Shaddup]

colon. nuff said.

[realpolitic]

The only people who refer to a class warfare on the part of Democrats is the ones who benefit from the tax cuts to the wealthiest among us. the wealthy have won the class warfare, as they win most battles.


"Today the top 1% of households receives more pretax income than the bottom 40%. And the distribution of wealth is even more lopsided. The top 1% of households owns nearly 40% of total household wealth -- more than the bottom 90% of households combined -- and earns half of all capital income. Income and wealth are more unevenly distributed among Americans than at any time since the Jazz Age of the 1920s. On measures of income and wealth inequality, the U.S. tops the charts among the advanced industrial nations."

http://www.businessweek.com/@@*7OQP4YQG8gsPxgA/magazine/content/04_44/b3906038_mz007.htm

[drblack]

Rich people must unite against Obama. Obama will help the middle class atr the expense of the top 2% of rich Americans.
Only a person making less than a Million a year could vote for Obama.
I am thankful that so many poor,workers and those in the south and mid-west have been too stupid to vote for candidates who would help them. Instead these dumb working class Americans have been tricked into voting for "values" candidates: this has kept the extremely Rich people in total control.
Listen to this extremely rich person. Rich people are better than poor people...so vote McCain.
Rich people will suffer if you vote Obama and 98% of Americans will do well if you vote Obama.

[MyTake]

I wonder if any of those rich people were in those huge crowds that Obama drew during his campaign?

It is too bad that we are unable classify the income of a person when they appear in public. Each income level should have to wear a certain clothing color based on their per annum income. We could straighten out a lot of the problems in the World had we this type of personal identification.

[sue4hil]

Thank you Lady Lynn for this insightful post.
In addition, I must say I am flabbergasted at what Obama said he would do to the coal industry. As a granddaughter of a coal miner, as a life long democrat, as a health care provider, a woman and a mother, I am proud to say I will cast my vote for Senator John McCain tomorrow-
the best candidate for our country

[BruceHNV]

Do your research. Don't buy the right-wing, out-of-context talking points.

McCain floated an identical plan for coal three years ago. The VIDEO of him defending it is on the web.

[Rotwang]

Your comment is ridiculous. Even in the "bankrupting" sound bite, Obama is calling for market incentives to promote the development of clean coal technologies. Coal power plants all over America are being blocked by the PUBLIC at the LOCAL level -- which is causing utilities to either abandon generating projects or switch to natural gas as the fuel.

Obama is saying that new, cleaner technologies MUST be developed in order to SAVE the industry -- but it's going to cost money. And that money us going to come from US -- in the form of tax incentives, government subsidies or higher front-end electricity rates -- one way or the other.

All Obama wants to do is make clean coal development competitive, cost-wise, and accelerate the long-term payoffs in higher fuel efficiency, lower costs and cleaner environment.

Seriously, do some research before you post.

[hydrangea4]

Thanks, Lady Lynn, for your insightful comments. Senator Obama continues to teleprompt his positions with lots of generalities, eloquence and confusing rhetoric. Senator McCain clearly humble and honest, he's been consistent on his economic policies. The effort to align him to the Bush policies is simply shortsighted. Get real, guys.

The two now famous coal tapes that suddenly surfaced from the 'archives' on Obama's position on the coal issue are disturbing; the economies of VA, OH and PA will be heavily impacted.
Before everything is twisted on his rhetoric, go to youtube and view for yourselves. McCain is clear with his support of clean coal as it is one of the traditional industries that made our country great; there is no reason for it not to co-exist with the renewable energy and twenty-first century environment technologies. He may not be savvy on blackberry and computers, but he is experienced and knowledgeable on what this country needs.

[realpolitic]

Everyone supports clean coal. It is not a difficult position to support. The question how and when do we achieve "clean coal."

[Rotwang]

Lady Lynn, please don't listen to Hydrangea4.

The "coal tapes" are baloney, and I've been selling coal to power plants for 35 years. McCain has a plan that would lose us 50,000 jobs in Ohio alone. Obama has a smart approach to public/private financing and market incentives that could prevent the slow death of the coal industry.

Every year, more US coal-fired process plants are retired or converted to natural gas. The old markets are disappearing, and the new markets won't be there without a plan like Obama's. Cap and trade may not be the ideal mechanism in the final analysis, but it's a viable working model.

Too many people like Hydrangea4 are too easily frightened by sound bites.

[itmaybetoolate]

So you support policies that encourage environmental destruction (good luck kids, you are on your own); restricting a woman's right to control her body (break out the wire hangers and call the back alley abortion providers); deep cuts in medicare (sorry granny - find a job to pay for your heart meds); and a health insurance industry that puts profits over people (sorry folks, we're gonna tax those health care benefits your employer provides) - not to mention the expansion of war (you are probably rich enough to keep your kids out of the draft). Proud? Really?