THE BLOG
06/25/2008 05:12 am ET Updated May 25, 2011

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