Sunday, October 05, 2008

Demagogueing on Taxes

Obama has a new TV ad, new to me at least, that implies that McCain will reward businesses with tax breaks as they malevolently move jobs from the homeland to low cost countries. The implication is that it is wise and just to give tax breaks to us middle class folk directly instead - something about which I am incredulous coming from a tax and spend liberal.

Where does one begin disassembling the knot of snakes in something like this ad, a big fib that only takes 10 seconds or less to state, and repeat over and over in network television ads? And as an old Russian proverb states, "repetition is the mother of propaganda."

First of all, businesses, large and small, are being driven to low cost countries because of the enticement of low cost labor, but even more compellingly, through tax incentives from those low cost countries who draw them to come and commit to their country with jobs and cash - and over the past half dozen years or so, American businesses were pulled into that. Raising US taxes on such businesses is not going to dissuade them from seeking cost control, but what it will do is cause such business to lose their competitive edge in a global economy, and ultimately result in their decline. And when businesses like these decline, it will mean a further loss of middle class jobs.

What we should do to provide incentives to US businesses to encourage the movement of jobs back to the US is to provide them with tax incentives to reverse the trend - which is the very thing Obama demagogues against. And even that wouldn't be enough in a world economy, but it is better than letting the whole house of cards to fall in a time of declining equity values, affecting people's pensions and personal savings.

Is this economic wisdom? Is this economic leadership? The pundits tell us the it is "still the economy, stupid," and I would agree that declining 401 K values, bankrupted banks and the sudden fall of huge 100 year old financial giants tends to center the mind on this subject, but I hope the American people are wise enough to differentiate economic demagoguery from economic wisdom.

Voters may like Obama's calm demeanor and cleaver articulation, but what of his ideas? Are they right? Are they workable? Are they practical? And what has history taught us about them?

The Hillary Clinton campaign determined a way to differentiate between her more substantive approach to Obama's in the closing days of the Democratic primary. She started to close the gap, particularly in the big industrial states like Pennsylvania. The McCain campaign would be wise to step on the same gas pedal. Instead they're yapping about Obama's relationship to Ayers. I don't think the people care about these things right now.

Follow the Money.

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