Are the Denver Democrats downing the stock market today? The Dow is off 230 points, starting right from the get-go. So-called market analysts are blaming financials and the credit crunch as they always do. But there’s more.
Barack Obama and Joe Biden gave us plenty of class warfare in their Springfield, Ill. get-together on Saturday. Tax the rich. Redistribute income and wealth. Go after all those corporate meanies. Trade protection. Card-check for the unions to stop secret elections. (Not even former Democratic presidential candidate George McGovern agrees with that one.)
Then there’s Nancy Pelosi on TV bashing oil. And a huge New York Times Magazine article on Obamanomics by David Leonhardt tells us about tax fairness and redistribution from Obama, and shows that my good friend Robert Reich is in the driver’s seat with lots of public spending for the Obama plan. Deficit hawks like Jason Furman, the Robert Rubin protégé, seem to be in second place.
Taxing capital gains, dividends, and rich people makes me wonder who exactly is gonna supply the capital and investment to grow the economy. And while Obama’s Wall Street supporters helped put a 20 percent lid on investment tax rates, a three-house Democratic sweep could make matters much worse on the capitalism front.
Meanwhile, the Barron’s cover story called “Dueling Visions” by my friend Jim McTague says that Obama wants to repeat the mistakes of Herbert Hoover, raising individual and corporate taxes and siphoning needed investment capital out of the markets and into the hands of bureaucrats. It doesn’t seem like much of an economic recovery program.
Another problem is on the spending side for consumer demand. Hate to say it, but rich people are not only the biggest investors, they’re also the biggest spenders. According to the Tax Policy Center, Obamanomics would boost their average tax bill by $94,000, to as much as $653,000. Phew.
With the Denver Dems strutting their stuff, this could be a bumpy week for stocks. Did anyone say free-market capitalism is the best path to prosperity?