Obama's 'Change' Is Capital On Strike
Economy: Barack Obama won the presidency by vowing to bring "hope and change" to America. We've seen the change as the economy's deterioration accelerated. Now where's the hope?
In the three months since the election, the broadest measure of the stock market's value, the Wilshire 5000 Index, has plunged more than 30%, slicing over $3 trillion from Americans' wealth. Investors have walked away from investing, while businesses shut down factories and offices and slash jobs.
This is both highly significant and dangerous. Capital, bluntly put, has gone on strike. Those who own wealth are pushing it to the sidelines, as a young and inexperienced president tries to jam through the most sweeping economic changes in over 70 years.
The prospect of these changes becoming law has already radically altered our nation's economy. Entrepreneurs and CEOs who once created new products, new services, jobs and trillions in wealth for America's workers and retirees now find themselves vilified and punished for their success.
ABC News reported this week that many upper-income taxpayers already are planning to cut back on work and investments to stay under $250,000 in income — the point where Obama's punitive taxes kick in. No one wins from this, yet Obama seems oblivious.
This isn't the only warning sign. A new study asserts that some 100,000 highly educated, well-trained Indians now living in the U.S. will return home in the next few years. Ditto China.
Immigrant entrepreneurs are highly sensitive bellwethers of economic and social conditions. They know where the opportunities are — and where they aren't. They're voting with their feet.
The economy shrank 6.2% in the fourth quarter, worse than first expected. Home sales continue to fall, unemployment is rising sharply, and business investment is prostrate. Such an economy cries out for tax cuts, but we get none. Just punishment of those with wealth who might be able to pull us out of the slump.
An estimated $1.4 trillion in new taxes planned by the new administration over the next decade explicitly target the people President Teddy Roosevelt once derided as the "malefactors of great wealth" — those in the top 5% of the income spectrum. Yet, they're the ones who've made our economy the envy of the world.
By the way, under Obama's plan the rich won't pick up the whole tab. New energy taxes of $646 billion will hit the middle-class hard. Meanwhile, in just eight years, our national debt will double to $20 trillion, as nondefense federal spending jumps from the long-term average of 16.5% of GDP to above 23%.
You — or your children — face higher taxes for decades to come.
As our stock markets melt under a barrage of new taxes on incomes, estates, capital gains, dividends and energy, it's good to recall that more than 100 million people own stocks or mutual funds. And that the stock market is the main wealth- and growth-creating mechanism in our capitalist society.
But when taxes go up, regulations proliferate and the rule of law and private property protections are weakened, the economy will invariably suffer. This is a universal lesson of economic history, one we ignore at our peril. And yes, this is what's happening now.
No, we don't blame all our current ills on President Obama. He came in at a tough time, when many bad decisions had already been made. But he is responsible for what he's done since.
His stimulus package is little more than a down payment on a socialist economy. It raises taxes on the successful, brings back the welfare state, hands out favors and cash to friends of one political party, while imposing government control over the entire free market in ways that just a year ago would have seemed unimaginable.