Wednesday, December 7, 2011

Transcendent Speech or Regurgitated Populist Hyperbole?

Yesterday, President Obama felt the need to fly half way across the country to Osawatomie, Kansas just to regurgitate all of his populist and hyperbolic campaign rhetoric into one heavily marketed and promoted speech. We couldn’t listen to it in real time because we have a job and were busy working, but lucky for us the White House tweeted about it as if it was the second coming of Martin Luther King Jr.’s "I Have a Dream" speech.

Here at the, we’ve already debunked many of the populist themes recycled in President Obama's speech, so we though we’d provide you with many of the official White House Twitter feed highlights, followed by our thoughts and links to previous pieces of relevance. Enjoy!

“This is a make or break moment for the middle class & all those fighting to get into the middle class”

Really? Giving the average working family and extra $1,000 this year is a magical potion to lift everyone up into the middle class? People lift themselves into the middle class by working hard and being wise with their money, the government doesn’t successfully lift people into the middle class. We discuss the absurdity of fiddling with the payroll tax in our most recent piece, “White House: Lower Taxes by Raising Taxes

“I believe that this country succeeds when everyone gets a fair shot…does their fair share…plays by the same rules.”

Everybody has a fair shot, whether they believe so or not. There is no rule, written or unwritten, that says one person has a shot at success and another doesn’t. This is what makes the US the land of opportunity – everyone has the right and the ability to make themselves successful.

As far as doing their fair share, we can only assume this relates to the % of income paid in taxes, which we discuss below in the "Warren Buffet" section of the running diary. 

Lastly, unless I’m missing something, we’re all subject to the laws and regulations of the United States, so I’m pretty sure we’re all playing by the same rules.  Rules, by the way, that have been written and enforced by Government itself.  If you fail to follow those rules, it’s Government’s responsibility to prosecute and punish the breaking of those rules.  If you have a problem with the rules themselves, only Government can fix them. 

“We should be known for creating & selling products all over the world that are stamped with 3 proud words: Made In America.”

Tough to disagree with this statement. The problem is that unions, government regulations and global competition are forcing manufacturing jobs overseas. This is the uncomfortable reality we live in – it’s cheaper, much cheaper, to manufacture goods abroad. Any company forcing the manufacturing of commoditized goods in the US is committing financial suicide. Due to union compensation and work rules, government regulations and global competition, the US simply can’t compete with emerging markets in labor intensive manufacturing. Should we make every effort to increase our manufacturing jobs in this country? Absolutely. Will it happen in great numbers with heavy government regulation and union pressure for high wages, extravagant benefit packages and rigid work rules? No. Even our existing American manufactures are being constantly harassed and bullied by the unions and their government enablers, just look at what's happening to Boeing.

“We need to extend a payroll tax cut…If we don’t do that, 160 million Americans will see their taxes go up by an average of $1,000”

These are the same 160 million Americans who will never contribute anything close to their “fair share” towards their "untouchable" Social Security and Medicare entitlements. The same 160 million Americans who pay very little in income tax. Plus, extending a temporary cut is not raising taxes, it’s letting a temporary tax cut expire. Both parties use this misleading tactic. Assuming this cut is funded 50% by by higher taxes on “a few hundred thousand” wealthy taxpayers, here is a more accurate tweet for the White House – “If we extend a payroll tax cut, 160 million Americans will see their taxes stay exactly the same, while a few hundred thousand Americans will see their yearly taxes go up by an average of $320,000 each.” How’s that for fairness?

“It’s wrong for Warren Buffett’s secretary to pay a higher tax rate than Warren Buffett and he agrees with me.”

We covered this entire subject at length in our piece "Warren Buffett's Missing Facts and $3,000 Gallon of Milk". In summary, this is an incredibly misleading argument, and is absolutely 100% enshrined in the tax code written by Congress.

“This isn’t about class warfare. This is about the nation’s welfare.”

Without specific plans and legislation, it’s only about class warfare, or more accurately, feigned populism for the purpose of securing votes.

“Our success has never just been about survival of the fittest. It’s been about building a nation where we’re all better off.”

We agree, but taking money from Peter to pay Paul does not build a nation where we’re all better off. Allowing Peter to prosper so his company can pay Paul, and John, and Bill, who then go on to start their own companies and hire Dave, Joe and Mike, builds a nation where we’re all better off. It sounds trite, yet somewhat appropriate in this circumstance - give a man a fish and you feed him for a day, teach a man to fish and you feed him for a lifetime.

“We still have a stake in each other’s success. We still believe that this should be a place where you can make it if you try.”

Really? Don’t the previous tweets suggest that this is “a place where you can make it if you try, but if you don’t try, the rich guy down the street will take care of everything for you.” We’ve lived in the UK and we’ve seen this model in action, and it’s not desirable in any way, shape or form.

“I believe America is on its way up”

We couldn't agree more, now if the Government would just get out of the way, there's no telling what we can accomplish.


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