American Elephants

The Wall Street Journal this weekend featured an interview with Harvey Mansfield, the great teacher of government and longtime member of the Harvard faculty. He offered this comment:

But if we get serious about what it means to vote, we immediately go to the notion of an informed voter. And if you get serious about that, you go all the way to voting as a wise choice. That would be a true voter. The others are all lesser voters, or even not voting at all. They’re just indicating a belief, or a whim, but not making a wise choice. That’s probably because they’re not wise.”

[T]he electorate that granted Barack Obama a second term was unwise—the president achieved “a sneaky victory.” The Democrats said nothing about their plans for the future. All they did was attack the other side. Obama’s campaign consisted entirely of saying ‘I’m on your side’ to the American people, to those in the middle. No matter what comes next, this silence about the future is ominous.

The president’s dishonest approach to bargaining, is to go out campaigning for a proposal that is not new. It is the budget he presented to Congress this last year that was rejected by 100% of the House and 100% of the Senate. When the president’s chosen negotiator, Treasury Secretary Tim Geithner announced the president’s offer, Senator Mitch McConnell (R-KY) the Minority Leader burst into laughter.

Mr. Obama and Harry Reid are trying to wreck the Republican Party politically by destroying its credibility as an enemy of high taxation. They are trying to get Republican fingerprints on the tax hikes they need to transform America into a European welfare state that will eventually require a value-added tax and/or a massive energy tax paid for by the middle class.

Even the New York Times is noting that Obama “has barely discussed how he would pare back federal spending, focusing instead on the aspect of his plan that plays to his liberal base.” The Los Angeles Times said that Obama “hasn’t said anything publicly about his targets for entitlement savings or cuts in discretionary spending. Instead, he’s tacitly stuck with the proposals in his fiscal 2013 budget, which Congress has already rejected.”

That is because Mr. Obama has no intention of cutting back entitlements, except perhaps cutting back on Medicare benefits or paying Medicare providers less.

A little known fact is that revenues are just about where they were before the financial crisis hit. Revenues are as high as they are because of the Bush tax cuts. When you raise taxes, particularly on high earners, you are apt to get less revenue, because the rich have choices. They can hire the best tax advisers, they can put funds into tax-free bonds, they can move money abroad, or just choose to receive less income.

The roughly 990,000 small businesses whose owners report their business taxes as individuals with incomes over $250,000 are increasingly pessimistic about the future. Uncertainty is even worse for them than for the rest of us, for they must make careful plans for the future. They know their taxes are going up, their energy costs will go up and thus transportation and the cost of goods will increase. They expect regulations to increase, and they expect to have to lay off employees and struggle to stay in business. So the president is out campaigning for raising taxes on the rich.

According to the exit polls, the public thought that Mitt Romney would do better with the financial problems the country faces, with the budget, and with the deficit; but they thought Mr. Obama cared for them. That’s where they got it wrong.

Obama’s tax hikes would reduce the rise in federal debt over the next 10 years by 15%. The president is silent about the other 85% of the debt. The real issue is federal spending. To describe the bottom line:

When this year’s kindergarteners enter college, just 13 years away, spending on Social Security and Medicare plus Medicaid and interest on the debt will devour all tax revenue. There would be no money to pay for anything else.

It’s not just being bad at math, it is a cynical not giving a damn about the American people. One in seven American people now live in poverty. We have massive unemployment out there, and small businessmen, the usual engine of growing employment, are absolutely pessimistic about their prospects. They don’t expect to hire, and may have to lay off people. U.S. manufacturing contracted in November, falling to its lowest in over three years. New orders have fallen, and prices paid were down.

As Edward Klein reported in The Amateur, “Shortly after Obama entered the White House, Treasury Secretary Tim Geithner warned him, “Your legacy is going to be preventing the second Great Depression.”

To which Obama boasted, “That’s not enough for me.”