Thursday, July 28, 2011

The President and the Rich

The relationship between President Obama and the "rich" is a strange one on both sides.

On the President's end, it starts with his definition. He has taken to referring to "millionaires and billionaires" but his low end includes people making $200,000-$250,000 per year (depending on marital status). A billionaire has 4,000-5,000 time the assets of this lower end.

Obama likes to include himself in this group. He regularly drops the phrase "like me" when talking about the rich. He is a millionaire, mainly through sales of his books. Before that he was a regular working stiff like the rest of us struggling to pay off college loans. Except, as a university professor married to a well-placed lawyer, he still probably qualified as rich under his own definition.

If you are rich then President Obama is sure that you have too much money. Some of it rightfully belongs to the government but was given away by the Bush Tax Cuts For the Rich (Bush cut everyone's taxes but Democrats always add the qualifier "for the rich"). Obama has no problems with the tax cuts that the rest of the country got under Bush, only the part that went to the rich.

This isn't an issue of fairness. Under the current system, around half of the country pays no income tax and some of that group gets money back from the IRS. The top 10% of wage-earners pay around half of the taxes. You might think that this constitutes a "fair share" (another term that the President likes to use). Possibly Obama's judgment on taxes has been warped by the involvement of George W. Bush. Like many on the Left, Obama reflexively hates anything that Bush touched.

Some of this is a knee-jerk reaction - how can we allow people to make so much money when there is widespread unemployment and misery? Many countries have tried equalizing income. It doesn't create prosperity.

While President Obama dislikes the rich in general, he saves special animosity for people in professions that he does not like. Bankers and investors are high on this list, especially if their income includes any sort of bonus. He tends to lump everyone on Wall Street together as being responsible for the Great Recession.

This is where things get complicated. President Obama dislikes Wall Street and everything it stands for but the Street loves him. Most of the campaign contributions in 2008 from people working on Wall Street went to Obama.

A few years ago someone wrote the book "What's the Matter with Kansas?" analyzing why the state votes Republican when the Democrats represent their true interests. I think that a good follow-up would be "What's the Matter with Wall Street?" The Democrats in general and Obama in particular hate Wall Street and everything it stands for but they keep supporting the Democrats over the Republicans.

The same thing happens in Hollywood but the entertainment industry never thinks of itself as rich.

The President has the same relationship with large corporations. He hates them and wants them taxed at a higher rate (even though the US corporate tax is already the highest in the world). These same corporations support Obama. This should come as no surprise since the large corporations are run by the same rich people who already have a dysfunctional relationship with the President.

There are rumors that this relationship is coming to an end, that the bankers and investors are getting tired of always being Obama's scapegoat. We will see what happens in 2012. At this point in 2003, Bush had raised more funds than Obama raised in 2011. Possibly Obama's wealthy donors are beginning to desert him.

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