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Wednesday, March 17, 2004
Democratic Strategy: Hate the Rich You Work For
Democratic Strategy: Hate the Rich You Work For
It appears that the Democrats are going to run their 2004 campaign on a two-pronged strategy: "hate Bush" and "hate the rich". The latter, at least, is the same old class warfare strategy they've tried and failed with before. Since John Kerry has proposed raising taxes on everyone who earns over $200,000 a year, that seems to be the defining line on who's "rich" and who's not. So, what of it? Why should those of us who make less than $200,000 a year care how much those darned rich people get their taxes raised? How is that going to affect you and me?
The answer is simple. In most cases, they're the people we work for.
People who make over $200,000 a year are the ones who run the business world that keeps most of the 94.4% of Americans that earn a paycheck (as of February 2004) employed. They're the people who own and invest in the large corporations and small companies that the majority of us work for. According to an IRS study done in the year 2000, only 2.8 million people earn over $200,000 per year. Keep in mind, however, that much of that data predates the dot-com bubble collapse that led to the Clinton recession in late 2000, foreshadowed as early as May 2000 by a "turmoil in technology stocks." By March 2001, the economy had clearly been failing for ten months in a row. Today's number of "rich" may still be less that it was before the recession.
Small businesses are the backbone of wealth creation in this country, and their influence on the economy is growing. In fact, the biggest difference between the Democratic meme that "2.3 million jobs have been lost since President Bush took office" and reality lies in that shadowy area between two methods of counting jobs. The Bureau of Labor Statistics payroll survey always quoted by Democrats only covers people employed by large corporations and established businesses. The household survey, which covers small businesses and startups, not only accounts for those 2.3 million jobs, but actually shows a net gain of 700,000. Small businesses are fast becoming the most important factor in today's economy. According to a 2001 study by the University of Colorado:
Wealth appears to reside primarily in larger U.S. firms and the results herein suggest that this is changing. Smaller firms do create significant wealth and, more importantly, the percentage of wealth increase is significantly larger among small firms. Although further research is needed, it may be, based on the results of our study, that the very large corporate behemoths are wealth destroyers rather than wealth creators. It also appears that the economic impact of smaller firms is significantly increasing over time.
How do you suppose "the rich" will react if their taxes are raised, these owners and investors? They'll do what they always do when their bottom line is threatened, of course. The owners of larger companies will cut jobs and worker benefits, stop investing their capital into expanding their businesses, and raise the prices of goods and services. Private investors will move their money out of the stock market, hiding it in tax shelters. Smaller businesses will simply go out of business, unable to turn a profit. Cutting taxes -- leaving money in the hands of those who earn it -- has the opposite effect. We saw that in the sixties under Kennedy, we saw it in the eighties under Reagan, and we're seeing it now under Bush.
In Liberal Economic Theory 101, the eeevil rich simply pay those extra taxes without feeling the pinch, and without attempting to make up the difference in those other ways. In the real world, however, paying more than the absolute minimum in taxes is something that happens only when you hire incompetent accountants. If Democrats were serious about raising taxes on "the rich", they'd start by eliminating all the Secret Tax Loopholes in the current tax code. However, because many members of the US Congress -- including Senator Kerry, who married into a $500 million fortune and is the most vocal proponent of taxing "the rich" -- are among the wealthiest Americans, serious and complete tax reform will probably never happen. The best we can hope for in reality is tax cuts for everyone. Including those eeevil rich.
Besides, eliminating all those IRS and tax accounting jobs would cause a real unemployment problem.
Posted at Wednesday, March 17, 2004 by CavalierX
 | | | Sarah
March 18, 2004 02:23 AM PST
Cav, thanks for the quick summary of how Dems can say we're losing jobs and the Repubs say we're not. I had a fight with a guy the other day who said Bush was destroying the job market, and I knew he was wrong but didn't have a quick way to summarize why. Now I do: thanks. | |
| | | Jamie
March 18, 2004 08:33 AM PST
I agree totally. And don't forget about the impact 9/11 had on jobs/employement! What you have here is something that I bring up to the people here that want to argue about how "Bush lost jobs, etc". A question I would like to ask the Dems (and I've asked this of people here at the office) is this: "Why do we want to punish people for being successful?" Is it a bad thing that people are successful? Most of the so-called "rich" weren't just given the money, they earned it, whether by owning the business , by investing or by marrying rich women (like Mr. Kerry).
One of the major Dem Senators (I can't remember his name) is promoting THIS novel idea - "We need BIGGER government" to end unemployment. Instead of giving tax cuts he is proposing using that money to hire more policemen and firemen (which is ok) and the creation of special jobs for the unemployed like cleaning up our streets, our national parks, etc. Gee, I guess nobody ever thought of that before. No, wait a minute, wasnt' there something called "the New Deal" (or something like that), that was implemented during the Great Depression? Did it work? NO. Some say it made the situation worse.
BTW, the Dems in the House spoke loudly and clearly about how they REALLY feel about our military men and women yesterday when they voted "NO" on a Resolution to honor our troops in Iraq. They spent the entire day arguing about the resolution, harping on the "Bush LIED", "We were misled" theme. The Resolution passed with only 2 Democrats voting for it. | |
| | | JM
March 18, 2004 09:36 AM PST
>they voted "NO" on a Resolution
>to honor our troops in Iraq
I've never heard anything so utterly disgraceful in my life. I always thought it would be a cold day in Hell before a foreign people thought better of our troops than our own. Then I saw this: http://www.snopes.com/photos/arts/kalat.asp and have heard what you've said. Guess I'd better search the Web for pictures of Satan skating to work. | |
| | | maureen
March 18, 2004 09:45 AM PST
What lost jobs are these that the Dems are talking about???? Are they the same jobs that Americans won't do?????? How can you lose something that you never had or wanted??? | |
| | | JM
March 18, 2004 10:29 AM PST
Hey, good point, Maureen... we DO hear a lot of hot air blowin' mostly from the left about how we ought to have open borders, to let people from other countries come and do "the jobs Americans don't want". In order for there to be jobs Americans don't want, there would HAVE to be too MANY jobs, not a shortage, right? | |
| | | Jamie
March 18, 2004 10:43 AM PST
"Joblessness" is a myth that the Dems perpetuate and arduously keep harping about being an important issue. Sure, being unemployed is not a good thing and I'm sure that it IS a major issue for those people who are unemployed. But it doesn't affect the vast majority of Americans. The Dems (and major media) ignore 9/11's impact, they ignore the fact that there are many jobs that average Americans refuse to take, they ignore the impact of the "Don't call" registry, they ignore the impact of the Dot.com implosion and the impact of the Enron/World Com/etc. scandals, etc. They ignore the fact that there are actually people in this country who don't want a steady job and are chronically unemployed. They also ignore the fact that unemployment numbers are lower here in the U.S. than anywhere else in the world. And for those people who lost a manufacturing plant in their area and thus lost hundreds of jobs, they need to realize that efforts to re-train people need to be undertaken. And efforts made by their local politicos to attract businesses to their area needs to come into play. But higher taxes just runs off businesses - just ask Cal-i-fornia.
The "lost jobs" story is similar to the stories about hundreds of thousands of "homeless" people that were around during Bush 41's term, who almost completely disappeared during the Clinton years, then mysteriously reappeared (or became homeless again) shortly after Bush 43 came into office. The media perpetuates this myth. (Read Goldberg's book "Bias".) | |
| | | JM
March 18, 2004 11:23 AM PST
Exactly. It wasn't the people who went away... just the stories. | |
| | | Jamie
March 18, 2004 11:37 AM PST
There is also that myth that "50% of American children live in poverty". Those types of stats are abused by the Dems, too.
The really sad thing is that a lot of Americans will believe all the hype and never look beyond what they are told by the major media outlets! | |
| | | Name
March 18, 2004 12:08 PM PST
The poorest poor people in America are practically envied by Europe's lower class, and by Asia's middle class. It's all relative... :) | |
| | | Jamie
March 18, 2004 01:06 PM PST
We didn't have a lot when I was growing up. And that was before cell phones, cable, etc. We were lucky to a b&w TV. I guess by today's standards my family was poor. We didn't know it, though. | |
| | | NameWG
March 18, 2004 06:28 PM PST
YOURS IS ONE OF THE FEW PLACES THAT HAVE MENTIONED THE "dot-com bubble collapse AS THE START OF THE RECESSION. BLAMINF THE TWO POLITICAL PARTIES IS THE EASY WAY OUT. PEOPLE NEED TOTAKE A LOOK IN THE MIRROR AND SEE THE CAUSE OF THE RECESSION "PLAIN OLD GREED" AND HOLD THEMSELVES RESPONSIBLE. wE WERE CAUGHT UP WITH GOLD FEVER. | |
| | | Jamie
March 18, 2004 09:24 PM PST
What gets me about the recession and the dot-com bubble that caused it is that people crow about the wonderful economy during the Clinton years when it was all based on the inflated revenues of these companies! They were lying and cheating and getting away with it. I will be glad if and when they finally prosecute the CEO's who perpetrated the scandals. | |
| | | JM
March 18, 2004 09:42 PM PST
I believe the recession was caused in part by TOO MUCH employment. When you get close to 100% employment, top companies are UNABLE to expand due to the lack of qualified workers. When you stop expanding, you stagnate... and begin to shrink as more aggressive competitors attack. | |
| | | JM
March 18, 2004 09:44 PM PST
You're right, Jamie. The boom of the '90s was fueled by companies like Enron, WorldCom and Arthur Anderson, weren't they? | |
| | | Jamie
March 18, 2004 09:55 PM PST
Yup. And the Democrats run around screeching about the Clinton years when it was mostly a farce. Sure, there were a lot of people employed, making tons o' money, but when that house of cards began to fall, it was as if nobody noticed that a lot of the boom was not REAL.
I was just now watching Hannity and Colmes and Alan was interviewing Howie Dean. Howie was practically gushing about how wonderful John Kerry is. How he is a "progressive", how he is the same on issues as Ralph Nader, how "a vote for Nader is a vote for G.W".... He was also interviewed on NPR this afternoon and was saying EXACTLY THE SAME THING, word for word. I think he has been coached (because if they let him talk on his own, he will just stick his big foot back into his big mouth.)
Do you think the Dems are SCARED that Ralphie will "steal" votes from the tin man? | |
| | | Jamie
March 18, 2004 10:06 PM PST
On Hannity and Colmes last night, they had a Republican analyst on along with Susan Estrich. It was hilarious. Alan Colmes was whining to the Repub guy about how Howie Dean was being unfairly criticized for the statement he made about Bush being responsible for the bombings in Spain. Every time Alan would say something about it, Susan E. would burst out laughing. So, then Alan turned to her and asked her what she thought about it and she said that she couldn't keep a straight face and defend Dean for saying something as stupid as that (Dean had said he got his information from a statement issued by Al Qaida) at the same time. She asked Alan how he could do that. Like I said, it was absolutely hilarious. Sometimes I find myself liking her, even though there is no way I can ever agree with her politics. She can be so abrasive at times, yet she is often very funny. She wrote a really good article about Howard Dean's campaign manager (the one who was fired in the middle of the campaign.) | |
| | | JM
March 19, 2004 06:45 PM PST
I actually LIKE Ms. Estrich, despite her Carol Channing voice. She's HONEST, and that's amazing. She rarely tries to spin the facts to make her side look good... she just says "yep, this looks bad for the Democrats." She has my permanent vote for Least Annoying Liberal. | |
| | | Kerry Dupont
March 19, 2004 09:12 PM PST
Great post! I agree with you that when unemployment numbers get too low, it causes the cycle to, well, cycle. I was a regional manager for the northeastern US during the 90's when unemployment was at it's height and it was a nightmare trying to staff during that period. Wages were ridiculous, with the supply of workers not able to meet the demands of business, we had people jumping around from one business in a genre to another constantly for a few more bucks an hour. You can't keep playing that game and continue growing a company or an industry. Like the dot com bubble, it had to burst in order to reorganize and continue true growth. Don't even get me started on taxes. I've handled a double estate (my father died within a year of his father) and I see red just THINKING about it! I own a small business and I could talk for a year about the PUNITIVE measures that I deal with for helping to drive the economy. AARRGGHH! | |
| | | JM
March 19, 2004 09:25 PM PST
Hey, nice Howard Dean impression! ;) Seriously, it just makes sense that when everyone's employed, competition for employees gets so fierce as to start eating up the profits. The only real question should be what employment level is optimum vis-a-vis the current economy? | |
| | | Jamie
March 20, 2004 02:02 AM PST
You guys would never make it a "perfect" Socialist or Communist society! Everyone should be equal, everyone should be willing to share what they have, and not be so greedy. And if it means we have to pay MUCH higher taxes than everyone else so that the "poor" have what we have, then so be it! | |
| | | Jamie
March 20, 2004 02:12 AM PST
Oh, BTW, the new Spanish PM pretty much told Kerry to go f--k himself after Kerry suggested that he should not remove Spanish troops from Iraq. Funn-EE! That really makes Kerry look bad after he has been boasting about the world leaders who confided that they wanted him to be elected. Also, after he said that he would be more diligent than the Bush admin in getting the world to work WITH us. | |
| | | DagneyT
March 20, 2004 03:24 PM PST
I've always enjoyed reading your perspective on other sites, CX, but had never visited your site until now. Succinct, but it makes points that are obvious to most thinking Americans.
The problem is, and you make the case very well, that the Dumocraps think most of America is made up of ill-informed and uneducated people the public school system has been trying to turn out for 30 years. They very nearly suceeded in some sectors. But alas, most folks like to eat, and found a way to get educated. (cont'd.) | |
| | | DagneyT
March 20, 2004 03:27 PM PST
I just have one question, and someone above alluded to it; the people they are saying are still looking for jobs, but the jobs aren't appearing...have they just stopped eating? Are they now homeless? How come none of the other stats aren't going up exponentially? | |
| | | Jamie
March 20, 2004 07:01 PM PST
There are jobs being created but not being reported. The media only reports the stats from a particular index. They don't use the stats from small businesses. There are several good articles out there about this, if I can go back a find a couple of them I'll point to at them. One article written by a Bush cabinet member spells it out in detail. I just can't remember her name rignt now or where the article was published (probably WSJ or NewsMax....), Guess I'm having a "senior moment"..... | |
| | | Jamie
March 20, 2004 07:42 PM PST
I can't find the really good article that Elaine Chao (Dept of Labor) wrote a couple of weeks ago. I'm thinking that I read it in the local paper, not on a website. Most of what I read online was back during the Dem primaries when all the candidates were campaigning in the states where unemployment is higher, so any articles I would have read back then have been archived.
I did manage to find one archived article, but it doesn't talk about the different reports that come out. It is "Tax Cuts Do What?" – opinionjournal.com archives – 2/29/2004 | |
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