Tagged: obama

Wealth Creators

As the President and House Speaker John Boehner try and repeatedly fail to come to an agreement regarding the so-called “fiscal cliff”, a dependable and predictable sticking point has been the mystifyingly overinflated issue of taxing the rich. The President is bizarrely fixated on ensuring that America’s wealthiest pay what is incessantly referred to as “their fair share”. Boehner and the Republicans have long been risibly fanatical in their insistence that the rich pay as little as possible.

This debate might sensibly be called meretricious if not for the fact that the public is bored and unconvinced by such pompous tomfoolery. Rarely has an argument with so little value so thoroughly sabotaged the machinery of government.

There is more than a little truth to the claim that, if taxed too extravagantly, America’s rich will flee to greener, less rapacious pastures. This month, the French film star Gerard Depardieu became an official resident of Néchine, Belgium, apparently in flight from the 75% tax rate imposed on France’s wealthiest citizens at the insistence of President Francois Hollande. In Belgium, where the individual tax rate tops out at 50%, Depardieu joins the sizable segment of Gaul’s exiled patrician class who have refused to contribute the bulk of their personal revenues to their nation’s depleted coffers.

Nations are not and cannot be in the business of chasing citizens from their shores by means of economic harassment. It must be noted and accepted that it is, in fact, possible to tax the rich at too high a rate.

In America, however, where the denizens of mansions and luxury high-rises rarely pay even 35% in personal income taxes, this point is likely moot. Those in favor of a low tax rate on the rich have argued insipidly for thirty years that the wealthy are not so much wealth possessors as “wealth creators”. This is a claim that bears scrutiny.

There are two possible ways that high earners might “create wealth”. The first is by employing others or by facilitating their employment through investment in productive enterprise; the second is through expenditure and consumption that stimulate the economy and cultivate employment. This second point is easily dismissed. Spending by the highest-earning quintile of taxpayers in 2011 totaled 38% of aggregate private expenditures; even if these high earners reduced their expenditures by precisely the amount of a hypothetical increase in their taxes, the effect on employment would be less than negligible.

The half of American private-sector workers who are not employed by small business would be unlikely to be affected by a rise in the personal expenses of their managers. Executives at public corporations would be unable to lay off workers to maximize their own salaries, since their pay is controlled by boards of directors that are themselves answerable to shareholders.

Clearly, then, the potential impact of tax increases on employment is restricted to those small businesses owned by high earners. A 2011 Treasury study found that only about a quarter of America’s small businesses are owned by those making more than $200,000 a year. So the people who might potentially be affected by an increase in the individual tax rates of their employers constitute about 12.5% of all private-sector workers.

This is a not-insubstantial segment of the population, and, while such encompassing venality seems seriously unlikely, there can be no guarantee that America’s small business owners are not so greedy as to lay off workers rather than suffer a pay cut. In fact, it would be perfectly rational for them to do so. As usual, the question is whether there is more to be gained by raising taxes on these earners then there is to be lost.

In a vacuum, there is clearly much more to be lost by raising tax rates on the wealthy: the miniscule gain in revenue to be squeezed from these earners will do almost nothing to close the deficit, and in most other respects is similarly paltry. One expects that the President has embraced the “fair share” notion as a rhetorical utility, a way of initiating a larger conversation about taxation. Such a conversation is deeply necessary: from broadening the tax base, to simplifying the tax code, to eliminating deductions and loopholes, to introducing novel new taxes and eliminating useless old ones, taxation deserves a serious dialogue of its own—as opposed to its current status as a blunt instrument with which to bludgeon the ideological opposition.

In any case, both the President and his Republican opposition have been thoroughly irresponsible in approaching taxation as an issue of purely ideological importance. “Wealth creators” deserve to be neither coddled nor demonized; they are part of the conversation, too.


The Greatest Threat

At the October 22nd presidential debate, when questioned by moderator Bob Schieffer as to the greatest future national security threat facing America, President Obama responded that he thought it would “continue to be terrorist networks”. Governor Romney somewhat outlandishly declared that “the greatest threat the world faces, the greatest national security threat, is a nuclear Iran”.

Romney’s claim, while clearly part and parcel of his grand strategy of blustering rodomontade, is not as bewildering as it might seem at first blush. Iran could leverage its possession of a nuclear weapon into an unearned seat at any number of bargaining tables. Even just one bomb could drastically improve Iran’s immunity to threats of Western military action, bolstering the Islamic Republic’s position and freeing it to manipulate the flow of oil and interfere in the affairs of its neighbors.

It is this unencumbered Iranian influence that poses a threat to global security, not, as numerous histrionic voices incessantly declaim, the supposedly suicidal tendencies of the Iranian leadership. Martin Dempsey, Chairman of the Joint Chiefs of Staff, has publicly declared his conviction of the Iranian regime’s rational nature, as have former Mossad director Meir Dagan and Shin Bet honcho Yuval Diskin.

Indeed, Governor Romney’s response is just so much fustian and bombast. President Obama’s answer is far more interesting, even if it does fall just short of being wholly true. Presumably, the “terrorist networks” of which the President speaks are Islamic extremist movements like Al-Qaeda and its many cousins, the menacing eidola that have so fully consumed American foreign policy for the past decade.

There are two dominant rhetorical approaches to the threat of Islamic extremism (it is insensate to refer to these openly fascistic movements as “fundamentalist”, since in terms of Islamic history and theology they are in no way “fundamental”). The stance that has pullulated most thoroughly in American public life is one of intransigent, intemperate and proudly overwrought panic. This is the attitude that manifests in anti-Sharia legislation, Quran-burnings, transparently Islamophobic law enforcement activities, and, most dangerously, the unsystematic and haphazard application of American power.

The second approach is dismissal of the entire threat. Adherents of this view believe that Islamic extremism poses little or no danger to America or its citizens, that the perceived peril of groups like Al-Qaeda is fictive or even fictional. At its worst, this view is reflected in 9/11 “Trutherism” or we-brought-it-on-ourselves masochism.

Nevertheless, there is a grain of truth in the claim that Islamic terrorism does not constitute a “national security threat” of tangible value. Since the death of 2996 people on September 11th, 2001, transnational Islamic terrorism has killed exactly zero Americans on American soil. Countless Americans, most notably Daniel Pearl and Nicholas Berg, have been murdered by Islamic extremists abroad, but it is difficult to view such incidents as blows against national security. After all, Americans traveling in other countries are far more likely (at this point in time) to be victims of street crime than of terrorism.

On the other hand, it’s not right to discount these murders from a holistic examination of the jihadist threat. It’s also important to consider the influence of extremist ideologists abroad on homegrown terrorism, as well as those plots tried and failed by foreign-trained erstwhile martyrs. While Major Nidal Malik Hassan, the Fort Hood shooter, received no material support from international terrorist groups, he found justification for his rampage in his correspondence with Al-Qaeda cleric Anwar al-Awlaqi—as did failed Times Square terrorist Faisal Shahzad and underwear bomber Umar Farouk Abdulmutallab. Those two, along with shoe bomber Richard Reid and dozens of others arrested in the U.S. since 9/11, underwent training abroad in Pakistan and elsewhere.

If foreign Islamic terrorist networks have failed in their attempts to do harm to America over the past decade, it’s not for want of trying. As we have seen, it is only vigilance and good luck that have protected Americans at home from the frequently incompetent extremists dispatched by maleficent forces abroad. Those same extremists have succeeded in inspiring “homegrown” terrorism that has cost American lives, and they remain a threat to Americans in foreign countries.

The half-truth of President Obama’s contention during the debate lies in the fact that America’s territorial integrity, the freedom of its citizens, the continuity of its government functions (that is, to the extent that they normally work) and, indeed, its continued global hegemony remain largely unthreatened by Islamic extremism. For now.

There is a threat. But the threat is posed not by terrorist networks subscribing to a fanatical ideology; it is posed by the possibility that this ideology will grow into something far greater and far more pernicious than the loose agglomeration of disturbed and violent young men into putative “networks”.

Islam, contrary to the bigotry and enthusiastic ignorance increasingly promulgated by far-right parties the world over, is not an inherently expansionist creed. But the ideologies on the Islamo-fascist continuum most certainly are. Chief among these are Wahhabism and its incestuous siblings, Salafism and Qutbism.

The primary characteristic of these ideologies is their abhorrence of modernity; the communications of jihadist ideologues prominently feature the wish to obviate all progress made worldwide since the Dark Ages. Wahhabists and Salafists are haters of song, destroyers of ancient shrines, murderers of young girls who dare to seek an education. Sayyid Qutb, the Islamist theoretician nowadays most famous for having provided the intellectual gristle of Al Qaeda’s medievalist ideology, supplied as well the notion that most of the world’s Muslims are not in fact believers, but rather apostates deserving of death.

The last decade has seen a stunning epidemic of jihadism throughout the world. In Mali, an Islamist group known as Ansar Dine took advantage of the chaos sown by a sudden military coup and the consequent Touareg rebellion to seize control of the north of the country, where they have hoisted the black flag of jihad. They have attempted to implement their own perverse version of Shari’a law in Timbuktu and elsewhere: video games, Western music, and unveiled women are all proscribed.

The goal of Nigeria’s Boko Haram is to institute a similarly draconian take on Shari’a across the entire country. Of late, the group has found it expedient to simply murder Christians, frequently by suicide bombing in their places of worship. In Somalia, it has taken an incursion by African Union forces to eject Al Shabaab, Al Qaeda’s local affiliate, from Mogadishu. Al Shabaab is particularly notable for having banned sambusas in areas under their control: the tricornered pastry apparently recalls the Christian Trinity far too much for the tastes of the organization’s discerning clerics.

The continent also hosts Al Qaeda in the Islamic Maghreb and its sister organization, the Movement for Unity and Jihad in West Africa. Elsewhere in the world and not to be discounted is Tehrik-i-Taliban Pakistan, which, like its Afghan twin, finds justification for its insanity in the teachings of India’s Deoband madrassah. Also active in those countries, as well as in India and Bangladesh, is Laskhar-e-Taiba, which wants, of course, the establishment of an Islamic state in South Asia.

None of these, strictly speaking, are transnational terrorist movements. None show real promise in smuggling a dirty bomb into the United States or fomenting unrest among America’s largely peaceful Muslim population. None, at this stage, threaten America’s national security in any capacity beyond that of a common thug. Yet it is advisable to be concerned.

For all the alarmist talk of a “jihadist finger on the nuclear trigger” in Pakistan, South Asia remains mysteriously un-annihilated. But perhaps the landscape of that region would look different if, rather than having developed under the influential thumbs of secular dictators, modern Pakistan had been birthed amidst the flames of jihad, consecrated in the blood of infidels and pledged to the restoration of the caliphate. Pakistan has its problems, but the extremist movements that flourish there are not and never will be institutionalized.

If even one of these jihadist movements succeeds in installing itself as the official government of a country, it will be a disaster. It may seem a far-fetched scenario, but movements like Boko Haram, Ansar Dine and Al Shabaab don’t irrupt from a vacuum. Boko Haram was a peaceful movement until Nigerian security forces, threatened by the rhetorical power wielded by the group’s religious leader, embarked on a brutal campaign of repression. Such needless atrocity, in validating a narrative of last-ditch, do-or-die victimhood, always jumpstarts the growth of savage and violent ideologies. If the Nigerian military continues to inflict indiscriminate human rights violations on innocents and militants alike in its pursuit of Boko Haram, the movement will only expand. And its continued expansion will make regional dominion seem less and less far-fetched.

One of the major grievances of Nigeria’s restive population is the misallocation of oil revenues: Nigeria produces just under 3% of the world’s oil. The sad lot of these people would be unlikely to improve under an Islamist government; instead, fantastic wealth would be distributed into the hands of fanatics who would doubtless use it to export their vicious and nefarious brand of theocratic fascism, as Saudi Arabia has vigorously done for more than half a century.

Oil revenue would certainly assist in such an unpleasant outcome, but it would not be entirely necessary. Territory, weaponry, natural resources, the coercive use of human capital, the bully pulpit—all of these assets would be available to Wahhabists, Salafists or Qutbists placed in power in Mali, Somalia or elsewhere. That, indeed, would be frightening.

-Mattathias Lerner

Mitt Romney’s “Trust Me” Campaign

The breathtaking mendacity of the Romney campaign should come as a surprise to no one; the 2012 election cycle has been one rich with casual deceit and a devoutly perfidious stripe of chutzpah. Our own President has disgorged his share of half-truths and flat-out whoppers during this past year, even earning PolitiFact’s not-quite-coveted “Pants on Fire!” rating for some more transparently false claims about his opponent.

Perhaps it is the sheer quantity and brazenness of Governor Romney’s untruths that is so shocking to his critics: his long-since-discredited claim about President Obama’s fictional “apology tour”, vigorously and repeatedly belabored, has done little to enhance the Governor’s image as a truthful and trustworthy candidate.

Indeed, trust seems to have become a central concept to the Romney campaign: the Governor now asks voters to consider him not on the basis of data or reason but owing only to their capacity to visualize him as an occupant of the Oval Office. Doesn’t he seem like a President? Go on– give him a chance. Trust him.

There is little beyond this narrow, visceral range of appeal to recommend Governor Romney to an informed voter. The centerpiece of the candidate’s supposed qualifications—his much-touted economic expertise—is a budget plan that, as a superabundance of nonpartisan studies have noted, will raise rather than lower the deficit. The Romney campaign, and the Governor himself, have taken to responding in frightfully vague fashion. Governor Romney will close the deficit while lowering taxes and raising defense spending—how? Just elect him. You’ll see. Trust him.

The IGM Economic Experts Panel, a nonpartisan survey of forty economists conducted each year by the University of Chicago’s Booth School of Business, found zero respondents willing to endorse tax cuts as a method of raising revenue. Around 90% credited the American Recovery and Reinvestment Act of 2009 as having successfully lowered unemployment, with similar ratios supporting the efficacy of the 2008 bank bailout and rejecting the idea that federal policies play a major role in gas prices.

All of this puts a major dent in Governor Romney’s already tremulous fiscal and economic case. But forget the specifics (as the candidate, when debating, seems so frequently to do). He is a businessman; he managed the Olympics. Trust him.

The candidate’s performance in the October 22nd foreign policy debate seemed to indicate that there is substantively very little to differentiate him from the President when it comes to the world at large. He clung so closely to the President’s actions and positions that, at times, his own presence was difficult to discern.

Where, precisely, is Governor Romney’s case for reelection? Where is the evidence that he will do a better job than the President? Where is the data? Where is the justification?

Never mind all that. Trust him.

-Mattathias Lerner