Op-Ed: Obama and the Elite, Convincing the Top 10 Percent

In order to create a new, competitive, and lasting 21st century economy, the Obama administration will have to convince the top 10 per cent of American wage earners that investing in America today will secure profits tomorrow.

If there is one thing that we all can learn from the recent wave of Democratic tax-evading politicians, it’s that rich people – even those that want to work for one of the most socially oriented presidents in US history – don’t like to pay taxes. Peter Baker of The New York Times points out that a number of Obama administration nominees have come under the hot light of media scrutiny and public ire due to their faulty tax records:

“First there was Timothy F. Geithner, who as treasury secretary now oversees the collection of taxes, but failed to pay $34,000 he owed until the offer of a cabinet job materialized. Then there was Tom Daschle, nominated for secretary of health and human services, even though he neglected to pay $128,000 in taxes until he was selected. And then there was Nancy Killefer, chosen to be the White House chief performance officer, who once had a $900 lien placed on her house for failing to pay unemployment taxes on household help”

All of this without mentioning Governor Bill Richardson of New Mexico, who was being considered for the position of commerce secretary – a post now allotted to Republican Judd Gregg – until Richardson and the Obama administration concluded that he ought to withdraw his name from the running. Appoint a guy currently being questioned about his involvement in a “pay-for-play” scheme to one of the most important positions in the new Obama administration? No We Can’t, they all realized. Paul Light of The Washington Post has particularly heavy words with regard to the Obama team’s vetting process, damning its quality:

“Did President-elect Barack Obama simply assume that the investigation could not sink a Richardson nomination? Regardless of the answers, it is safe to say that, as Obama aides select future candidates for senior-level positions, the sheer number of appointees undergoing background checks virtually guarantees that more mistakes will be made.”

Of course, the scope of these charges pale in comparison to those made by New York Times op-ed columnist Frank Rich against many Bush administration executives. In a true to-the-point article Rich runs through the many, many dark days of the Bush years and caps it all off by pointing out just how expensive those years have been:

“The tentative and amorphous $800 billion stimulus proposed by Obama last week sounds like a lot, but it’s a drop in the bucket when set against the damage it must help counteract: more than $10 trillion in new debt and new obligations piled up by the Bush administration in eight years.”

Citing sources ranging from Colin Powell to previously unreleased Pentagon papers, Rich begins his article just as pointedly:

“Three days after the world learned that $50 billion may have disappeared in Bernie Madoff’s Ponzi scheme, The Times led its front page of Dec. 14 with the revelation of another $50 billion rip-off. This time the vanished loot belonged to American taxpayers. That was our collective contribution to the $117 billion spent (as of mid-2008) on Iraq reconstruction — a sinkhole of corruption, cronyism, incompetence and outright theft that epitomized Bush management at home and abroad.”

In all, the article called for a public inquiry into the potential wrong-doings done by the Bush administration from 01 to 09. The reason I point out both Democratic and Republican corruption in government is to make one point; but first a couple more paragraphs. I think we all realize that in order to get out of this recession everyone of us has to make certain changes and certain sacrifices. Just by looking outside and seeing the changes going on all around us, it’s clear that just like the 20th century was much different than the 19th century, the 21st century will be (and is) much different than the 20th century. Whether you live in the country and are seeing, feeling, and witnessing the increasingly erratic behavior of daily weather, or live in a city and are constantly seeing new high-rises with cranes in the middle driving upward either beside or in place of old, broken down buildings, it is clear that the 21st century is turbulent and fast paced. With that said, Obama and his team - in addressing the current economic fiasco - have to make sure that the changes they make and the programs they support or initiate, act to create a new economy that provides real jobs and lasting inputs into the American economy, thus paving the way for future prosperity and also serving to convince and rally the top 10 percent of wage earners in America to in fact pay their taxes. Few are more vocal in demanding that the money spent today be toward creating an economy that will be competitive tomorrow, than Texas congressman Ron Paul. In several interviews over the past month, Ron Paul has made a number of recommendations based on the original and intended interpretation of the constitution. Arguing that the constitution is America’s chief and principle document, and therefore must guide the way any politician or president acts, Paul urges that many changes ought to be made to the financial system, and that any sort of restructuring of the labor force has to be one that is directed toward building a 21st century economy. Rich Karlgaard of Forbes magazine brings up one of Paul’s greatest ideas and also points out a few suggestions made by Intel’s Sam Palmisano.

“Stop your talk about job creation; the goal of a government should never be job creation. Let me quote Texas congressman Ron Paul who makes this point better than anyone ‘Jobs’ says Paul ‘can be a sign of a healthy economy, but artificially created jobs make our problems worse. The goal of a healthy economy is productivity – jobs are a positive outcome of that. A job could be to dig a hole in the ground one day and fill it up the next, or the equivalent at a desk. This does no one any good. But the value of that paycheque ultimately has to come from taxing someone productive.’ Ron Paul is spot on right. (…)

(President Obama) I know you recently talked to Intel’s chairman and CEO Sam Palmisano and he talked to you about (investing in America’s future). Sam’s ideas are really good: basic science, update our power grids, reclaim our status as the worldwide leader in broadband communications, and medical information technology. President Obama, these are the investments that will pay off.”

Simply printing money will not save the economy. If it is spent foolishly there is no question that it will make the problem worse – but that’s obvious. What’s frustrating is that it’s even hard to tell whether or not printing money and spending it effectively can save the economy. The obscene amount of debt attached to the ankle of all US dollars grows with each day, and unless the American people see something created that provides them with a lasting source of income – in the same way that a fresh water well provides a needing town with a reasonable source of water – the mortgage they have taken out from the three-headed beings that are the owner, printer, and loan collector operatives in the Federal Reserve will turn out to negatively impact their future However, there is reason to believe that the Obama administration and the American people will be able to build the foundations of a new and powerful 21st century economy. The first point that must be made is that nearly every national economy throughout the world has also inflated their economies (to varying degrees) by issuing similar bailout packages. This means that the value of the US dollar shouldn’t lose too much of its purchasing power, relative to other foreign currencies (provided things stay the same, by which I mean, no nation adopts an intrinsically valued currency). This then means that there is a decent chance that if the considerable amounts of money spent in the coming months and years are used toward developing industries that lead commercial and industrial power throughout the 21st century, the US dollar will not only not sink; not only will rebound; but the US dollar, along with the US economy, will flourish. There will still be a hell of a lot of debt, but every nation will have that (to varying degrees). How do you pay off the debt? Since the American government took the loan from the bankers at the Federal Reserve on behalf of the American people, someone has to pay it back, plus interest. And it is for this reason that Obama, over the next few months and years, must convince the top 10% of financial earners in America to greatly help invest in the future of their country with no prospect for personal gain, beyond the assurance that with a strong economy will come strong opportunity for great investments. The loans have been taken, so there is no going back. Somehow, the money borrowed today must be paid and at the same time, the US – guided by the Obama administration – must create an economy that is to the 21st century what oil was to the 20th century, an economy that is to the 21st century what ship creation was to the 16th century; all of this while addressing the challenges and realities of the 21st century. That means that Obama and his administration needs to invest in promising businesses while at the same time convincing the top 10 percent of American wage earners that the burden being placed on their shoulders is worth bearing. Thanks for reading. GRMM