Christopher Berger editorial: Schadenfreude

Christopher D. Berger


The Obama’s announced solution to the massive deficits he’s amassing will be to tax the rich into oblivion, though the full extent of his taxation scheme is not yet apparent.  In the budget he’s announced he wants to sunset the Bush tax cuts (raising taxes, but not couched in those terms), bringing the top marginal rates up to 39.6% from 36%, raising the capital gains rates to 20% from 15%, and keeping the taxes on estates above $3.5 million at 45%.  The single biggest problem is that it won’t actually balance the budget, there simply aren’t enough people making the kind of money he’s talking about to do it, and it will effectively deter any economic growth his spending may generate, even doing further damage to the economy.

According to numbers published by the IRS, you could confiscate all the income of all kinds made by those with incomes above $250,000 per anum and still not quite cover the federal deficit of $1.5 trillion or so for this year (so far, though that’s likely to go up).  Obama, intelligent man that he is, and surrounded by so lofty a cloud of advisors, surely knows this.

He has further expressed a desire to raise corporate taxes in a further effort to balance the budget, though no concrete plans have yet been announced for that, while at the same time capping executive salaries at $500,000 for corporations who took government money (and eventually for those who didn’t, if Barney Frank (D-MA) has anything to do with it).  In the midst of an economic crisis, taking more money away from businesses already having financial difficulties can hardly be regarded as curative of our present economic woes (which, I might add, are contributing to governmental budgetary woes), and any president who seriously thinks so is not of sufficient insight and understanding to be leading this nation.  Since even I would tend to regard Obama as a man of some intelligence, if one with an extremely misguided ideology, this leaves me wondering just why these would be his chosen methods of ‘fixing’ the problem.

All in all, he wants to increase the percent of GDP excised as federal government revenues from 16% to 19%, in the midst of an economic crisis caused, by his own admission, by people not having enough money to spend leading to declines in business revenues, with pursuant layoffs, closures, and the like, and a concomitant decrease in capital outlays by these businesses, leading to people having even less money to spend, etc.  This makes no sense.

In a lot of ways, the government tax code acts as a very powerful floodgate on the economy.  It’s like a reservoir, holding money back from us as such a reservoir holds water back from rivers below it.  One can raise the floodgate to raise the level of the lake behind it and simultaneously lower the level of water downstream, or lower it to dramatically increase the level downstream, just as the government can via taxes take money out of the system and decrease economic activity while increasing its own revenues, or cut taxes and release money back into the system, creating substantial economic growth.  The difficulty is, there’s no good way to both raise the floodgate (or taxes) and increase the level of water downstream (or economic activity) simultaneously.  The analogy oversimplifies the whole thing a bit for supply side economics (in which there is a way of simultaneously lowering the gate and increasing the water level of the reservoir), but is, I think, an accurate assessment of the Keynesian economics Obama and his lackeys propound.  What he’s proposing doesn’t make sense even under the Keynesian model, particularly as he’s not talking about financing new spending but lowering the deficit.

All of this leaves one wondering just what he’s trying to accomplish, since under no generally accepted economic model will his actions help to reinvigorate the economy.  There’s only one thing I can think of that he could be trying for: he’s trying to get even with the rich.  That’s who his plan is targeting.  Obama, I submit, is not a grand, erudite statesman looking for the best course for the country, but rather a small-minded man who has yet to move past his days as a community organizer, and who has suddenly been granted a great deal of power which he intends to use to further his brand of social justice (i.e. everyone gets screwed).  His backers aren’t by and large supporting his tax policies because they believe the tax policies will actually fix the economy but out of a sense of schadenfreude: they feel good not because their situation has improved in any way, but because someone else suffered too, someone who previously might not have.  This is what happened during the French Revolution when they were executing the nobility: people were not, by and large, better off for the nobles being dead, but they felt good about it nonetheless.  They were heartened by another’s misfortune.

Obama will ride this popular wave of schadenfreude to victory in the implementation of his tax policies.  In the ultimate legislation of morality, Obama and his minions in Washington will tell people how much they can make and how they can spend it not out of any economic rationale, but because they think certain expenditures or financial statuses are wrong.  God (currently answering to the name Obama for this crowd) forbid that corporate executives should make use of private jets to maximize their productivity or have chauffer-driven cars to maximize the amount of time they can spend on their jobs.  Stopping them from doing so won’t create jobs or save the taxpayer money; indeed, given how much revenue is derived from such things, it would cost us money in the long run.  It’ll just assuage liberals’ sense of social justice for a while to screw the rich in such obvious ways.  It’s the ultimate schadenfreude trip, and a bit sadistic at the same time, since in this case the same people deriving moral/social validation from the destruction of corporate titans are the ones destroying them.

So let’s be clear: all the discussion of making the rich pay their fair share and stopping corporations from growing fat on ripping off the poor is Obama’s only justification.  As I say, he’s legislating his own morality, without regard to what’s actually good for this nation, and he’ll feel just fine about it even as the economy sinks further into recession as a result. He’ll feel good that he’s done something to balance the scales, to give the rich a taste of what the rest of the nation is feeling (though I promise you, they’re feeling it quite acutely themselves already).  He’ll feel good about ruining people who have done nothing but contribute to employment and economic growth, just because he thinks its right.  And that is a distressing thought.

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