“I have found incredible success in raising money for Gov. Romney…We are raising the guy a fortune from people who are disaffected by what the president is doing”
— Hedge fund executive Anthony Scaramucci as quoted in the Los Angeles Times
Since President Obama’s scapegoating of the “rich”, many of his former Wall Street donors have become noticeably reticent in recent weeks.
The President’s team recently struggled to fill 100 seats for $10,000 a head at a recent fundraiser in Manhattan hosted by the Oracle of Omaha, Warren Buffett. This lack of donor interest is even more shocking given that “recent fundraisers in Hollywood and New York have gone for $35,800 a pop.”
Meanwhile, Mitt Romney seems to have had no problems raising money from Wall Street professionals, selling out a “breakfast fundraiser at the exclusive Essex House hotel [on] Tuesday.” In fact, Romney “raised $4.9 million before June 30 of this year, nearly twice what Obama” did, and Romney is only one of many Republican hopefuls, not even the party nominee. Goldman Sachs employees, who supported candidate Obama heavily in 2008, have donated six times as much money to Romney’s campaign as they have to Obama’s.
While demonizing the “rich” may please his proletarian footsoldiers, his recently lackluster fundraising results may have alienated his cash cows.
Reflections of a Rational Republican 
The president hasn’t demonized the rich.
He continued the TARP bailout plan undertaken during the Bush administration, signed a pretty mild financial reform bill, and has called for some tax policies to return to surplus-era levels.
The Democratic Party is about 80% owned by the financial industry; the GOP is 100% owned by the financial industry. So the GOP will, probably, raise more money from the financial industry than the Democrats. Finance now sucks up about 40% of our economic growth, to no apparent benefit for the country, in large part because of changes in the law in the 80s and 90s. As Paul Volker put it, the only financial innovation of the past 30 years that aided economic growth was the ATM.
Tellingly, this post includes zero quotes from the president and zero analysis off his policies. This is because being a Republican is a cultural pose, like being emo or goth, without policy preferences. The president is bad because he isn’t one of us; meaningless smears like “class warfare” are the equivalent of a calling someone a “nerd.”
Here’s an interesting take on campaign donations & the parties: http://www.rooseveltinstitute.org/in-the-news/money-and-midterms-are-parties-over-interview-thomas-ferguson
The post fails to analyze any of Obama’s policies, because I have already written posts extensively on why his policies are poor. The point of this post was merely to suggest that his policies, which deliberately target 10% of the population, which already pays 45% of taxes, has consequences from a fundraising perspective. If the President pisses in someone’s pot, he shouldn’t be surprised if that group decides not to drink it.
A few data points in just the last few days that indicate his financial reform and healthcare bills aren’t working are Bank of America’s $5 debit card fee, and the 9% rise in healthcare costs in the past year (more on that in a future post).
Republicans do have clear policy views, namely less regulation and lower taxes. In sum, they favor smaller government. That said, I agree with you that they haven’t always behaved that way. Witness the Presciption D plan, under Bush.
In terms of the TARP bailout, I think Bush should be congratulated for doing the right thing, despite it being an action that conflicted with Republican ideology. It was a pragmatic step that saved the financial system. Had he stood firmly on ideological grounds, the whole economic system could have collapsed.
The president hasn’t demonized the rich.
If he isn’t demonizing the rich by what he is saying. What WOULD demonizing the rich look like?
President Obama raised more money than any Presidential candidate before him, in 2008. Much of this from big donors. Yet the GOP is the party of the rich. Even if Obama’s numbers are down, he still can jet out to California and have a bunch of rich Hollywood Liberals grease him . Then there are the solar industry kick backs . Rich donors bundle mega bucks for the President and they start solar companies like Solyndra . The White House pays them back with green energy loans , which they then go bankrupt on .
True. I think he was actually on track for raising a $1 billion war chest until recently. People like Soros supported him and the President reciprocated by passing legislation that effectively forced Soros to close his hedge funds to outside investors. You just cannot make this stuff up.
Sean ,
Guys like Soros are such master manipulators, that one way or another they can figure out how to benefit from Obama’s socialism. Warren Buffet is the one that mystifies me. In public he is a green Obama Socialist . In private he is a to hell with climate change capitalist.
http://www.dailyfinance.com/2009/11/04/warren-buffetts-big-railroad-buy-raises-the-stakes-in-his-long/
He’s been so wealthy, for so long, that he has completely forgotten what it is like to be on the bubble (i.e., $200 – 500k in income). Furthermore, hidden taxes have risen in recent years, yet the federal government continues to ignore this. For example, last week, the county property tax assessor had the temertiy to send me a tax bill that implied a 2% increase in my home’s value. I sent it right back with a note describing how the house across the street with an identical floor plan has been on sale for months at a valuation $90,000 less than what I paid for my house (in 2009 no less).
$200,000 of income puts one in the top 2% of the population in terms of household wealth. I think that only appears “on the bubble” if one doesn’t recognize the amount of luxuries and ease one has in a life with that income. Is 98% of the population either “on the bubble” or below? The wealthiest 20% of Americans (including those earning far less than $200,000 – the top 20% are roughly those above $90,000) do better than the wealthiest 20% of any other country, and pay the least taxes. Again, our middle class does not compare as well with the rest of the world. The only way I can think to look at this objectively is in a comparative context, and done that way (including comparing with the US at any time earlier this century), it’s impossible to say the wealthy have much to complain about, or that Obama’s plans cause them any real pain.
“$200,000 of income puts one in the top 2% of the population in terms of household wealth. I think that only appears “on the bubble” if one doesn’t recognize the amount of luxuries and ease one has in a life with that income.”
Scott, you are taking this number out of context. $200,000 in Texas would be certainly be like living in the lap of luxury, but $200k in Manhattan, might allow you to live in a two bedroom apartment (if you’re lucky). The problem is that most of the jobs that pay that kind of money require their employees to live in extremely expensive locations. A tax increase on these folks actually may cause some real pain.
But that’s what socialists do. They use taxes and regulations like blunt instruments without regard to context.
Obama is not a Socialist, Alan. So, get off that kick, as it is really getting old.
So even talking about a small tax increase on the wealthy is the equivalent to demonization of the rich? But saying people who don’t pay taxes shouldn’t vote isn’t demonizing the poor? The rich are not being demonized by anything Obama is saying, nor are his policies unfriendly to them. The financial industry and business in general is regulated less in the US than in pretty much any advanced industrialized state — under regulation helped cause the financial debacle of 2008! But as for fundraising, I think if we compare Romney and Obama’s 3Q totals when they’re announced it won’t even be close (and 3Q will be low for Obama because of a lot of delayed fundraisers due to the debt ceiling). If anything I think Obama has been too friendly to Wall Street.
No. But, talking about a tax increase on the wealthy in the context of a proportional tax decrease on the poor is classic class warfare.
I think it is perfectly reasonable for only people who pay taxes to vote. After all, children are bared from voting until they are 18 — the same age they can presumably be drafted. In my opinion, those who pay into the system deserve to dictate how their money is spent. Those who do not, don’t.
No, that’s not class warfare. The wealthy are doing very well, the poor are suffering. To disenfranchise the poor because they don’t have resources would be anti-Democratic and assure not only protests, but probably a revolution! The wealthy benefit more from the system, and asking them to pay a slight amount more (and still remain the least taxed and the wealthiest top tier in the world) is not class warfare. You seem to neglect the fact that what the tax dollars purchase create the capacity for the wealthy to have what they have. They benefit from the tax dollars more than the poor do, even if the poor get transfers. Without the stable political system, legal protections, and the like, the wealthy would not be doing near as well. They are net winners.
One more thing – I have an acquaintance (who happens to be a Republican) who was one of the many in Maine who worked in a factory and lost his job. He’s in his fifties, has been struggling, and was unemployed for a year and a half. He finally got a job recently and was thrilled. It’s been difficult for him, but he actually grows a lot of his own food and has a couple animals (for food) — he lives on a small plot of land outside town. He works hard and hated not having a job. Am I really going to label him “dead weight” and tell him that because he’s been struggling and doesn’t pay federal taxes he does not get a say in who represents him in making decisions about this country? Government is more than just determining how tax dollars are spent (indeed, government existed long before there was a federal income tax! Should nobody have voted then)? Think this through.
Since I work in finance, I know at least several dozen people who has lost a job at some point in the last few years. I know it is difficult. My fundamental problem is that fewer and fewer people are paying taxes. Yet they get to vote on new programs that benefit them and generate additional taxes. It is simply no longer a sustainable system. It is classic moral hazard. I don’t care if they pay a dollar. They should contribute something or they shouldn’t vote.
Scott,
” No, that’s not class warfare. ”
Of course it is . Punishing the rich to give to the poor and telling the poor that it actually will work is class warfare. Obama is not trying to fix the economy. All of his policies are about convincing the poor to hate the rich. That’s about it. When you have to say something isn’t, it is. When you have to say something is, it is not . President Obama has been saying what you say for 4 years now. Fortunately he now has a 3 year track record . Only the hardcore left believes anymore what Obama is selling . We on the right always knew better . The so called independents, the so called political middle believed Obama and put him in office. Nearly every election since 2008 shows that the independents disagree with you .
Alan, you don’t have anything in that paragraph but real vague “Obama is bad” assertions. Come on, you can do better than that? Do you really believe that Obama doesn’t want to fix the economy — you mean you really think he wants it in bad shape? Seriously? I mean, you can say he’s made wrong choices and can make an argument but when you say he doesn’t want it to improve you’ve entered crazyville. Oh, and the hard core left are anti-Obama, they think he’s been too nice to the Republicans, too friendly to Wall Street and too willing to compromise. The hard core left ditched Obama awhile back, he’s too moderate for them.
Scott,
Obama is a true believer in his redistribution philosophy . I think he would like the economy to work, but not at the expense of admitting that class warfare has failed. His supposed compromise attempts with Republicans were all smoke and mirrors. An illusion which you guys believed . If you wish to punish him for false attempts at working with my guys, go ahead. Every proposal was false.
The President would rather things stay bad than reverse course. Of course he wished socialism, green energy, and high government spending had worked. If they had, do you think he would have given President Bush as much credit as he has given blame ?
This dance you guys are playing with Obama is very entertaining. You guys are the spurned ones. You are mad. Obama has finally now abandoned his fake moves to the right . I will credit him for ordering the hits on the terrorists which the left seems determined to feel bad about . Obama has the left. Where are they going to go ? They might stay home, so he has to stoke them.
I’m sure it is Obama’s allies who are behind the so called Wall St. protesters . More stoking up the base.
I’ll also give Obama credit for backing off on the new job killing EPA regulations, but the continuing threat they pose to business is still hurting the economy . The left wing imbeciles like Michael Moore are getting on MSNBC and ranting, but again when the time comes they will get back into line. They have to .
I troll the left blog galaxies and I believe Obama is achieving what he wants . They are moving from despondency to anger. The shift the blame to Republicans game is finally working , but only with the true apostles . Obama is playing to a narrow anti capitalist crowd. How he will expand that base is going to be worth watching .
My fundamental problem is that fewer and fewer people are paying taxes.
This is false.
You are worried about the folks at the bottom voting for ever-higher benefits at the expense of those at the top, dragging down the economy. This is a concern that is valid in theory. Happily, though, it does not fit with what we’ve seen in the US in the past few decades, and it does not fit with what we’ve seen anywhere in Europe.
(German banks may indeed have lent too much money to Greece; but look at the country by country data within the EU over the past 20 or 30 years. We don’t see excessive taxation curtailing economic growth anywhere.)
The problems that you’re worried about are not things that are happening in the real world.
My apologies. What I meant to say was “federal” taxes. I normally catch the mistake, but obviously missed it in this case. What is more interesting is the chart you sent me. According to that chart, the bottom 60% of the population by income takes in a greater share of income than it pays in total taxes, whereas the top 40% pay a higher share of taxes than they receive as a share of total income.
It seems to support the point that the “rich” are paying more than their “fair share.”
In regard to excessive taxation curbing growth, Greece is the perfect example. They spent too much on lavish public employee programs, and now the economy there is contracting as a result.
Greece is the “perfect example” of European economies the same way that New Coke is the perfect example of capitalism. It proves the system doesn’t work!
You probably want to be sure to talk about “federal income taxes” if you want to project fear about the government helping the lazy poors, as the less well-off pay a higher percentage of their income in federal payroll taxes.
As to “fair share,” of course that depends on the context. Given that the income of the bottom 80 percent have been stagnant for a few decades, and the wages of the top 1-5 percent have gone way up, it seems to me that it makes most sense to return to surplus-era marginal rates on income earned over $250,000. What’s more, there is no reason, given American history and the history of similarly situated countries, to think that it would have a negative impact on the economy. What’s more, we’ve seen that the poor have not been using the government to cripple the economy to take from the rich– instead, it’s been the other way around.
Adam Smith:
Given world history, and everything that humans have believed about capitalism for the past few centuries, a modest increase in marginal rates on some upper-income taxpayers seems to be the correct policy.
This is policy here, this is America’s future, these are factual questions that we need to work hard in order get the right answers. Retreating to emotional outbursts like “death panels” and “class warfare” doesn’t help America. It makes rational discussion more difficult. It makes it less likely that we get the right answers.
That’s correct. I meant “federal income” taxes. Fair point.
On Greece, please explain how that country is not an example of high spending and taxation leading to an economic contraction. You cannot just assume it away by comparing it to New Coke. As you’ve wisely noted, these are very important issues that we cannot afford to get wrong.
The Greek experience is an atypical or irrelevant indictment of wealthy democracies, just like the datum of New Coke fails to establish that capitalism is doomed to failure.
Greece is a poor country of 11m people, relatively new to democracy. Its economy and political system are characterized by nepotism and inefficiency. It’s not a comparison that’s very useful when we’re talking about US policy. The only reason that trouble in Greece might hurt anyone else is (1) banks from countries like Germany lent to them stupidly and (2) the Europeans mistakenly decided that linking all countries great and small in one currency was a grand idea.
Debt levels are a function of government expenditures and revenues and economic growth. We look to our experience, and the experience of similar countries, to see whether our current levels of spending and taxation are sound.
Incidentally, in 2008, the Tax Foundation thought that Greece was an economic dynamo that would surpass the US (yes, I’m exaggerating) because its statutory corporate tax rates were far lower than ours: http://www.princeton.edu/~pkrugman/greekmenace.png Given our experience since, and life in the US with Bush Jr. vs. Clinton tax rates, it appears that “tax down = good” might not be quite as useful a framework for policy as the GOP imagines.
Your claim is that spending levels are sustainable based on prior US experience. However, the last time the country spent 25% of GDP on the federal government was during World War II. Are you suggesting that spending 25% of the country’s overall economic output is “normal” or healthy?
We have to look at trends, here– spending is high because the economy has been very bad for about four years.
These are sensible policies that long precede Pres. Obama, or Bush.
The income security and medicaid spending growth in these charts is what I am worried about most.
I think it’s a myth that the poor vote to simply get more benefits. The poor tend not to vote, and they vote for Representatives not on programs. The problem, of course, is that the number of people below the poverty line is increasing. There also is a greater maldistribution of wealth in the country; perhaps its because some are working a lot harder, but I suspect that’s not the cause. We need programs that get the poor working, producing and earning money. To the extent that current programs aren’t working they should be assessed and transformed/replaced. I believe that a vast majority of Americans want to work and earn money and don’t want hand outs. Government programs should be about giving them opportunities, not just handouts.
I don’t think all the poor vote for more benefits, but many do, primarily those who tend to vote Democratic on a consistent basis. Though I do generally agree with you that programs that help people help themselves are better than those that provide handouts.
Not saying we should be spending more, but as near as I can find out, US total government spending is 30% of GDP (includes state and local governments). In the Developed world that’s the second least, only South Korea spends less. I believe the UK spends 38% and Japan 32%, the rest more. But that’s old data — I think from 2003 (and I don’t have a link to it, just have it written down). I suspect, though, we’re still among the lowest in terms of government spending in proportion to GDP in the industrialized world. So whether it’s normal or healthy is a matter of opinion. I’m more concerned about debt and deficits than total amount — a country shouldn’t spend more than it’s willing to raise in tax revenues.
This is classwarfare however it is against the working class and not the wealthy. Over the past 30 years the working class has actually seen a decline in income while expenses have increased. Meanwhile the concentration of wealthy has grown in the top 1%. Here are a few stats from The Wall Street Journal, which is a conservative newspaper:
The Census snapshot indicated that the gap between the best-off and worst-off Americans widened a bit more in 2009, a long-standing trend, but not by much. The top fifth of households accounted for 50.3% of all pre-tax income; the bottom two-fifths got 12%. In 1999, the top fifth claimed 49.4% and the bottom got 12.5% of the income.
The bureau’s annual snapshot of American living standards also found that the fraction of Americans living in poverty rose sharply to 14.3% from 13.2% in 2008—the highest since 1994. Some 43.6 million Americans were living below the official poverty threshold, but the measure doesn’t fully capture the panoply of government antipoverty measures.
The inflation-adjusted income of the median household—smack in the middle of the populace—fell 4.8% between 2000 and 2009, even worse than the 1970s, when median income rose 1.9% despite high unemployment and inflation. Between 2007 and 2009, incomes fell 4.2%.
Here is link: http://online.wsj.com/article/SB10001424052748703440604575495670714069694.html
Angela,
I don’t dispute your data (except for 2008 being the highest poverty rate since 1994 – recent census data now indicates that 2010 was the worst at about 15%). That said, while I agree with your data, I fundamentally disagree with your conclusion. Class warfare implies a deliberate attempt to harm one class of people to benefit another. President Obama has openly stated that he will increase taxes on the “wealthy” to fund a payroll decrease on everyone else. In contrast, no one explicitly sought to harm working class people over the last 3 decades. It just happened as a consequence of the addition of more than 2 billion additional workers in emerging markets, coupled with a debt-fueled boom that benefited both the rich and poor.
I think you’re misstating what Obama said. He said — just like Reagan did in the 80s — that loopholes exist that allow the very wealthy to avoid paying a fair share. Like Reagan, he wants to close loopholes. He’s noting that the recession hits the poor the hardest, as poverty rates climb and the middle class face tougher economic times. Those who benefited the most in the last 30 years (again the top 1% gained 281% of income, the bottom 60% didn’t keep up with inflation) pay a little more to get us through this crisis. His rates would be less than what the wealthy paid under Reagan. Meanwhile those really suffering should get a tax break. It makes sense — if you’re well off and not suffering you don’t need a tax break. To call that class warfare is hyperbolic. Whether attempted or not, the poor and middle class are in a much worse position now then they were 30 years ago. If the wealthy were waging class war on the poor over the last 30 years, what we have now would look like the kind of result one would expect.
Scott,
Every good myth has some truth in it . I know a lot of poor people who will vote for politicians who will give them free stuff. This stuff has to come from somewhere or someone. The rich are demonized, so lets steal it from them . I have a lot of people in my relation, who most certainly think like that . Since we all know how we all feel, we can only stand each other if we do not talk politics .
These are the same people who do not look for a job until 3 weeks before their 99 weeks of unemployment are gone.
Yes, Alan, you’re right. And to the extent that government programs enable such behavior it’s bad since ultimately those abusing government services are hurting themselves by making themselves dependent. That’s a horrid way to go through life. Government programs deserve scrutiny and reform to try to prevent that, the Democrats haven’t taken that problem seriously enough. Still, I know a lot of poor Republicans as well as Democrats, and I most people really do want to work and make a life for themselves.