Tuesday, October 14, 2008

Obama misses the point

Barack Obama doesn't like John McCain's proposal for a temporary reduction in capital gains rates to get the economy moving. It won't work, he says, because no one has any capital gains.

Great economic analysis for a lawyer and community organizer. The absence of capital gains is precisely why McCain wants to lower the rate. The idea is that the prospect of lower taxes will increase the upside for those who gamble on the purchase of potentially undervalued assets like, say, real estate or mortgage-backed securities.

8 comments:

Anonymous said...

I think you misrepresent Obama's comments. What I've read is that Obama said he thought that reducing long-term capital gains tax was not particularly relevant because "nobody really has capital gains right now." He said "That probably is not going to be particularly useful in solving the financial crisis." He didn’t say it wouldn’t work, just that it’s not relevant to our current crisis.

Obama's concerns are legitimate; if there are few chances for long-term capital gains in the current market, lowering this tax TEMPORARILY will have little impact.

If I misunderstand Obama’s position, you could enlighten me with a link to a “better” source; because so far what I’ve found is different from what you state.

gnarlytrombone said...

Interesting choice of word.

Anonymous said...

Obama starry eye crowd does not care what he says because it is perfect to them. It has not mattered that he does not have any experience, that he associates with questionable people and that he is as far left as a person can get. We no longer are dealing with the same America and our freedoms will be lost to the tyranny of the left.

Anonymous said...

For the Record: Anonymous at 7:24 pm was me.

sean s.

Anonymous said...

Rick

A question: Is the debacle of Bush's failed Presidency, McCain's likely-failed candidacy, and our economic crises leading toward a Conservative melt down like what occurred after Goldwater's defeat?

There are many signs of discontent among conservatives regarding Bush, McCain, and the financial mess. The precipitating event to my question is the resignation of Christopher Buckley, the son of conservative icon William F. Buckley, who resigned yesterday from the conservative National Review days after endorsing Barack Obama. See http://politicalticker.blogs.cnn.com/2008/10/15/buckley-leaves-national-review-after-obama-endorsement-2/#more-24565

There is also David Brooks' column from a few days ago:

http://www.nytimes.com/2008/10/10/opinion/10brooks.html?_r=1&hp&oref=slogin

and kristol's now famous column advising McCain to fire his campaign. Is there a build-up to a seismic change in conservativism? Between the Gut-reactionaries (like Bush or Palin) and intellectual conservatives?

Or is this just pre-defeat panic?

sean s.

Sherrie said...

Sean...

I think if he said "that probably is not going to be particularly useful in solving the finacial crisis" ... on the planet I am on I would interpret that as saying "it wouldn't work".

I think it would encourage people to invest, so I think it will work.
I think it is very relevant to our current crisis.

Anonymous said...

Sheri;

Perhaps on your planet you might interpret "not particularly useful" to mean "won't work" but on my planet we don't present our interpretations as what someone else meant.

Temporarily reducing capital gains taxes should encourage investment; which is always good. It would "work" for that.

But our current financial crisis is principly a collapse of the credit market. Encouraging capital investment is at best an indirect response to the credit market problem. Since this is the problem we need to solve in the current situation, the tax change above won't matter much to that; it won't "work" to resolve that problem.

I realize that this differnce might seem too subtle to matter, but these subtlties matter. In a crisis situation, it is unwise to spend time and energy on ineffective actions.

More to the point: if you think that McCain's proposal would "work"; you might tell us the mechanism you believe justifies this opinion. I admit I don't see it.

sean s.

tom paine said...

"The idea is that the prospect of lower taxes will increase the upside for those who gamble on the purchase of potentially undervalued assets like, say, real estate or mortgage-backed securities."

Hmmm...interesting concept...seems it has been tried before. Let me think...yep, it was all those clever Wall Street white shirts that are now getting thousands of millions of dollars in bailouts!