Economics 101

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It seems that Senator Obama needs a remedial course in economics.

We’re hearing lots of political ads here in Ohio, running up to our primary on March 4th.  There’s an Obama ad they keep playing over and over, which says something like this:  “Barack Obama will close corporate tax loopholes so he can give tax breaks to the middle class and help companies create jobs.”

Huh?  Either he doesn’t understand how things work, or (more likely) he assumes that the citizens of Ohio are ignorant of such things.  If you raise taxes on corporations and give tax breaks to the middle class, it will not help companies create more jobs.  It will have the opposite effect.  Companies will do more outsourcing and lay off more workers in an effort to pay the higher taxes.

The ad also points out that corporate C.E.O.s make more in 10 minutes than the average worker makes in a year.  OK.  So what?  What are you going to do Mr. Obama?  Limit how much corporate C.E.O.s can be paid?  Sorry, that’s not the President’s job.

It seems he’s running on the tired old theme of class warfare.  Let’s all hope and pray that he’s as successful with it as Michael Dukakis and John Kerry.

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24 comments so far

  1. gasdocpol on

    (I voted against Dukakis and held my nose when I voted for Kerry. I could not bring myself to vote for either Reagan or Carter. I have since gained more respect for both of the latter two.)

    When too much money is in the hands of too few people, it is not good for the economy. When everyone does better, everyone does better.

    “Kenny Boy” Lay, GW Bush’s earliest and staunchest supporter, was in the process of building a palace for himself to rival the Hearst Castle with his ill-gotten gains when ENRON went belly up ruining the lives of thousands as their pensions went up in smoke. So much for making our CEOs even richer so some money can trickle down.

    Eliminating tax cuts for the rich is a step in the right direction. Getting us out of the very, very expensive war that Obama opposed from the start will be helpful also.

  2. Danny Nieves on

    If Obama needs a remedial course in economics, what does the President that we’ve had for the past eight years need? What about John McCain, who is on record for saying that he knows nothing about economics. Even George Bush Sr. had his doubts about Reganomics,
    maybe you should be taking the remedial course.

  3. Roland on

    The very fact that Obama wants to tax company for their profits in order to bring gas prices down shows he knows nothing about supply and demand. The fact he states that drilling in the U.S. will do nothing to the prices shows he knows even less.

  4. gasdocpol on

    Roland

    Obama said
    I’ll make oil companies like Exxon pay a tax on their windfall profits, and we’ll use the money to help families pay for their skyrocketing energy costs and other bills,” the Illinois senator said.

    Obama charged that McCain’s support for extending President George W. Bush’s tax cuts means he is in favor of $2 trillion in corporate tax breaks, including $1.2 billion for Exxon Mobil Corp.

    “If John McCain’s policies were implemented, they would add $5.7 trillion to the national debt over the next decade. That isn’t fiscal conservatism, that’s what George Bush has done over the last eight years,” Obama said.

    McCain said that he does not know much about economics and this is confirmation of that.

  5. Roland on

    So, Obama is againt a company making profits. Well, at least the amount of profit that HE would deem as bad. I wonder, does Obama know the difference between a profit, a net profit and a profit margin? Do you?

    Obama said he will “use the money to help families” This is yet another way that Liberals will “help” other people by taking money from you by gunpoint.

  6. gasdocpol on

    Roland

    Oil companies are making record profits. Bush/Cheney come from big oil. We are getting screwed at the gas pump. Over 4000 Amaericans have died in Iraq. Life is wonderful!

  7. Roland on

    Oh….right. So now, it’s about Bush/Cheney and the war. Nice diversion.

  8. gasdocpol on

    Roland

    It is just coincidence that the oil companies have done so well since 2001?

  9. Burt Hollandsworth on

    Folks who complain about corporate CEO pay have never been on a search committee at a multi billion dollar company, trying to come up with a short list of candidates who are good enough to run the company.

    We’re not talking about running a Dairy Queen, these are big companies, with big headaches, and lots of cash that the bigwig is responsible for generating. Most (all?) of these CEO type guys are super-rich before they take the job at the big corporation to begin with. You have to offer enough to convince them to work at all, much less to work for you.

    All of these jobs are powerful and prestigious. The only other thing that a company can offer a candidate besides power and prestige is cash and stock options.

    Same way with university presidents, provosts, etc. Important folks need big money. We DO NOT need the government to limit this. Companies need to be free to decide what they pay their executives. If they pay them too much, then that’s their own fault.

  10. Roland on

    Well said Burt.

    Gasdocpol, do you know the difference in a profit, net profit, profit margin and gross profit? What was the big, bad oil companies profit margins over the past few years?

    Here is a clue – it’s been the same. Around 9%. 9% each year (I think for about 3 years now).

  11. gasdocpol on

    Roland

    net profit = revenues – expenses
    profit margin = net profit/ revenue = operating efficiency
    gross profit = revenues (sales)

    Net profits is the bottom line which oil companies increased done despite no improvement in operating efficiency.

    (past 3 years are all within the Bush/Cheney administration. )

    Burt

    The USA pays the top CEOs much more than many foreign countries do and we are not doing so well lately. I wonder…..

  12. Roland on

    Oh, so when the economy tanked at the end of the Clinton administration, that was all Clinton/Gores fault, right? Yeah, because the President has SO much control over the economy. In fact, the President has a little button he presses when he wants gas prices to go up.

    So, you are saying that Govco should regulate how much people get paid? Hmmmm….what do you do gasdocpol? Maybe you make too much.

  13. gasdocpol on

    Roland,

    Upon what are you basing your statement that the economy “tanked”at the end of the Clinton administration. I remember that it had done quite well during the Clinton years and was not doing as well at the end.
    I do know that the national debt skyrocketed as soon as GW Bush became President. Conservative? lol

  14. Roland on

    Check your history gas. Starting towards the end of 1999 and the spring of 2000, the whole dot-com bubble started to burst then, during the summer, the economy went down. Yeah, it didn’t “tank” but wasn’t all that great either.

    Oh, I never said Bush was conservative. Far from it.

  15. gasdocpol on

    Roland

    You still have not told me by what criteria you claim that the economy went down. I am glad that you are no longer saying that the economy “tanked ” under Clinton. I think that it was still better than it was when Clinton took over. The economy was strong while we were reducing the national debt. With Bush the economy got steadily worse while skyrocketing the national debt.

  16. Roland on

    I don’t like doing homework for others but:

    http://en.wikipedia.org/wiki/Early_2000s_recession

  17. gasdocpol on

    Roland

    (Sincerely) thank you for the reference. (I am usually pretty good at asking google the right question)

    Clinton had some luck because of the e-business boom . To his credit, he did not screw up the opportunity.

    You would claim that forces were set into motion during the Clinton years that made Bush look bad.Is there some evidence for that? I think that money spent on Americans would have been better for the US economy than the money spent on the Iraq war.

    Long term the increase of the national debt caused in part by tax cuts that favorized the rich cannot be good.

  18. Roland on

    I didn’t say that at all. Just pointing out the economy at the end of the Clinton term. He was lucky as well coming off a recession. That always means a rebound. Also, Bush had a bit of bad luck with 9/11.

  19. gasdocpol on

    Roland

    PNAC and Bush gained from 9/11. I am glad you recognised it. That gives legs to the theory that says that PNAC went on record as saying that their agenda would be helped by a catastrophic catalyzing event-a new Pearl Harbor and PNAC members :Cheney, Rumsfeld and Libby were in a position to tamper with our defenses for 8 months prior to 9/11.

  20. corey on

    i thought that obama was good from the start

  21. Dawan on

    Thank you for putting Barack Obama in a stereotypical framework! (Sarcasm) I am sure that will help America rebound by degenerating back to the racist ideas that stole the nation’s potential and continue to do so today.

  22. Dawan on

    Why it is stereotypical? It is stereotypical because it boxes Barack Obama into a hip hop image, which seems to define the African American image in music today, in some sense, because hip hop is extremely popular. So, if a person has never seen as black person but sees hip-hop or rappers they maybe mistaken that blacks are that but we are so much more. Yes, that is part of the African American people but we are more than that we are: Michael Steele, Dr. Michael Eric Dyson, Stevie Wonder, Usher, Tupac, Dr. King, poor, rich, spiritual and spiritual impoverished, and so much more. Making African Americans just as diverse as any group of people and not a homogenous group of people.

  23. Sparky on

    “If you raise taxes on corporations and give tax breaks to the middle class, it will not help companies create more jobs. It will have the opposite effect. Companies will do more outsourcing and lay off more workers in an effort to pay the higher taxes.”

    I guess you were in a coma from 1992 til 2000…..how did that McCain Palin thing work out for you?

    You support Conservatism so I’m assuming you were the first one in line to join the Marines in 03. Since you voted for their war and all.

  24. buba on

    who ever made this picture is a lame because it is not funny you need to find something better to do with your time!!!!


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