The VAT's in the Fire

The VAT's in the Fire
Ken Blackwell
Friday, April 23, 2010

When President Obama was a candidate, he pledged over and over to voters: If you make less than $250,000 a year, your taxes will not go up. Voters read his lips. They hoped for change.

Yesterday, the President said that the Value Added Tax is “on the table.” That means it will be the main course served up after the November elections. After ramming through his ObamaCare bill on the narrowest of partisan margins last month, the President is finding that it’s going to be impossible to deliver on that massive new entitlement without hefty additional taxes. That’s why he’s enlisted “go along to get along” types like Erskine Bowles and Alan Simpson--men who will never have to face the voters’ wrath--to stitch a fig leaf for an after-November major tax hike.

Margaret Thatcher used to say the problem with socialism is that soon you run out of other people’s money. The European socialism that is the President’s program will require a substantial increase in the already worrisome tax burden.

Last week, Mr. Obama scoffed at the TEA Party rallies on tax day. “You’d think they’d be saying ’thank you,’” he told a fundraiser for embattled Sen. Barbara Boxer. TEA partygoers were not amused. Their title comes from the slogan: “Taxed Enough Already--TEA.” TEA partygoers know what the rest of the electorate is just finding out: the European-style social welfare system Obama wants cannot be supported without vast increases in revenue at every level of production. Of course, double-digit unemployment has also become a staple of Euro-socialism. An aging population is placing ever greater strains on those sclerotic economies. The Greeks expect the Germans to bail them out. The Euro is falling against the dollar. And the Europeans have just had a week to cool their heels while volcanic ash grounded most of their air travelers.

Europe is no model for the U.S.--even if we could mimic their behavior. Europeans have sub-contracted their defense and security needs to the Americans for generations. German Ambassador Klaus Scharioth last fall told a Washington audience that Germany was grateful for the sixty million U.S. troops who have served in his country since World War II.

That was a rare and gracious tribute to American power. But it also served to highlight Germany’s dependence on U.S. might for her defense. Now, a small contingent of German troops is serving with NATO forces in Afghanistan, and Germans are dying in defense of freedom for the first time in their long history. Germans are increasingly a part of a coalition of the unwilling. German soldiers in Afghanistan are openly questioning Berlin, demanding of Chancellor Merkel the reason they are in that war-torn country.

Germany can shrug. Atlas can’t. That’s why the U.S. cannot maintain military strength and Euro-socialism at the same time. Perhaps that’s what this administration really wants. President Obama’s curious--very curious--statement that we are a dominant military superpower “whether we like it or not” was most revealing. It was a statement from the soul of a Peace Prize winner, from the heart of a nuclear pacifist.

It may well be that this crisis that liberals don’t want to waste is being used precisely to end America’s role as the world’s dominant military superpower. It may be that the pacifist wing of the Democratic Party, the wing that nominated Obama, intends to use the VAT and ObamaCare as a means of disarming the U.S.

Soviet military power eventually collapsed because spending grew out of control. The Soviets had to leave Afghanistan. The left has always resented America’s ability to project force. Perhaps they understand there’s more than one way to bring the troops home.

Meanwhile, it is increasingly clear: If Obama keeps his majorities in Congress, he will give us a VAT. As endangered Freshman Tom Periello (D-Va.) memorably put it: “Unless you tie our hands, we’ll keep stealing.”

President Obama’s Republican opponents have united around the theme of repealing ObamaCare. Now, they must add to that opposition another binding pledge: Stop VAT.
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Obama's Profits Allergy
David Limbaugh
Friday, April 23, 2010

I wonder why any president of the United States would feel compelled to protest, repeatedly, "I believe in the power of the free market." Has any other president said it -- at least in the context Obama keeps saying it? That's rhetorical.

Sure, Ronald Reagan talked about the glories of capitalism frequently, but never in terms of trying to convince skeptics that he really believed what he was saying.

But Obama said it again in that very context, in his Wall Street speech in New York on Thursday. "As I said two years ago on this stage, I believe in the power of the free market." Believe me; he didn't go on to elaborate on the wonders of entrepreneurship, capital formation, liberty or the robust economic growth that free markets produce and which cannot be replicated, with any faint degree of consistency, in command-control economies.

Indeed, just one sentence later, Obama added one of his ubiquitous free market qualifiers. He said, "But a free market was never meant to be a free license to take whatever you can get however you can get it."

Excuse me? Please tell me one capitalist who believes that a free market is synonymous with a license to steal. None does. They all understand that our capitalist system operates under the rule of law. We already have laws preventing stealing, fraud and the like. So why does he have to frame the issue in such distorted extremes? Also rhetorical.

But let me ask you something: Could Obama make the same statements about the federal government, as in, "I believe in the power of the federal government, but the federal government was never supposed to have a license to take whatever it can get however it can get it"?

Sure he could make the statement, but would he mean it? Rhetorical. Surely we can all agree that he has far more confidence in the federal government than in the invisible hand of the free market. In fact, Obama leftists these days are coming out of the woodwork to condemn conservatives and other free market advocates for believing that capitalism can possibly work without the constant heavy hand of government regulation pressing down on evil entrepreneurs for their excess profiteering.

Raised and mentored at the feet of capitalist-hating leftists, Obama repeatedly reveals a visceral distaste for profits. And I don't mean so-called "excess" or "ill-gotten" profits only, but just plain old profits. Obama thinks, like a Marxist, that profits are "surplus value" stolen by capitalists from laborers who produce the wealth.

He is obviously so deeply steeped in Marxist indoctrination that he believes that prices are only high because of profits. In his static view, only a government-controlled system can cut out those evil profits and maintain reasonable prices. He apparently has no concept of -- or any appreciable real-world experience validating -- the ability of the market, through competition, to produce higher-quality goods at lower prices.

We witnessed this with his opportunistic war on insurance companies, when he savaged them for their "obscene and excessive" profits. But the unvarnished data proved the insurance industry's profits are modest compared with those of other industries. Obama was surely aware of that but shrewdly labeled them "excessive" because he knows Americans are not allergic to profits as he is.

In hot pursuit of his latest federal power grab (a complete financial overhaul), what Obama doesn't tell us is that it wasn't an unregulated market that primarily caused the financial crisis -- the crisis that facilitated his ecstatic quest to completely transform America into a socialist state. It was largely an unbridled, out-of-control, do-gooder leftist Congress that substituted its values for the wisdom of the market and incentivized and forced financial firms to make loans to people who couldn't possibly repay them, among other things. These wonderful leftist congressmen, who hold themselves out as impartial regulators, resisted Republican efforts to rein in their friends at Fannie and Freddie.

Obama's financial overhaul bill would not enhance the rule of law, which in a nutshell is a government of laws, not of men. It would diminish the rule of law by replacing the law's intended impartiality (objective standards that citizens can rely on) with giving "unlimited discretion" to arrogant, power-drunk government thugs who think they are better-equipped, morally and intellectually, to run our macroeconomy. There would be no level playing field guaranteed by the rule of law, but an expansion of the ability of government, with yet more confiscated taxpayer money, to pick the winners and losers for whatever reason it wants and without having to explain why. This, as I wrote before, is TARP writ permanent. And we know how much accountability the government has had with TARP expenditures -- or with Obama's stimulus funds, for that matter.

When will this insanity end?