Thursday, October 25, 2012
By Mike Lanza on 10.25.12 @ 6:07AM
Obama champions the Scandinavian view of wealth.
In the spring of 2006 I had an opportunity to travel to Sweden, the land of my mother's birth and home to her side of the family. It had been at least ten years since I had seen any of Mom's relatives, and I felt a great deal of excitement and anxiousness leading up to the reunion. After landing in Gothenburg, I made my way over to my aunt's modest apartment located in a nearby suburb. A handful of relations were there to greet me; their faces older, but instantly recognizable from my childhood.
I was especially happy to see my cousin, who was about 19 at the time and living at home. I would turn 21 at the end of the week and was glad to have a peer and not just doting older relatives to show me around. The long time spent apart and our closeness in age made for easy conversation. It also helped that my cousin, like many younger Swedes, is extremely proficient in English. Our exchanges covered a wide range of issues (girls, American cinema, and the local drinking age were popular subjects). On one occasion, however, my cousin asked me how I thought our countries most differed.
Sweden is, of course, a fairly socialist state. According to CNBC.com, it boasts the second highest income tax in the world. I explained (with the pompousness of an over-read, snot-nosed college kid, I'm sure) that the U.S generally favors lower taxes than most of Europe. The thought process being that entrepreneurs and investors, if allowed to keep a greater share of their profits, will be more inclined to take considerable financial risks like starting a business. In Sweden I argued, there are fewer incentives to keep making money beyond a certain point because such a large portion is taken by the government. While the American system may not provide as many services as Sweden, it does offer economic freedom and greater opportunities to become wealthy.
I noticed a curious expression cross my cousin's face.
"You see, Michael," he began, looking for the right words in English, "In this country being rich is not such a good thing."
I cocked my head as if though I had water stuck in my ear.
"It's just that if you make a lot of money," he continued, "people think you may have done something wrong. They suspect something. Do you understand?"
I didn't really. And at the time I probably dismissed the notion as just another Scandinavian quirk, like eating meatballs with mashed potatoes and gravy (a delicacy since made world famous by IKEA). I didn't often hear that kind of talk in America -- at least not from somebody who wasn't sporting a Che Guevara t-shirt and Birkenstocks.
Though I brushed it off at the time, my cousin's insight into Swedish thinking seems relevant in today's political climate. These days, it's almost taken for granted, on the left at least, that wealthier Americans must be hiding something. Either they don't pay enough (or any) taxes or they simply don't deserve credit for their financial success. Nothing has done more to perpetuate this narrative in the United States than President Obama and his liberal supporters.
For the better part of the past year, Team Obama has made the "the other guy's too rich" line their main selling point. TV spots routinely feature "average" voters talking about how Romney can't relate to their problems because he's too wealthy and detached. Obama surrogates are even more direct. Stephanie Cutter called Romney a tax cheat; Harry Reid exclaimed -- falsely as it turns out -- that Romney didn't even pay taxes for ten years. Given the president's laundry list of economic failings ($5 trillion in new debt, 47 million on food stamps, persistent unemployment, etc.) deflection makes good political sense.
But does President Obama personally distrust wealthy people? I don't think so. He and his wife are plenty well-off themselves and it's no secret that Obama enjoys carousing with the ultra-rich. Heck, the guy recently attended a $40K-a-plate fundraiser at Jay-Z's posh 40/40 club in Manhattan (the president did draw the line at the 18-foot "champagne tower," which was covered up for the occasion).
So while the president may not share Sweden's wariness of the rich, Obama does, in his own words, "believe in redistribution." Sometimes called "leveling the playing field" or "spreading the wealth around" the process is the same: government takes money from one group and gives it to another. While popular among liberal Democrats, wealth redistribution, in its more aggressive forms, has always received more hostility on this side of the Atlantic than the other. This may be due to the fact that in order to redistribute money, one must first take it from the people who earned it -- an act that offends our American belief in personal property and economic freedom.
In truth, Obama's public contempt for the rich is far more than just a campaign tactic. The president's entire economic agenda relies on Americans adopting a more European perspective on wealth. Liberals believe -- correctly -- that Uncle Sam will have a much easier time redistributing earnings when successful people are looked at with suspicion and even contempt. The strategy is twofold: First, paint the Romney types as cheaters (i.e. tax evaders and rule breakers). Second, when you inevitably get some blowback from that, argue that even if the rich don't outright cheat, they really didn't earn their wealth anyway. Take for example Obama's now infamous comments on successful businesspeople: "You didn't get there on your own" and "If you were successful, somebody along the line gave you some help."
All of us contributed to Joe Blow's successful business, or so the thinking goes. We are his investors; his partners. And yet, Joe is keeping a big chunk of the profits for himself. Ergo, Joe is ripping us off. Redistribution suddenly doesn't sound so bad when the money was ill-gained and frankly, belonged to the rest of us to begin with.
While Obama hinges his dwindling prospects on the Swedish economic model, the Swedes themselves seem to be moving away from it. Since my last family visit, the country has undergone some fascinating political changes. In late 2006 Sweden elected a new center-right government, replacing the Social Democratic Party after a dozen years in power. Under Prime Minister Fredrik Reinfeldt, Sweden lowered its corporate tax rate in 2009 and plans on cutting it by another 16% next year. The government is also proposing individual tax breaks for investors in order to free up financing for new and expanding businesses.
If attitudes about wealth are changing in Scandinavia, the president remains committed to his tired class warfare routine here at home. While even socialist nations like Sweden are coming to embrace a tax system that encourages economic growth, our president spends his time berating the same investors who help make that growth possible. Make no mistake, if Obama does manage to turn his languishing campaign around we'll be hearing the same anti-wealth histrionics for another four years -- and we'll be feeling them too, with higher taxes on "the rich" and new regulations that stall the economy. Yes, a lot has changed since I last visited my family overseas but I'm hoping to return soon. Maybe this time around my cousin will be the one explaining economic freedom to me.
Posted by Brett at 2:47 PM