"An unlimited power to tax involves, necessarily, a power to destroy; because there is a limit beyond which no institution and no property can bear taxation." ~ John Marshall
Dictates to the Union
Column by Emmett Harris.
Exclusive to STR
The other night, President Obama continued the modern tradition whereby the current White House denizen annually assaults the airwaves with a stream of teleprompter words that rival Lunesta in their ability to induce drowsiness. I’m referring, of course, to the State of the Union Address.
It was a long, boring, and typically dangerous speech. It was a speech boasting of spending cuts promised in the future balanced against spending increases delivered in the past and intended for the future. One side of the ledger is pure fantasy, an empty promise designed to present an air of responsibility to an utterly irresponsible institution. The one truth that threads its way throughout the oration is power, power wielded by and concentrated in the federal government generally and the presidency specifically. Whether one views this as good or bad, Obama promised much more of the same.
To sell his power schemes, he begins by lauding the military. “At a time when too many of our institutions have let us down, [America’s Armed Forces] exceed all expectations.” Sounds inspiring, but the praiseworthiness depends on what is expected of them. For me, having been a Marine, I think I‘d set the bar a bit higher than President Obama apparently has. Ten years and multiple conflicts have brought out the worst in some of the troops. He continues: “Imagine what we could accomplish if we followed their example.” Yes, imagine the
war crimes accomplishments.
Next, he goes for the easy layup by recounting how his grandparents “shared the optimism of a Nation [sic] that had triumphed over a depression and fascism.” Yet, the rhetorical ball bounced off the rim. The nation triumphed over fascism? Really? Considering that his speech is overflowing with fascistic proposals that are poorly veiled dictates to the Union, it’s probably premature to do a victory dance.
These setups led into his real aim, which is to lay the foundation for further control over the economy. “Long before the recession,” he said, “jobs and manufacturing began leaving our shores. Technology made businesses more efficient, but also made some jobs obsolete.” He hopes no one will connect the regulations and taxes--his specialties--that are contributing factors in the outsourcing of manufacturing, however let’s focus on the second statement regarding job obsolescence. This is what happens in capitalism. Improvements in productivity eliminate the need for some workers. Increased productivity means fewer workers are required to produce an equivalent or greater amount of goods and services. Besides boosting standards of living, this should be celebrated because, under capitalism, displaced workers then are freed to transfer into new or other sectors where labor is more in demand. The process isn’t painless for those involved, but the pain is minimized and quickly corrected. We, however, suffer under a mixed economy (fascism), where government is always present and never so unobtrusive as to avoid hampering economic adjustments. Under this system the pain is maximized. When jobs become obsolete, workers struggle to find new endeavors and grow frustrated because the fault of their plight (government) is safely hidden behind the scenes, leaving only globalism, greed, and corporations to take its blame.
A mixed economy also leads to the class warfare that is not-so-subtly stoked in Obama’s next sentence: “Folks at the top saw their incomes rise like never before, but most hardworking Americans struggled with costs that were growing, paychecks that weren’t, and personal debt that kept piling up.” When growing costs affect wide swaths of the economy, it’s a safe bet something besides supply and demand is the culprit. The fault here can be laid at the feet of our shiny-headed maestro of malaise, Ben Bernanke. He meant well perhaps, but he created too many crisp new dollars that were then left searching for something of value to corrupt. Growing costs and interest rates that encouraged increasing levels of personal debt are the result of Bernanke’s efforts. The “folks at the top” who benefited aren’t indiscriminately the wealthy. Wealthy individuals can also be victims. The beneficiaries are those who get the money first; and the biggest one of them all is our very own federal government, with Obama there at the helm.
Demonstrating how much of an utter capitulation we’ve made to fascism, Obama cited the auto industry bailouts as an example of how to proceed in the future. Managers of failing companies, if the companies are big enough and politically connected enough, need not concern themselves with the rigors of competition. When troubles arise, Uncle Sam is only a photo-op away, ready to ride in and save the day with almost unlimited cash. This, as Bastiat said, is what is seen -- politicians smiling and congratulating themselves on their wonderful beneficence, which saved many, many jobs. The unseen is the jobs that were lost or will now never be created because the government had to first abscond with wealth from other areas of the economy before it could bequeath it to its auto buddies. Focusing on only one side of the equation is misleading at best. It also further strengthens the idea that government-private partnerships, i.e., fascism, are a model for prosperity. Mussolini smiled.
Not all was bad in the speech. Obama was right to point at high tax rates as an impediment to business. According to him, “[A high tax rate] makes no sense, and everyone knows it.” Though his diagnosis was correct, his prescription wasn’t. Instead of simply lowering or eliminating taxes across the board, which would leave little room for him to ensure winners and losers, he wants to use the tax code to punish companies severely and not-so-severely according to the degree they conform to his wishes. (Since taxation is theft, it makes no sense to speak of punishment and reward. It all falls on the punishment side.) He also intends to impede further against free trade by creating a Trade Enforcement Unit to interfere with commercial transactions that happen to cross political borders. This too will concentrate power in the president to pick favorites among business and countries.
These weren’t the only examples of power lust lurking between the lines of the speech. But they do provide a representative sample. Jefferson rightly took a dim view of these spectacles. There is no need for such staged oratory, for the constitutional task of reporting to Congress can be accomplished with a brief letter. Policy proposals and sloganeering do nothing to further convey how things are. Instead, these overtaxing monologues are more akin to a carnival barker promising anything and everything to swell the ranks of sadly insensate suckers who pass for customers, or, in the case of the State of Union Show, the suckers who pass for voters.