Google

Web Capitol Hill Blue

 
August 7, 2008 - 4:50am.

Among the several unpleasant outgrowths of the Barack Obama-Hillary Clinton death duel, perhaps the most disturbing was the widespread perception that the junior senator from New York was more attuned to the cares and hardships of the working class than her chic counterpart from Illinois.

I still don't understand how anyone could have overlooked the damage done to blue-collar America by the former first couple's stalwart commitment to "free trade" -- in the form of NAFTA and permanent "normal" trade relations (PNTR) with cheap-labor China -- but evidently many did, particularly in states like Ohio, West Virginia and Pennsylvania. Every time Hillary told the story of her grandfather toiling in a lace factory in Scranton I wished some comedian would say: "My grandfather sweated and suffered so much in that lace mill that Bill and I vowed that no one in Pennsylvania would ever again have to work in a factory. With NAFTA and PNTR our dream has been realized!"

But Hillary couldn't have gotten away with such hypocritical nonsense without Barack Obama providing her a pass on class, the great unmentionable in a country that pretends that everyone is born equal and anyone can become president. For all his supposed concern about regular folks, Obama's sympathy for the beleaguered people who still do manual labor remains suspect, while his willingness to appease the wealthy elites who preach the benefits of "free markets," low taxes and job-destroying trade bills appears entirely sincere.

Granted, Obama has made a few gestures toward reducing the vast gap between the lower-middle class and the richest one percent of Americans, who now possess about 22 percent of the nation's wealth (the top 10 percent control 48.5 percent). In August 2007, for example, he co-sponsored, the Patriot Employers Act, which would give a one percent tax credit to employers who, among other things, hired more American workers and paid their employees at least $7.80 an hour. Around the same time, pressed by his populist rival John Edwards, Obama also said he would support legislation to treat the income of hedge-fund managers as regular personal income, instead of the current practice of taxing it at the capital-gains rate of 15 percent. Meanwhile, the presumptive Democratic nominee has proposed restoring the top income-tax rate to the Clinton era's 39.6 percent from its current 35 percent.

But these measures are just a few raindrops on a scorched earth of class bias fomented by every president since Ronald Reagan. Obama's campaign autobiography, "The Audacity of Hope,'' is stunningly frank about his affinity with wealthy donors during his Senate campaign in 2004: "Increasingly I found myself spending time with people of means -- law firm partners and investment bankers, hedge fund managers and venture capitalists. As a rule, they were smart, interesting people, knowledgeable about public policy, liberal in their politics, expecting nothing more than a hearing of their opinions in exchange for their checks."

If you think that this passage is merely foolish, you're missing the point. The book is carefully calculated to present Obama as a non-threat to the big-money interests that pay for campaigns. Even so, Obama tries to have it both ways: "On core issues," he writes, "I was candid; I had no problem telling well-heeled supporters that the tax cuts they'd received from George Bush should be reversed."

But it's easy to be candid when you're talking about proportionately so little money: a 4.6 percentage-point increase in an investment banker's income tax to a hardly confiscatory 39.6 percent (the top marginal rate remained over 90 percent until 1964) won't make much of a dent. As Obama notes, "My own worldview and theirs corresponded in many ways -- I had gone to the same schools, after all, had read the same books, and worried about my kids in many of the same ways."

Thus, "I know as a consequence of my fund-raising I became more like the wealthy donors I met, in the very particular sense that I spent more and more of my time above the fray, outside the world of immediate hunger, disappointment, fear, irrationality, and frequent hardship of the other 99 percent of the population."

Flying "above the fray" (as a new senator Obama rode 23 times in corporate planes before halting the practice) is precisely what has let Obama raise so much money from the likes of Goldman Sachs, JPMorgan Chase and Citigroup.

With friends like Robert Rubin (now of Citigroup, late ruler of the Clinton administration's Treasury Department), Obama can afford to condescend to the laid-off Maytag workers of Galesburg, Ill., their jobs moved to dollar-an-hour Mexico. Sad though it may be, he writes, it's "hard to deny Rubin's basic insight: We can try to slow globalization but we can't stop it." Such cliched thinking is one reason that the Employer Patriot Act is languishing in the Senate Finance Committee; it's why Obama proposes only tinkering with NAFTA, and why he barely addresses China, whose vast pool of low-cost labor is the far greater problem for American workers.

Meanwhile, Obama has stopped talking about making hedge-fund managers pay income tax on their partnership income at the same time as he proposes to increase the capital-gains rate to 25 percent. This is tactically clever, since it sends a friendly signal to the hedge-funders, while suggesting to progressives that he's no pushover for Wall Street. At 25 percent, those "smart" and "interesting" financial touts would still be paying far less tax on their hedge-fund income than if they had to pay the top income-tax rate.

So far, Obama has outraised John McCain among employees of hedge funds $822,000 to $348,000 -- this although John McCain wants to leave the capital-gains rate at 15 percent and opposes treating hedge-fund partner income as personal income. But there's a money logic to this seeming incongruity: Hedge-funders specialize in predicting winning investments, and the accommodating Obama looks like a better bet than the more honestly pro-plutocrat McCain.

Obama spends so much time courting the rich that I'm not surprised that James Webb has removed himself from consideration for vice president. Webb is the most articulate Senate critic of America's class divide.

"The most important -- and unfortunately the least debated -- issue in politics today is our drift toward a class-based system, the likes of which we have not seen since the 19th Century," he wrote two years ago. Webb understands that class stratification is aggravated not only by tax and trade policy but also by public schools that serve increasingly as holding pens for students who can't afford better private or parochial education. Attendance at an elite private school or university, as Obama well knows, is one of the greatest aids to upward mobility in America today, as well as the best guarantee, along with a low inheritance tax, that people of means will maintain their children in the economic status they've become accustomed to.

Webb's bald rhetoric about "robber barons" and "class struggle" might have proven inconvenient for the boy wonder from Chicago when he was at a fundraiser on Park Avenue. But if Obama's candidacy fails, it might be Webb, and not Hillary, who picks up the pieces in 2012.

Obama was right when he said that small-town, low-paid Americans are "bitter" about the broken promises of politicians. With Democrats like him and the Clintons leading the country, these left-out citizens might finally turn really angry.

 

(John R. MacArthur is publisher of Harper's Magazine and author of the forthcoming book, You Can't Be President: The Outrageous Barriers to Democracy in America.)

»

I still haven't heard

I still haven't heard anything from Obama about rolling back the Bush agenda to September 10, 2001.

He's just a kinder, gentler capitalist waterboy.

FREE AMERICA

DIRECT DEMOCRACY

»

Sounds as if the "liberal

Sounds as if the "liberal media" media would much rather engage and do battle with McCain for the next 4 years.
New Yorker-Harper-NYTimes-Washington Post, have all worked extremley hard to drive up Obama's negatives.
Maybe this strategy is better for their bottom line(capitolism?), but it is definately not good for the rest us.

If Obama follows Harper Magazine's strategy he is sure to lose, as he would face McCain and the RepubliCons unarmed...

OBTW: When was the last time a non-capitalist U.S. President was elected?

»

There is another little

There is another little problem with the idea of raising the capital gains rate to a general 25% . It would absoulutely hammer smaller investors while still giving the big boys a break . At present capital gains is divided into " long term " capital gains realized after holding the investment over a year and " short term " gains realized in less than a year . Short term gains are taxed at the same rate as the regular income of the investor , long term is taxed at the 15% overall rate . So , a middle or lower middle class worker who has a small stock portfolio ( or an IRA ) under his idea ( as stated in the article ) would be moved into the 25% bracket on their investments and worse , their retirement , when their regular tax rate is closer to 15 or 20% . Quite a disinsentive to invest wouldn't you think . While the big investers would still be getting quite a break as their regular income rate would be about 36% but by moving the capital gains rate to 25% they would enjoy an 11% tax break on said funds while the small invester would be hit with a 10% hike . A much better plan would be to have a 10% long term capital gains rate on gains up to about 100 thousand dollars a 20% rate on gains between 100 and 200 thousand and tax anything above that as regular income . That would give incentive to invest and save to middle income investers while closing the capital gains loophole for the big boys who have moved all of their income into the long term bracket .

»

" Hillary couldn't have

" Hillary couldn't have gotten away with such hypocritical nonsense..."

Would that be the Hillary Clinton who served on the Board of Directors of WalMart for six years?

Obama is certainly right of John Edwards, but that just means Obama is actually electable. I guess that's a problem for Mr. MacArthur! I suppose he will be supporting Ralph Nader this year.

»

You talk about Obama doing

You talk about Obama doing little for the average American. Well after Bush and his cronies leave there is not going to be much left to do anything with. At least Obama wants to try and level the playing field a bit to help us out with these trade deals. McCain and his lobbyist buddies seem to be working overtime to send jobs overseas rewarding companies that do so with tax breaks. Just today over 10,000 jobs with the potential of thousands more are going out the window in an area of Ohio that can not take such a hit. The area is going to be left devastated all thanks to McCain and his lobbyist buddy and campaign manager Rick Davis. Then there was the contract that was rewarded to Airbus over Boeing even though Boeing had the better bid that will send thousands of jobs to Europe. Again thanks to McCain's influence with his lobbyists buddies. Of course we have the famous Keating 5 savings and loans scandal that cost the American taxpayer millions and once again left thousands of Americans devastated. I do not recall McCain shedding any tears for them but did work overtime to save his own tail when he should have been kicked out of the Senate and sent to jail. Obama wants to give the middle class a tax break of 1000 dollars and eliminate income taxes for the elderly who make under 50,000. McCain wants to give 4 billion more in tax breaks to the oil companies. I know about Obama's support of the 2005 energy bill that gave tax breaks to the oil companies but it also gave massive support to alternative and renewable sources of energy. Much like this recent compromise reached by those 10 Senators that Obama supports. Unlike McCain I believe and trust Obama will give real support to alternatives and renewable energy sources. I believe McCain like Bush will take the oil part and dump the rest. Much like Bush did with McCain's support on the no child left behind education plan that never got funded properly. Now we have high school graduation rates that are deplorable and more and more people unable to go to college. Obama wants to give something like 4000 dollars each year to help people afford a college education and getting these young people involved in community activities, the peace corp, and other such programs. I think this is a great way to keep these young minds busy doing something positive and even patriotic rather than languish in our overpopulated prisons.

»

Capitol Hill Blue's columnists, blogs and reader comments

Capitol Hill Blue is an independent, non-partisan news site that belongs to no political party and subscribes to no political or philosophical point-of-view. Our columnists are welcome to their opinions but readers should understand that their views do not necessarily reflect the editorial policies of this web site. We also welcome comments to selected opinion columns and in our popular ReaderRant discussion forum. Please remember, however, that we believe in civility on this web site and comments may be reviewed, moderated or removed if we feel they contain obscenities, racism, bigotry, anti-Semitic remarks or attack other posters. Our goal is reasoned discussion on issues facing this nation and we do not feel that goal is served by personal attacks and by seeing how many cute adjectives you can attach to an elected official or politician's name.

Copyright © 2008 Capitol Hill Blue

Sign up for Capitol Hill Blue's email newsletter
Get our headlines each morning.

Email:

User login