Obama’s ‘War On The Wealthy’ Is Total BS

By Friday March 6, 2009

With little else constructive to offer (e.g.: Jindal’s regurgitation of old, discredited talking points), the GOP is using scare tactics in their war against Obama and the Dems, using the wealthy as human shields. Perhaps they should replace their loudmouth, entertainer leader (who is happily using them, again), to rake in the listeners (i.e., money)) with someone who can get their act together without making them look like fools.

To hear conservatives tell it, you’d think mobs of shiftless welfare moms were marauding through the streets of Greenwich and Palm Springs, lynching bankers and hedge-fund managers, stringing up shopkeepers, and herding lawyers into internment camps. President Obama and his budgeteers, they say, have declared war on the rich.

On Tuesday, Washington Post columnist (and former Bush speechwriter) Michael Gerson argued in an op-ed that “Obama chose a time of recession to propose a massive increase in progressivity—a 10-year, trillion-dollar haul from the rich, already being punished by the stock market collapse and the housing market decline.” The plans are so radical, “there will not be enough wealthy people left to bleed.” CNBC’s Larry Kudlow wrote that “Obama is declaring war on investors, entrepreneurs, small businesses, large corporations, and private-equity and venture-capital funds.”
[…]
Obama’s proposals don’t mean the government would steal every penny you make above the $250,000 threshold, or that making more than $250,000 would somehow subject all of your income to higher taxes. Rather, you’d pay 36 cents to the government in income taxes on every dollar over the threshold, rather than 33 cents.
[…]
Second, this return to 2001’s tax rates was actually part of the Bush tax plan. […] Third, we know from recent experience that marginal tax rates of 36 percent and 39 percent aren’t wealth killers. […] Fourth, we also know from recent experience that lower marginal rates on income taxes, and lower rates on capital gains and dividends, aren’t necessarily wealth producers.
[…]
What would happen if the marginal rate on the portion of your income above $250,000 were to rise from 33 percent to 36 percent? Under the old regime, you’d pay $16,500 in federal taxes on that amount. Under the new one, you’d pay $18,000. The difference is $1,500 per year, or $4.10 per day. Obviously, the numbers rise as you make more. But is $4.10 a day bleeding the rich, a war on the wealthy, a killer of innovation and enterprise?



205 Comments
  1. Mr. Fusion says:
    3/8/2009 at 4:57 pm

    #197, Cow-Paddy, Ignorant Shit Talking Sociopath, Retired Mall Rent-A-Cop, Pretend Constitutional Scholar, Fake California Labor Law Expert, Pseudo Military Historian, Phony Climate Scientist, Leading Troll Extraordinare, Asstrologist, and President of the “I Hate America Club”

    Actually, redlining is done based actuarial data. That the law made illegal in no way speaks to its validity as a tool to put something into a category, even “sub-prime”.

    Sub Prime were loans that shouldn’t have been made because the borrowers weren’t qualified for traditional loans. The CRA did nothing to encourage, let alone force banks to make bad loans. All the CRA did was make bank stop discriminating against minorities.

    There has been nothing I have seen that would suggest CRA enforced loans are any more toxic than similar loans to whites in white areas. In fact, by helping to revitalize neighborhoods, they have increased property values making the risks even less than similar mortgages elsewhere.

    So Cow-Patty, why do you hate America?

  2. Mr. Fusion says:
    3/8/2009 at 5:37 pm

    Loser and Cow-Patty,

    A little more information to dispel your incorrect ideas about the Community Reinvestment Act and its role in the housing bubble.

    Wikipedia has a good post on the VRA and its involvement on the housing bubble.

    Some economists, politicians and other commentators have charged that the CRA contributed in part to the 2008 financial crisis by encouraging banks to make unsafe loans. Others however, including the economists from the Federal Reserve and the FDIC, dispute this contention. The Federal Reserve and the FDIC holds that empirical research has not validated any relationship between the CRA and the 2008 financial crisis.[56][57]

    …

    Some legal and financial experts note that CRA regulated loans tend to be safe and profitable, and that subprime excesses came mainly from institutions not regulated by the CRA. In the February 2008 House hearing, law professor Michael S. Barr, a Treasury Department official under President Clinton,[67][34] stated that a Federal Reserve survey showed that affected institutions considered CRA loans profitable and not overly risky. He noted that approximately 50% of the subprime loans were made by independent mortgage companies that were not regulated by the CRA, and another 25% to 30% came from only partially CRA regulated bank subsidiaries and affiliates. Barr noted that institutions fully regulated by CRA made “perhaps one in four” sub-prime loans, and that “the worst and most widespread abuses occurred in the institutions with the least federal oversight”.[68] According to Janet L. Yellen, President of the Federal Reserve Bank of San Francisco, independent mortgage companies made risky “high-priced loans” at more than twice the rate of the banks and thrifts; most CRA loans were responsibly made, and were not the higher-priced loans that have contributed to the current crisis. A 2008 study by Traiger & Hinckley LLP, a law firm that counsels financial institutions on CRA compliance, found that CRA regulated institutions were less likely to make subprime loans, and when they did the interest rates were lower. CRA banks were also half as likely to resell the loans.[70] Emre Ergungor of the Federal Reserve Bank of Cleveland found that there was no statistical difference in foreclosure rates between regulated and less-regulated banks, although a local bank presence resulted in fewer foreclosures.[71] .[69]

    My emphasis.

    Then there is a University Of Chapel Hill study

    Risky mortgage products, not risky borrowers, are the root cause of the mortgage default crisis, according to findings from a new study of default rates among low-income and minority home buyers conducted by the University of North Carolina at Chapel Hill’s Center for Community Capital.

    The results of the study show that home loan borrowers with similar risk characteristics defaulted at much higher rates when they borrowed subprime mortgages than when they received loans made primarily for Community Reinvestment Act (CRA) purposes.

    “The results are timely given the frantic rush to identify culprits in the financial crisis and to develop policies to rescue and rebuild the mortgage market,” says center director Roberto Quercia.

    “These results show clearly that mortgages made using traditional affordable housing guidelines are holding up much better than subprime mortgages. Homeownership can remain an important and primary path to financial security for Americans, even among those of modest means, as long as home buyers have access to safe-and-sound mortgage products,” he said.

    The study, “Risky Mortgages or Risky Borrowers: Disaggregating Effects Using Propensity Score Models,” compared the default rates of home mortgage borrowers with similar credit characteristics who received different loan products.

    One group received loans through an affordable home mortgage program, called the Community Advantage Program (CAP), designed to expand homeownership among lower-income and minority homebuyers. The other group received subprime mortgage loans.

  3. LibertyLover says:
    3/8/2009 at 6:17 pm

    Poison Twin,

    From your quote:

    Plaintiffs alleged that the Defendant-bank rejected loan applications of minority applicants while approving loan applications filed by white applicants with similar financial characteristics and credit histories. Plaintiffs sought injunctive relief, actual damages, and punitive damages.

    Which is EXACTLY the point I was trying to make. Of course, the plaintiffs accuse the bank of that. What else is there to charge them with?

    It is cheaper to give the risky loan than to fight it in court.

    By Obamessiah’s own words, the subprime loans to poor people to put them houses started out as a good idea, but got out of hand.

    Are you disputing Obama on this?

  4. Sonny says:
    3/8/2009 at 6:54 pm

    #202, Loser, and you are a loser, read my post #201. I have quite adequately exposed your idea that CRA loans and Sub-Prime loans are NOT the same thing. It should also dispel some of your quaint ideas. Or not, as I said, you are a loser that insists on spouting bullshit.

    You keep telling us you own your own business. By your lack of knowledge I really suspect you are just posing.

    What else is there to charge them with?

    It is cheaper to give the risky loan than to fight it in court.

    What effen part of your loser brain doesn’t accept that the Bank turned them down even though they were equally qualified. The only accepted reason they were turned down is because of race. Only after the bank was forced to allow some auditing of the applications did they agree to settle.

    You can’t even read the effen link you point to.

    By Obamessiah’s own words, the subprime loans to poor people to put them houses started out as a good idea, but got out of hand.

    Sub-Prime mortgages were not as near the problem as the fraudulent mortgages were. And there were a lot of fraudulent mortgages. You are screwing the pooch when you keep confusing those Sub-Primes with CRA approved mortgages.

    I read a report recently that CRA mortgages were safer than average mortgages. Simply because by improving the neighborhood their value rose. That made the mortgages more solid and defaults were easier to resell. Improving neighborhoods have the added benefit of more community pride, lowering crime, and encourages employment opportunities. I haven’t looked hard for it so don’t take my word for it. I offer that only as an unproved comment.

    *

    Please note, #201, that first line, second paragraph, that should be CRA. Some stupid idiot put the V right next to the C on my computer.

    🙂

  5. LibertyLover says:
    3/9/2009 at 4:24 am

    Poison Twin,

    What effen part of your loser brain doesn’t accept that the Bank turned them down even though they were equally qualified. The only accepted reason they were turned down is because of race. Only after the bank was forced to allow some auditing of the applications did they agree to settle.

    You crack me up. Banks aren’t in the business to discriminate. They are in business to make money. When they give out loans they make money. They gave out, what they considered mind you, a loan that was less than prime (i.e., subprime).

    Sub-Prime mortgages were not as near the problem as the fraudulent mortgages were. And there were a lot of fraudulent mortgages. You are screwing the pooch when you keep confusing those Sub-Primes with CRA approved mortgages.

    And I didn’t say our troubles today were all subprime nor did I say our troubles today were all CRA. I quoted BHO and I agree with him —

    Subprime lending started off as a good idea – helping Americans buy homes who couldn’t previously afford to. BHO, 2007

    He knew CRA loans were subprime. And it was probably a good idea at first, but it opened the door to abuses that eventually led to our problems.

  6. bobbo says:
    3/9/2009 at 4:46 am

    #204–LIAR==I see I have been too kind. You are NOT a LIEBERTARIAN. At least those folks misbegotten as they are have a “philosophy.” You have NO philosophy, only repetition.

    “No Bank would discriminate.” /// No one can really be this stupid.

    How do you choose what positions to get stuck on?


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