To save you some effort, you can just forward along this:
The centerpiece of the McCain/Palin attacks on Obama these days is that he is a “socialist” who will raise taxes. Although he will lower taxes for 95% of Americans (unfortunately, in my view, since we are likely to face a trillion dollar federal budget deficit next year), it is true that he is proposing smaller deficits than McCain by raising some taxes on the wealthiest Americans. However, even those tax increases would still have no one paying higher federal taxes than they did under Clinton – and those were pretty good years for the economy.
Take the capital gains tax, which seems to be a Republican obsession (understandably, since it is relatively easy to convert most investment income into capital gains). A bit of history: In the Tax Reform Act of 1986, St. Reagan RAISED the capital gains tax to 28% where it stood for ten years until it was lowered to 20% in 1997. As you might recall, the decade from 1987 to 1997 was generally a good one for the economy – at least better than the subsequent decade. The capital gains tax was further lowered to 15% in 2003. Obama proposes to raise the capital gains tax back up to 20% for those making more than $250,000 – where it stood from 1997 to 2003 and significantly LOWER than the rate St. Reagan left us with. (Here is a Wall Street Journal op-ed by Obama economic advisors Jason Furman and Austan Goolsbee outlining Obama’s tax plans.)
Although Obama doesn’t propose to raise taxes fully to the levels that prevailed under Clinton, nonetheless we are being told they would destroy the economy and lead to “socialism.” OK, let’s take the extreme case. Let’s assume the tax rates that prevailed under Clinton. How did the economy do under Clinton? Let’s look at capital gains.
Forget the tax rates, did you even HAVE any capital gains?
The Dow Jones Industrial Average went up from 3253 to 10,587 under Clinton (325%). As of yesterday’s close, it has gone DOWN to 8175 under Bush (-22.8%).
The S&P 500 went up from 447 to 1342 under Clinton (300%). It has gone DOWN to 848 under Bush (-36.8%).
The NASDAQ went up from 700 to 2770 under Clinton (395%). It has gone DOWN to 1505 under Bush (-46.7%)
Let’s take the broadest measure of the market, the S&P 500: Would you rather pay a 20% tax on a gain of 300% or enjoy the benefit of a lower 15% tax rate on a … LOSS of 46%?
Staying with the economy, who would you most trust for advice on which candidate would be best for the economy? Of anyone in the country. My pick is easy: Warren Buffett. He is unquestionably the world’s greatest investor. His integrity and objectivity are beyond question. He has already committed to giving his vast wealth to the Gates Foundation (without even his name on some venerable institution as his legacy). He lives relatively simply in Omaha. He financial counsel is conservative, common-sense and practical. And has for years been warning against exactly the dangers that have brought our financial system to its knees.
Warren Buffett is supporting Obama. And Obama regularly seeks his counsel.
Who else might have credibility? How about the guy who broke the back of double-digit inflation during the Reagan years? That would be Paul Volcker, Fed chief from 1979 to 1987.
From the Wall Street Journal:
Mr. Volcker has emerged as a top economic adviser to Sen. Barack Obama during a presidential campaign dominated by a global financial crisis. Their growing bond is paying dividends for each man.
Mr. Volcker delivers gravitas and credibility to Sen. Obama, people in the Obama camp say, as well as ideas and approaches to the economic crisis. "Volcker whispering in Obama's ear will make even Republicans comfortable, because he's a hero of the right and a supporter of a strong dollar," says John Tamny, a supply-side economist and Republican.
… Mr. Volcker is just as well known for taming the runaway inflation of that era. His stock has risen in recent months as his gruff warnings about the risks of deregulating the financial sector have come to look prescient. His successor's reputation, meanwhile, has come under a cloud. Alan Greenspan is under criticism that the low interest rates and deregulatory ideology of his tenure contributed to today's crisis.
With nearly every day presenting a fresh financial emergency, Sen. Obama has persuaded Mr. Volcker, who travels the globe for economic meetings and occasionally disappears on fly-fishing trips, to be at the ready; Mr. Volcker now keeps a cellphone on him at all times. And though he still doesn't own a computer (his assistant prints out emails for him), he's gotten used to Sen. Obama's rapid-fire messages sent from a BlackBerry device.
The Obama-Volcker relationship continues to evolve, campaign advisers say. At the start, Sen. Obama sought advice from Mr. Volcker and other outside voices through his economic adviser, Austan Goolsbee, a 39-year-old University of Chicago professor. But starting with the demise of Bear Stearns Cos. in March and continuing today, Sen. Obama speaks directly and often with Mr. Volcker about the intricacies of the financial crisis and possible solutions. They've become "collaborators," as one aide puts it.
For example, when the U.S. Treasury put forth a plan to set up a $700 billion rescue fund to buy up toxic assets, Sen. Obama quickly backed it on the advice of Mr. Volcker. Like other prominent economists, Mr. Volcker also advocated early on for the recapitalization of banks. On this advice, Sen. Obama proposed direct equity infusions in banks in his frequent conference calls with Treasury Secretary Henry Paulson. The idea, initially rejected by Mr. Paulson, was finally proposed last week by the administration, in an effort to get banks lending again to businesses and each other.
Sen. Obama's team of economic advisers includes two former Treasury secretaries, Robert Rubin and Lawrence Summers, and in some decisions, Mr. Volcker doesn't reign supreme. The candidate's latest proposal, for example, a $60 billion stimulus package, was initially fought by the former Fed chief on the grounds that Americans were already overspending. Moreover, he is unlikely to take a long-term role in any Obama administration.
… But for now, and going into the campaign's final weeks, aides say Sen. Obama is increasingly relying on Mr. Volcker. His staff now routinely reviews policy proposals and speeches with Mr. Volcker. Conference calls and face-to-face meetings of the Obama economic team are often reorganized to accommodate his schedule. When the team discusses the financial crisis, "The most important question to Obama: What does Paul Volcker think?" says Jason Furman, the campaign's economic-policy director.
The two men have developed an ease with each other, say aides, even as their styles appear to differ: Sen. Obama, who tends to use the Socratic method from his law-school training, examines all points of view and debates them. With a more formal and direct demeanor, Mr. Volcker likes to go straight to solutions.
In last week's final presidential debate, after Republican John McCain raised questions about his rival's ties, Sen. Obama said, "Let me tell you who I associate with. On economic policy, I associate with Warren Buffett and former Fed Chairman Paul Volcker...who have shaped my ideas and who will be surrounding me in the White House."
Some Democrats have speculated that, if elected, Sen. Obama could name Mr. Volcker to a post, possibly even as Treasury secretary, for a limited time. Banking and Wall Street executives are pushing the two campaigns to name a new secretary shortly after the election to reassure markets during the transition. The Obama campaign wouldn't comment on possible appointments. "I just want to be helpful, because I believe Sen. Obama -- in his person, in his ideas and in his ability to understand and articulate both our needs and our hopes -- brings the strong and fresh leadership we need," Mr. Volcker said in an interview in New York. Mr. Volcker wouldn't provide details of his policy suggestions or his personal relationship with Sen. Obama. …
Starting in late summer 2007, Mr. Goolsbee had regular discussions with Mr. Volcker. He incorporated Mr. Volcker's ideas, including his early concern that the housing downturn would snowball into a larger financial crisis, into Sen. Obama's policy positions. In a September 2007 speech at Nasdaq, Sen. Obama predicted that because of oversight lapses and abusive practices that cause the public to doubt financial results, "the markets will be ravaged by a crisis in confidence."
In early January 2008, when Sen. Clinton was pounding her rival over his lack of experience and stature, Sen. Obama phoned Mr. Volcker to ask for his endorsement. … Mr. Volcker, a long-time Democrat who had mostly stayed out of partisan politics, agreed, and wrote out his statement in longhand.
The presidential candidate's first big economic address took place in March at Cooper Union in New York. Mr. Volcker's fingerprints were evident in the speech. The onetime central banker had long been vigilant about strong regulatory oversight; as Fed chairman he rejected big banks' attempts to repeal Depression-era laws to engage in more risky practices like investment banking. New financial institutions and instruments have since led to the repeal or relaxation of those laws, and Mr. Volcker told Sen. Obama that the
U.S. regulatory structure must be strengthened and updated for the 21st century.
With Mr. Volcker sitting in the front row, Sen. Obama told the audience at Cooper Union that the current financial-regulatory framework must be "revamped." He faulted deregulation for the growing economic
crisis. "Our free market was never meant to be a free license to take whatever you can get, however you can get it."
… In the past two months, financial crises have come one after another, picking up speed with the federal government's July effort to bolster big mortgage insurers Fannie Mae and Freddie Mac. As the contagion from the subprime mortgages and risky mortgage credit swaps threatened to topple other institutions, Sen. Obama asked for "emergency meetings" with his economic team, about a dozen advisers including Mr. Volcker and Mr. Buffett.
At the first group meeting in Washington in late July, Sen. Obama said he wanted to hear from each adviser on the worsening economic downturn and asked Mr. Volcker to go first. "The very health of the credit markets is at stake," Mr. Volcker said, according to one attendee. He urged strong action to restore confidence, particularly in the U.S. banking system. …
Ask yourself this: Who would you rather have advising the next president of the United States, Phil Gramm and Alan Greenspan (McCain’s economic heroes – both of whom pushed for deregulation of financial markets) or Warren Buffett and Paul Volcker (both of whom warned against it)?
Let’s turn to foreign policy.
Who is the most (the only?) credible remaining Republican voice on national security and foreign policy and the most trusted by political independents? That would probably be Colin Powell. Many of us lost respect for him when he failed his greatest test, publicly supporting Bush’s policies despite personal doubts. But at least he was a voice of reason within the Bush administration. He was outmaneuvered by Cheney and Rumsfeld and eventually forced out. And he has now at least partially redeemed himself with his endorsement of Obama.
Powell is a decades-long friend of McCain’s and even donated to McCain's campaign last year. Powell’s endorsement of Obama on Meet the Press is one of the best, most-thoughtful ones out there. (I particularly admire his defense of Muslim-Americans – a rare thing among any public figure these days.) I encourage you to watch or read it (it’s not too long and very much worth watching):
Here is the video:
The transcript is here.
There are simply too many great observations to quote. Watch or read the whole thing.
If Warren Buffett, Paul Volcker and Colin Powell aren’t enough, here are a few others:
Former Republican Senator Larry Pressler (R-SD) has come out for Obama:
Pressler, who said that in addition to casting an absentee ballot for Obama he'd donated $500 to the Illinois senator's campaign, cited the Democrat's response to the financial crisis as the primary reason for his decision. "I just got the feeling that Obama will be able to handle this financial crisis better, and I like his financial team of [former Treasury Secretary Robert] Rubin and [former Federal Reserve Chairman Paul] Volcker better," he said. By contrast, John McCain's "handling of the financial crisis made me feel nervous."
I find the Pressler endorsement particularly surprising – a former Republican Senate colleague of McCain’s. For Pressler, like Powell who is a long-time friend of McCain’s, that must have been particularly tough. What would have driven him to make it public?
(Maybe he feels, as Senator Thad Cochran (R-Miss) said, “The thought of [McCain] being president sends a cold chill down my spine. He is erratic. He is hotheaded. He loses his temper and he worries me.”)
Then there is Ken Adelman. His views mean nothing to me. He is the one who famously predicted that the Iraq war would be a “cakewalk.” (I always thought there was a certain contradiction between the claims that Iraq posed an imminent threat to the US while also militarily being a “cakewalk” to defeat. Of course, we invaded and occupied Iraq precisely because it was an easy military target – serving potentially as a very large aircraft carrier from which the US could dominate the Middle East – not because it was a threat to us.) I don’t know why Adelman is even taken seriously anymore. But, as George Packer recounts on his blog at The New Yorker, he has solid Republican credentials. And he is supporting Obama:
And then there is Christopher Buckley (author of the brilliant “Thank You For Smoking” and other novels and son of conservative legend William F. Buckley). He endorsed Obama in a blog post entitled, “Sorry Dad, I’m Voting for Obama”. I won’t post it all. But here is a bit:
First Colin Powell, Now…
Ken Adelman is a lifelong conservative Republican. Campaigned for Goldwater, was hired by Rumsfeld at the Office of Economic Opportunity under Nixon, was assistant to Defense Secretary Rumsfeld under Ford, served as Reagan’s director of arms control, and joined the Defense Policy Board for Rumsfeld’s second go-round at the Pentagon, in 2001. Adelman’s friendship with Rumsfeld, Cheney, and their wives goes back to the sixties, and he introduced Cheney to Paul Wolfowitz at a Washington brunch the day Reagan was sworn in.
In recent years, Adelman and his friends Cheney, Rumsfeld, and Wolfowitz fell out over his criticisms of the botching of the Iraq War. Still, he remains a bona-fide hawk (“not really a neo-con but a con-con”) who has never supported a Democrat for President in his life. Two weeks from now that’s going to change: Ken Adelman intends to vote for Barack Obama. He can hardly believe it himself.
Adelman and I exchanged e-mails today about his decision. He asked rhetorically,
Why so, since my views align a lot more with McCain’s than with Obama’s? And since I truly dread the notion of a Democratic president, Democratic House, and hugely Democratic Senate?
Primarily for two reasons, those of temperament and of judgment.
When the economic crisis broke, I found John McCain bouncing all over the place. In those first few crisis days, he was impetuous, inconsistent, and imprudent; ending up just plain weird. Having worked with Ronald Reagan for seven years, and been with him in his critical three summits with Gorbachev, I’ve concluded that that’s no way a president can act under pressure.
Second is judgment. The most important decision John McCain made in his long campaign was deciding on a running mate.
That decision showed appalling lack of judgment. Not only is Sarah Palin not close to being acceptable in high office—I would not have hired her for even a mid-level post in the arms-control agency. But that selection contradicted McCain’s main two, and best two, themes for his campaign—Country First, and experience counts. Neither can he credibly claim, post-Palin pick. …
Obama has in him—I think, despite his sometimes airy-fairy “We are the people we have been waiting for” silly rhetoric—the potential to be a good, perhaps even great leader. He is, it seems clear enough, what the historical moment seems to be calling for.For this sin, by the way, Buckley was essentially fired from the National Review that his father founded. (File under: Death of the Modern Conservative Movement.) I have the feeling his father would not have been able to pull the lever for a McCain/Palin ticket, either.
So, I wish him all the best. We are all in this together. Necessity is the mother of bipartisanship. And so, for the first time in my life, I’ll be pulling the Democratic lever in November. As the saying goes, God save the United States of America.
I could go on. But this, at least, should be enough to reassure your wavering Republican friends that Obama is not a terrorist-loving radical Muslim Marxist.
It’s OK to vote for him. You’re in good company.