Sunday, September 28, 2008

Trickle Up Economics

Obama has been accused of being all "flash" and no substance. I think there's a tinge of racism (if even subconsciously) behind this notion, but generally I understand where it comes from: he's new, he's young, early on, his popularity seemed to come from these souring speeches that were big on generalities but without a lot of meat.

But he has since followed it up with plenty of meat, and what's interesting to me, is that meat basically fleshes out the tag lines from his early campaign.

Basically, you can sum up Obama's plan in his most famous tagline: "Yes We Can". His message and his policies all point toward this phrase. That through institutions, both public and private, a framework can be laid such that the many can lift themselves a little higher, contribute a little more, such that all our benefited. Call it the trickle up economic theory.

His tax plan gives greater tax cuts to the poor and middle class all the way up to those making $250K/year. Because we have a massive debt and massive obligations incurred by past administrations, he imposes tax increases on the very rich. Wealth re-distribution you accuse?

Consider that 1% of the wage earners in America today make 16% of the income, the largest disparity since the 1920's. If you want to fund the government, you have to tax those with the income.

Its not wealth redistribution by the way, there are no give-aways in Obama's plan. The revenue would be used to shore up infrastructure, education, and health care programs that benefit everyone including the rich. Everybody benefits when more people are educated, when more people have access to health care. We all suffer when some of us don't get access to such things.

And good roads and bridges, an education plan targeted at bringing more people into productive work, and a health care plan that will free up people to take greater risks (its harder to leave that big company and its health care benefits to start a business these days)... benefits everyone including the rich.

And its not socialism. Obama believes seriously in the free market, but he also appreciates and understands its limitations, I think we all feel it now with this financial crisis. His plan tends toward solutions where the free market is allowed to work within the confines of a framework that provides some protection for individuals who may be hurt by it. It also strives to enable more people to become bigger players in it. A more dynamic, talented, educated work force is the driving force that makes the free market go.

Reagan's trickle down economy, where you give tax breaks to those with the biggest incomes with the hopes that they will use the extra cash to invest thus spurring on job growth had an ounce of truth to it.

But it makes a ton more sense to work on creating environments where more people are better educated, more people have a greater opportunities to innovate and create.

That has been truly America's contribution to the world, and Obama more so than McCain hopes to continue that tradition.

Its all about trickle up economics. Yes We Can.

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