Elkhorn Creek Lodge

Barackonmics; Upstairs, Downstairs

Posted in economics, politics by Eugene Podrazik on November 14, 2008

It’s been remarked elsewhere that the winning coalition of Obama’s presidential victory was a bottom/top coalition.  That is, a coalition of the top and bottom of the economic ladder.

The interesting thing about this coalitions is that both are relatively immune to the economic vissicitudes that affect everyone else in the middle. 

For, the bottom, we have people on various welfare and governmental aid programs. They are net consumers of other people’s taxes. Not much more to be said except that Bush’s “compassionate conservatism” did little to reduce the number of these individuals. These folks represent a permanent constituency of the party of big government. Maybe, the next time, the GOP really needs to give the taxpayer a real break by seriously culling out the government-handout class.

The high end is more interesting. The super rich, and even the moderately rich, derive income streams from other than wages. So, things like Social Security and Medicare taxes don’t matter. If a trust or other compensation agreement is so arranged, a lot of expenses can be had on pre-tax dollars. So, raising income taxes has the perverse effect of enhancing those benefits. I be willing to bet that Al Gore’s giant carbon-footprint private jet isn’t coming out of post-tax dollars.

What is interesting is how country club Republicans became country club Democrats. The first reason is tribute. The need to own the candidate to protect their fortunes and station. Short of a reign of terror mass beheading, these folks don’t really have to worry about much of Obama’s tax plans since the cost will be a small price to pay for the security of their position and station in society. It also helps, that Obama is now, with his house and book deals, very much part of the ancien reigime. Robespierre? 

The second issue is the conceit of 30 years of prosperity thanks to Reagan. Many of these individuals did very well in a variety of business endeavors thanks to Reagan’s policies of economic growth. Now, financially secure, they can dally in the idiocies of global warming and whatever other vogue causes that strike their fancies; the idle mind is indeed the devil’s workshop.

Then, there’s the issue of slamming the door behind to keep others from horning in on their positions of power and influence. Most of these well-to-do Obama supporters are very well aware of the radicalness of capitalism; since their successes (or those of their immediate ancestors) came from business successes that in some way overturned the established order. Bill Gates, for example, is very wealthy because of his upsetting the cozy world of IBM. So, these people turn to the ideology of societal ossification; socialism.

In many ways, Obama’s hometown of Chicago, represents the very top/bottom economic structure that gave him the presidency. On the bottom are the governmental dependents; patronage workers and welfare. And, ward heelers, er, community organizers, to make sure they vote the right way for the Chicago political machine.

On the top are the wealthy. Nominally Republican, except when doing business in Chicago. They contribute and they pose with the machine politicians; as pillars of the community. But, there are understandings. Understanding like Obama’s sweetheart mortgage deal from the Northern Trust. Of course, you’ll never see ACORN raising a ruckus in Northern Trust’s lobby; that reserved for some mom-and-pop Savings and Loan back in the neighborhood struggling to survive without any hope for bailout bucks. Of course, the elite will never be seen in the Chicago public schools; they have their own private schools or, just over the Chicago border, their elite public schools. As you move up in the machine, you’re rewarded richly but expected to “understand” there are just some things you just don’t touch. Obama’s been a good and loyal foot soldier and has been richly rewarded for this service; nice house in Hyde Park and a nicer one now on the East Coast.

Here’s how thick it gets. Obama’s pal Bill Ayers was no radical who worked his way up from the mean streets, he’s the son of Thomas Ayers, former CEO of Commonwealth Edison, now Exelon. 











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