That fact the Democrats are running Congress and that they are poised to occupy the White House after the ’08 elections may have come home to roost. While yesterday’s dramatic drop of the Dow may have been triggered by foreign influence, mainly the Hang Seng, the lack of confidence in the U.S. Government to construct sound economic policy prevented our markets from withstanding the assault.
Both House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid have said that the Bush tax cuts are history. Presidential hopeful Sen. Hillary Clinton was on the stump telling the world that the profits of the oil companies need to be confiscated and spent elsewhere. Those two statements more than anything else right now could spell the end of the economic prosperity we have enjoyed for so many years.
What the rest us learned in economics 101 and through the examples provided by every major tax cut in history, they cannot seem to grasp. Tax cuts, not increases, spur the economy and actually increase government revenues while raising taxes has the opposite effect. Of course, this is nothing more than another attempt at wealth redistribution. They will go after high wage earners only (folks that actually work for a living); while they leave the likes of Ted Kennedy, with his fortune safely tucked away in Cayman Islands banks, alone.
The de facto nationalization of big oil by Mrs. Clinton borders on the insane. Both small investors (show me a well-managed mutual fund that does not own oil stock right now) and the government (in the form of decreased revenues) will feel the ramifications of it. How many more companies would flee our shores and set up shop in more friendly business climes, such as London, as so many have to escape Sarbanes-Oxley. The confidence in the American Government, along with the dollar, would evaporate. The world market would wonder if the government would stop with big oil. As they have with the tax code, defining lower and lower incomes as wealthy, would the government decide which companies other than the oil industry are making too much money or paying their shareholders too large a dividend? Would they decide that companies that put large amounts of their profits into research and development are operating at an unfair advantage when compared to other companies? Who would decide what the threshold for “unfair” is?
If we wish to remain on top in the global market, America needs to have the free-market it has always had. These attempts by the left create a socialist state by another name must not be allowed to control our economic future.