Used Car Salesman-in-Chief

By Mr. Curmudgeon

The year was 1957. Magazine ads heralded a new product that would revolutionize an industry. One advertisement boldly stated, “A man in your town recently made a decision that will change his life.” When it was finally revealed, the public was decidedly underwhelmed … and the Ford Motor Company suffered an embarrassing failure with its unveiling of the Edsel.

“This is a story that has continued to fascinate people as few other epic disasters in modern history,” writes author Thomas Bonsall in his book Disaster in Dearborn: The Story of the Edsel. “Certainly few cars have grabbed the public’s fancy as much as the ill-fated Edsel – the Titanic of automobiles, a marketing disaster whose magnitude has made it a household word. Indeed, for a parallel one must go back to the Titanic itself, which sank in 1912. Both have become metaphors for overweening management ambition and shortsightedness – or worse.”

I thought of the Edsel as I listened to President Obama’s State of the Union Address Tuesday evening. The president passionately pleaded with Congress to raise taxes on millionaires and billionaires. Obama, the millionaire, and his biggest fan Warren Buffett, the billionaire “don’t need and the country can’t afford” their keeping what they have earned, insisted the president. “It either adds to the deficit, or somebody else has to make up the difference – like a senior on a fixed income; or a student trying to get through school; or a family trying to make ends meet,” said Obama. “That’s not right. Americans know it’s not right,” Obama scolded.

The Edsels in this case are the crumbling entitlement programs now bankrupting the nation. Unlike Ford’s showroom lemon, Americans can’t walk away and refuse to pony up cash for failed government products. Instead, we have become addicted to these unworkable programs whose out-of-control costs drive up deficits and outpace the economy’s ability to finance them. This is why America must go to communist China, hands held out.

More importantly, the president’s plea is a damning admission that the perpetual-motion failure machine called socialism is tailored to consume success. And those dependent upon that machine are willing to suspend their sense of reality in favor of fairy tales offered by political demagogues.

Many in the press, especially the New York Times, took the president’s call for higher taxes on the rich as a frontal assault on his presumed Republican presidential rival Mitt Romney. However, as the Wall Street Journal noted, “Romney remains in a defensive crouch, as if he’s embarrassed by his wealth.” The reason, of course, is Romney’s 15% tax bite. The money he now lives on is derived from investments (earning over $20 million in 2010), made from money that was taxed at a much higher rate (over 30%) when he worked at Bain Capital. And that percentage creeps upwards with every year’s dividend payment.

But Romney has painted himself into a corner. “The Romney [tax] plan only abolishes taxes on capital gains and dividends for households that earn under $200,000 a year,” says the Journal, “The Romney contradiction is that he can’t defend his 15% rate while he attacks Mr. Gingrich for favoring lower taxes.”

You see, under the Gingrich plan, there’ll be no capital gains.

Why are capital gains lower than taxes on earned income? The answer: Congress uses tax policy to encourage risk-taking. No investor can know if his or her investment will yield fruit. Taxing investor gains at a lower rate encourages the flow of capital into the marketplace to create new companies, expand existing ones, and generate jobs. Gingrich, therefore, wants to put this practice on steroids. Romney, unfortunately, fears all that job creation makes him look greedy. And that is precisely what Obama wants Romney and America to think.

If, as many conservatives tell us, Romney is the personification of capitalism – a much needed commodity in these hard economic times – why is he too shy to sing its praises? If his investments fuel economic expansion, creating new positions for America’s unemployed, why does he cower in the corner? If Gingrich’s tax plan encourages Romney to risk more of his fortune to create jobs, why does he attack it using Obama’s definition for the non-rich (those making below $200,000)?

Obama made a sales pitch in his State of the Union speech. Unlike the old Ford ads that once sang the praises of its shiny, new Edsel, Obama is selling that old clunker of a welfare state. He says diverting investment capital from the economy and job creation is worth the trouble if it means America follows the path taken by those brave trailblazing Greeks. Besides, it’ll be fun to watch the willing Mitt Romney and Warren Buffet hitched up to the old rust bucket like Clydesdales. And we’ll all enjoy yelling a collective, “giddy-up!”

That twisted enjoyment is what class warfare is all about. It produces an endorphin rush much like morphine, cocaine and heroin. Under its hallucinogenic influence, we’ll be too high to notice our rusty welfare state as it slides over the cliff.

The pusher of this mind rot, Obama, calls it “the defining issue of our time.” But it's just a clunker.