Thursday, November 10, 2011

the specter of Communism is haunting who?

Communism has been part of the repertoire of muck slung at the current administration and its liberal constituency. "Obama is a communist!" you could hear, even uttered by a few who experienced real socialism.
Really? The exaggeration is patently false (just look up the definition of communist), but for the sake of argument, let's consider its figurative sense and look at the statistics that are likely dearest to the anticommunists, marginal tax rates. With the exception of the first three years since the establishment of the federal income tax, the marginal rate for couples making more than $250,000 (a near top rate that likely identifies the rich) reached bottom at 25% in the mid Twenties, then it grew parabolically to reach a top of 94% in wartime, but after the WWII stayed near those "confiscatory" levels during the Fifties and Sixties, a time of prosperity that included Eisenhower's two terms. Reagan, the anticommunist hero, slashed this rate to 50%, Bush senior brought it down to another local minimum of 28%. We are now at 33%. If we let G.W. Bush's tax cuts expire we would go back to 36%, still well below Reagan's level. I bet the top 1% likes this communism, likes this income redistribution.
The communist epithet crossed the line of hilarity when it was flung at Warren Buffet a few months ago. Remember when he took one page ads and exhorted Congress to raise the top marginal rates? Comrade Buffett is the same who swung a sweet deal with Goldman consisting of a 6 billions equity infusion in exchange for preferreds and warrants.
But it's only the other day that it finally dawned on me what communism in the developed world is these days. Giorgio Napolitano, the president of the Republic of Italy, stepped into the credit crisis that bedevils his country sovereign bonds and issued a statement to calm the financial markets. Mr. Napolitano was a high ranking member of the Italian Communist Party!

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