So, I had an interesting conversation with a friend of mine that I thought I’d share. Conversations like this are pretty common for me. I find myself, as an absolute political junkie, constantly interjecting my opinions into conversations. I have friends of all stripes and many respect my opinion on things dealing with economics and politics. Others don’t. Still, I find the utter lack of interest in getting to the bottom of all things economic and political a bit disconcerting. The following is the conversation I had with a Democrat-leaning friend of mine recently. I’ll call him Ted, for the sake of anonymity. This transcript, while not perfect (I did not tape record it), is a pretty accurate representation of how the conversation went:
Ted: They didn’t pass the Buffett Rule today. This is such bullshit. I’m sick and tired of Republicans protecting the rich at the expense of the poor.
Me: How would you classify me? You know that I’m not a Republican, right?
Ted: Yeah, I know. You’re a libertarian. (Note: This was said in an almost mocking tone, haha.)
Me: I, for one, am glad that they didn’t pass the Buffett Rule. Do you want to know why?
Ted: Yes. Please enlighten me (Again with the mocking tone)
Me: Have you ever heard the term, “the seen and unseen?”
Ted: No, don’t think so.
Me: The seen and unseen refers to the hidden costs or benefits of doing something. Sometimes, no matter how benevolent you think you’re being, there are hidden costs that are being masked…but they are only masked by your decision to not reflect fully on these things to the end.
Ted: Ok. So what are the hidden costs of the Buffett Rule? Isn’t that what you are getting at?
Me: Precisely. So, let’s say we pass this Buffett Rule. Do you think that these multi-millionaires and billionaires have an incentive to invest in companies anymore? Better question: Do you think that by increasing the tax rate on income from investment that it would have an effect on whether or not those people invest?
Ted: I would think so. But, what does that have to do with me? I’m still not seeing the benefits here.
Me: Do you have an IRA account or other investment vehicle?
Ted: Yeah, I have a 401k.
Me: Well, what do you suppose will happen to all the stocks in your portfolio, should all or even a part of these investors decide that investment is no longer in their interest?
Ted: I don’t know…they’d go down, I guess.
Me: Yes. You are correct. They will drop like a rock. Now, how many people in America invest some of their savings into stocks in order to “get ahead” later on down the road?
Ted: I’d say a fair amount.
Me: So, who do you think is really going to be hurt the most by this rule? Do you think the big wealthy investors are going to be hurt by this or the middle-class investors? I think it’s obvious.
Ted: Ok. I see what you are getting at. I didn’t think about it that way. But, why would the Obama Administration not think of this? How come they don’t see the error in this?
Me: Truth be told, I do think they know about this. I think they know exactly what they are doing and they don’t care. It doesn’t fit into their narrative. They’re currently engaged in class warfare and trying to get the OWS crowd to vote for them. This fits better into their narrative. The Obama Administration is not actually interested in the working class or poor. They are interested in winning in November.
Ted: I don’t know if I believe that, but you convinced me on the Buffett Rule. Thanks.
Me: Well, just remember. Not everything is as neat and tidy as people try to package them. Sometimes there is more to the story. Sometimes you really need to dig deep down into the issue and reflect. Once you do that, you’ll be better prepared to see both the ‘seen’ and the ‘unseen’.
The Buffett Rule, the Obama Administration’s latest attempt to create class warfare and division amongst the citizenry of this great nation, is an absolute facade. Forty-seven billion dollars, while a lot of money, will only run the government for about ten to twelve days under the current administration’s spending binge. Forty-seven billion dollars is the estimated net revenue gained over the course of a decade from the Buffett Rule. The harm that it will do exceeds the benefits. We don’t have a revenue problem in this country. We absolutely do have a spending problem. The Obama Administration has never been serious about trying to curtail spending and fixing the underlying economic problems in this country. And so it continues.