Hedge Funds Give More to Obama

According to a Reuters report, hedge fund managers have thrown more than twice as much money at Obama's campaign as they have at McCain's. From the report:

New figures show the Illinois senator and presumptive Democratic presidential nominee has drawn $822,375 in campaign contributions from employees of hedge funds, compared to $348,300 for his Republican rival, Arizona Sen. John McCain.

The figures, compiled for Reuters by the Center for Responsive Politics, a nonpartisan campaign finance research group, reflect mounting concern over the rising cost of health care and other domestic issues where several hedge fund managers said Obama had an edge over McCain.

The New York Times business section ran a similar story on April, 22 and gives a list of Obama's wealthiest donors.

Democrats have not been altogether difficult for hedge fund managers to deal with. New York Senator Charles Schumer last year defended the 15% tax rate that a number of hedge fund managers pay on income from fees they charge for managing other people's money. As was widely reported in 2007, Schumer argued that to charge higher rates would be to discourage "risk-taking", as though entrepreneurs were the timid sort and need to pay less in taxes than do construction workers and secretaries in order for us to keep them out there taking risks for the rest of us.

It is a good thing then that small business owners are hardier sorts because neither Party is working very hard to give them 15% tax rates on income.

On the Matter of Political Dynasties

Of the rationales for supporting Obama (or Edwards, Richardson, Biden, etc) in the Democratic presidential primaries, one of the best, in my opinion, was the argument that the U. S. presidency should not be a revolving door for Clintons and Bushes.

But, come to think of it, do we not effectively have alternating dynasties in the form of our two party system? Each time a Party returns to the White House, it brings with it the usual suspects, the familiar elites, the people whose expertise has gotten us into the crisis situations we are in today in the first place. This two-party tango is essentially as tight a trap for this country as any system of alternating family dynasties would be.

I have been particularly critical of Republicans lately, but today's New York Times has me remembering just how presumptuous, infuriating, and corrupt the Democrats can be as well. It is not just our little brown mousy Congress allowing felonies to be committed by the White House. It is (today's example) Congressman Charles Rangel accepting a gift of four rent-controlled apartments in Harlem, using one of them possibly illegally as a campaign office, and expressing surprise that anyone would raise an eyebrow. Rangel denies knowing that he got a special deal not available to others in the city, including people who are being thrown onto the street so that landlords can raise the rent. But, in any case, he believes he deserves the apartments. Would he be so happy with them if he had to pay the same market value that almost everyone else has to pay to live in New York?

How do we get a new party started in this country? Seriously?

One Reason I Don't See Myself as a Republican

Douglas Moran, in his comment on a Ross Douthat blog at the Atlantic, identifies one reason that I will not consider voting for the Republican Party this year despite whatever reservations that I have about Obama.

Douglas wrote:

The flip side of the last 40+ years of the Republicans using social issues as wedge issues has meant that if someone is interested in, say, gay marriage, or equal protection under the law, or legalization of marijuana, or divesting from South Africa, or helping poor folks in Appalachia, or whatever, the Democratic party is the only place they could turn. And more recently, if you are an economic conservative as well as a social liberal, the Republican party has actually been actively hostile.

For the last 8 years--and even arguably before then--the Republicans have been fixed on personality, the personality of The Leader. For the last 8 years, that has been Bush, and no matter what Bush did, his base didn't desert him. Torture? Pre-emptive, nation-building wars? Vast expansion of executive power? Huge new benefits programs? New cabinet-level government department? Massive deficits? None of these are "conservative" stances in any way, yet Republicans supported them because *Bush* did.

End of quote. Thanks, Douglas.

The disorganization of the Democratic Party seems to have some merit now. Politics really are very personal and, therefore, should be messy. When a group of disparate individuals agree too often, the word "cult" should maybe come to mind. But, to be fair, I think a lot of Republicans were quietly unhappy about how the last 8 years were turning out. It's just that we are all so partisan now, we do not perceive that we have choices. So we live like soldiers in trenches, adjusting our bayonets and getting ready for the next charge, the next drive for a few more inches of land (the NFL really reflects our culture back to us). This trench warfare, this constant winning and losing of territory, is what our elections feel like.

Living in the Material World

The Christian Science Monitor reported in late March that the Egyptian Army had taken up baking bread to curb food riots.

The article states that the UN Food and Agriculture Organization "expects food prices to stay high for the next three to five years, presenting a challenge for governments trying to keep domestic food prices low in order to keep poor citizens properly fed and avoid mass protests and social unrest. "

Now, the predictions of Marxism may have turned out to be quasi-religious social fantasy rather than science, but surely market-based economies do rely on overseas and cross-border markets. What else is globalization about? Who is most affected by food and fuel prices? That would be people in whatever country who live from hand to mouth or from paycheck to paycheck (so to speak). In other words, that would be the vast majority of people that we look to to buy our goods and services, the demand upon which our globalized jobs depend ... unless businesses are just going to sell to other businesses.

This would not seem a good time for John McCain (or Barack Obama, either) to be listening too seriously to Supply Side advocates. It is not that the markets are not reacting as we expect them to; it is that, in the face of shortages, markets are acting just as we expect them to. Prices for essentials are going up. Wages are not going up nearly as fast, and why would they, given that people needing work are everywhere and given that actual labor is devalued in a world where production can be moved anywhere at anytime?

We can come up with alternatives to petroleum given a concentrated effort; coming up with alternatives to food is going to take more concentration than that.

The Economy Performs Better Under Democrats?

I have not heard this brought up much since grad school, and not at all by the TV punditry, but we have numbers to argue that economic performance tends to be stronger for everyone under Democratic administrations. I have linked to several postings on these studies here, here and here. More such analysis is readily available.

This piece from the Federal Reserve Bank of San Francisco finds no statistically significant advantage for either party with regard to stock market performance, an area where Republicans are assumed to be stronger. In an election year like this one, Republicans do not need investors to hear that sort of thing, especially as corporations have found Democrats to be just as willing to let themselves be twirled around lobbyists' fingers like Sauron's rings. Why would investors necessarily want to support Republicans under those circumstances?

This link, along with this, finds that Republican administrations are better for the average pocketbook during election years only, offering an explanation as to why no-growth or slow-growth Republican administrations get reelected. I doubt that Democrats have to worry about that this year.

The Rich Will Do Fine. The Rest of Us, Maybe Not.

An analysis entitled How the Rich Would Fare Under Obama, McCain concludes that earnings for the top 1% go down under Obama's taxation plan and up under McCain's plan. This is not surprising nor is it news. But what should surprise is the heat generated by the back and forth between those who, on one side, argue that tax cuts for the very wealthy benefit society the most by spurring job creation and those who counter that the country is in far too much trouble for us to be cutting taxes for anybody.

Objections to the supply side argument make a world of sense. How can the supply side drive job creation if economic conditions for the largest sectors of the consuming public are so strained? The government can cut taxes for the top 1% and the top .1% all day, every day, but as long as the middle and working classes are just treading water, if not drowning, where is the demand going to come from to snap up all the new services and products that the wealthy are supposed to unleash on us? And if the demand does not exist, where are the new jobs going to come from?

The wealthy are going to do fine, regardless. They always have and likely always will, seeing how well-represented they are in Washington and how lawyered-up they are. It is the non-wealthy and small businesses who need to be the focus in this election. They need real growth in income and, in the case of small business, real tax relief, not just massive borrowing from China and the Middle East to keep everyone afloat.