Debate transcript

I've been reading the transcript from last week's Democratic debate and had a few observations. The first is regarding Barack Obama:

People are frustrated not only with jobs moving and incomes being flat, health care being too expensive, but also that special interests have come to dominate Washington, and they don't feel like they're being listened to.

Barack is right. The special interests do dominate Washington DC. One great example is with regard to the failure to pass the Colombia Free Trade Agreement. In a nutshell, the agreement would make Colombia's current duty-free access to the U.S. market, enjoyed under the auspices of the Andean Free Trade Agreement, permanent. In exchange the U.S. would be able to enjoy similar access to the Colombian market. It is hard to see this as anything but a win for the U.S., since the U.S. would enjoy tariff reductions while Colombia would simply get assured maintenance of the status quo on its access to the U.S.

Barack Obama, however, opposes the CFTA. Why? Likely because the unions, who hate any type of free trade agreement, are against it. Unions, let us not forget, are a special interest that represent a minority of American workers.

Then there's this:

MR. GIBSON: All right.

You have however said you would favor an increase in the capital gains tax. As a matter of fact, you said on CNBC, and I quote, "I certainly would not go above what existed under Bill Clinton, which was 28 percent."

It's now 15 percent. That's almost a doubling if you went to 28 percent. But actually Bill Clinton in 1997 signed legislation that dropped the capital gains tax to 20 percent.

SENATOR OBAMA: Right.

MR. GIBSON: And George Bush has taken it down to 15 percent.

SENATOR OBAMA: Right.

MR. GIBSON: And in each instance, when the rate dropped, revenues from the tax increased. The government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down. So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?

SENATOR OBAMA:...You know, I believe in the principle that you pay as you go, and you don't propose tax cuts unless you are closing other tax breaks for individuals. And you don't increase spending unless you're eliminating some spending or you're finding some new revenue. That's how we got an additional $4 trillion worth of debt under George Bush. That is helping to undermine our economy, and it's going to change when I'm president of the United States.

MR. GIBSON: But history shows that when you drop the capital gains tax, the revenues go up.

SENATOR OBAMA: Well, that might happen or it might not. It depends on what's happening on Wall Street and how business is going. I think the biggest problem that we've got on Wall Street right now is the fact that we've got a housing crisis that this president has not been attentive to and that it took John McCain three tries before he got it right.

This, quite simply, doesn't make any sense. Confronted with facts, Obama seeks to change the topic. One is left to conclude that either Obama doesn't understand the relationship between tax policy and incentives or he is simply looking to raise tax rates as a punitive measure on the wealthy that is divorced from increasing government revenues.

Then we have this gem from Hillary Clinton:

...And the fact is that, you know, I don't want to take one more penny of tax money from anybody. But what I want to do is make some smart investments. And I was the first to come out with a strategic energy fund, where we need to be investing in clean renewable energy. And I think we could put 5 million Americans to work.

"Investments" mind you are politician speak for government spending. So Hillary Clinton, by her own admission, intends to tax Americans and transfer that money to other individuals to pursue research into renewable energy. Aside from the fact that I have no idea how this can be justified by the Constitution, let's keep in mind that if past is prologue with this type of spending that it will go to Iowa farmers for things like ethanol -- which is politically popular -- rather than what is actually effective. It seems to me that if you want something that is actually effective that you would leave this to the free-market, since it has a much better incentive structure for uncovering and rewarding useful inventions.

This is highly instructive in that it shows that Clinton is both convinced that the government would do a better job of uncovering renewable energy than the private sector and that she also doesn't realize -- or doesn't care to acknowledge -- that every dollar taken out of the economy in the form of taxes to pay for these programs means money that can't be spent supporting other types of jobs. So we get all this government money to be spent on creating millions of energy jobs and no heed is paid to the millions of jobs that will either be destroyed or never created in the first place because of this intervention.

This also stood out to me:

MR. GIBSON: We're running short on time. Let me just give somequick questions here, and let me give you a minute each to answer. What are you going to do about gas prices? It's getting to $4 a gallon. It is killing truckers.

SENATOR CLINTON: That's right.

MR. GIBSON: People are in trouble. And yet the whole world pays a whole lot more for gas than we do. What are you going to do about it?

SENATOR CLINTON: Well, I met with a group of truckers in Harrisburg about a week and a half ago, and here's what I told them. Number one, we are going to investigate these gas prices. The federal government has certain tools that this administration will not use, in the Federal Trade Commission and other ways, through the Justice Department, because I believe there is market manipulation going on, particularly among energy traders. We've seen this movie before, in Enron, and we've got to get to the bottom to make sure we're not being taken advantage of.

It's funny, this is the same crowd that talks about how we need clean renewable energy and yet when the free market starts encouraging the development of those alternatives -- through higher gas prices -- the Democrats start screaming. It's revealing that Clinton's initial instinct is to launch an investigation. Rather than giving a sober examination to the issue and trying to understand what factors have driven prices up, her reflexive distrust of the market dominates. If prices go up it must be due to greedy corporate fat cats engaging in market manipulation. The fact that supply is constrained by a government with widespread prohibitions on where to drill for oil and regulations against the development of new refineries goes unremarked.

The cognitive dissonance is really amazing. I think what it really comes down to isn't that they are genuinely outraged over the high gas prices per se, it's just that too much revenue is going to the oil companies instead of the government. Indeed, Clinton adds that:

And what I would like to see us do is to say if we have that, then we should have a windfall profits tax on these outrageous profits of the oil companies, and putthat money back into the highway trust fund, so that we don't lose out on repair and construction and rebuilding.

Reading the transcript in its totality its readily apparent that both Obama and Clinton have little regard for either the limited authority granted to the government by the Constitution or the free market. As such, neither is worthy of endorsement for president of a country founded on both.