Dear Mrs Maria Bartiromo: Some Basic Economics

Ben Cohen
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Dear Maria Bartiromo,

I am writing to ask you to reconsider some of your statements about Barack Obama, taxes, and the economy.

Firstly, your warning that Obama would likely raise taxes is
correct. Your warning that this would have a negative impact however,
is simply ridiculous. You are a decent economist, so you should know

Blanket statements like this have nothing to do with serious debate.
Obama does not want to tax people who cannot afford it, and is aiming
his cuts at those who can. The neo-liberal orthodoxy that you repeat
about taxation has been proven wrong quite spectacularly. The
unprecedented tax cuts by the Bush Administration have led to poor
economic growth, massive deficits and now recession. Tax cuts do not
necessarily mean economic growth, an economic fundamental you seem to
be unaware of.

Secondly, your statement that Americans who earn over $200,000 are
not rich is simply offensive. 35 million people deemed 'food insecure'
in the United States, and there are poverty levels that exceed every
modern industrialized nation on earth. The U.S Department of Health and
Human Services states that the Federal poverty threshold for a family
of four is $21,200 per annum. $200,000 would therefore feed and house almost 10 families. Last year, 36.5 million
people lived under that poverty threshold, so the $200,000 you claim
does not make someone rich could ostensibly provide for even more.

In an interview with Barack Obama back in March, you made a number of assertions that again, were disingenuous and highly biased. You asked:

"Why raise taxes at all in an economic slowdown? Isn't that going to put a further strain on people?" 

Again, let's go back to some basic economics. As corporations and
the mega wealthy avoid paying their fair share of taxes, the government
has less money to spend on vital services like health care, education,
public transport and infrastructure, despite the business communities
(ie. you) profession that it does. As wages stagnate and costs go up
these services are absolutely crucial for the majority of the
population. Cutting taxes for the rich does not provide more tax revenue,
just more debt and less services for the poor who work for them. So,
contrary to your assertion, increasing taxes for those who can afford
it will significantly ease the strain on working people rather than add
to it.

Most disturbingly in your question and answer session, you asked him:

"You want to index the minimum wage to inflation, we'll see the
minimum wage go up every year. You are looking to strengthen the
unions. Basically, making costs go up for small business. Why put a
further strain of expenses, higher expenses, on the one place in the
economy that's actually creating jobs?"

As someone earning a six-figure salary, you don't really have a
right to be talking about the minimum wage. No one can survive living
on the federal minimum wage, and the argument that it would hurt
business by raising it is just not true.
The people whose lives you speak about so blithely are deeply affected
by even the smallest increment of change, and an extra dollar an hour
can mean the difference between eating or not.

You also stated in regards to Obama's proposed increase of the
capital gains tax that: "It's not just the Buffets of the world who own
stocks ... You are impacting a lot of people ... A hundred million
people own stocks today."

This may be correct, but it is highly misleading. As of 2001, 90% of the population
owned 15.5% of stocks and mutual funds. 84.5% was owned by the
remaining 10%. Stocks and bonds are not a major concern for the
majority of Americans, as they derive most of their income from labor.

The capital gains tax mostly affects people like yourself -- those
with disposable income and inherited wealth. Most Americans are not
afforded those luxuries, so the debate is irrelevant if you are talking
about regular people. But then again, you are not.

I look forward to hearing your response,

Ben Cohen

(Cross Posted in the Huffington Post)