Obama Sold Out on his Principles

A Loyola University clip of the future President from 1998 has been posted.

The trick is figuring out how do we structure government systems that pool resources and hence facilitate some redistribution -- because I actually believe in redistribution, at least at a certain level to make sure that everybody’s got a shot.

I have to agree with what President Obama said in 1998.  There are a couple of reasons why it makes sense to have a progressive tax structure that has people with more wealth paying a higher percentage of their income as taxes.

Firstly, the more wealth you have the more rapidly you can grow it.  Those with more wealth have access to instruments with higher returns while having the same or lower risk than those with less of it.  The inflation created by this process causes the corresponding currency debasement to impact those with less wealth disproportionately.  We therefore impose taxes to counteract this effect.

The other reason why it makes sense to tax wealthier individuals at a higher rate is because they impose more externalities on society to maintain their wealth.  Take private property as an example.  Private property requires not only the recognition that something is mine, but also societies recognition that it is no one else's.  A government is required to enforce that distinction, and therefore those with more property require additional  protection.

The truth is that everyone believes in redistribution--after all, the purpose of economic systems is to redistribute wealth by some means.  The debate is really about what kinds of redistribution are acceptable and what the mechanics of it are in order to better serve society.  A society that seeks to promote the general welfare (as stated in the Constitution) of all citizens might have different ideas on how to redistribute wealth than one that seeks to encourage a lazzie-faire, cold individualism.

Sadly, the President is not the person he once was.  He is content to sell out to Wall Street and lobbyist interests, rather than protecting the interests of the people that elected him.  The alternative is not palatable for me either.  For this election, I'm voting for a third-party.