I have often described this statist feedback loop:
- Create government program
- Government programs messes up certain aspects of the market
- Blame such messes on "failure of markets" or capitalism or even the rich, rather than the government program
- Create new government program to fix problem created by last program
Obama's new political strategy seems to be even more brazen
- Democrats pass new program over Republican objections
- New program has unseemly subsidies for rich people
- Blame subsidies on Republicans, to the point of using subsidies as example of bankruptcy of Republican party
The chief economic culprit of President Obama’s Wednesday press conference was undoubtedly “corporate jets.” He mentioned them on at least six occasions, each time offering their owners as an example of a group that should be paying more in taxes.
“I think it’s only fair to ask an oil company or a corporate jet owner that has done so well,” the president stated at one point, “to give up that tax break that no other business enjoys.”
But the corporate jet tax break to which Obama was referring – called “accelerated depreciation,” and a popular Democratic foil of late – was created by his own stimulus package.
Which is not to say that the losers in the Republican party would not likely have supported the same plan had it been their idea.
By the way, this is nearly exactly what Obama has been doing with those so-called special subsidies for oil companies. This subsidies are in fact the identical tax breaks that all manufacturers receive that allow them to accelerate expensing of capital investment. This is a tax policy that has enjoyed bipartisan support and no one is suggesting should be eliminated in general -- just eliminated for industries that have bad PR.