Thursday, May 28, 2009

Teddy Roosevelt deja vu

Loyal reader, reliable critic, and fellow libertarian Tom Burger recently brought to my attention an editorial published in the New York Times, in September 1913. "The editorial was reacting to a platform of Teddy Roosevelt that included an income tax, a central bank, and curbs on competition." The fact that it resonates so well with Obama's rhetoric of today convinced me to transcribe a portion of the text (the original at the link above appears to be a fuzzy scan). If you had any doubts about the socialist origins of Obama's beliefs, this should put them to rest.

The parallels between Teddy and Obama are many and fascinating, as wikipedia makes clear: “He is most famous for his personality … the youngest person to become President … a Progressive reformer … distrusted wealthy businessmen … the first U.S. president to call for universal health care and national health insurance … promoted the conservation movement … attacked big business and suggested the courts were biased against labor unions … the masses loved him; he proved to be a great popular idol and a great vote getter.”

Here is an excerpt of the NYT editorial, but you really should read the whole thing:
Theodore Roosevelt has now brought out and matured his doctrine of Socialism. It is not the Marxian Socialism. … Mr. Roosevelt achieves the redistribution of wealth in a simpler and easier way. He leaves the land, the mines, the factories, the railroads, the banks—all the instruments of production and exchange—in the hands of their individual owners, but of the profits of their operation he takes whatever share the people at any given time may choose to appropriate to the common use.

Mr. Roosevelt’s plan for the reorganization of Government and society is set forth in his article on “The Progressive Party” in the September issue of The Century Magazine. In summary it is this:
1. …
2. Extend indefinitely the power and functions of Government. For the solution of the problems confronting the people, and effectually to cure the evils of to-day, “it will be necessary to invoke the use of governmental power to a degree hitherto unknown in this country, and, in the interest of democracy, to apply principles which the purely individualistic democracy of a century ago would not have recognized as democratic.”
3. …
4. Put the making and the repeal of laws and the interpretation of the Constitution directly into the hands of the people … . “We hold moreover, with the utmost emphasis, that the people themselves should have the right to decide for themselves after due deliberation what laws are to be placed upon the statute books, and what construction is to be placed upon the Constitutions, National and Sate, by the courts so far as concerns all laws for social and industrial justice.”
5. Confiscate great fortunes and let the people take what part they choose of all private fortunes by the taxing power. … “We believe in a heavily graded income tax … discriminating sharply in favor of earned, as compared with unearned incomes.”

“The goal is not Socialism,” says Mr. Roosevelt, “but so much of Socialism as will best permit the building thereon of a sanely altruistic individualism, an individualism where self-respect is combined with a lively sense of consideration for and duty toward others …”

… His collectivism, his co-operative plan for business, his Government direction and control “to a degree hitherto unknown in this country,” he protests, “would not mean in the slightest degree any impairment or weakening of individual character.” “We are striving,” he says, “in good faith to produce conditions in which there shall be a more general division of material well-being, to produce conditions under which it shall be difficult for the very rich to become so very rich, and easier for the men without capital, but with the right type of character, to lead a life of self-respecting and hard-working well-being.”

The plan must be examined. It is not without foresight and purpose that Mr. Roosevelt would call into being a Government of men, not of laws. The Constitution … guarantees protection to the life, liberty, and property of the citizen. When the deep, even-flowing, traditional current of constitutional interpretation by men profoundly learned in the law is diverted to the fretted and tortuous channel of popular caprice, the checks the people at the beginning laid upon themselves, the guarantees they gave as a solemn covenant of all with all are swept away, mere sticks in the Niagara Rapids. The Constitution is torn to tatters. … In vain the possessor of a great fortune will appeal to the courts: the people are the courts, and they want his money. Not only great, but the small, fortunes will be open to spoliation, any fortunes, any accumulation. …

… Mr. Roosevelt destroys the motive of toil and enterprise when he contrives a tax that would bear heavily upon “unearned” incomes, that is incomes from investments. If you destroy the incentive you prevent the achievement. …

… Mr. Roosevelt’s reconstitution of society would leave it inert by destroying individual initiative, hope, and ambition, which are the foundations of progress. … why has he constructed it? Because he knew that with his great skill he could make this Utopian dream attractive to that very considerable part of society which is the material with which agitators work—the discontented, the unsuccessful, the envious. And upon a Progressive Party thus assembled and fortified with delusions he would rise again to power.
In the end, we are reminded that those who benefit disproportionately from a more powerful state are the political leaders themselves. And therein lies their motivation.

10 comments:

Cabodog said...

Political leanings appear to be cyclical in nature. Not working...? Let's try it the other way... Uh oh... that sure as stuff ain't working... Better try it the other way.

Question is, how much damage will be wrought over the next four years -- make that 3.75.

Scott Grannis said...

Those are indeed the key considerations when trying to forecast the economy over the next several years.

Brandon said...

How did the initial income tax levy affect growth?

Scott Grannis said...

I don't have the data handy, but I doubt it was significant. The top marginal rate in 1913 was only 7%, and it only applied to a relatively small fraction of income earners.

Paul said...

At least Teddy had the excuse of not having the track record of government corruption and incompetence that we have today.

Mark A. Sadowski said...

Scott,
He was also an early proponent of the estate tax. He felt that gross inheritances led to laziness and ineptitude. Just another good reason why Teddy's face has been carved on Mount Rushmore for all to see for an eternity.

Paul said...

"He felt that gross inheritances led to laziness and ineptitude."

So naturally, inept and lazy government bureaucrats should be given someone's proprety to waste.

dave said...

Scott is right the first year the results were negligible as you would expect from such a low rate but it only took congress three years to turn a revenue raising tax into a populist club.

Have a look here:
http://therightsideofdave.blogspot.com/2008/11/power-to-tax-is-power-to-destroy.html

Public Library said...

I was thinking along the same lines as Dave. Has there ever been proof that raising taxes either increased revenues or reduced deficits?

My guess is no and it blows me away that politicians continue to prescribe the same medicine over and over again as if the result will be different this time around.

I thought that was the definition of insanity?

Scott Grannis said...

Public: you are right. In fact, we have hard evidence that lower tax rates can deliver higher revenues. Consider that in 1970 the top marginal federal tax rate was 70%, and revenues collected were roughly 18% of total income. Before the recession hit last year, the top tax rate had been cut in half, yet revenues collected were 18.5% of GDP. So we cut tax rates in half, yet the government collected a greater share of total incomes in taxes.