Why Is Everybody Leaving Obama?

Despite persistent insistence of economic improvement, President Obama has lost more than half of his key economic advisers.  White House Budget Director Peter Orszag resigned in June.  Christina Romer, Chairwoman of the President’s Council of Economic Advisers left in September, and now Larry Summers, Obama’s Chief Economic Adviser has also resigned recently.

The next obvious candidate to resign is Treasury Secretary Timothy Geithner, who is considered brilliant but doesn’t pay his taxes, yet tells America that the government should raise taxes.  The fact that Obama hooked him up with the Treasury Secretary job despite Tim cheating on his taxes tells me that Tim will likely stay loyal until Obama is no longer in office.  Very few people have a second chance of this magnitude.  If Tim does quit, he will get destroyed by the Democrats and the public.

EVEN THE PROTECTOR OF OUR COUNTRY DOESN’T CARE

General James Jones’s resignation as United States National Security Adviser is also a big disappointment.  What’s more important than keeping America safe?  Yet, what’s more stressful than being America’s National Security Adviser!  General Jones always said he’d serve two years, but it hasn’t been two years yet General!  So what is it that has caused all these senior Obama staff to job hop like they are highly coveted dotcommers during the boom boom days?

The answer is simply they ALL see the writing on the wall.  If you are a long time reader of Financial Samurai, you realize that everything is rational.  The reason why you are overweight is because you don’t care what other people think, don’t enjoy exercise so much, and really like food.  Hell, it’s the reason why I don’t have a 4-pack anymore.  Staying in shape is such a pain in the ass and I love my rib-eye steak too much!

Republicans are clearly going to win the House this mid-term election, and get plenty of further support in the Senate.  The officials who have left Obama no longer want to be associated with a failing administration.  If the Obama administration had a 80% approval rating with unemployment declining and the economy rocking, do you think any of these advisers would leave after only 20 months?  Of course not.

SO WHAT DOES IT ALL MEAN?

The markets have gradually begun to factor in a more balanced government approach for 2011 and beyond.  There won’t be any Federal income tax increases on “the rich” in 2011 because the newly elected Republicans in the house won’t let it happen.  In fact, there might even be a chance there won’t be Federal income tax increases in 2012 either!  As a result, the markets will continue to stay buoyant due to the relief that the government is becoming less anti-business.

Remember back in January, when President Obama declared class warfare and the markets tanked (click link to see chart if not)?  Now you understand why it’s important to NOT wage class warfare, and to be inclusive of everybody.  It’s important to treat people fairly, including the ones who’ve busted their butts to succeed and so happen to make over $200,000.  Look what happens when the markets believe in equality?  They rally and make everyone better off.

CONCLUSION

It makes me sad to see Obama on TV every day, because it reminds us that he is more concerned about campaigning than running the country.  When was the last time you saw any President be on TV so much?  The clearest solution to the class warfare/taxes debate is to raise the income limit that describes evil people from $200,000 to a much higher limit, say $1,000,000.  Nobody will be able to argue with a straight face that their lives will suffer if taxes go up with an income over million bucks.

Feel free to keep taxes just the way they are for the rest of us and introduce some taxation for the 47% of Americans who don’t pay taxes.  Just $100 bucks a year on 100 million people who don’t pay anything is an extra $10 billion in revenue.  Cut just 10% off the military budget, and that’s a $70-100 billion a year savings.  Unemployment at 9.6% is 3% higher than you promised us it would be by now when you first took office.  Don’t punish the people who are responsible for hiring other people.  If you don’t listen this November, more and more of your staff will leave, until you are left with only campaign advisers running the country.  That’s when we all lose.

Regards,

Sam

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. says

    This is in my top 5 favorites of your posts Sam. I love the reference to Geithner and not paying taxes.

    So, sit down with your two-pack and ribeye and send this post to Obama. During his next town hall, he just may mention a story from Sam out in San Francisco that feels sad because he doesn’t want to be considered evil and he actually had to make payments on his house instead of having America pay for his home…

    • says

      Ha! “Sit down with your two-pack and ribeye and send this post to Obama.” Kris, you are quite the wordsmith!

      With regard to the post, all I want to say is that everything going on in Washington saddens me deeply. I hate even thinking about it. Still, I’m hopeful that we will do better!

    • says

      Wow, Top 5 post! I’m honored! I donno if I have a two pack anymore :( Maybe if I starve myself all day and do 30 reps of situps!

      What a difficulty paying your mortgage when ur neighbor doesn’t! Free ride!

  2. says

    I think it would be very difficult to tell the poor Americans (47% of the population) that you are raising taxes for them, while telling the riches 3% that you are not. It may be the most fair solution, but no administration would try something like that.

    Do you think it would be a wise move for Obama to propose that solution?

    • says

      Ouch. You think the 47% of all Americans who don’t pay taxes are poor? I think a large majority of them would reject that claim.

      Definitely worth raising taxes on those making over 1 mil, and keeping taxes the same for everyone in the middle while cutting spending.

        • says

          The proposal is to get people to contribute something, not nothing if they are benefitting from public policy. I’m surprised you think paying $100 in taxes Total a year from nothing is a bad idea. Many people make 30-100k a rare and don’t pay any taxes.

          If you don’t think raising taxes will fly, why do you think raising taxes on people who pay the most taxes already will fly?

        • The Genius says

          I have friends who make 50-80k a year who aren’t paying any taxes due to all their deductions. They aren’t “poor” by any means and would be offended u called them poor.

          I’m surprised you believe in free riding. Guess you are either young, ignorant, didn’t read the entire post, have reading comprehension issues, or all of the above.

          Sam’s proposal of only 100$ a year in taxes is frankly too low, from zero!

  3. says

    @Daniel
    I like the 100$ min tax idea. I actually think it should be closer to $250 (which is only $20 per month and i’m guessing is less than their cell phone which they have, or tv service). We have a property tax for anyone who owns land, why can’t we ask anyone over 18 to contribute to society. I do think that their should be exemptions to this rule (unpaid internships, disabled people, etc.) but on a whole i feel that this would be more motivating than harmful.

    It may even motivate people in the lower tax brackets to earn more and do more with their lives.

    • The Genius says

      I agree. $250 a year from zero taxes would raise 25 billion in revenue from 100 mil non tax paying people who benefit from the rest who pay taxes.

      I dot know what @Daniel is smoking. Must not hVe read the post or got the meaning at all!

      • says

        I don’t think $100 is too much at all. In fact, I think everyone should pay taxes.

        But when you’re increasing taxes for some people but not the rich (even if they don’t consider themselves rich), it will be perceived badly.

        So it would be great to do, but it’s not realistic, and which is easier to justify: raising taxes for those who don’t make a lot (even if they have their priorities mixed up) or for those who already have a lot of money (if they can’t afford just a little bit more, then they must have cable packages and phone plans that are more than they need, too)

  4. Greg McFarlane says

    Next month the GOP is going to control the House, and might control the Senate. Hopefully they won’t drop the ball this time, and will enact meaningful fiscal reform. Presumptive Speaker of the House Boehner needs to introduce a “flat” tax proposal: a basic personal deduction for everyone (say $20,000) and a constant rate (say 17%) on the remainder. Enact this, and no one can complain about how the system is unfair. It’ll be a pain for tax attorneys, and a boon for everyone else. Of course, the president has way too many interest groups to please to not veto this, but it’s fun to think about.

  5. says

    A few predictions:
    - We’ll never see substantial changes to the tax code (aside from simple tax increases) – it will piss off way to many people.
    - There will always be a revolving door in administrations – these people can make way more money once they have that public service under a President box checked. They can then sell their “contacts and influence” into a nice 500K job and speaking engagements.
    - The people, the die-hard liberals, will never abandon Obama no matter how bad he screws up the economy. Their ideals are the same.
    - Republicans may not do as well in the mid-terms as people are predicting bc of the Tea Party movement shaking things up and attacking even Republicans during their campaigns.
    - As soon as mid-terms are over, that’s when the real tax increases will start. Our current situation is simply unsustainable.

    • says

      It is a certainty in my mind that the Republicans will take the house. But, the Senate.. unsure and doubtful about a majority.

      I just want to see more checks and balances instead of wreckless spending.

  6. says

    Sam, I previously almost wrote a post, but deleted it.

    All I have to say is, the current administration isn’t doing the optimal job and some of their policies are going against what the general populations believes to be the correct path.

    As for businesses, you can’t beat those running businesses and expect them to lick your hands! An Antibusiness administration is a bite the hand that feeds you administration!

    If the republicans don’t swing too far right, their could be quite a one sided election process coming up.

  7. says

    Any politician that imposes a minimum tax will be demonized by his opponent as raising taxes on all Americans. It will be billed as a tax on the poor even though this is not the case. I fall in the camp of Buffett that all Americans should have to pay taxes. He believes that the rich should bear a larger burden of taxes. I am not in favor of increasing taxes on $250,000 income earners. Taxes on those who make a million dollars or more would help close the deficit.

    • says

      Hi Mark – I’m in the camp that everyone should pay taxes too. I mean, come on… if you are making $40,000 a year, you can afford to pay $100 a YEAR in taxes!

      Everybody pitch in to get this economy rocking again for increased employment!

  8. says

    Sam, this was very informative for me. How do you find all this information? I understand you have a deep knowledge of finance already, but do you just read news sites and put the numbers together?

  9. says

    I’m not a full on pro Obama by any sense. Being more of a lefty I think he tries to please everyone on too many fronts and it ends in him pleasing no one…. I think the popularity drop also comes from choices that are not instantly fixing all America’s problems and people are jumping ship because of public witch hunts.

    I think tax should increase the more you earn and although I hated the money coming out when I earned a lot more I accepted that I was happy for this. Afterall I was still richer from earning more cash.

    If Obama had ended war and took a more hardline approach to making health truly available for all I would be a much bigger supporter. I do however think that some of his policies will bring better benefits than people are projecting right now. If some of this can materialize before term 2 then maybe just maybe we will see a reelected Obama and a more hard lined left approach from him (I know you probably don’t want this). Just as many American’s fear publicization, I fear privatization and have had good experiences in more socialist environments.

    • says

      Forest – I am just curious why you think the rich should pay more in taxes. I don’t know if I am rich or not, but if I am, why should I just pay more? As Sam said, many people (who are not poor) pay zero in taxes. To me, it makes more sense to make everyone pay at least some taxes (outside the poverty level) than to punish the group of people that probably do more to stimulate the economy than anyone else.

      I guess I get frustrated because I came from nothing. I put myself through college and was saddled with tons of debt. Because my husband and I graduated with a decent salary, we got taxed a-plenty at graduation, yet nobody cared that I had a lot of student loans to pay back. I guess I don’t know why I don’t deserve my money as much as the next person.

      I am not attacking by any means, I just sincerely want to hear your thoughts.

      • says

        Hey Everyday Tips, don’t see it as an attack at all, so no worries there.

        I think part of it is how I view society as a group rather than from an individual point of view. I came from nothing too and I have been up, down and sideways. As a good part of society it’s your job to contribute to the whole and help keep the whole system running smoothly. If everyone is kept healthy and off the poverty line then time can spent on advancing society and achievements rather than people fighting for survival.

        I know some deadbeats screw with this kind of system but the media always concentrates on this minority. What about the majority of people who use these socialist style systems as a fall back when times are bad. We could all lose our jobs and income tomorrow. A near fatal accident not covered by insurance could cripple any of us for the rest of our lives financially and in reality. If the problem of surviving was alleviated then the societies energy could be put elsewhere. Some of us come from nothing and we do make it. Some people don’t but not for a lack of trying. They may be disadvantaged by race, bad youth decisions, the way they speak and a lot of other things.

        The bad apples (deadbeats) of a system of course need to be weened out but I am sick of hearing these POV’s and I wish people would concentrate on the stress and problems that benefits for low income people stops. A happy society will function better that is fact.

        If you are earning huge wages and you have no debt (people with debt should get tax breaks until it’s gone, but of course that idea encourages rich people to take on debt but hey it’s an idea) then why not pay more back into the system for the health and wealth of your fellow country people?

        People from disadvantaged backgrounds often end up in a cycle of poverty that is damn near impossible to break and the added need to do whatever you can to survive means that it’s almost impossible at times to break out of that. Not everyone is intelligent enough for college and may only really function well in jobs that will only ever pay min wage, they contribute to society just as much and I think deserve a decent life for their effort even if an employer isn’t paying them well….. It’s about how we can help each other live in comfort from my point of view not what I personally deserve.

        Obviously I know the current government or any gov isn’t perfect but I do believe a more for everyone system would benefit every individual more too. I believe it would mean crime drops, less people would die, education would go up and more people would be able to go after creative careers and have time for healthy activities such as socialising and exercise.

        I could keep going on but I better stop now.

        • says

          Thanks for the prompt reply.

          I think my issue with it all is I know a lot of people that get away with spending frivolously, do everything they can to cheat the system, and they pay way less than I do. I am the first one to help out a person in need, and I have no problem helping the impoverished. However, there really are a lot of bad apples out there.

          So much comes from my childhood perspective. Where I grew up, not only were people poor, but they also chose to smoke and drink their paychecks away. The food stamps were used ‘improperly’, and no matter what they got for free, the kids never seemed to be getting the full benefit like they should. I agree that some people just don’t have the intelligence to get out of their situation. Some people don’t have the desire. Some people like to smoke and drink.

          Social programs are great and have their place. However, we don’t have the support system in place to help people get out of their bad situations, or to monitor that the funds being doled out are used properly. I guess I am conflicted. I have paid down debt, saved all I can, gone without, you name it. Then I am mocked by some for being so responsible when I could have just had my mortgage ‘renegotiated’. I am just kind of fed ujp with the mindset these days of getting something for nothing, and for the responsible almost being punished. Yes, my family is lucky they can afford their house, but it is for a reason. We are lucky my husband has a good job, but again, he educated himself and worked like a dog to get where he is.

          I guess I kind of just rambled in my response. I guess I just don’t trust the governemnt to to properly handle my tax dollars one iota. That is the crux of my issue. I disagree with so many decisions, yet they want more and more of my money.

          The neighborhood I grew up in is worse than ever. If our tax dollars were properly allocated and people were truly get the help they need, wouldn’t these neighborhoods be improving? Why is Detroit going to hell in a handbasket? There are many reasons for that, but if government was so capable of handling money, then why do so many communities look like a war zone? Maybe if I saw more positives with my tax dollars, my attitude would be different.

        • says

          The cycle of poverty is a very concerning issue which those who are not in this cycle should do as much to help those get out of the cycle. I strongly believe this.

          It is not fair if someone is born into poverty and has no mentor, and no guidance to get out.

          One by one, I believe we can make a difference as individuals! Not so much through government programs which are large and amorphous.

          I hope the Yakezie Scholarship vertical can make some difference!

  10. says

    Hey Everyday Money, my words are always placed in hope of moving closer to a system I feel is ideal and I fully acknowledge that the government right now is not doing things perfectly. But pull the systems now and the govs in the future that will do the right things with the cash will have a hell of a time reinstating it. Obama’s push towards public health is a piece of crap but I like the fact the ball is now rolling. The USA is the last developed country to not have public health care and it’s showing in the overall health and death rates.

    The poor people you talk of were all around me growing up and even in my family to some degree. Some of it is simply lazy people but I feel it’s often more a condition of self worth. When you are born into poverty it takes a particular mindset to realise you are not a piece of crap and grow some self worth. Some people are working hard on improving this but I actually think more tax dollars need to go into this. When a big giant power plant or big piece of industry needs to be built what happens, it goes into a poor neighbourhood and causes even worse conditions for the people making them feel even more worthless by their own government.

    By taking benefits away from poor people the ones who really are trying will be discouraged further and maybe the most innovative minds and people of our future would instead end up a drunks, drug addicts or worse!

    Maybe more ridged systems for funding the poor need to be put in place so that money is used correctly. Checkups and lifestyle evaluations could be done across the board but of course then the gov would be accused of creating a big brother nanny state!!!

    You may enjoy this talk by Majora Carter about Greening the Ghetto: http://video.google.com/videoplay?docid=2883494385256707942#

    • says

      Forest- I am all for helping the poor, and you hit my point on the head in one of your last paragraphs, stating the need for more rigid systems. I do know what you mean about big brother, but on the other hand, if you are getting things for free, then maybe you have to surrender some information.

      Believe me, I want to help the poor people as much if not more than anyone. I want people to get out of their bad situations, and believe me, I help where I can. However, I think the refinancing of mortgages to people that aren’t even foreclosing (the latest plan) and just throwing money at problems is not working.

      Poor people are screwed over in that they have to live by power plants and airports. My heart breaks when I drive through some of the neighborhoods. That is my point though- the government is not making things better. If they were , then the high school dropout rate where I grew up wouldn’t be ridiculously high and selling drugs wouldn’t have the same appeal. I know the answers are not easy, but as I said, just tossing money at the problem is not helping.

      One thing that does seem to be working is in regards to unemployment. I don’t know what I think about the 99 week thing, but I do know several people who are using the money they are provided for education (through unemployment) to re-train themselves and get a new job. That is what I want my tax dollars going to. However, there is a school district near my house that wants to build a new high school, with a new board of education across the street. With tax dollars, they also want to build a beautiful skywalk from the high school to the board office. That is totally a waste of taxpayer money in my opinion. During times like these, tax dollars need to HELP, not make things more convenient.

      Yikes, I could ramble on forever. In closing, I want to help those who need it, and if my tax dollars actually went more toward that, then I would be more willing to pay.

  11. says

    Forest and Everyday Tips. I too grew up in a poor neighborhood and I definitely have an opinion. Many poor people aren’t desperate, PERIOD. They know how to use the social service systems to get they’re rent and groceries paid. Using FREE services is a lot easier than working. In fact many of them thought that my mom was stupid for not taking advantage of programs she was eligible for. Even now people are saying she should sign up for heating assistance because of her income. I can’t in good faith sign her up for that when I have enough money to cover her expenses. Maybe I’m a chump, but part of me feels like it’s better for me to take care of my own family than it is for the government to try to take care of everyone.

    My girlfriend worked at a welfare to work program she would go nuts when she saw these women with expensive manicures topped with a sense of entitlement to boot. The manicure thing was quite common, hence it became a pet peeve. If you’re really poor, how can you spend money at a nail salon? Smoking and drinking is an addiction, so I can see how that can be hard to stop, but manicures? If that’s not a sign that our system is screwed up, I don’t know what is.

    I have a great deal of compassion for people who are stuck in the cycle of poverty, but in this country, it’s just a little too easy to have a comfy place to live, your food and medical bills paid for and not have to do a thing in return. Yeah, you may have to live in the hood, but at least your not a slave to the man. What incentive is there to work. Is there one? Safety maybe. Self respect? Not sure.

    • says

      When people are desperate, they will do ANYTHING to survive…. and that includes studying their butts off, listening to their parents, and excelling. That said, there are a lot of distractions where things can go wrong. This is where individuals can help other people.

  12. says

    @Forest

    “If everyone is kept healthy and off the poverty line then time can spent on advancing society and achievements rather than people fighting for survival.”

    There always has been and always will be a poverty line, because there always has been and always will be classes. Even in the now defunct USSR there were classes.

  13. Lindsay says

    Hey Sandy,

    You know, I figure a little treat every once in a while probably does some good for the morale. Being poor is stressful. Worrying about how to pay for food, rent, clothing etc. is definitely stressful. (Though I am by no means poor, I have been in situations where I didn’t know how I was going to pay for my next meal. It sucked, and BOY was I stressed.) So, If a $20 manicure makes you feel a little calmer, a little more at peace, a little more normal, I am by no means against it. (Same goes for hair salons in my book).

    • says

      Lindsey, I agree on some level. People definitely still have to have fun. I’d argue that there are free or mostly free ways to destress like having a picnic at the park or going to the local lake or pool. It’s when people do these things in lieu of taking care of they’re basic needs that it becomes an issue.

      We once had a tenant that was at risk of getting evicted and she admitted to me that she took a trip to NYC just to de-stress..oh and she had the manicure, cable, a cell phone, her daughter took dance classes, etc. I couldn’t do that if my basic needs were at risk. It would just make me more stressed. I admit, that I’m wired differently so maybe I just don’t get it.

      • BD says

        I’m with you. As someone who is very poor, I get MORE stressed when
        I spend money on non-basic needs, not less stressed. I think I’ve had one manicure in my entire 39 years of being here on this earth, and that was decades ago, when I was making a living wage. I’d much rather do free things to de-stress.

  14. says

    A lot of stuf to reply to here :s….. Love it when post comments get like this :)….. Will try and come back a little later today or tomorrow and throw my view back in the ring for another round of beatings :).

  15. says

    Instead of raising taxes on everybody, they should apply a “deluxe tax”. Therefore, it would only hits the rich or the ones who spend their money on unecessary goods. For example, if you add a 10% tax on luxury cars, the guy who really wants his Porche will dip an extra 10K.

    On the other side, essensial goods such as food (not to read fast food, this should be taxed big time!), will not suffer from a deluxe tax… what do you think?

  16. BD says

    I think Obama is probably the worst president this nation has ever had. I’m pretty sure he’s lengthened the depression by overspending, and threatening to screw the wealthy people of the nation who provide jobs.

    If there’s one thing I’ve learned in life, you do NOT bite the hand that feeds you. Rich people are the ones with the money who provide jobs, so by biting them with high taxes, you only hurt people like ME, who are poverty-level, and struggling to survive.

  17. says

    It would never last through the populist outcry but I would even go so far over to the supply side that I would get behind a regressive tax system where those with higher incomes paid LESS tax than those with lower income assuming two important points:

    A) The baseline tax for those with lower income was something very low (something like 15% which certainly seems fair given that almost 50% of people pay no income tax at all right now)

    B) The regressive income tax only regresses for those who meet the standard of being a “job creator” (i.e. the owner of a chain of 35 dry cleaners with 100+ employees and makes a well deserved $1.5 mil is definitely a job creator while someone sitting on a trust fund or an inheritance and taking $1.5mil a year is definitely not a job creator)

    What do you think? – Joel

  18. says

    Excellent Post! I completely agree with raising taxes on those who earn over $1M rather than $200K. It’s really just economics 101.. people who are lower – middle income earners, when they have extra money, they will spend it on items they need or want, which will fuel the economy, creating an upward spiral. People who are extremely high income earners will save their extra income (especially in volatile economic times), which doesn’t help our consumer driven economy at all. Thanks for the excellent post!

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