Many years ago, when I was a college student, I took a course from John Kenneth Galbraith. On the first day of class, Professor Galbraith gave a brilliant opening lecture, after which the students gave him a standing ovation.
Galbraith kept on giving brilliant opening lectures the whole semester. But, instead of standing ovations, there were now dwindling numbers of students and some of them got up and walked out in the middle of his lectures.
Galbraith never got beyond the glittering generalities that marked his first lecture. After a while, the students got tired of not getting any real substance.
Senator Barack Obama’s campaign this year reminds me very much of that course from Professor Galbraith. Many people were ecstatic during the early primaries, as each state’s voters heard his glittering generalities for the first time.
The media loved the novelty of a black candidate with a real chance to become president, and his left-wing vision of the world was largely their vision as well. There was a veritable media honeymoon for Obama.
There was outrage in the mainstream media when ABC anchor man Charles Gibson asked Obama a serious question about the economic effects of a capital-gains tax. Who interrupts honeymooners to talk economics?
The fact that Senator Obama did not have a very coherent answer made things worse — for Charles Gibson. Since Obama can do no wrong in the eyes of many of his supporters, they resented Gibson’s having asked him such a question.
The question, incidentally, was why Senator Obama was advocating a higher capital-gains tax rate when experience has shown that the government typically collected more revenue from a lower capital-gains tax rate than from a higher rate.
Senator Obama acted as if he had never thought about it that way. He probably hadn’t. He is a politician, not an economist.
Politically, what matters to the left-wing base that Obama has been playing to for decades is sticking it to “the rich.” What effect that has on the tax revenues received by the government is secondary, at best.
What effect a higher capital-gains tax rate will have on the economy today and on people’s pensions in later years is a question that is not even on Senator Obama’s radar screen.
Economists may say that higher capital-gains tax rates can translate into lower levels of economic activity and fewer jobs, but Obama will leave that kind of analysis to the economists. He is in politics, and what matters politically is what wins votes right here and right now.