The Week

(Roman Genn)


In the course of a speech on energy at a Maryland college, President Obama mentioned former president Rutherford B. Hayes, one of those bearded 19th-century Rs, who was also, as Obama told it, a technophobe. He claimed that Hayes said of the telephone, “It’s a great invention, but who would ever want to use one?” But then the switchboards lit up with Hayes historians calling to say that the quotation is apocryphal; that in fact Hayes had the first telephone in the White House (his number was, simply, 1), as well as the first typewriter; and that Thomas Edison came to the Hayes White House to demonstrate the phonograph. Jay Carney, scrambling, noted that Ronald Reagan had told the bogus Hayes story in 1985. But Reagan, characteristically, used it in a self-deprecating joke: “I thought at the time that he might be mistaken.” Self-deprecation is not exactly this president’s line, is it?

Democrats are planning a publicity stunt for April 15, Tax Day. They will introduce legislation to enact the so-called Buffett Rule, which would radically increase tax rates on some Americans. The usual rhetorical sleight-of-hand is at work: Democrats talk about “millionaires and billionaires,” but the Buffett rule would apply to taxpayers making as little as $500,000 a year — not chump change, but not Warren Buffett money, either. But don’t think that there’s big money in taxing big money: A congressional report estimates that high-income taxpayers would adjust their tax and investment strategies in response to the new law, and that the tax increase would generate less than $50 billion in new revenue over the next decade. Warren Buffett and Bill Gates, two energetic tax-hike enthusiasts, have between them enough money to simply hand the Treasury that $50 billion and still be among the world’s wealthiest men. Fortunately, this stupid and destructive tax increase has practically no chance of getting out of Congress, but getting the law out of Congress is not the point: This is another salvo in the Democrats’ 2012 class-warfare campaign.

A number of high-profile Goldman Sachs employees have quit in recent months, including a half-dozen from its U.S. proprietary-trading group, which is being closed down because of new regulations. But none of the big dogs made quite as big a splash as Greg Smith, a relatively junior trader in foreign-equities derivatives, who took to the pages of the New York Times to excoriate his former employer on the way out the door. It is an odd essay, full of strange little boasts (he works in the fact that he once won a bronze medal in ping-pong at the Maccabiah Games), and it brims with career frustration: “If you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence.” Smith was with the firm for twelve years — twelve years during which Goldman Sachs was not known as the Boy Scout of Wall Street — but apparently only recently discovered that the firm is in the business of maximizing its returns. (The Times being the Times, his essay was accompanied by a cartoon of vultures feasting.) Goldman Sachs, lately a major financial benefactor of Barack Obama and congressional Democrats, is not without its sins, but its clients, far from being the feckless rubes of Smith’s essay, are among the most financially sophisticated players in the market, and they keep coming back, which suggests that Goldman is giving them what they want.

April 16, 2012    |     Volume LXIV, No. 7

Books, Arts & Manners
The Long View  .  .  .  .  .  .  .  .  
Athwart  .  .  .  .  .  .  .  .  
Poetry  .  .  .  .  .  .  .  .  
Happy Warrior  .  .  .  .  .  .  .  .