Obamanomics

Here's a chart I stole from Flopping Aces:



The markets have lost nearly 400 points just this week, for a total of 2,124.37 since Election Day. Of course, liberals are still blaming George W. Bush, but it's pretty hard to blame the former president when the markets dip dramatically every time Teh One opens his mouth.

Why are the markets so unhappy with Obama's proposals for "fixing" the recession? It's basic economics.

Back in high school, we learned that governments tax behaviors they want less of and give credits for behaviors they want to encourage. That's why there are rather heavy taxes on cigarettes and alcohol and tax deductions for mortgage interest, charitable giving and business research and development. That doesn't mean that there won't be people who smoke, drink, or speed (speeding tickets are municipal penalties for bad behavior), but these are voluntary taxes, easily avoided.

But now, Obama wants to eliminate home mortgage deductions for high-end earners and charitable deductions, moves that will punish not merely "the rich," but nonprofits (specifically churches) who depend on charitable giving.

It's no accident that Obama wants to cap the tax deductions for charitable giving. The only way to grow government is to increase dependence upon it. If he can starve churches and religious charities, dependence on government can grow. More importantly, limiting deductions will have unexpected results, just as Bill Clinton's luxury tax on yachts did, which actually hurt yacht builders.

Capping or eliminating upper income deductions are sure to harm not "the rich," but those who make their living selling to the rich. And capping charitable deductions will affect more than churches--although they would be hardest hit--but arts organizations and other nonprofits liberals love and think are worth government help.