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Book Review: Trickle Up Poverty by Michael Savage
Raymond Richman, 11/7/2010

Michael Savage, Trickle Up Poverty, Stopping Obama’s Attack on Our Borders, Economy, and Security (New York: William Morrow, HarperCollins, 2010)

This is an extraordinary book that exposes Pres. Barack Obama’s policies to fierce and justified criticism. Michael Savage argues that Pres. Barack Obama has deliberately failed to secure our borders and seeks amnesty for the millions of immigrants who entered the U.S. illegally. He has weakened the U.S. militarily by signing a one-sided nuclear treaty with Russia and conceding Russian leadership in space. He has done nothing to reduce our trade deficits which have cost American workers millions of good-paying jobs in manufacturing.

He begins by noting that Barack Obama was unqualified for the position of President of the United States, that he had no experience in government administration and only a very brief tenure in the Senate of the U.S. In both the Illinois and US Senate, he often voted “present”. And worse, that Obama believes in the “failed Sugarplum Fairy fantasies of Leninism and Marxism.”

He writes about Obama’s Marxist-Leninist Roots: … for decades Obama has had ‘friendly associations with communists and terrorists …Frank Marshall Davis in his youth in Hawaii to communist terrorists Bill Ayers and Bernardine Dohrn in Chicago.” He writes: “Contrary to what Marx taught and Obama believes, spreading the wealth around impoverishes us …Taking money from you and me to give to someone who is looking only for a handout, a bailout, or a way out, removes our incentive to excel, to grow, to risk investment, to invent, and to dream big dreams.”

In one of his eleven chapters entitled “Nightmare on Wall Street”, he deals with the causes of stock market crises.  He criticizes the SEC’s suspension of the uptick rule on July 6, 2007, the rule which forbade a short sale unless the preceding sale was an uptick, i.e., a sale at a higher price than the preceding sale. And the imposition of the mark to market rule, which required banks to revalue assets daily using market prices, imposed on November 15, 2007. The result was a collapse of bank liquidity and exacerbated the financial crisis following the end of the housing boom and a collapse in the stock market just prior to the November, 2008 election. While we agree with Savage that these contributed to the crisis, the real causes were the end of the housing boom which caught the banks and other financial institutions by surprise, including Fannie Mae and Freddy Mac, government-created agencies whose mission was to back-up home mortgages including the most risky mortgages.

Savage is enthusiastic about the Tea Party movement and questions the loyalty of the President and the groups that supported him, like ACORN, the ACLU, and the SEIU, whose president is a frequent visitor to the White House. The SEIU was founded by the communist founder of ACORN Wade Rathke. He also worries about traditional Republican leaders’ attempts to co-opt the movement, naming Sarah Palin, the “John Boehners, the Newt Gingriches” and Dick Armey.

A must-read chapter is entitled, “The Late Great Climate Scan / Cap and Tax.” Pres. Obama believes in man-made global warming and is taking steps, some by fiat, some by legislation, dictating "everything from what kinds of light bulbs we can use to what kind of fuel we can put in our cars" and much more including a cap-and-tax bill. He consistently uses decrees ranging from drilling moratoriums in the gulf to expanding public lands where drilling is not permitted. Savage writes:  “Obama plans to designate thousands of square miles as ‘National Monuments.’ This Soviet-style mandate by fiat would prohibit any development of millions of acres rich in timber, clean coal, minerals, natural gas, and other vital resources.”  This is radical environmentalism. Savage writes that man-made climate change is not science but fiction intended to strengthen the move toward world government and to redistribute income between rich and poorer nations.

Another is “The Health Scare Fraud” And another, “The Real Cost of Legalizing Illegals – It’s the vote, Stupid”.  Every chapter is worth reading.

Every chapter is full of anecdotes and interesting observations that will be new to the reader. For example, the health bill puts the IRS in charge of ensuring that people comply with their obligations to remain ensured. The bill calls for establishing a “Ready Reserve” corps whose commissioned officers shall be appointed by the President and be available and ready for involuntary calls to active duty during national emergencies and public health crises.  A civilian national security force that’s just as powerful as the military reserve. There is no tort reform in the bill. Obamacare is really about redistribution of medical benefits. He castigates the Obama appointments of known Marxists and socialists as “Czars” without Congressional oversight, in effect creating “a far left infrastructure.” He discusses Obama’s affiliation with ACORN and notes that ACORN led protests against Wal-mart locating in inner city areas.

Savage approved the Tea Party’s 10 point “Contract from America” but believes it is flawed because of what it omits. There is no mention of illegal immigration, no mention of language, i.e., English only, cultural issues, prayer, traditional marriage. Instead of ten, he proposes thirty-seven, including a number of economic proposals.

He would impose tariffs on imports from China, writing “We must draw a line in the sand with regard to China in order to loosen their strangle hold on our economy by imposing a 20 percent tariff on all goods produced in China. That tariff should be raised by 5 percent each year that China refuses to revalue its currency.” This proposal is similar to one that Prof. Paul Krugman, a free trader, has made. We have a different position. We believe that currency revaluations don’t work well. Countries that pursue mercantilist policies can easily nullify its effects. What we favor is our own invention, “scaled tariffs” which would be imposed only on goods from countries with which we have large chronic deficits, like China, Germany, Japan and others. The rates would go up if the trade deficit increases and down when it decreases, and disappear when trade is brought close to balance.

He would keep the estate tax at Zero. We disagree for a variety of reasons. The argument that it forces the sale of inherited businesses is specious in our opinion. The tax can be postponed until the business is sold. 

He says “NO” to the VAT Tax. The VAT is currently rebated to exporters by foreign governments putting US businesses at a disadvantage. We believe a strong argument can be made to eliminate the Corporate Income Tax and to substitute the VAT for it.  Our foreign competitors are permitted under WTO rules to rebate the VAT to their exporters. The Corporate Income Tax cannot be rebated or imposed on imports. Savage is right when he writes, “We don’t need more taxes, we need less government spending, waste, and fraud.” We have one qualification. We have no objection to user taxes like taxes on motor fuel to pay for road and street construction and maintenance. 

Aside from these differences on taxes and tariffs which are topics within our area of expertise and not his, Michael Savage has written a great book and we recommend it to our readers.

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Comment by Andrew, 11/19/2010:

Michael Weiner is so overrated its funny that people listen to him

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  • [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]

    Journal of Economic Literature:

  • [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....

    Atlantic Economic Journal:

  • In Trading Away Our Future   Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]