"No New Taxes" Meet Barack Obama

In the eyes of most people, including political pundits, scholars, and every day voters, the beginning of the end of the George H.W. Bush presidency began in June 1990 when he decided to raise taxes. Raising taxes is the occupational hazard of a politician. Even my favorite tax cutter, Ronald Reagan, found himself doing such near the end of his second term. For George Bush, it was absolutely fatal.

In 1988 Bush was desperately trying to make the case that he could carry the Reagan mantle. Conservatives have long been suspicious of Bush's tax cutting credentials. In 1980 Bush described Reagan's tax cut objectives as "Voodoo Economics." Many rank and file Republicans feared that the candidate of 1980 would become the President of 1989. During the 1988 Republican National Convention, Bush tried to placate those concerns with a paragraph that would at first lift up his candidacy and then later haunt his presidency. During that speech, Bush told the enthusiastic crowd: "And I'm the one who will not raise taxes. My opponent now says he'll raise them as a last resort, or a third resort. But when a politician talks like that, you know that's one resort he'll be checking into. My opponent, my opponent won't rule out raising taxes. But I will. And the Congress will push me to raise taxes and I'll say no. And they'll push, and I'll say no, and they'll push again, and I'll say, to them, ‘Read my lips: no new taxes.’ Many believed that statement both sealed the deal and cursed his presidency when he turned back on his pledge in less than two years.

Fast forward to 2008 and candidate Obama has pledged that the middle class would not see an increase in taxes. In fact, we were told that the vast majority of those making less than $250,000 would actually receive a tax cut. This was a constant theme of the Obama campaign and we were even given a nifty calculator on the Obama website so people could see how much they would save under the Obama plan. Fox News reports that is about to change: "'We will not get this economy back on track, recovery will be not strong and sustained, unless we ... can convince the American people that we're going to have the will to bring these deficits down once recovery is firmly established,' Treasury Secretary Tim Geithner said on ABC's 'This Week.' Asked point blank whether it was right to suggest it is a matter of when, not if, taxes will be raised, Geithner responded, 'It is absolutely right.'" The Associated Press went on to point out that Geithner would "not rule out tax increases for the middle class." The Administration can't afford to do such because the middle class has the vast majority of the taxable income "available."

According to Steve Moore of the Wall Street Journal, "The latest data show that a big portion of the federal income tax burden is shoul­dered by a small group of the very richest Americans. The wealthiest 1 percent of the population earn 19 per­cent of the income but pay 37 percent of the income tax. The top 10 percent pay 68 percent of the tab. Meanwhile, the bottom 50 percent—those below the median income level—now earn 13 percent of the income but pay just 3 percent of the taxes."

When Obama begins to go after this "treasure chest" of dollars, his positive polling numbers will go the exact opposite direction as the unemployment figures. The amount of days that will be left in his administration will likely become very numbered indeed.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

As Conservatives Ponder the Future of the GOP

There is a raging debate going on in conservative circles that the future of the Republican Party is doubtful, at best. After years of feeling left out in the cold, many are declaring the GOP is dead. For several years the Republican Party has chosen to be a "light" form of the Democrat Party. You might even call it a "diet" alternative. Like diet soda, nothing can beat the purest form. Sales are always higher for the original. The fact is, Democrats are not significant winners, but the GOP are serious losers.

Let's look at the Presidential races alone since Ronald Reagan. In 1988 a "converted" George HW Bush assured voters that he wasn't no longer calling for tax policies that encouraged economic growth "Voodoo Economics," he was committed to being responsible when it comes to regulations, and he had even "matured" when it came to the issue of abortion and declared himself "pro-life." In one of those rarely inspiring moments in his first campaign, Bush declared "Read my lips, no new taxes." By the end of that first term he had instituted a massive tax increase and made unreasonable regulations on the environment that wiped out mom and pop shops (e.g., the modification of gas pumps that cost over $10,000 each). The real Bush had stood up and the voters were ready to let him go.


Fast forward to the next GOP president, George W. Bush. He had something of a reputation as a moderate conservative in Texas, but said all the right things on the campaign trail in 2000. As President, his first term was noted for standing strong against terror, providing a massive supply-side oriented "tax cut" that allowed us to quickly recover from the stock market struggles at the beginning of the decade and to rebound from September 11th. By 2004, a fairly conservative candidate in a couple crucial areas that mattered, found himself as the first Presidential candidate to win by a true majority since 1988. He had won 2.5 (out of 3 million) square miles of ballot boxes around the country and proved that someone with a conservative message could win reelection.


Unfortunately, by 2006 Bush had largely abandoned that message and we had the Democrats taking over both Houses of Congress. When a moderate like John McCain got the nomination, he found himself forced to defend (and even agreeing) with a President who was actively and aggressively socializing the country in the name of TARP. Bush and company supported "consumer driven tax cuts" that did nothing to stimulate real job growth and contributed to a perfect stage for the slaughter of anyone affiliated with the GOP.

We are now quickly approaching the 2010 elections and there is a great deal of apprehension about the future of the Republican Party. Many are crying it is time to abandon it and are seriously discussing a third party alternative. The problem with that is that the GOP is little more than a vehicle, a "car" that needs to be fixed. As we get closer to 2012, the car that needs to be repaired has instant ballot approval in every state of the union, more dollars than all the other third parties combined, and a political structure through out the country. Those who are ready to abandon the GOP must weigh the obvious weaknesses in the party with the fact that starting from scratch or using a preexisting third party will take years to create a serious challenge against the left. I doubt the Republic has years. It is time to make that vehicle work for conservatives and Americans. Taking the GOP back is an important step in bringing the country back to the values that made it great.


Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

Do Democrats Fear John McCain?

Do Democrats fear John McCain? According to the latest web commercial from the John McCain commercial, the answer is overwhelmingly, "yes." In the commercial, found at JohnMcCain.com, individuals see a series of quotes from individuals expressing who Democrats fear most in this election. Without exception, the answer is Senator McCain.

In my friendships and business relationships, I get a similar response. The prospect of a McCain candidacy keeps the Democrats up at night, I am told.

I'm not buying it. Sure, he will likely make the Democrats life difficult when he talks about national defense and terrorism. As a former POW and veteran, and heroic in many respects, he will be tough to tackle on those issues. Furthermore, he has been consistently right on the war from the beginning and the Democrats have become remarkably quiet about it in recent weeks. Why? Because Americans seem to be interested in winning again rather than merely getting out in a hurry.

However, on numerous other issues, there is a little difference between him and the Democrats. He has been terribly inconsistent on taxes, soft on spending issues, and has flip-flopped on immigration. My view is, if you have a choice between a Democrat or a Democrat impersonator, you will choose the original article.

I can't help but think that there is a little bit of reverse psychology in the quotes by these Democrat leaders in this commercial. Would they sincerely express who they really fear or would they give the impression they fear one in the effort to get the GOP to choose that candidate? My gut tells me that the latter is the case. By the way, those Republicans e.g., Robert Novak) who are saying the same thing in the ad are merely quoting what Democrats are telling them. The Democrats want McCain because he will likely do a poor job to motivate the Republican base that are so crucial in getting someone elected.

I believe that the Democrats fear Mitt Romney the most. Why? He has the important Governor credential that has been the most common characteristic of every successful Presidential candidate since the 1970s. In fact, only one candidate since Carter hasn't had that credential -- George H.W. Bush -- who sat from the lofty position of sitting Vice President. He has proven that he can win in one of the toughest states for Republicans in the country. This is no small accomplishment. Furthermore, McCain is on the brink of financial ruin. Romney has plenty of cash to sail smoothly into the general election. Romney, who does have his own flip flop problems, has the strongest favorable positions on the issues that motivate the Republican faithful. This will be crucial come November.

I am not sure any of these Republicans are worthy to cause the Democrats to be fearful. But if there is one, it isn't McCain.

Kevin Price is Host of the Houston Business Show (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at HoustonBusinessShow.com. Visit the archive of past shows here.

Neil Bush on the Houston Business Hour

He's introduced as "the President's brother," or the "former President's son", or the "former First Lady's favorite son" (as he like to put it) but I will merely call him Neil. Neil Bush was a guest on the Houston Business Hour yesterday (M-F at 7 AM on CNN 650). He has this unique ability of making a person feel like they have known them for years. He's friendly, like a next door neighbor. He's intuitive and seems like he has solid business sense. He provided one of my favorite interviews in years.

Andy Valadez of Marketing Dynamics and a regular contributor to my program and website video taped the interview and you can see it in its entirety at YouTube.

Neil's company, Ignite Learning, seems to be very cutting edge and provided a great subject for today's program. Instead of being redundant by saying what the interview was about, let me encourage you to watch it instead.

Order Kevin Price's audio program The Accumulators, which explains the impact that the Internet is having on marketing and consumer behavior. It is available online here for only $10 plus p and h. Receive the Houston Business Review e-zine free each week by clicking here.

See How They Run: The Truth Behind Giuliani and McCain as Front Runners

The front runners for the GOP nomination for President are former mayor of New York Rudy Giuliani (see photo) and Sen. John McCain (R-AZ). Giuliani has the lead, which seems to be widening daily. The truth is, neither one of these gentlemen will likely be on the top of the ticket by November 2008 and if they are, Republicans will probably lose.

The GOP has always treated the conservative wing of its party as a loud and obnoxious group that tries to wield too much influence. The truth of the matter is, the conservatives are the tail that wag the dog. Every candidate that has successfully obtained the GOP nomination since Ronald Reagan has run as a strong conservative. Bob Dole was the only one the conservatives seriously doubted and he lost when it mattered in November of 1996. The only other Republican to lose since than was George H.W. Bush for reelection. He convinced Republicans that Reagan had converted him to a true believer by 1988 , but supported a tax increase that was philosophical anathema to conservatives and poison to the economy. Republicans can't get away with statements such as "read my lips, no new taxes" and pass a significant tax increase once in power, just ask the first Bush.

So how does one explain the surveys that have Giuliani and McCain winning by a huge margin among GOP voters? There are several reasons for this:

* Many people vote in the primary, but do nothing in the Fall. Only the conservatives activists, as a whole, get people to the polls for the GOP in November.

* It is really early in the race and both of these candidates carry messages and histories that resonate with conservative voters. McCain is, in spite of how much I disagree with him on many of his views, a war hero and he is largely right when it comes to Iraq. Meanwhile, Giuliani was amazing during 9/11 2001 and won every one's heart as the nation's mayor. But mayor and President are two different things and he doesn't hold positions on social or even economic issues that lines up with the party faithful. However, Americans as a whole are solidly behind winning the war in Iraq and both of these candidates have taken the most hard line positions on that issue.

In the end these candidates positions on social issues and taxes will likely come back to haunt them. I am just hoping that happens before Republicans nominate one of them.

The Rise of Pessimistic "Conservatives"

Having cut my political teeth on the philosophy of Ronald Reagan, I have a hard time seeing "pessimistic" and "conservative" in the same sentence, but such a group is quickly on the rise. What's most interesting about this group is that they claim Ronald Reagan as their philosophical ancestor. I think the former President would be rolling in his grave if he knew that those claiming his mantle have become xenophobic about immigration and anti-free trade. But those are the exact positions many on the Right are proclaiming.

Pat Buchanan was the first conservative to get on this bandwagon back in 1992 when he ran as an alternative to Bush I and in direct opposition to the North American Free Trade Agreement. At the time, only hard left, pro-labor, candidates (remember Dick Gephardt) adhered to such positions. Slowly, but surely, it is becoming conservative dogma. I'm afraid that, in another decade or two, it will be on the same level of common held Republican beliefs as tax cuts generally are. Unfortunately, undermining free trade has a very different result than cutting taxes.

The reason people are opposed to free trade is because other countries (whom we trade with) don't practice it and it results in the "exportation" of jobs. There is no doubt that other countries are protectionist, but those countries suffer from extremely high prices and fewer choices than we enjoy. Are you ready to pay multiples more for the type of goods we buy from China in order to artificially prop up the prices of goods from more friendly nations? Punishing our trade partners with tariffs or quotas, punishes our consumers more than it hurts competitive nations and it leads to a reduction in the quality of goods we produce while "enjoying" such "protection." People advocate eliminating free trade because of "jobs" being exported to these countries? What jobs? The unemployment is this country is 4.5 percent, which is considered almost zero (four percent is the actual number) by most economists when you factor in voluntary unemployment, illegal activity, seasonal unemployment, etc. Protectionism will not only fail to protect jobs, but destroy them; because so many jobs (sales, marketing, legal, import, etc.) are created by trade into this country. In the end, attacking free trade will attack our prosperity and our jobs.

Regarding immigration, I understand the concern of conservatives wanting to protect our country, but te populist view does nothing to help the problems coming from it. The problem is that the system doesn't offer hope to people who want to contribute to this nation of immigrants, much opportunity to do so legally. Rather, they force people underground and allows those of us who have been here longer to act holier than thou and call them criminals. I, in particular, find this offensive. My mother was born and raised in England, met my father during World War II and came to this country, eventually giving birth to me. I know I'm the child of an immigrant. It just happens I'm one that our country finds attractive. You, too, are a descendent of immigrants unless you are a Native American. It is by luck I'm a citizen of the greatest country of the world, not by any effort on my part. We must offer opportunities to others, but they must make sense. Here are a few ideas:

* Require people to be in this country for an extended period time (minimum of ten years) before they are allowed to become citizens. This, in my opinion, should be the case regardless of where they come from.

* Provide a fast track program for those from foreign countries willing to serve in our military. Over 60,000 people serve in the US military from foreign countries. That kind of sacrifice deserves special consideration. We should consider expanding this program, especially during these times.

* Allow a long term separate status of people who never get citizenship, but work, send some money home, and eventually return there. That is the desire of many, if not most of them.

* Curtail welfare programs for immigrants, placing severe restrictions.

* Move away from an income tax and go towards a consumption tax, to make sure everyone is paying for the blessings of liberty with every purchase they make.

These are just a few things we can do to keep valuable labor important to this country (again, at 4.5 percent unemployment, there are many jobs Americans don't want to do) here, without compromising our security. In fact, it will make us more secure than ever to know who these persons are, where they live, and what they are doing here. America is a nation of immigrants. Reforms like this will make them legal ones.