Through a long campaign, President-elect Barack Obama made a mantra of his pledge to raise taxes on the wealthy and cut them for the struggling middle class. But now it seems likely that the rich won't be paying more, at least for a year or two, because any tax hike would be bad for the country's morale in the current economic struggle. That's what Mr. Obama's aides have suggested.
That may be a campaign promise not kept, but ducking the tax issue is a convenient bit of recession theory that fits seamlessly with what appears to be the Bush administration's economic game plan. Hundreds of billions have been spent to rescue large financial institutions generally described as "too big to fail." But only a promise of trickle-down help has been offered to members of the middle class, apparently designated too small to survive.
The Federal Reserve and Treasury Department have spent $1.4 trillion on loans and investments to keep an array of investment bankers, insurance companies and mortgage lending giants afloat. Trillions more have been pledged to guarantee that these institutions will keep their promises to investors. All of this is aimed at revitalizing a financial system that had stopped lending money to most consumers. But ordinary Americans are having a hard time spotting the benefits.
