Rove Blames Market Volatility On Obama: It Reflects ‘People’s Concerns’ About An Obama Presidency

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"Rove Blames Market Volatility On Obama: It Reflects ‘People’s Concerns’ About An Obama Presidency"

Today on Fox News, host Neil Cavuto asked Karl Rove to explain today’s “very volatile markets.” Rove responded by claiming that it was a result of people’s uncertainty over an Obama presidency:

ROVE: But we have to be a little bit careful here, because markets try and predict the future. And what they may be doing here, this volatility may be people’s concerns about what would happen if Barack Obama, who has a lead in the polls and has been deemed by the media to be the likely next president of the United States, what would happen to their economy and their portfolios if he were to become president? [...]

Well, Americans understand instinctively, at least investors understand instinctively, that if you lower the corporate tax rate it makes American companies more competitive around the world, and it means that we’ll have more jobs, more growth, more prosperity in here in America. If you raise that tax, or leave it where it is — the second highest in the world — it means American companies are becoming less competitive.

Rove also claimed that investors were nervous about Obama’s “anti-business attitude,” pointing to how he would “raise the capital gains tax, which will take some value out of the market.” Watch it:

It’s absurd to claim that the entire market is responding to presidential election polls. Substantively, however, Rove is also off the mark. First, Obama is not proposing to raise corporate taxes. McCain wants to lower them, even though two-thirds of corporations already pay zero taxes. This cut is nothing more than a corporate giveaway; it would do little to boost the economy and create jobs.

Second, temporarily cutting the capital gains tax, as McCain has proposed, will actually “take value out of the market,” as CAP’s Michael Ettlinger explains:

One virtue of having a tax on capital gains is that it dampens volatility and promotes longer-term investing. That is, if you pay tax on profitable trades, you’re less likely to make moves based on short term movements on the market. Given the uncertain times we face, it’s far more likely that a [low] rate on capital gains would prompt a massive exodus from the market than a massive entry into it.

In the past, Rove has also blamed the media for the struggling economy.

Transcript:

CAVUTO: Here’s the wild card right now. If we can, guys, take a peek at the big board here, you see the numbers here. But very volatile markets nevertheless. Play that out for me.

ROVE: Well, I think think it depends what you look — volatility does not help McCain. It is better that it be volatile on the upside than volatile on the downside. But we have to be a little bit careful here, because markets try and predict the future. And what they may be doing here, this volatility may be people’s concerns about what would happen if Barack Obama, who has a lead in the polls and has been deemed by the media to be the likely next president of the United States, what would happen to their economy and their portfolios if he were to become president?

He know that he wants to raise the capital gains tax, which will take some value out of the market. We know he is in favor of raising taxes on the top 5 percent. I think a lot of people who are invested in the market realize that if you have an anti-business attitude — today he’s making a very anti-business speech out in Indiana, just delivered a barn-burner of an anti-corporation speech.

Well, Americans understand instinctively, at least investors understand instinctively, that if you lower the corporate tax rate it makes American companies more competitive around the world, and it means that we’ll have more jobs, more growth, more prosperity in here in America. If you raise that tax, or leave it where it is — the second higher in the world — it means American companies are becoming less competitive.

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