Paul Greenberg

A presidential campaign is the health of economic illiteracy. Every four years, ignorance comes into its quadrennial own. There are voters to mobilize, resentments to stoke, dull gray truths to be replaced by shiny new shibboleths, and the gullible 99 percent to be fired up against the evil 1 percent.

Arise, ye disgruntled! We have nothing to lose but whatever we were taught in Economics 101.

It's been happening at least since Andrew Jackson declared war on the Second Bank of the United States, the last vestige of Alexander Hamilton's vision of a fiscal system worthy of a great and growing nation. With the bank's demise by executive order, it was replaced by wildcat banks and their worthless banknotes. A general malaise settled in; the Panic of 1837 would go on a lot longer than 1837. America itself became a bad risk.

Old Hickory proved more of an Indian fighter than economist, though he was equally fierce in both endeavors. His war against the national bank killed any hope of stability, let alone prosperity. But he'd brought down all those evil bankers, investors and speculators. Along with the rest of the American economy. Ah well, every war has its collateral damage.

Now those wicked capitalists are at it again. This time the villain is "private equity" -- a short name for high-stakes troubleshooters who buy companies in trouble, reorganize them, and hope they turn into great successes. Then those once troubled companies can be resold at a handsome profit. That's the objective of firms like Bain Capital -- Mitt Romney's highly successful private-equity firm. Which tends to place its bets on especially troubled companies, where the risk is great and the profit can be even greater.

And the taxes can be lower. For the income from these general partnerships is taxed at a lower rate for good reason: to give investors an incentive to put their money at risk to save and create American jobs. The administration says it's all for that goal -- till election time arrives and the temptation to badmouth those who do just that may prove irresistible. Call it election fever; it hits every four years, and its first symptom is demagoguery.

Another reason for lower taxes on income derived from capital investment, as opposed to the wages and salaries so many of us depend on, is that such income has already been taxed once -- as part of the 35-percent corporate tax rate -- before it's distributed as dividend income.

Paul Greenberg

Pulitzer Prize-winning Paul Greenberg, one of the most respected and honored commentators in America, is the editorial page editor of the Arkansas Democrat-Gazette.