Friday, January 30, 2009

Outrunning the Bear

The old joke goes that two men were being chased by a bear when one of them shouted to the other one: "What are we gonna do? We can't outrun that bear!" The second man replied: "I don't have to outrun him, I just have to outrun YOU!"

That seems to have been big tobacco's philosophy earlier this week during the debate over a hike in federal tobacco taxes. Sen. Jim Webb, D-Va., offered an amendment to cut the 61-cent-a-pack tax hike to only 37 cents, and make up the difference with a new system of taxing the income of partners in hedge funds as ordinary income.

Could big tobacco have been betting that, in the current economic climate, hedge fund managers are more despised among the American public than they are? Considering that Webb withdrew the amendment due to a lack of support, was it a bad gamble? Who outran the bear?


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