American Elephants


Obama Wants Greater Economic Equality. His Policies Destroyed It. by The Elephant's Child

President Obama’s Inaugural Speech, angry and divisive, was all about a call for the Progressive Project. Big Government, Big Health, Big Equality, Big Progressive Reform of Everything. Even reforming history to insist that the old ideas of the old white men who wrote the Declaration and the Constitution no longer measure up to the needs of modern progressive society.  Modern.

The centerpiece was a call for greater economic equality. The president said that “our country cannot succeed when a shrinking few do very well and a growing many barely make it.” That’s just what has happened over the last four years. A new big tax on “the rich” doesn’t begin to compensate for the misery Obama’s policies have inflicted on everyone else.

The recession formally ended in June 2009. We should have seen real recovery beginning, but the auto companies were bailed out, with portions of the value of the companies turned over to the workers. The car dealers — independently owned businesses whose only connection to the auto manufacturers was that they purchased the cars they sold from the car makers— were abruptly put out of business.

The management of GM was replaced with Obama’s own choices. Chrysler was turned over to Fiat, an Italian company. The union workers at GM and Delphi had their pensions restored, while the non-union employees were left out. GM was told to start making electric cars — Volts —that GM management said were not yet ready for prime time, which has proved to be true.

Then the administration cooked up a program to get all the people who were planning to buy a new car to turn their old ones in to be crushed, decimating  both the used-car market and the used-parts market, and gave the people who were going to buy a new vehicle anyway, a big subsidy to make their purchase promptly. Is there anything in that tale that might make businessmen nervous? Suspicious of the government? Inclined to hunker down and not get noticed? Right.

That was followed up with a vast and complete reformation of American Health Care, promising to reduce the cost, “bend the cost curve down” was the favored term. Except the cost of health care had been coming down slowly for some time, as new diagnostic tools became more available, new drugs improved outcomes, new techniques saved lives.

The “cost curve” was to bend down with the addition of 30,000 to 50,000 people without insurance, and with the addition of over 100 new agencies to manage our new socialized medicine, and perhaps 100 new employees in each of those agencies. The cost curve was to be bent down by forcing the entire medical establishment to get all their records online.  Complete failure. Expensive. Anything there to concern those businessmen who were expected to hire new workers and pay for their health insurance? Perish the thought.

There were the roads and bridges that turned out to be not shovel ready. Have you noticed that 4 years later, he’s still talking roads and bridges? There were the vast promises of new high technology jobs in new 21st century sources of clean energy. Lots of subsidies with taxpayer funds. Government picking and choosing which businesses to support always works well.  New tools, old energy. The wind remains completely intermittent; solar energy is diffuse, affected by natural things like clouds and night. The jobs? Temporary, and vanishing when the companies go bankrupt which most did.

Every regulation issued by the government has costs and consequences. The EPA has been a regular fountain of regulation, most unnecessary and accomplishing nothing except tighter government control of the economy. The costs to businesses are huge. Everything from businesses being abruptly shut down, to paperwork requirements that mean hiring more people to fill it out.

The Deepwater Horizon explosion killed 11 men, and shut down oil production in the Gulf for an ever-extending period. Big offshore rigs picked up and went to other countries where they were more welcome. The extended shutdown — was it needed for safety reasons? or to promote all that clean energy? — put all sorts of businesses related to the oil fields out of business, motels, restaurants, suppliers in many states.

That is the situation for businesses struggling to survive. Small business (50 employees and up) has long been the engine of growth in our society, not huge corporations. Those who should be leading the growth in the economy are understandably sitting on their hands, hunkering down, hoping not to get noticed. They are afraid of their government, and with good reason.

Median household income is 7% below where it was when Obama took office. Most of the high-paying jobs lost in the recession are being replaced with low-paying jobs. Small businesses are laying off workers to get below the magic number of 50 employees because of ObamaCare. Universities and colleges, the home of progressive angst about income inequality, are reducing hours for their adjunct employees because of ObamaCare.

The number of people on food stamps is up 46% since Obama first took office. There are 2.7 million more people in poverty than in 2009. So who is doing well? From whence comes Obama’s claim that the economy is recovering? The “shrinking few” that Obama complains about are doing fine. Wall Street investors, corporate chiefs are doing nicely because of administration efforts to keep interest rates low. The three richest counties in the country all surround  Washington DC, where we know pay is higher and people work less than the rest of us.

The only real answer to income inequality is a private sector  economy that is growing and thriving. That spreads opportunity and mobility in ways that no federal government could hope to do. Government jobs are paid with the funds supplied by the private sector in taxes on a population that is employed and creating and innovating. A free market economy unhampered by big government.




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