December 6, 2013

Changing the Subject

Income inequality is the “defining issue of our time”?

When things aren’t going your way, change the subject. That’s what Barack Obama did this week in hopes of grabbing onto something – anything – to distract the American people from the man-caused disaster known as ObamaCare. But is his chosen shiny object, the economy, really his strong suit?

In remarks Wednesday, Obama declared that income inequality is the “defining challenge of our time,” and he promised to focus on it “for the rest of my presidency.” He warned of “a dangerous and growing inequality and lack of upward mobility that has jeopardized middle-class America’s basic bargain – that if you work hard, you have a chance to get ahead.” What he didn’t mention is the inconvenient truth that inequality has increased more during his presidency than that of any predecessor. Never mind that, though; his mouthpiece, Jay Carney, laid blame for rising inequality at the feet of George W. Bush.

As is his default setting, Obama’s solution is for the government to take away more of your freedom, redistribute more of your income, and mandate a higher minimum wage – all of which inevitably hits the middle class and hinders job growth. Indeed, it’s telling that median middle class household income has actually fallen during the Obama “recovery.”

Speaking of job growth, 203,000 jobs were created in November, dropping the headline unemployment rate from 7.3% to 7%. Of course, a considerable measure of that was workers returning from furlough after the government shutdown.

As for the economy, there is some good news out there, if tempered. GDP grew by 3.6% in the third quarter, well above the previous estimate of 2.8% and far outpacing the average of 1.2% over the last three quarters. The only trouble is that much of the growth came from expanding inventories, not consumer demand, and that means fourth-quarter growth could stagnate. Some economists estimate that it will fall to just 1%.

In the end, Obama’s pivot to income inequality may fall on deaf ears. According to Gallup, people who actually think the “gap between rich and poor” is anywhere approaching the “defining challenge of our time” is just 1%. As for the 99%, we’re just worried about the anemic economy.

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