Grassroots Commentary

Obama Finds His Inner Elizabeth Warren

Bill Franklin · Dec. 16, 2013

After the disastrous rollout of his ObamaCare website and the sticker shock sweeping in behind millions of private insurance policy cancelations, Obama promised to make his signature healthcare law the focus of the remainder of his second term. That lasted for 3½ minutes. Sagging poll numbers compelled him to shift to another focus. So last week he gave a predictable speech decrying income inequality. The audience was the Washington DC liberal think tank, The Center for American Progress, and he promised that would become his focus for the remainder of his second term.

If we Google the key words “Obama” and “focus” we find that over the years Obey’s “focus” has variously been jobs, women’s issues, wars, climate, energy, the Middle East – you name it. Lots of focusing and refocusing means no focusing because in truth Obama has the attention span of an amoeba.

Several newly-released polls show that almost 60% of adults disapprove of Obama’s job performance. Each negative poll shifts his focus du jour to another red herring issue tout de suite in order to distract the voting public from the crummy job he is doing as president. Oui? This latest refocus is a patent attempt to deflect the media and public attention away from the ObamaCare disaster.

The choice of income inequality as the latest Obama focus is ironic. Abraham Lincoln said, “God must love the common man, he made so many of them.” Obama and his Democrat buddies essentially paraphrase that: “We liberals must love the poor people because our policies create so many of them.”

“I take this personally,” Obama harrumphed in his inequality speech, pointing out that members of his family have benefited from government programs. He must have been referring to his alcoholic uncle who is in this country illegally because Obama and Michelle have had every door opened, every privilege extended, and every preference given, allowing both Obamas to partake of the best education the country offers and benefit from the most influential political connections the liberal establishment could lay at their feet as they ascended to the heights of Olympus.

Calling rising income inequality “the defining challenge of our time” is laughable coming from Obama’s lips. More than any other modern president, he has used his office to live like an imperial monarch while pushing an inequality-inducing agenda that has crushed the median income, produced an anemic recovery, and given the Federal Reserve justification to rejigger monetary policy to drive up house and stock prices. Obviously, those who owned houses and stocks benefitted – not because of greed or exploitation but because of government policy.

What hypocrisy to blame private enterprise, markets, and technology entrepreneurship instead of government for the gap in incomes from top to bottom! Might the gap reflect a gap in skills, experience, and knowledge? Might the gap reflect a gap in the value one’s work contributes to an economic society? The term “income inequality” implies there ought instead to be income equality. What does that mean? Obama’s CAP speech reveals a man who believes the American economic system should provide everyone equal economic outcomes. Those on the Right believe in equal opportunity, not equal outcomes measured as equal incomes and wealth.

It is Obama and his liberal scourge that have stonewalled school vouchers for inner-city kids and protected education unions from accountability for the sorry state of public education. It is Obama and his congressional protectors who can’t connect the high corporate tax and business regulation dots to the weakest post-recession recovery in history dots. It was Obama and his union minions who were quick to pick winners and losers in the stimulus bailouts rather than let the market decide who was “too big to fail.” It was Obama, Reid, and Pelosi who peddled their nauseous “fair share” rhetoric to justify playing Robin Hood in the redistribution of wealth as if government were engaged in anything other than outright theft. We can thank Obama and the ancestry of liberalism he mentioned in his speech for the generations of welfare recipients who have unwittingly become residents on the government plantation, dependent on the “big house” as surely as if society’s clock had been turned back 150 years.

So, what does Obama propose to solve “income inequality”? Easing the rules on union organizing. More stimulus spending (translated union spending.) An increase in the minimum wage – from $7.25 to $10.10. Along side that he wants an increase in the wage floor for workers whose incomes are mostly tips, which can average up to $20 an hour, but the tip income would not be counted in tripling their “minimum wage.” He wants a Paycheck Fairness Act which would make the government the referee in paying men and women equally for similar work. The government will define “similar.” He wants to extend unemployment benefits another 99 weeks (a new incentive to get the unemployed to look for work.) He wants an Employment Non-Discrimination Act which would give government new powers to interpret bias against gay, lesbian, bisexual, and transgender hiring. The government will define “bias.”

On top of this grab bag of new government rights and raises is the calamitous ObamaCare which will raise the cost of hiring everyone, but it will be especially felt by small businesses which are most sensitive to labor expense. Sane thinking would start by trying to solve that problem. Instead Obama’s health law will make it worse.

While he avoided an explicit accusation, the Obama CAP speech left little doubt that the “income inequality” problem is caused by a small group of greedy people at the top of the economic pile who spend every waking moment trying to keep everyone else at the bottom of the pile. Obama’s speech solution translates into two remedies – (i) give everyone on the bottom of the pile a raise by government fiat and (ii) transfer the ill-gotten gains of the rich (the makers) to the “have nots (the takers.)

I’m not making this up. Here’s what he had to say. "The top 10% no longer takes in one-third of our income, it now takes in half.” Note the use of the verb “take.” “Whereas in the past, the average CEO made about 20 to 30 times the income of the average worker, today’s CEO now makes 273 times more,” he further whined. “And meanwhile, a family in the top 1% has a net worth 288 times higher than the typical family, which is a record for this country.” (And Obama knows how to find those people when he’s raising money for his never-ending campaigning.) Of course, he denied that he was promoting equality of result. But he made clear his belief that wealth and income differences are unfair and government policy should eliminate them. That sure sounds like a complaint about the inequality of results.

Well, let’s look at the facts, which fortuitously were released by the CBO this past week. The top 40% of households in a rank order of pretax income actually paid 106.2% of the 2010 income taxes, the latest year of data available. “How can any group pay more than 100%?” you ask. Short answer: because a large group of wage earners “pays” negative taxes – i.e. they pay no taxes AND they qualify to get money from the government. Household incomes in the bottom 40% of the rank order paid no tax and received $18,950 in government transfers in 2010 so says the CBO.

The top 20% of households ranked by pretax income PAID 92.9% of taxes in 2010. The next 20% down the rank order PAID 13.3%. Add those two together and the top 40% PAID 106.2% of the government’s net tax income. The next 20% down the rank order PAID 2.9%, bringing the total PAID by the top 60% to 109.1%.

Then we get to the next 20% down the rank order of household incomes. They PAID -2.9%. The bottom 20% PAID -6.2%.

Add those percentages up and they net to 100% even in Palm Beach County FL. It should be pretty clear that the makers are paying and the takers aren’t – their “taxes” are incomes.

I never thought anyone could get to the left of Elizabeth Warren. But Obama’s CAP speech sure did it. Rather than the socialist agenda he promoted, conservatives have better ideas for creating a better society. To solve a problem, one should start with what causes it. It’s apparent that at least 40% of households make too little money to enjoy the lifestyle of the 60% above them in the rank order of pretax incomes. Is that because the top 60% are keeping them down? Only Obama and his liberal ideologues believe that hogwash. “It’s the economy, Stupid!” Isn’t that the advice James Carville gave candidate Bill Clinton to run against Bush 41? This economy is incompetently managed. All of the White House breast-beating that accompanied last week’s jobs report that the economy had added 203,000 last month – better than expected – totally ignored that there are still four million less people in the full-time workforce than were there before the Great Recession. Each year more people reach workforce age and the jobs aren’t there because of Obama’s anti-growth policies.

Inequality is bad when it’s caused by crony capitalism – wealth created by favors from government. Solyndra and other friends of Obama’s come to mind. Inequality is bad when government policy provides incentives that compete with hard work, when it protects constituencies from better alternatives (union, schools), and when it produces an underclass (entitlements.) Inequality is good when it provides role models like Bill Gates, Steve Jobs, and Warren Buffett, when it provides proof that the American system of innovation and markets rewards companies like Intel and Facebook, Google and Amazon.

Inequality doesn’t hurt our economy. Wrong-headed government policies do. That would include the no-interest Fed policies that produced the recent stock market boom, much to the cheers of the Obama White House whose resident now has the gall to vilify the people who benefitted from it. That would include ObamaCare, which is hated by the majority of the American public who suspect healthcare quality will decline because of it.

Last week the death of Nelson Mandela was “honored” by politicians around the world. Mandela would have abhorred the encomiums. He was a modest man who forbade photos of him after he was released from prison. The only image of him was taken illegally and released after his death by the South African government. In the grieving audience were Obama, British PM David Cameron, and Denmark’s PM Helle Thorning-Schnidt. Putting their best face forward for the occasion, they took a “selfie” like teeny-boppers cuddling their heads while Michelle fumed. Only God knows what transpired between the Nation’s representative to the world and his wife as they deplaned from Air Force One after the Mandela memorial. I’m glad I wasn’t there to hear it.

But Obama’s self-absorption brought this thought to mind. Shakespeare’s King Lear is one of his most complex plays. Among other faults, Lear could not separate his roles of king, father, and friend. As the providentially-endowed steward of the realm, his kingship absorbed all of his other roles. He was king of the realm, king of his family, and king of his friends. Ultimately he lost everything and became mad. In the end he discovers his true self, recovers his sanity, rises above treachery, and is restored his kingship in a proper perspective. When Lear dies, Shakespeare called him “every inch a King” but he was also every inch a man as well.

Obama is our president, not our king, and he is the steward of the Republic. I wonder if it will ever be said of him that he was “every inch a President” – or every inch a man?

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