A haze of ugliness hung over Pres. Barack Obama earlier this week in Osawatomie, Kan., where he delivered a speech as malodorous as an Occupy Wall Street encampment and about as thoughtful.
He communed with the spirit of Teddy Roosevelt, who delivered his famous 1910 “New Nationalism” speech there defining progressivism for the next century. The president was after smaller game. He merely needs a campaign theme to patch him over for the next year, so any old argument will do. He settled on all but blaming the rich for trashing the American Dream. Income inequality, he said, “gives lie to the promise that’s at the very heart of America.”
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How so? The president maintains that with inequality on the rise, it had already become more difficult in 1980 than at the end of World War II for a child to climb out of poverty into the middle class. What happened between World War II and 1980? For one, we had the advent of the Great Society. The fact that the creation of a liberal dream state coincided, in his view, with the diminution of advancement might make a more reflective man stop and think. Not our president.
The federal government already runs a sprawling, massively redistributionist system of taxes and benefits. The top 1 percent earns about 17 percent of all income and pays about 37 percent of all federal income taxes. By the reckoning of Robert Rector of the Heritage Foundation, the welfare system has paid out roughly $16 trillion since the beginning of the War on Poverty. According to Cornell economist Richard Burkhauser, once tax policy, transfer payments, and the like are taken into account, all income groups have gained since the late 1970s.
But President Obama implied that some people are poor because other people are rich, an assumption of class antagonism antithetical to the American idea and tenuously connected to the evidence. Consider a concrete example. The president’s former top budget official, Peter Orszag, departed the administration to work at Citigroup for $2 million to $3 million a year. Putting aside the seemliness and the merits of Orszag’s pay and that of his cohorts on Wall Street, how does his paycheck make it harder for anyone else to get ahead? Orszag’s income doesn’t increase out-of-wedlock childbearing, incarceration, or lack of work effort — all significant obstacles to advancement up the income scale.
If inequality were foreclosing opportunity, we would have seen steadily declining mobility since the late 1970s. Scott Winship of the Brookings Institution, an expert in this area, says that as near as we can tell, the data don’t bear that out. We are “sticky at the bottom,” meaning we have trouble getting people out of the bottom fifth, but that has been a longstanding failing. It’s not the product of a new zero-sum dynamic where Reverse Robin Hoods are pillaging the poor.
Everyone agrees the ticket ahead in America is education. Children from the bottom fifth who get a college degree have only a 16 percent chance of staying in the bottom fifth and a 19 percent chance of making it to the top fifth and getting excoriated by the most powerful man in the world. In his speech, President Obama called for a “national mission” to improve education in the same breath as he inveighed against “laying off good teachers.” Does it ever occur to him that some of the teachers might not be good? The teacher’s unions have surely done more to hamper upward mobility in America than the nation’s most loathsome collection of banksters.
We should endeavor to create the conditions for economic growth, transform education fundamentally, and champion the bourgeois virtues at every opportunity. But President Obama only wants shiny new wrapping paper for his same old proposals — taxes on the rich, infrastructure spending, and regulation. This familiar litany is now supposed to be the answer to complex, decades-long trends. It’s good to know he takes himself so seriously; no one else should.
This is the best Obama's got. Apparently it's the only thing he's got, the only thing he's ever had - pointing fingers at people he describes as the "haves" and opening his palms, greased with record-setting hundreds of millions from Wall St., to those he describes as being victims of inequality.
If income inequality is on a par with being a victim, then we're sunk. There's no such thing as income "parity", as if such a thing could ever be defined or implemented without the deaths of millions. Ask China where their millions went. Ask the former Soviet Union. Ask Cambodia.
Banging the inequality drum misses the relevant point on income mobility, which is the true metric. There will always be a bottom fifth, just like there will always be a top. The question is are people mobile in those income segments, and the answer is a resounding yes.
But if you're looking for a simple answer to a complex question, no potential voter needs look no farther than Obama. The answer, as always, is that rich people are the devil, and must be punished by all right-thinking politicians who took millions from them. How does that *not* make sense?
"Does it ever occur to him that some of the teacher’s might not be good?"
One of the things I love about NRO is that the writing is excellent and that typos and grammar still matter on this website. So I happily give this rare mistake a pass.
There is no mystery to obama if you understand the leftist mindset. The rich are the enemy to those folks. They are the counter to the collectivist state. They personify the ultimate possibilities of capitalism. That is anathema to the leftist.
If obama gets another four years---and I think that is likely---then he will have completed his strategy for transforming this country. The human nature tends to be addicted to dependency and that is what obama offers. Today we are as addicted to Big Government as one can get. Expecting people to shed that addiction is foolish. It will take some cataclysmic event to cure us of this affliction.
Yes, there will always be a statistically "bottom fifth". But the fact is that this bottom 20% in this country have more than the top half in most countries around the world. Yes, somebody will "fall" into the bottom but he will still be better off that those who were previously in the bottom fifth by your logic. The rising tide lifts all boats but the progressive tsunami is threatening to drown us all.
I think Ken's point was one of Mathematics. So long as we are dividing the income-earning population into fifths, every time someone climbs out of the bottom fifth, the lines move, and someone else is now in the bottom fifth.
Yes, there is a necessity. There is always a first number in any finite numerical progression. If you have the lowest income at $5 compared to my $10, then get a raise to $15, I now have the lowest income. So there must always be a "lowest fifth."
But it's bogus because it is purely relative. Go back to you making $5 and me making $10. If we both become twice as wealthy in real terms, then income inequality has gotten worse! (Because 2x10 is separated by more from 2x5 than 10 is from 5).
I believe his point was not that there doesn't have to be a bottom fifth, but that you don't have to "fall" into it, i.e. go down in income or standard of living. You can stay where you are, and end up in the lowest fifth as others pass you. A society where many are "falling" into poverty is very different from one where everyone is rising, just some faster than others.
When you divide a group of anything into 5 equal sub-groups, moving one to a different pile requires that you move one from the new group back. There will always be a "bottom 20% - - - where the line is drawn can change, but there will be a "bottom 20%."
Funny thing, though .... when you talk "bottom 20%" in this type of argument, no one pays much attention to how that dividing line has moved over the years.
Someone doesn't necessarily 'fall' into the bottom fifth. They could quiet happily live on an adequate sum of money and be in the middle fifth. Then as some make it out of the bottom fifth and surpass them, the bottom fifth 'level' rises up to consume our static individual. Who may, except for the newspaper, never know or be concerned with their now bottom status as they live happily upon their same or equivalent monies.
Which, of course, is what we have. Kings of your, stripped of the ownership of their lands and hordes of gold but left with their castles and their highest stipend would be in the bottom fifth of American income.
Will the big O's appeal to class envy have legs? We Americans may be covetous, but we still have ambition. Remember Harvey and Sheila who traded their used MG on a new XKE then switched to GOP? Well, that’s the way things go.
There is nothing in Obama's body of work that would inspire any rational reason to vote FOR him, so his strategy has to be whipping up sentiment AGAINST Republicans. What better way to do that than create class hostility? Everyone "knows" that all the wealth in the country is being hoarded by a handful of greedy conservatives, and if we just raise taxes on them, government can spend even more money to properly educate our kids about the evils of capitalism.
It amazes me how Socialists live for wealth redistribution, while at the same time doing everything they can to destroy wealth creation. Being a conservative, I am governed by logic, so this is something I guess I'll never understand. And, that's okay.
The private and public sectors comprise the whole of the American economy. The private sector produces the wealth that supports the public sector, and public sector cost is ultimately factored into the cost of goods and services produced. This growing cost makes the US uncompetitive, globally, and affects the lower income groups the most with loss of traditional jobs, and failure to maintain relative economic position. (Women, children, and minorities hit the hardest)
The liberals/progressives/leftist have successfully shifted shift blame to the to the successful drivers of our free enterprise economy for what the ever-growing bloated inefficient public sector is doing to the lower income groups
With the advent of the phenomenal success of free market, free enterprise capitalism, income rose from less than $500 to approximately $40,000 annually working wage average in America. This still doesn't change the fact that the cost of the public sector is largely borne by the lower economic strata. Higher income people, to varying degrees, have the means to 'pass the buck' when public-sector costs increase.
A typical example: the cost of medical liability for practicing physicians is a business cost added to the charges. This adds to the cost of insurance premiums --- and for businesses that provide health insurance, it is simply added to the cost of goods and services sold. By the same token, the good doctors will collectively raise their fees to offset any new personal taxes. Corporate tax is ultimately added onto costs of goods and services sold, thus making corporations tax collectors for big government. All these costs are added on to the cost of living, which is absorbed by the lower income groups because they cannot pass it on.
The observable phenomena to this effect are when prices rise. Upper income groups and those with adequate cost-of-living adjustments manage to stay ahead of inflation while the most of the lower income groups fall behind, absorbing the cost of expanding public sector.
Even the entitlements programs are regressive transfers from lower income groups to higher income groups. Social Security and Medicare help preserve estates of higher income groups that are passed on to their children --- paid for by the wage workers at the bottom, who of course, will have nothing to pass on to their children. (The guilty shame will even make conservatives not want to talk about it)
Should there ever be a conservative politician that effectively communicates (a populist message) how the cost of public sector trickles down to the lower income groups --- there would be a wrenching political realignment. The party of Democrats would be reduced to shell of hard-core leftists ---- clinging bitterly to the socialist dogma in the dustbin of history.
-- "The top 1 percent earns about 17 percent of all income and pays about 37 percent of all federal income taxes." --
Yes, Rich, but what percent of their *incomes* do they pay in? Of *course* a millionaire is paying more an *amount* in taxes than someone who earns only $20,000 a year because he earns more. That's not what either Obama or Buffet are saying, and you know that; what they are saying is a millionaire shouldn't be paying a lower tax rate than that $20,000/yr person
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