Since the moment he announced his presidential candidacy, Barack Obama has waged a tireless, now four-year-long spread-the-wealth campaign against the more affluent.
He drew his mythical them/us line at $250,000 in annual income: If you went into the dark territory above that level, all sorts of promised punishments would kick in. At various times his administration has called for higher income taxes on this group, health-care surcharges, and removing the caps on income subject to Social Security payroll taxes — all to be added to higher state and local taxes. And, of course, higher capital-gains and inheritances taxes as well.
The president is not interested in nuances. He does not care that 40 percent of Americans pay no income taxes, or that the top 1 percent of earners pay 40 percent of aggregate collected income-tax revenue. Yet many of the people in these brackets were not always so rich and probably won’t be for long. Top incomes are transient. Millions of Americans strive to reach them for a few years to provide for retirement, or college expenses, in the expectation that they will fade quickly. A quarter of a million dollars in annual compensation is great money in North Dakota, rather less so in Manhattan or the Bay Area.
Furthermore, most of these upper-income earners are the owners of small businesses, which simply calibrate proposed taxes in terms of money not available to hire employees and buy equipment. In contrast, the president assumes that a hardware-store owner or a small manufacturer already concedes that he makes too much money. The idea seems to be that, in penance, he will cut his profit margin and, for the public good, will gladly pay more of what profits remain to an Ivy League technocracy that knows far better than he how to spend his ill-gotten revenue on others more deserving.
Obama, the supposedly savvy politician, oddly has little appreciation of the psychology of business. Millions of job creators still have only a vague idea of the net effect of Obama’s policies — except that they will probably mean less profits, and they are being enacted in a punitive spirit for past sins.
Obama’s policies are also seen as malleable and predicated on notions of social justice rather than on absolute adherence to the law — as in the reordering of the Chrysler creditors and the recent threats against health insurers who do not toe the federal line. Employers are human. Call them greedy, undeserving of their profits, and prone to party at Vegas — and in hurt they will sit on their money and wait such castigation out.
There also seems to be little appreciation of how one creates wealth — not surprising, since Obama and his economic architects are mostly salaried elitists who have spent much of their lives on various tenured government payrolls. Almost none were entrepreneurs who had built businesses from nothing.
The result is that Obama has little insight into the mentality of a businessperson, whose values and world view are antithetical to those of the salaried and tenured employee who accepts stability and a monthly check as he does the changing of the seasons. But to the self-employed, the world is an often hostile place in which a bad back, a chance fire, an unethical employee, a wrong guess, or a national recession can destroy years of hard work in a blink.
Nor do the Obamians appreciate that the possibilities for wealth creation are infinite: The more rewards the audacious see, the more they take risks to turn ideas into new products and services. That energy enriches us all. Instead, there is now the return of the old peasant mentality of a limited good. With a finite pie, one slice to someone must mean one less to someone else. The relative wealth of a few, not absolute wealth for all, is what matters.
Implicit here is Obama’s progressive notion that wealth is unfairly allotted, ill gotten, and ill spent, and therefore should not be entirely one’s own. Surgeons in countries without socialized medicine, he has told us, make money by gratuitously slicing off limbs or ripping out tonsils. High earners can go to Vegas or the Super Bowl without thinking twice about it, given the superfluity of their riches. “I do think at a certain point you’ve made enough money,” the president pontificates — a variation on his earlier lament that the Supreme Court had never demanded “redistributive change.” Where that “certain point” rests, we do not know, though we suspect it is high enough to allow vacationing at the Costa del Sol and Martha’s Vineyard.
In his mind, government simply cannot allow one person to make $10 an hour digging a ditch, and another $300 an hour sitting behind a desk closing a deal. The old tragic justifications of the inequality in compensation inherent in capitalism — one rises up the job chain, and recompense is not rigid and fixed; the successful entrepreneur takes more risk, may have greater skills and education, can create more wealth for others, is luckier, more motivated, or healthier, accepts more stress, does not necessarily want the more moral or enjoyable life — mean little to the therapeutic Obama. His Manichean world is fixed: suspect rich and noble poor.
As a materialist he judges equity in life by income. Thus he sees the government’s proper moral obligation not as ensuring equality out of the starting gate, but as guaranteeing that we all reach the finish line at the same exact moment.
Abroad, this same notion of enforced equality explains our new foreign policy. The bowing, the apologies, the contextualization of America as neither exceptional nor especially moral, the cold shoulder to Europe and the emphasis on the Pacific and on the Arab and Muslim worlds — all that assumes an anti-imperialist and anti-capitalist world view.
Abroad, as at home, wealth is not a result of risk, luck, talent, or mastery of capitalist practices. A nation is not necessarily wealthy or poor depending on the degree to which it adopts proven successful formulas that ensure private property rights, transparency in the judicial and financial sectors, free markets, low taxes, sober accounting practices, consensual government, separation between religion and state, and meritocracy in lieu of tribal preference.
Most students of such matters know all this to be true as they compare South Korea with its northern counterpart, the old East Germany with the old West Germany, Cubans in Miami with those in Cuba, China in the 1960s with the country of the new millennium, an oil-poor Chile with an oil-rich Venezuela, or free-market Israel with statist Egypt. Not Obama.
In contrast, in his view, oppression and exploitation better explain wealth and poverty. The United States is wealthy largely because of profits from past exploitation — slavery, racism, class prejudice, theft of land from Native Americans, and robber-baron policies abroad that stole the resources of other nations. We owe the world contrition, not guidance about how to emulate our success.
Once again, in the peasant view of a limited world, wealth is finite: If we have three-car families, people in a basket case like Zimbabwe pay for our excess by having none. To suggest that Zimbabwe’s problems are entirely its own doing, and are not connected to post-colonial trauma or to exploitative wealth creation by the West — and that with radical social, cultural, political and economic changes Zimbabwe could easily be another Switzerland (which lacks Zimbabwe’s natural resources) — is to reject almost all that Obama has learned from his teachers and friends, and as an astute navigator in the world of identity politics.
Finally, note that crucial to this equality-of-result world view is the notion of exemption. Where Michelle chooses to vacation, how many holes of golf Barack plays, what sort of home they insist on buying, how they travel abroad and the influence they enjoy as emissaries of a wealthy capitalist United States — all this is not contradictory to what is so easily mandated for others.
Our progressive elites are educated almost as gods. They are prepped to bring about change for less astute and sensitive others. To the degree they are accorded and enjoy privilege, it is simply a necessary means to an end — better homes, transportation, leisure, and material appurtenances are not matters of enjoyment, but are the needed tools to more efficiently enact social change. A tax-avoided $7 million Kerry yacht allows the anointed senator the necessary recharging to repeal the pernicious Bush tax cuts that “those” over $250,000 enjoy at the expense of others. The restorative sanctuary of a John Edwards or Al Gore mansion is integral to obtaining social justice or a greener future for the less privileged.
The new technocracy need not worry over an embarrassing Marbella vacation (why not stay at the UAW’s vacation compound in Michigan?). There is no contradiction in a bloated public sector far better compensated and pensioned than its private counterpart. Persistent tax cheating by members of Congress, and by grandees like a tax-raising Treasury Secretary Geithner or would-be HHS secretary Tom Daschle, is merely a series of accounting errors.
To expect otherwise would be to ask the indoor pigs of Animal Farm not to don clothes and walk on two legs as they sacrificed to ensure that the animals outside the farmhouse window were properly equal — or else.
– NRO contributor Victor Davis Hanson is a senior fellow at the Hoover Institution, the editor of Makers of Ancient Strategy: From the Persian Wars to the Fall of Rome, and the author of The Father of Us All: War and History, Ancient and Modern.