By Alan
Caruba
As the
liberal disaster called Obamacare unfolds, President Barack Obama is already
embarked on his next Big Lie: income inequality.
It’s
useful to visit some of the planks of Karl Marx’s 1848 Communist Manifesto.
They included abolition of private property—the keystone of capitalism—and the
application of all rents of land to a public purpose. Marx advocated a heavy
progressive or graduated income tax whereas a fair tax that treats all
Americans fairly by taxing what you spend instead of what you earn. The current
tax code is more than 73,000 pages! Marx wanted to eliminate all rights of
inheritance and centralize credit by means of a national bank.
What Obama
is talking about is socialism/communism when he claims that income inequality must be
altered by more government intrusion into our lives and his claims are false.
He said that “a dangerous and growing inequality and lack of upward mobility”
is “the defining challenge of our time”
His
objective is to further divide Americans by promising what government cannot
and should not deliver. This is now the Democratic Party theme leading up to
the midterm elections in November. He is right about one thing, only economic growth can provide the
opportunity for Americans to increase their personal incomes, provide a choice of
investments, and save more for the future. In his first five years in office,
economic growth has been historically slow.
In a Wall Street Journal opinion commentary by Robert A. Grady he cites a 2011
study by Lee Ohanian and Kip Hagopian, “The Mismeasure of Inequality”, that concluded
that “inequality actually declined 1.8% during the 16-year period between 1993
and 2009.” According to studies by the U.S. Treasury, the capitalist system in
America, providing mobility (up or down), found that “considerable income
mobility” in the decades 1987-1996 and 1996-2005, found that approximately half
of those in the bottom income quintile in 1996 had moved to a higher quintile
by 2005. They were decades, the 1980s and 1990s, in which the vast majority of
Americans gained higher incomes.
In the
past four and a half years since the recession officially ended, poor people
and the middle class were hurt the most and opportunity slowed. Under Obama
millions of Americans are out of work and dependent on government programs such
as food stamps and unemployment compensation. The later ended for many on
December 31. The inequality that Obama cites is the direct result of the
failure of his economic programs as well as a dramatic surge in federal
regulations that harm economic growth.
The
Affordable Care Act—Obamacare—is discouraging full-time employment. According
to Gallup’s payroll-to-population ratio, the proportion of the American
population working full-time, has dropped almost two percentage points in the
last year to 43.8%. Wall Street Journal columnist noted that Obama spent 2013
fund-raising for the Democratic Party “making 30 separate visits to wealthy
donors” at “more than twice the rate of the President’s two-term predecessors.
On the day following the September 11, 2012 attack that killed an American
ambassador and three others in Benghazi, Obama flew to Las Vegas on a
fund-raising trip.
In the
year ahead you will hear him cite figures based on 1979 income rates to justify
his call for more opportunity, but in 1979 the mean (average) household income
of the bottom 20% of wage earners was $4,000. By 2012, it was $11.499, an
increase of 186%. For the middle class, the increase was 211%. Despite the 2008
financial crisis, it still rose.
Did the
rich get richer? Yes. But the rich earn their money from inheritance, from
business development (jobs) and investment. Under communism there is no
inheritance; the state gets it all. And the state owns the factories and
instruments of production, as well as collectivizing agriculture. It maintains
a “progressive” or graduated income tax.
Does the
political theme of income inequality work? Bill de Blasio, New York’s new
mayor, ran on an income inequality platform and will be sworn in by former
President Bill Clinton who will be accompanied by his wife, Hillary.
Income
inequality will be the theme of Obama’s forthcoming State of the Union speech,
but like everything else he says it will be a Big Lie.
© Alan
Caruba, 2014
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