“A society that puts
equality –in the sense of equality of outcome-ahead of freedom will end up with
neither equality or freedom. The use of
force to achieve equality will destroy freedom, and the force, introduced for
good purposes, will end up in the hands of people who use it to promote their
own interest.”
-Economist
Milton Friedman (1912-2006)
How prescient of Dr. Friedman to foresee the Obama
Administration.
The President, who has done more to destroy the middle-class
than anyone in recent memory, called his speech on Wednesday, July 24 “A Better
Bargain for the Middle Class”. This from
a man who has squandered his first five years in office on ineffective policies
for reducing inequalities through redistributing wealth rather than creating or
growing it.
Tear the veneer from any Obama policy or program and in its
basic foundation it is a redistribution plan designed as a health care plan, an
energy plan, a tax plan, a stimulus plan.
The President appears to have redefined “middle-class” as a larger food
stamp grant, ninety nine weeks of unemployment; government subsidized
everything, and lots of “programs”. Not
my idea of “middle-class”.
The President came to
office in 2008 with the economy in recession and a 7.8% unemployment rate. His policies have failed to ignite what we
normally call a recovery. Since he came
into office economic growth has only averaged about 2% or less per year and was
still an anemic 1.8% in the first quarter of this year.
The Wall Street Journal noted after the President’s speech, that stocks and housing prices are rising, but job growth has never arrived as it does in an economy with 3%-4% growth. Unemployment in California is still high, at 8.5% in June, with African-Americans (17.1%) and Hispanics (11.1%) suffering disproportionately, according to the California Labor Department.
The Journal and Senier Research, using census numbers, put
the median annual income level in May of this year at $51,500, 5%, or $2,718
less, than in June 2009, after the recovery was announced. In other words, median real household income
has fallen during both the recession and the recovery.
What job growth that has taken place during the President’s
administration is illusionary with part time, temporary and contract employment
now the rule, more so now as ObamaCare is incenting businesses to cut
employees’ hours below thirty hours per week.
The July fifth jobs report showed the economy created
195,000 jobs the previous month. However,
sixty percent of the job gains were in low paying industries: retail firms
added 37,000 jobs, leisure and hospitality companies added 75,000. The number of people wanting full time work,
but working part time increased by
322,000 to 8.2 million (1.3 million in California). The underemployment rate (the
unemployed, the people working part time who want full time work, and the
people who have stopped looking for work) now totals 20 million Americans and
rose in June from 13.8% to 14.3%.
According to the Associated Press, temporary and
contract workers currently number 17
million as companies turn to them in the face of ObamaCare and other
uncertainties in the economy. The number
of “temps” in the workforce has increased more than 50% since the recession
ended in 2009, to 2.7 million people.
And we have yet to reach the same number of employed that we
enjoyed before the recession began. The
Teamsters Union calls this the “Jobs gap” and puts the shortfall at 9.1 million
jobs. This “gap” includes the net 3.4
million jobs lost between December 2007 and December 2012 and the 5.8 million
jobs that should have been created during this time to absorb new potential
labor market entrants.
Five national unions, the Teamsters, the United Food and
Commercial Workers, Unite Here, the Laborers’ International Union and the
International Brotherhood of Electrical workers have all demanded that
ObamaCare be repealed or reformed to save union health plans and pay
levels. The union representing the IRS,
the agency that will run ObamaCare, has demanded their workers not be included
in it.
Ronald Reagan came to office in 1981 with 10.8% unemployment
and Jimmy Carter’s recession in full bloom; he cut taxes and regulation,
focusing on growing the economy. The
economy grew at 4% through his administration. Fifty-five months after the
recession of 1980 started (about where we are now with Barak Obama) the Reagan recovery
had created 7.8 million more jobs than when the recession started (there was no
“job gap”)and continued creating jobs throughout President Reagan’s
administration. According to the Wall
Street Journal, the median family income rose during the Reagan presidency by
$3,380 or 7.7%.
I opened this column with a quote from Milton Friedman and
will close it with one from Winston Churchill: “socialism is a philosophy of
failure, the creed of ignorance, and the gospel of envy, its inherent virtue is
the equal sharing of misery”.
Welcome, Winston, to the Obama years.
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