From his state of the union address, it is clear that Obama wears rose colored glasses. Rose colored, not only because they reflect his mistaken impression that it is the action of his administration rather than free enterprise that has begotten an improved economy but also because rose is nearer red, the color of communism, of which he has ideological attachments. With both houses of Congress against him, Obama is making one last ditch effort at pandering to the American people, attempting to induce them to follow the same failed path of over-taxation, excessive spending for politically preferred groups, and over regulation that has held back the economy since the New Deal.
The state of the economy is indeed better than it was in 2008, but that has occurred in spite of Obama, not because of him. The economy while doing better is far less healthy than it would be had taxes been slashed, government programs gutted, and regulations eliminated by an aggressive decentralization of the federal government so sorely needed. In particular, the economy reflects far less upward mobility than two decades ago, precisely because opportunities for advancement depend on significant GDP growth, which remains poor under the weight of excessive regulation and taxation of business and massive entitlement spending.
Barack Obama has grown the federal government in size, scope, and power more than any President before him. His expansionist state directs economic activity to a greater extent than ever before and in virtually every area of federal government involvement we find massive failures (such as the well known failures of the Administration’s green initiatives) and market dislocations.
Rather than trust in the American people to decide how best to invest and spend their own money, Obama wants to assume control over private resources and direct that they be spent for initiatives that strike his fancy. He, like many who subscribe to a corporatist theory of government, thinks he knows better than private individuals and businesses how best to use the money the market has paid them as a compliment for their industriousness and invention. He is thus a quintessential paternalist; arrogant and condescending he views political power over private property as a fair substitute for private choice.
So it is that in his state of the union address, Obama commands business to set aside with full pay one week for sick leave a year for every employee regardless of the financial wherewithal or nature of the business; to pay women more money on the false argument that women are universally paid less than men for the same jobs; and to increase the minimum wage. It is he, Obama, who presumes to dictate what benefits are best and must be supplied, acting as if he speaks for all workers everywhere. His is a false paradigm. He is a demagogue.
For those who pay hourly wages for work performed, forcing them to finance sick leave for workers will mean fewer jobs available. The best evaluations of pay rates reveal that women are paid the same as men when they perform the same tasks in virtually every area of business. Individual cases of discrimination are already subject to redress under the law. Using the false argument of unequal pay for the same positions as a pre-text, Obama wants to insinuate government into every decision to hire and pay an employee to a greater extent than ever before. The minimum wage increase argument is an old saw that is bereft of common sense and economic wisdom. When we separate from market verities the amount paid for work, we inevitably create dislocations.
The most obvious one is the loss of jobs as employers forced to pay more for each employee, necessarily must either forego future hires or cut existing jobs to afford the added cost. Moreover, the evidence reveals that in an upwardly mobile economy, those who earn minimum wages ordinarily hold such positions for a comparatively short period and then advance or acquire new, better paying positions. By imposing federal requirements for sick leave pay, higher pay for women, and minimum wage increases, the government merely shifts economic burdens to the backs of more people anxious to get into the economy. The result is fewer jobs, higher youth unemployment, and higher unemployment among new market entrants.
Obama panders to the public with promises that his Administration will force business to pay more for benefits the President prefers. That highly paternalistic approach is characteristic of his Administration which detests free enterprise and regards business as reprehensible unless heavily controlled by unelected heads of bureaucratic agencies.
There is a better alternative, of course. That alternative respects private property rights and individual choice. When government devotes its energy to removing all manner of regulatory barriers to private initiative and choice and lowering taxes on the productive, the freedom needed to invest and invigorate an upwardly mobile economy is restored. But, of course, doing so eliminates the role of politics (the “I promise you X benefit, paid for by taxing the rich or increasing deficit spending,” that is the Obama mantra).
Obama also calls for new federal spending programs for public works, so-called “infrastructure development.” Those “make work” programs provide economic opportunities only for a limited period of time. They also involve federal mandates to the states, rather than leaving it to the states and localities, along with taxpayers at the local level, to decide for themselves what needs improvement and how best to make improvements in infrastructure.
Obama calls for a new federal entitlement: 2 years of community college for everyone. Like so many of his grab bag promises, this ill-conceived notion would compel taxpayers to finance two years of community college attendance for every high school graduate, making community college education a new entitlement. In that proposal lies the death of truly diverse and innovative community college education and the distortion of markets that encourage savings, thrift, and enterprise from youth. Another government hand out is born encouraging our young people to believe that they may obtain things of value for nothing. Truth be told, the new community college entitlement will come at a cost to everyone and will do nothing beyond extend high school by two years. Success in a free market will still depend on the mettle of each individual, and the mere fact of a government payment for associates’ degrees (just as today the mere fact of high school diplomas) will not assure that those with associates’ degrees will be employable or, if employed, will enjoy better positions or higher wages. Moreover, many who now opt for a four year degree and work through college to achieve it will be encouraged to avoid that hardship for a government paid two year degree, thereby reducing the population available for four year colleges, increasing the cost of tuition to those in those colleges, and decreasing the available pool of employable people with bachelor’s degrees.
Obama calls for a new Precision Medicine Initiative, which appears to be yet another massive financing of federally mandated medical research. Those initiatives have been undertaken since Richard Nixon’s war on cancer with billions spent and very little to show for the money. Rather than dump billions into what Obama predicts will be the new direction in medicine, he should massively cut taxes on medical scientists and medical industries that innovate to encourage research and development, allowing private parties to determine medical demand and the best way to save those afflicted. But, of course, Obama wants to command the direction of medical research, not allow individuals and businesses the freedom to choose.
Unsurprisingly, Obama calls yet again for more taxation on the rich. We depend on capital accumulation to encourage private lending, to enable research and development, and to expand employment opportunities. When capital is saved or invested, it benefits the entire economy, particularly those seeking to find a job or expand a business. Rather than allow for any capital to remain in private hands untaxed to the hilt, Obama wants to seize it and tax it (whether that is a transaction over the internet or passive income). In his state of the union address, Obama calls for new taxes on passive income.
Although many of the foregoing initiatives are ones Obama claims should engender bi-partisan support, the Republican Congress will quickly prove itself worthless if it supports them. Each bad idea offered by the President should be rejected by Congress, and the false promises he has given the American people should be revealed and condemned at every turn.
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© 2015 Jonathan W. Emord – All Rights Reserved
Jonathan W. Emord is an attorney who practices constitutional and administrative law before the federal courts and agencies. Ron Paul calls Jonathan “a hero of the health freedom revolution” and says “all freedom-loving Americans are in [his] debt . . . for his courtroom [victories] on behalf of health freedom.” He has defeated the FDA in federal court a remarkable eight times, seven on First Amendment grounds, and is the author of the Amazon bestsellers The Rise of Tyranny, Global Censorship of Health Information, and Restore the Republic. He is the American Justice columnist for U.S.A. Today Magazine and joins Robert Scott Bell weekly for “Jonathan Emord’s Sacred Fire of Liberty,” an hour long radio program on government threats to individual liberty. For more info visit Emord.com, join the Emord FDA/FTC Law Group on Linkedin, and follow Jonathan on twitter (@jonathanwemord).