Friday, December 23, 2011

Middle Class Values, Rich and Poor ... Fairness and Inequality

President Obama says he is fighting on behalf of the middle class.

To help him win that fight, I have a suggestion. First, he should take the time to try and better understand the American middle class which he purports to be representing, including its value system.

Obama's Strategy -- And How to Fight It was written by Karl Rove. He says this about how the President is planning to position himself while campaigning for his re-election in 2012:

"This month, during a speech in Osawatomie, Kan., and in an interview on "60 Minutes," President Barack Obama laid out the broad contours of his re-election strategy. Republicans would be wise to examine his words and prepare accordingly.

Mr. Obama will frame this election as a fight for the middle class. He told his Kansas audience that America was once a place where "hard work paid off, and responsibility was rewarded, and anyone could make it if they tried." Now, as he informed "60 Minutes" correspondent Steve Kroft, "the rules are rigged" against "middle-class families." . . . .

Mr. Obama will make "fairness" a major theme. He declared in Kansas that his goal was to "restore balance, restore fairness," and he then told Mr. Kroft that a "balanced approach" to the nation's deficit crisis required "everybody to do their fair share."

But resentment is not an effective political appeal. Americans tolerate unequal outcomes if they believe people have equal opportunity. Crude class warfare like Mr. Obama's has never been successful in presidential campaigns (consider candidates Mondale, Dukakis, Gore and Kerry)."

That last part about unequal outcomes and equal opportunity is confirmed in Americans Not As Worried About the Rich-Poor Gap:

"We hear it every day: “Inequality is at an all-time high.” America has woken up to the real crime — the gap between the rich and the poor. The President says it. Pundits say it. The Occupiers are living, breathing proof.

There’s just one flaw: Americans as a whole aren’t more concerned about inequality.

According to a recent Gallup poll, 52% of Americans say the rich-poor gap is “an acceptable part of our economic system.” A slightly lower 45% said the gap “needs to be fixed.”

Those are high numbers, no doubt. But Gallup says Americans are less concerned about inequality now than they were in 1998. In 1998, 52% of Americans wanted to “fix” inequality.

The survey found that Americans prefer growth over a reduction in inequality. Some 82% said growth was either “extremely” or “very” important; only 46% said “reducing the income and wealth gap between rich and poor” was “extremely” or “very” important.

“In short, the public wants fairness but retains a healthy skepticism about the federal government’s ability to achieve it,” as Charles Lane writes in the Washington Post.

Inequality crusaders will say Americans just don’t understand the problem. If they knew the real numbers, that 45% who said the gap “needs to be fixed” would be much higher. Others say Americans have simply become numb to the problem.

But there is another possible explanation for why Americans care less about inequality today than they did in 1998. Inequality itself is lower than it was in 1998."

Here's what I believe. Since by definition more than half of Americans belong to the middle class, it follows that a large majority of Americans would possess middle class values. Count me in.

But what are those values? Do they represent what the President believes they do?

I think not, assuming he means what he says. Thus, I conclude that our President simply doesn't understand what matters most to the middle class.

And what speifically are those middle class values and ideals that President Obama apparently doesn't understand?

Well, to begin with, people want to be treated equally with respect to opportunities--not results. We readily accept that those who work harder and smarter, or maybe are just plain luckier, will achieve or receive more than the rest of us.

Not everybody will earn an 'A' grade. We get that, but we want the chance to compete for one in a fairly officiated game.

And for the most part, our American free market system works exactly that way. Some of us start low, work through the middle and end high, and some start high, fall through the middle and end low.

Some of us who try out will make the team, some will get cut, some will start, some will get benched, some will star and some will fail. Some of those who fail will later succeed and vice versa. That's what competition and freedom are all about.

The President says that the game is rigged against the middle class. He wants to restore fairness and require everybody to do his fair share. What game? What unfairness?

He should get specific about what he means when he says the game is rigged against the middle class. Who rigged it? The government? Aren't they the ones who set the rules of the game?

And let's also ask him to explain what we means about the middle class being treated unfairly. Who in the middle class hasn't been given an opportunity to succeed in America? If the game was rigged against them, how did they become a member of the middle class? Who's not doing his fair share with regard to treatment of the middle class?

President Obama won't ever get specific on any of this because he has no legitimate story to tell. He just wants to be re-elected. That's what politicians do. Run for office and do what they believe will get them enough votes to win.

Let's get specific about middle class values and treatment in a self governing free market society.

We'll use a simple example of the free market at work. In a free market system, each of us "works hard" and produces something of value to ourselves and others as well. We'll use corn as the example of what our hard work has produced.

There are four things that can happen to the corn we raise.

(1) Some of what we produce we will eat or consume. (2) Some will be set aside for our future consumption. We'll call that portion of the crop investment or deferred consumption. (3) Some will be traded with other producers of different products. We will exchange some of our corn for what they produced. (4) That leaves the part we transfer to the government. Some will be rightly used to pay for our country's common defense, system of justice and other things like roads and such that are used by the general public. And lest we forget, some will be used to pay for all those entitlement and transfer programs, too

Let's look closer at the entitlement and transfer portion of the government redistribution program attributable to #4. The more of what we produce that is taken by government, the less we will retain and have available to do with as we please for our own use, as itemized in #1, #2 and #3 above.

So what's fair really gets down to how big #4 should be. At least that's the way I see it.

First, let's make one thing perfectly clear. I wholeheartedly embrace American middle class values.

Here's what that means to me. If we work hard and play by the rules, we should be allowed to keep the vast majority of what we make for (1) current consumption, (2) investment leading to future consumption, or (3) to exchange our production with others for what they have produced. That's how a free market system works to our individual and collective advantage and prosperity, respectively.

Now that brings us to #4 and its size. As #4 expands, the total of #1, #2 and #3 must contract. It's a zero sum game pitting #4 against the total of #1, #2 and #3.

Stated differently, how much of what we produce should be taken by the governing elite for whatever purposes they deem fit, including redistribution and government operations and payroll? How much of our money should be spent on other people's social security benefits, medical care, nursing homes, public schools, student loans, government operating costs and such?

And if for whatever reason, as a middle class member I don't pay enough for what I receive from government, who should pay for the shortfall? My view is that I should pay for it, assuming I'm able. Either that or I should agree to take less in the future. To me those are middle class values.

In other words, to me middle class values mean that we very much want to row our own boat. We don't want government to take other people's money and redistribute it to us to support our own spending habits. We want to pay our own way.

That said, middle class values also mean that we'll be eager to assist the truly needy if they can't take adequate care of themselves. We'll also want to pay for the care of the old and young who aren't able to care of themselves. And the poor as well.

Middle class values mean we pay our own way and help others who can't.

So if those of us with middle class values are taking more from the entitlements trough than we're contributing, due to government's actions, we'll either choose to put more in or reduce that which we're taking. We won't expect the younger generations or even the well off to pay for us that which we can pay for ourselves.

All that said, those with middle class values will be anxious to help those in need of help. By so doing, more people will have an opportunity to enter into the boat rowing and owning middle class themselves.

Now what's so complicated about that, Mr. President?

And if that's a fair representation of basic middle class values, which I believe it to be, then how is the game now rigged against the middle class? And if so rigged, how were the 'riggers' able to do so it without government participation and complicity?

And for those of us who have fallen on hard times, why are the more successful and even the luckier ones to blame? Why are they responsible to equalize the outcomes? That's not what middle class values represent. Not even close.

Mr. President, you can't fight successfully on behalf of the middle class if you don't understand its foundation and the values it shares.

One thing is absolutely clear about the difference between President Obama and me. One of us has no clue about generally accepted American middle class values and beliefs.

Thanks. Bob.

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