Wednesday, January 28, 2015

Obama's Robin Hood Approach is in Reality a Take It from the Middle Class Willie Sutton Strategy ... Where the Money Is ... Middle Class Economics, Income Inequality and Broad Based Prosperity ... Opportunities vs. Outcomes

President Obama likes to play Robin Hood. He believes that's the politically astute way to win elections. He's been right about that, having won two presidential elections, and our U.S. economy and We the People have suffered and continue to suffer as a result.

The plain fact is that equal opportunities never lead to equal outcomes. It just doesn't work that way in a freedom based individualistic meritocracy, which is what America has long been and the vast majority of Americans still want it to be.

President Obama also claims to be an advocate and supporter of the middle class. In fact, he has invented the term 'middle class economics' as evidence of his concern. But the simple truth is otherwise. He's really following a Willie Sutton bank robber approach of 'going where the money is' --- the middle class. Evidence of this can be seen by his offering up and then abruptly surrendering the recently floated plan to hike taxes on that same middle class he says he's trying to help.

Obama's 529 Surrender is subtitled 'But the middle-class should realize they're where the money is:'

"Well, that must have polled badly. The White House on Tuesday dropped its proposal to tax 529 education savings accounts, a week after President Obama floated the idea in the State of Union. . . .

Mr. Obama wanted to tax 529 plans to finance a more targeted college subsidy program that politicians could better control. The 529 plans put the power in the hands of parents. The political problem is that 529s have become popular with, well, the middle class; there were some 11.8 million accounts and the average balance was $20,671 as of last June.

House Speaker John Boehner had called on Mr. Obama to withdraw the proposal, and the Ways and Means Committee was already rolling out legislation to force Democrats to go on record for the 529 tax increase. “Given it has become such a distraction, we’re not going to ask Congress to pass the 529 provision,” a White House official (said) in a a classic of political rationalization.

It’s a shame there won’t be a vote, because the 529 tax increase is a rare example of the President’s policy sincerity. Liberals sooner or later must raise taxes on the middle class because taxing the rich alone can’t possibly finance all of the Democratic Party’s entitlement schemes. The middle class is where the real money is. So while taxing 529s may die for now, it’s only a matter of time before liberals are back with a carbon tax or value-added tax or something. That’s the real meaning of “middle-class economics.”

Obama's Robin Hood economics won't help the middle class tells the opportunity vs. outcome story in common sense fashion:

"If the president really wants to help the middle class, he will stop trying to mandate equal results and concentrate instead on legislating equal opportunity.

Once again it comes down to a case of the have-nots versus the haves. The president is upset that some people make more than others. In this year’s State of the Union address, he asked lawmakers whether they will “accept an economy where only a few of us do spectacularly well, or will we commit ourselves to an economy that generates incomes and chances for everyone who makes the effort?”

He must fancy himself as today’s Robin Hood, since he wants to take from the rich and give to the poor. How else can you explain what the president calls “middle-class economics”? He wants Congress to adopt a series of measures that would redistribute income which he thinks will help what he calls “America’s struggling middle class.”

The president forgets one thing: Unequal distribution of income and wealth is an inevitable result of the workings of our capitalist system. Interfering with it by raising taxes on the rich to give to others is like throwing a monkey wrench into the gears that turn our economic engine.

Besides the Democrats, the president’s views are beginning to resonate with a number of Republicans as well. If this persists, it would be bad news for our economy, since it suggests that this could become part of the government’s philosophy no matter how the 2016 elections turn out.

Actually, one of the quickest ways in which the president can help make incomes more equal is to encourage the production of oil and gas.

Approving the Keystone pipeline and encouraging fracking are two ways to get quick results. They will add middle-class jobs while also lowering gas prices. In turn, this will help consumers, especially those in the middle to lower class. People in this bracket spend a greater share of their incomes on gas and oil than those who earn more.

Getting back to income inequality, I would remind you that this is nothing to be ashamed about. After all, capitalism is all about taking chances and working hard with the expectation of a reward if the right choices are made. And many wealthy people do share the rewards of their wealth by being charitable.

That said, I would like to raise the question of what exactly constitutes income inequality? In other words, how equal must wealth and income be to avoid being called unequal? I am not sure, but one thing I do know is that we can never have shares of wealth and income divided equally across the population. No economy can produce this result — not even the most socialist. . . .

Wealth and incomes are also affected by the ownership of stocks, bonds and homes. Would those who worry about equality of wealth have the government regulate the ability to buy and sell these items?

What about schools? . . . Should the government require schools and colleges to admit students who are not qualified?

Simply put, the best way to boost middle class incomes is to employ the right policies that would boost overall economic growth that help everyone. As another Democrat once said years ago: “A rising tide lifts all boats.”"

Summing Up

Yes, a rising tide indeed lifts all boats.

Obama's redistributionist Robin Hood programs are actually targeted toward growing the government at the expense of the private sector. If the government is growing, the private sector is shrinking. It's that simple.

To the extent Mr. Obama and his gang of 'government do-gooders' (an oxymoron, of course) are successful, the middle class will be harmed due to a stagnating economy and lower overall economic growth. In other words, we need economic growth for one and all, and more government programs aren't the answer.

While sound bites may work to win elections, populist rhetoric won't ever create broad based middle class prosperity.

Sherwood Forest this ain't, and Obama's 'middle class economics' is a farce. So be on the lookout for Willie Sutton. He's coming after your money.

That's my take.

Thanks. Bob.

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