President Barack Obama has some bad news for poor and working class Americans: He’s going to spend the final three years of his presidency attacking the income gap.
“The combined trends of increased inequality and decreasing mobility pose a fundamental threat to the American dream, our way of life, and what we stand for around the globe,” the president said in a recent speech.
No coincidence the pledge to stamp out inequality comes at the same time Obama’s popularity and performance ratings are plunging due to the Obamacare fiasco. He always pivots to populism when he gets in trouble.
But this is no grand shift. Obama has been playing Robin Hood since Day One. All his major initiatives have been built on soaking the rich.
And what’s happened? Those on the bottom rungs of the economic ladder have less disposable income than they did when he took office, and the fat cats are fatter than ever.
According to Bloomberg, the richest Americans earned a larger percentage of the total national income last year than they have since 1917. The top 10 percent earned twice as much as the bottom 10 percent. January’s big tax hikes on investors and new Obamacare taxes targeted at the wealthy haven’t slowed the 1 percent’s rise.
Workers, meanwhile, captured a smaller share of total econmic output than in any year since 1952. Factcheck.org reports real household income is down 5 percent during the Obama years, while the number of food stamp recipients is up 49 percent.
The more Obama has tried to help the poor and middle, the worse off they’ve become. That’s a factor of policies that have throttled economic growth and dampened job creation. Obamacare is hurting the middle class in a number of ways, but mostly because employers are wary of adding new workers due to the costly insurance mandates.
Higher taxes have also discouraged job creation. There are still more workers than jobs in the post-recession economy, and that depresses wages.
The wealthy, meanwhile, are stacking up dollars. Obama’s monetary policies have kept interest rates artificially low to offset the damage done by Obamacare and higher taxes, and the low rates are fueling a housing and stock market boom.
It would be better for everyone if the wealthy were gaining by planting their money in job creating enterprises, but unfavorable capital gains rates work against investment.
Try as he might, Obama can’t spread the wealth. History is gorged with populist politicians convinced they can work the levers of government to make the poor richer by making the rich poorer. The poor just always end up getting poorer.
Obama should loosen his grip on the private economy and let businesses start creating jobs again. A tighter job market will increase wages for everyone.
If the president stops obsessing about transferring wealth, he’ll have a chance of actually narrowing the income gap.
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Nolan Finley is an opinion columnist with the Detroit News.