By John F. Di Leo -
Reflections on the last State of the Union Address from Barack Hussein Obama…
The modern Democratic Party has made no secret of the fact that they detest the free market. No, not dislike, not disrespect, not even misunderstand… they detest the free market.
From Secretary Hillary Clinton haughtily declaring “I can’t be responsible for every undercapitalized entrepreneur!” to Senator Bernie Sanders famously declaring that 23 brands of deodorant are “too many”… the leading lights of the modern Democratic Party are dim bulbs indeed, when it comes to economics. They proudly refuse to understand the subject, and they set themselves up as superior to its realities.
It has long been obvious that anti-business, anti-market programs are now an undeniable failure. Twenty years ago, even President Bill Clinton famously declared “The age of big government is over!” – this wasn’t his own brave acknowledgement of his own failure; it was the world’s acknowledgement of an undeniable truth, as the Soviet Union collapsed and the world of command economies was proven undeniably unsuccessful as a philosophy.
Obviously statist programs are a disaster around the world.
- Government-run light rail lines cost a mint and attract few passengers, losing more market share and more money every year.
- Government-run city schools are little more than gang recruiting centers, at costs that are double, triple, even quadruple the cost of nearby private schools and homeschools that are far safer and infinitely more educational.
- Government-run VA hospitals have gone from a bad joke to a terrible crime.
So the Democratic Party – the party of the state – entered the 21st Century adrift, desperately looking for a way to retain power, and to retain control of the debate, despite countless failures across the board, from small things like a local unused rail line to big things like the War on Poverty.
And then came, in 2009, the Obama administration.
Barack Obama found a way to square the circle. His only skill – speechmaking – provided the Left with a new way to deal with the 20th Century’s absolute proof of socialism’s failure.
He would say he was in favor of employment, and jobs, and opportunities, and growth… while continuing the Leftist practices of demonizing the successful, attacking the small business community, and taxing and regulating commerce right out of the country.
In a nation of over 300 million people – and more non-English-speaking newcomers every day, if they have their way – this method has been a gold mine.
- People want to work; the Democrats say they’re for job creation.
- People want good schools; the Democrats say they’re for education improvement.
- People want safe streets; the Democrats say they’ll take the guns off the street.
On issue after issue, the new method of Left-speak, mastered by Barack Obama but also utilized by modern Democratic candidates from Hillary Clinton to Rahm Emanuel, has succeeded in keeping a party viable long after its policies should by all rights have consigned it to the dustbin of history.
The modern Democratic Party consciously undermines every positive they claim to champion.
- “Job Creation” requires a business climate that nourishes both small business creation and existing business growth, both of which are attacked every day by tax-and-spend policies and strangling regulations. But they don’t talk about these, and a soundbite electorate gets lost in the weeds when the opposition brings it up.
- “Education improvement” requires discipline, a safe environment, and a rigorous curriculum. Generations of court rulings and soft-on-crime initiatives have left our cities so full of gangs that inner city school children are safer untaught at home than “taught” in the schools, and the once-rigorous American curriculum has been so overloaded with psychobabble that history and civics are barely mentioned anymore. (go ahead, ask a 9th-grader who Hammurabi, Charlemagne, Napoleon, Hamilton or Adam Smith were. I dare you).
- “Safe Streets” require one simple thing: locking up the criminals and throwing away the key. About 97% of crimes are committed by repeat offenders. Virtually every criminal is caught… but Democrats ensure that we let them go… and then they blame the guns in law-abiding citizens’ possession for the fact that the robbers, rapists, muggers, brawlers and killers they’ve released are committing the same crimes again and again.
How do they get away with it? Positive sound bites, and a willful destruction of the process of reasoned analysis in the schools. With the vast majority of schools in the hands of the Left for a century, the Democratic Party has virtually educated the public to be susceptible to their campaign techniques.
The Tragic Master Example
Everything you need to know about the policies of the modern Left, you can learn from the history of Obamacare.
We had a genuine problem in American healthcare. As healthcare got better, it got more expensive… at the same time that prior leaps and bounds in general household economic status were slowing. So we needed more choices in health insurance funding options, and we needed to speed up our economic growth again.
We didn’t have a healthcare quality problem; we’re curing diseases that we could never have even slowed, not that long ago. But we had a healthcare funding problem, one that some tweaking of existing policies could have helped, but one that a booming economy could have virtually solved.
What we knew, without a doubt, going in, was that more nationalization of healthcare would NOT help, but would hurt. The disasters of socialized medicine in England and Canada, the ongoing horrors of the Veterans Administration hospitals here in the USA, prove that, beyond the shadow of a doubt.
But what did we get? Promises made with fingers crossed, and more government involvement than ever before. Increased federal mandates that ensured huge increases in cost, economic destruction that has suppressed economic growth even further, complexity that has driven the closure of hospitals and clinics and local physician practices all over the country (especially in rural and poorer areas where Obamacare simply makes the practice of medicine utterly economically unfeasible).
Economic growth would have solved the problem; instead the problem is worsened, and economic growth is itself hamstrung. Those promises made with fingers crossed are now laughed about as if they were made in jest – “Sure, you can keep your doctor,” “You’ll save $2500/year in premiums,” “If you like your plan, you can keep your plan.” Real lives are ruined, millions have lost their jobs, homes, retirements, as a result of Obamacare and the destruction it caused. And for what? More people are uninsured today than before Obamacare was established, because Obamacare itself is so expensive, millions can now better afford a tax penalty than a health insurance plan.
The New Initiatives of an Obama State of the Union Speech
It is in this context that we must analyze every line of anything offered by the current occupant of the White House… and we just remember to apply the same context to the pronouncements of any modern Democratic Party politician, since their party is united on this matter (remember, not one single Republican voted for Obamacare; it’s the quintessential modern Democrat program).
Problem: “Technology doesn't just replace jobs on the assembly line, but any job where work can be automated.”
- Barack Obama, January 12, 2016
A central theme of the current Democratic Party is that they shouldn’t be blamed for the problems caused by dislocation of work; we’re far better off blaming technology.
But the view of the Luddites was proven wrong, virtually as soon as Luddites first arose, two centuries ago! In fact, if workers are educated correctly, with decent schooling, good work ethic, and openness to learning new skills, the economic changes brought by technology will create new jobs faster than they create displacement.
The Luddite Left claims that automation kicks people out of work without acknowledging that workers are needed to both operate and build the automation!
Robotics, conveyor belts, and the components that comprise them, must all be manufactured before a plant can utilize them. The new plants that make those tools must be built before the tools can be made. So there are construction jobs, factory jobs, logistics jobs, all created by automation, before, not after, the displacement occurs.
The displacement that the Left blames on technology, in fact, owes its origin to the policies of the Left. High income taxes and over-regulation, the burdens of unemployment insurance, workmen’s comp coverage, sky-high property taxes on the plant grounds, outrageous conditions of employment… and the burden of Obamacare… these are the things that cause these new plants to be located elsewhere, rather than in the United States.
Conservative plans – cutting tax rates, cutting the red tape – would enable these new jobs to pop up before the old jobs get displaced. But that’s not a helpful narrative for the Party of Government, so the statists don’t mention these truths in their speeches.
Problem: “If that new job doesn't pay as much, there should be a system of wage insurance in place so that he can still pay his bills”
- Barack Obama, January 12, 2016
As part of the One-Two Punch approach of modern Democrat rhetoric, the Left isn’t satisfied with blaming the march of history for the problems we face; they must also find a way for government to involve itself in the solution.
Note that we’ve already established the fact that the problems we face are caused by their government action. There’s good factory work all over the world, but more and more of it is leaving these shores for more welcoming pastures, and has been for generations. We could easily stop this loss and welcome them back – just cut those crippling tax rates and send most of the bureacrats home – but that’s not an option for the statists. So…
If the person loses his job, he needs government. In the Democrat worldview, the government is there to provide unemployment insurance for the duration while he looks… welfare if unemployment runs out and he still has no job… food stamps and public housing if his home is foreclosed upon or if he can no longer pay the rent on an apartment… and of course job retraining programs so that he can owe even his education to the benevolent government.
The Left has indeed been very successful at making the jobless dependent on government.
But they have a problem. What about people who aren’t ever jobless? How can the Left make us dependent on the government too?
Don’t dismiss this as silly… Certainly, this sounds odd, but it is indeed a very real aspect of the political strategy of the Left. They know that there will always be a portion of the American electorate which is opposed – on principle – to taking anything from the government, and their goal for generations has been to whittle away at that portion by making them accept a check too.
So the lifelong worker has to take Social Security when he retires. The working parent of a college student has to accept education tax credits to pay for college tuition. Every working parent, in fact, winds up dependent on those “per-child tax credits” every April as well. Bit by bit, they’ve managed to get the most rugged individuals to accept something from the government, to weaken our resolve when we stand firm in the public square to declare that “The Leviathan is too large!” When we say “No, we need to cut entitlements!” – the Left wants to be able to say “But you accept some too!” And the opposition is shamed, and broken.
Or so they hope.
Wage insurance is just the newest of these tactics. Wage insurance is a new idea, dreamed up by some grad students in an economics class at the end of the 20th Century. The idea is simple, and can even be reasonable:
If you lose a job paying $40,000/year, and immediately find a new job paying $37,000/year, wouldn’t it be nice to have an insurance plan that would cover that delta for a while, perhaps until you get a raise and move up even or better again?
It sounds nice… though, under the usual rules of insurance (for obvious reasons) it’s challenging to make it practical. If paid for – voluntarily – by the former employer as part of its layoff package, it might be a reasonable and pleasant thing.
But it is the sort of program that can begin as a tiny benefit, then grow in no time flat.
- What if the company offering the project as part of its layoff package finds that the layoff wasn’t enough, and it’s still suffering, so it eventually goes bankrupt? Who’ll take over the funding of the program then?
- What if one employer can afford to offer this plan, but another employer cannot; will the government insist that they do it anyway, though it squeezes their remaining workers and perhaps bankrupts the firm?
- What if one state has lots of wage insurance and the next has little; will the state wind up mandating that wage insurance be a part of a company’s benefits, no matter what? Before you assume that a government would never mandate specific benefits, consider how many company-funded, or half-funded, benefits are already mandated by state or federal government, from Medicare and Social Security to health insurance.
- How long should wage insurance last: three months, six months, a year? You may need it longer in a recession, longer if you pick the wrong job, wrong industry, or wrong location.
- How much of a delta should wage insurance cover: Up to $3000/year, up to $5000/year, up to $10,000/year?
- One common proposal is to cap such a program at jobs paying $50,000/year. But with inflation and disparity of costs of living nationwide, such a program will certainly expand upward as well. Why should the guy who had made $49,000 get his $5000 delta covered, but not the guy who had made $51,000? And since the higher-paying jobs are harder to replace, shouldn’t we acknowledge that they need it – deserve it! – just as much?
It’s a slippery slope. Such a benefit as wage insurance, however well-intentioned, can quickly become yet another economic costs that prices manufacturing out of the US marketplace. A tool designed to soften the pain of job displacement will almost certainly have only one effect; to cause far more job displacement than there was before.
And again, we must return to the critical issue: the solution proposed by the Left – not just Barack Obama, but the Clintons and Sanders and Warrens and O’Malleys of the world as well – is always one that will exacerbate the problem that it claims to solve.
Wage insurance – if mandated by government – will just drive manufacturers away, and further deplete the number of potential job openings in a shrinking sector. The products will still be made, but in China, in Japan, in Mexico, in Malaysia. People will be employed; they just won’t be Americans.
In the final analysis, the lesson to learn from this economy, and from the spokesmen of the Left, is that we must fear government not only when it sounds blatantly anti-business, but even when it sounds pro-business. They will say “we want more employers, more businesses, more growth, just be sure that when you do it, you jump through these thirty hoops, pay these thirty fees, and employ these thirty regulators. And then go ahead and manufacture to your heart’s content!”
There is one solution, and only one. We must learn the lesson of 1984, and see through the NuSpeak… and learn the lesson of Atlas Shrugged, and once and for all, tell the advocates of Big Government, in the words of John Galt, to “Get out of my way!”
Copyright 2016 John F. Di Leo
John F. Di Leo is a Chicago based international trade manager and writer; his columns have been found in Illinois Review roughly weekly for seven years now.
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