Sunday, February 01, 2015

Obama’s Peter Pan Economics

Obama’s Peter Pan Economics

Other than the president, perfect fairness is an obsession mainly among children.

By Daniel Henninger in the Wall Street Journal

In the winter of his presidency, Barack Obama is touring the country—Idaho, Kansas—talking about something he calls “middle-class economics.” His Saturday radio address, a helpfully condensed version of his 59-minute, 57-second State of the Union speech, offered his definition of the idea:
“That’s what middle-class economics is—the idea that this country does best when everyone gets their fair shot, everyone does their fair share, and everyone plays by the same set of rules.”
Let’s try to unbundle this sentence.
It sounds familiar, until one notices that Mr. Obama has added something—the word “fair.”
In the traditional version, everyone at least gets a shot and does their share. But what, exactly, does the President of the United States mean by a “fair” shot and “fair” share?
Other than the president, the one other slice of the American population that obsesses over fairness everywhere is children. Every parent knows that about the age of four, kids in groups start saying, “That’s not fair.”
If you have a birthday party and cut pieces of the cake for all, one of them will say, “Her piece is bigger than mine. Why is she getting a bigger piece? That’s not fair.”
And parents, ever since Adam and Eve left the Garden of Eden, have felt obliged to instruct their children on the reality. Life isn’t going to be “fair.” And the path into the future requires more than envy, tantrums and grabbing what belongs to others.
Cradle-to-grave fairness may be infantile, but the idea lives on, especially in politics and most of all in Mr. Obama’s mind.
He says middle-class economics means “two years of free community college, so we can keep earning higher wages down the road.”
How can community college be “free” for everyone? This isn’t middle-class economics. It’s Peter Pan economics. In the story of the boy who never grows up, Peter tells the Darling children they can fly if they “think lovely thoughts.”
In Mr. O’s world, tax revenue is sort of like Tinker Bell’s pixie dust. You just scoop up another handful and spread it wherever you want. As he said Saturday: Middle-class economics “means making it easier to afford childcare, college, paid leave, health care, a home, and retirement.”
Unraveling the Obama belief system is a challenge, so let’s take the lower, simpler road and agree with conventional wisdom that “middle-class economics” is mostly about where the votes are.
Mr. Obama is forcing Republicans to defend themselves against the undefinable progressive murk of “fairness,” and he is writing Hillary Clinton ’s campaign agenda before she starts selling him out. In short, the political class has decided that the middle class is ready for its close-up.
What we are about to learn, though, is that “middle class” is just a phrase, whose human reality is more complex and hard to pin down than the Peter Pans of politics believe.
The first indication that politicizing the American middle class carries peril for pols who claim to be its champion came this week when the White House deserted its plan to tax 529 college-savings accounts.
Across millions of kitchen tables since the plan to tax “upper-income” savers was announced, 30- and 40-something spouses said: “He wants to do what?” Even Nancy Pelosi , grandmother of six, went rogue and reportedly asked the White House to drop the idea.
The one datum driving the middle class into the spotlight of presidential politics is that median, inflation-adjusted household income has fallen, from about $54,000 in 2008 to below $52,000.
Beyond that, how does one define what is middle class? Sen. Ted Cruz , discussing the subject last weekend with Sens. Marco Rubio and Rand Paul at the Koch brothers’ California conference, described the middle class as “working men and women.”
U.S. elections are run on the conceit that America’s problems, including stagnant incomes, are unique to us. But we should look beyond the U.S. to see where we don’t want our politics to go.
China? The Wall Street Journal reported that two-thirds of middle-class college grads there want to work for a state-owned company or the government. Why? They say senior bureaucrats make all the important decisions. We’ve had that model in the U.S. recently, and economic growth collapsed.
What of Europe and its social-market economies so admired by Democratic progressives in the U.S.? Much of Europe’s educated, middle-class youth are permanently unemployed because subsidies that absorb half the continent’s GDP prop up and pay for the lifestyles of their parents. Call it jobless fairness.
When the middle-class sweepstakes begin, no conceivable Republican presidential candidate will be able to outbid or out-gripe Hillary Clinton. But they will need an alternative to the platitudes and magic dust of federal programs and tax credits that will float from her campaign.
If in our elections the subject is America, then Republican candidates need to search for their agenda inside the American experience. Forget fair. Start with work. The rest will come.

No comments: