The further to the left or the right you move, the more your lens on life distorts.

Thursday, February 20, 2014


This president can and should be criticized for many things—incompetence, mendaciousness, arrogance, even lack of interest in the management aspects of the office he worked so hard to get. He has been aided and abetted by members of the Democratic party who have defended even his most "boneheaded" scandals (the IRS attacks on his opposition were "phony", and deserve no further investigation). And of course, the roll-out of his signature health care legislation is a case study in failure—at virtually every level and by virtually every measure. Unless, of course, you believe the White House spin machine (just today, the W.H. is "lowering expectations" by telling us that signups will not reach its own 7 million target).

But there's another thing that is very troubling. This president has demonstrated (2012 comes to mind) that divisiveness is a winning strategy. Democrat vs. Republican, rich vs. poor, one ethnic group against another, the public sector vs. the private sector—the list is long. At the foundation of Barack Obama's divisiveness strategy is class warfare—an attempt to pit Americans in one economic class against the evil one percent. It's predicated on a breathtakingly dishonest zero-sum game view of the economy, of wealth in America, and of capitalism. But no matter, it has worked, and the troubling thing is that it's quite likely that future Democratic presidential candidates will adopt it going forward.

Most recently, the president has been pushing the minimum wage as a wedge issue. The Washington Times comments:
The nonpartisan Congressional Budget Office on Tuesday released a new report that said such a dramatic increase could cause employers to lay off workers or hire fewer, which would reduce employment by 500,000 jobs — or maybe twice that.

“Today’s CBO report shows that raising the minimum wage could destroy as many as one million jobs, a devastating blow to the very people that need help most,” Senate Minority Leader Mitch McConnell said in a statement. And the estimate comes on top of another report that found Obamacare could reduce the workforce by some 2.5 million workers.

Once again, though, the White House — which cites CBO numbers when they fit the Democratic agenda — took issue with the latest findings. Obama spokesman Jay Carney said “respected economists” say the opposite of the CBO, “that there is not evidence that it has a significant impact on jobs, and that, to the contrary, it’s beneficial to the economy and to efficiency and productivity.”

“And the theory behind the opposition to raising the minimum wage — that it costs jobs — if you tease it out all the way, then there shouldn’t be a minimum wage at all,” he said. Ah, the White House, always ready to “tease it all the way out.” And the media? They couldn’t care less — there was just one question on the minimum-wage increase asked at Tuesday’s briefing.

The president and congressional Democrats are once again looking for a wedge issue to divide and conquer during the 2014 midterm elections. In 2008, it was “The 1 Percent”; in 2014, it’ll be the 2.2 percent of Americans who earn the minimum wage. “We’ve got to build an economy that works for everybody, not just a fortunate few,” the president said last week.
The amusing thing about the White House spin machine is that the spinners aren't very bright. Let me demonstrate. According to Obama's spokesman, Jay Carney, "...if you tease it out all the way, then there shouldn’t be a minimum wage at all.”

Fair enough. But since we're "teasing things out all the way," let's conduct a thought experiment by teasing in the other direction. Why not increase the minimum wage to $25.00 or $$30.00 per hour? That would certainly allow teenagers in their first job at a fast food establishment to live large, wouldn't it? Heck, why not $100.00/hour? If the minimum wage has no impact on jobs (as the administration contends, but the CBO correctly refutes), why not $100.00? Now that's teasing..

Would anyone argue that the "teased" minimum of $100.00 per hour would cause a massive reduction in entry level jobs? Would any rational person argue that as the cost of labor goes up, the profitability of automation (to replace entry level workers) becomes more and more attractive.

A minimum wage of $10.10 is NOT exorbitant, but it's the height of fantasy thinking to believe it will NOT have a negative impact on jobs. When coupled with concomitant increases in employer-paid payroll taxes and resultant pressure on pay rates just above the minimum, it's a recipe for more part-time workers, increased emphasis on automation, and fewer entry level jobs. But it will make the class warriors feel really good about themselves, even as some entry-level workers get axed. Like all things, increases in the minimum wage represent trade-offs, but it's the height of dishonesty to suggest, as the White House does, that there is no economic downside.

One of the things I notice about Obama and his supporters is that they will not consider facts that don't fit their world view. They live in fantasy where actions don't have consequences, where regulation only helps and never impedes, where small business owners are voracious capitalists, rather than the bedrock of a growing economy, where profit is always suspect, and nonsensical attempts at "economic justice" are always beneficial.

But no worries, I'm just teasing.


Charles Krauthammer summarizes nicely:
“We know that Democrats like to redistribute income. And they pretend it is always from the rich to the poor. What the [Congressional Budget Office] has shown absolutely clearly is that when you raise the minimum wage, you redistribute the income from one set of low income people to another set of low income people. There are some who will get a raise and who will be better off. But there are others who are going to lose their job, lose everything…going … from $7 an hour to nothing. Going to lose their opportunity. And the irony is that the winners get a marginal advantage. But for the losers it is devastation. And you don’t really think about this administration as sort of robbing the people it says it really wants to help. And that is why they have to run away from these [CBO] numbers.”
It's perfectly okay to suggest an increase in the minimum wage. An increase might even be necessary. But it is blatantly dishonest to suggest that there will be no trade-offs in the process. And that's what this administration is doing.