Let’s Talk About The Rebuttal

It’s not easy to give the rebuttal speech to the State of the Union. Chances are that you don’t have a copy of what you are rebutting. I guess you can make changes at the last minute, but the majority of your speech has to be written before you have a clue what it is supposed to be about. It’s not a great place to be. That said, however, I would like to take issue with some of the comments made by Stacey Abrams last night. Much of what she said was only half of the truth, and some of what she said was simply not true.

Time posted a transcript of her speech. I would like to talk about sections of that speech.

Ms. Abrams stated:

Just a few weeks ago, I joined volunteers to distribute meals to furloughed federal workers. They waited in line for a box of food and a sliver of hope since they hadn’t received a paycheck in weeks. Making their livelihoods a pawn for political games is a disgrace. The shutdown was a stunt engineered by the President of the United States, one that defied every tenet of fairness and abandoned not just our people – but our values.

It was nice of her to give out meals, but she failed to mention that all of those furloughed workers received every penny of their back pay. The simply got an extra paid vacation.

She further stated:

In Georgia and around the country, people are striving for a middle class where a salary truly equals economic security. But instead, families’ hopes are being crushed by Republican leadership that ignores real life or just doesn’t understand it. Under the current administration, far too many hard-working Americans are falling behind, living paycheck to paycheck, most without labor unions to protect them from even worse harm.

The Republican tax bill rigged the system against working people. Rather than bringing back jobs, plants are closing, layoffs are looming and wages struggle to keep pace with the actual cost of living.

We owe more to the millions of everyday folks who keep our economy running: like truck drivers forced to buy their own rigs, farmers caught in a trade war, small business owners in search of capital, and domestic workers serving without labor protections. Women and men who could thrive if only they had the support and freedom to do so.

Hasn’t she read the economic numbers? On December 20th, The National Review reported:

A recent Wall Street Journal economic analysis of current jobs reports found that worker wages were starting to rise above inflation and that the biggest percentage gains were showing up in the paychecks of the lowest income workers. In other words, income inequality with respect to take home pay was shrinking.

…Remarkable, too, about this chart is that every group that was least likely to vote for Trump has seen an abnormally large gain in jobs and wages. Our supposed racist president has delivered outsized economic gains for blacks and Hispanics — with both groups now experiencing the lowest unemployment rates in at least a half century. So much for Trump’s policies benefiting only white America. The rich are clearly not “the big winners” from Trump’s economic policies.

Contrast that with the economy when Democrats were in charge:

The poor and unskilled that Mr. Obama was supposed to lift out of poverty saw their incomes fall by 7.4 percent for those with less than a high school diploma and 8.2 percent for those with only a high school diploma. In dollar terms, between the time the Obama recovery began in June 2009 and until June 2014, median black household income fell by nearly $3,000, Hispanic households lost nearly $2,500, and female-headed households lost roughly $1,500. In 2015 and 2016, income gains were thankfully reversed for these demographic groups, but many still lost ground over eight years. The income gains under Mr. Obama were mostly concentrated in those Americans in the top 20 percent of income. This is why the income gap between rich and poor rose nearly every year under Obama.

Ms. Abrams, if you truly cared about the success of the middle and lower classes, you would support the policies of President Trump. President Trump’s economic policies have worked. President Obama’s economic policies failed miserably. I would also like to note that illegal immigration depresses the wages of unskilled workers. The Democrat party sold out the working man a long time ago.

 

Let’s Start Teaching People Economics And Common Sense

The new popular cause on the left is ‘income inequality.’ Basically that means that if you are the head of a corporation, you shouldn’t make significantly more than the low-wage earners in that corporation. Never mind the extra education you got to qualify for the job or the extra hours you worked there, you can’t have what you earned–it’s just not fair. Actually, in a publicly held corporation, the Board of Directors makes those decisions, and the Board is accountable to the stockholders. There is no reason for the government (on any level) to be involved. However, a popular cause is a popular cause and has to be reckoned with.

Hot Air posted an article today about a new law passed in Portland, Oregon.

The article states:

The city of Portland, Oregon, is imposing a surtax on companies whose CEOs earn more than 100 times the median pay of their lower-wage workers.

Companies will see a 10 percent increase on their tax rate if the CEO makes 100 times the average employee and a 25 percent increase if they make 250 times the average salary, The New York Times reported.

The new law, which passed 3-1 in the city council, is estimated to generate about $2.5 to $3.5 million per year, which will be used to address income inequality on a local level.

On “Your World” today, Portland City Commissioner Steve Novick said that aside from climate change, extreme economic inequality is the greatest problem of our time.

Note to Commissioner Novick–extreme economic inequality is not the responsibility of the City Council.

The article concludes:

Just over the border from Oregon you can find a lot of offices for Boeing. Their CEO, James McNerney, had a compensation package last year of nearly $20M, and that’s not even close to being one of the biggest paydays for CEOs out there. If you suddenly whacked Boeing with a 25% surtax they would shut down their offices and move to South Carolina so fast that you’d hear a booming sound from the air rushing in to fill the vacuum where their office buildings used to be. And all of their workers would either flee the area with them or be on the unemployment line. Unemployed people can’t afford a lot of artisanal cheese every week, so the effect on the ground spreads outward.

This isn’t how you build an economy, guys. It’s how you crater one. No wonder you’re so proud of the phrase, Keep Portland Weird. Put down the bong, folks. You’re supposed to be creating jobs and wealth.

The free market creates wealth–government control does not.

 

 

The Story Behind The Problem Of Income Inequality

Jeff Jacoby posted an article at Townhall.com in November of this year entitled, “The Real Cause of Rising Income Inequality.” Income inequality has increased under President Obama, and Mr. Jacoby points out a few reasons why.

Before I get to Mr. Jacoby’s article, I want to refer to Senator Daniel Patrick Moynihan’s 1965 report on “the breakdown of the Negro family.”

Senator Moynihan’s report stated:

The Breakdown of the Negro Family Has Led to a Startling Increase in Welfare Dependency.

The majority of Negro children receive public assistance under the AFDC program at one point or another in their childhood.

At present, 14 percent of Negro children are receiving AFDC assistance, as against 2 percent of white children. Eight percent of white children receive such assistance at some time, as against 56 percent of nonwhites, according to an extrapolation based on HEW data. (Let it be noted, however, that out of a total of 1.8 million nonwhite illegitimate children in the nation in 1961, 1.3 million were not receiving aid under the AFDC program, although a substantial number have, or will, receive aid at some time in their lives.)

Again, the situation may be said to be worsening. The AFDC program, deriving from the long established Mothers’ Aid programs, was established in 1935 principally to care for widows and orphans, although the legislation covered all children in homes deprived of parental support because one or both of their parents are absent or incapacitated.

In the beginning, the number of AFDC families in which the father was absent because of desertion was less than a third of the total. Today it is two-thirds. HEW estimates “that between two-thirds and three-fourths of the 50 percent increase from 1948 to 1955 in the number of absent-father families receiving ADC may be explained by an increase in broken homes in the population.”10

A 1960 study of Aid to Dependent Children in Cook County, Ill. stated:
“The ‘typical’ ADC mother in Cook County was married and had children by her husband, who deserted; his whereabouts are unknown, and he does not contribute to the support of his children. She is not free to remarry and has had an illegitimate child since her husband left. (Almost 90 percent of the ADC families are Negro.)”11

The steady expansion of this welfare program, as of public assistance programs in general, can be taken as a measure of the steady disintegration of the Negro family structure over the past generation in the United States.

I would argue that the ADC program has actually encouraged the breakdown of families of all races. When the government subsidizes a behavior (in this case, fatherless families), that behavior increases. The welfare programs as currently written are a perfect example of this.

Now, back to Mr. Jacoby. The article states:

One report, aptly titled “For Richer, For Poorer,” is by sociologist W. Bradford Wilcox of the American Enterprise Institute and economist Robert I. Lerman of the Urban Institute. It documents the profound links that connect family structure and financial well-being, and underscores what decades of empirical data have shown: Families headed by married couples tend to be much stronger economically than those headed by unwed single parents.

“Anyone concerned about family inequality, men’s declining labor-force participation, and the vitality of the American dream should worry about the nation’s retreat from marriage,” the authors write. The steady fall in the percentage of married two-parent households — from 78 percent in 1980 to 66 percent in 2012 — goes a long way toward explaining why so many ordinary families have trouble climbing beyond the lower rungs on the economic ladder. Correlation isn’t proof of causation, of course. But there is no refuting the strong association between growing up with both parents in an intact family and achieving higher levels of education, work, and income as young adults.

Basically, intact families are economically stronger than broken families.

The article at Townhall.com concludes:

Income inequality may or may not be “the defining challenge of our time,” as Obama and others have proclaimed. But the most significant driver of that inequality — the biggest impediment to upward economic mobility — isn’t hard to identify. The higher the fraction of children not being raised by their married parents, the more of our fellow citizens for whom the American Dream is likely to remain beyond reach.

The family is one of the building blocks of our society. Unless we strengthen that building block, our society will crumble. Our compassion needs to be combined with wisdom. Children from broken families are more likely to commit crimes and less likely to finish their education. The government needs to find a way to strengthen marriage–not undermine it.

It May Seem Like A Good Idea, But Does It Work?

One of the new mantras of the political left is income inequality. It is simply a crime that people who spent years becoming educated and learning things make considerably more money than those who didn’t. A college graduate has always made more money than a high-school graduate (but that was back when people majored in subjects that included marketable skills–but that’s a whole different issue).

Yesterday the Wall Street Journal posted an editorial explaining how President Obama’s efforts at wealth redistribution have impacted the poor and middle class. In one sentence, higher taxes and redistribution policies have helped neither the poor nor the middle class.

The article reports:

On taxes, Mr. Obama often claims that the rich don’t pay their “fair share,” yet the most affluent one-fifth of taxpayers on average supplied 68.7% of federal revenue for 2011. That’s according to the Congressional Budget Office, which last week updated its statistics on the U.S. distribution of income and taxes for 2011 and preliminary calculations for last year.

As for the top 1%, they funded 24% of everything the government does in 2011. The CBO also estimates that the end-of-2012 fiscal cliff deal that lifted the top marginal income tax rate to 39.6%, plus ObamaCare’s taxes on high-income individuals, increased their average federal taxes by 4.3 percentage points to 33.3% of income. The Warren Buffett minimum-tax rule asserted that no millionaire should pay an effective tax below 30%. Mission accomplished.

So what has been the impact of the increase in taxes on the wealthy? The editorial reports that in 2011, two years after the recession was declared over, middle class income fell by 1.9% compared with 2007.

The article concludes:

The main lesson in these statistics is not about dependence on government. Rather, it is a verdict on Obamanomics. Presidents who put reducing inequality above increasing prosperity end up with less growth and opportunity that benefits everyone, and thus with more inequality.

There’s also a lesson about the exhaustion of the liberal tax agenda. As a matter of arithmetic in a tax system as tilted toward the high end as America’s, the rich aren’t nearly rich enough to finance progressive ambitions. If Hillary Clinton wants more redistribution, she’ll inevitably have to tee up everybody between the 21st to 80th income percentiles for a European-style value-added tax, carbon tax or some other revenue maker.

Have you ever noticed that the people who want to redistribute wealth have enough money to pay accountants to shield their money? It is always the middle class that ends up paying the bill.

An Interesting Viewpoint On Wealth

Thomas Sowell posted an article at Townhall.com today about inequalities in the ability to create wealth. He points out that we are hearing a lot about inequalities in wealth, but what about the disparities in the ability to create wealth?

Mr. Sowell points out:

In a market economy, people pay us for benefiting them in some way — whether we are sweeping their floors, selling them diamonds or anything in between. Disparities in our ability to create benefits for which others will pay us are huge, and the skills required can develop early — or sometimes not at all.

The article reminds us that most of the professional golfers on the PGA tour have never won a tournament, but a few golfers such as Arnold Palmer, Jack Nicklaus and Tiger Woods have won many.

There is a cultural aspect to this as well. In an ethnic groups where achievement in school in encouraged, there will be more students getting the education they need to succeed when they enter the work force. If a child is taught a good work ethic, he will achieve some measure of success. There was a recent study that showed that if a young person finished high school and got married before having children. his chance of being poor was much less than if he did not do those things. We don’t control our circumstances, but we are responsible for our actions, and to a great extent, those actions will be responsible for our success.

Mr. Sowell concludes:

Higher achieving groups — whether classes, races or whatever — are often blamed for the failure of other groups to achieve. Politicians and intellectuals, especially, tend to conceive of social questions in terms that allow them to take on the role of being on the side of the angels against the forces of evil.

This can be a huge disservice to those individuals and groups who are lagging behind, for it leads them to focus on a sense of grievance and victimhood, rather than on how they can lift themselves up instead of trying to pull other people down.

Again, this is a worldwide phenomenon — a sad commentary on the down side of the brotherhood of man.

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