View from the Right

by

Rod Martensen

                                                                                                            February 2009

IT’S BACK TO THE FUTURE

Well, it has been two weeks since Chairman Obama assumed the mantel of power. The economy is no better and the waters have not receded. But, in fairness to the chairman, the planet is colder, a lot of people do seem to feel much better about themselves, and he is poised to reverse the laws of physics and take us back in time to the New Deal. All of this has about as much to do with curing the ills of the economy as the price of peanuts in Taiwan. By the way, I still haven’t received my check to pay my mortgage or to fill up my gas tank. What gives here?

In a blizzard of activity and a plethora of executive orders, all done very publicly before the television cameras, Chairman Obama is about to take us back to the future. On January 30, 2009 he held yet another press event to announce that Joe the Vice was being put in charge of a “middle class task force.” Never mind that nobody ever defines what constitutes “middle class” in contemporary America, or for that matter rich and poor (stay tuned for a separate discussion of this in another article). According to Joe the Vice, organized labor (i.e. unions) made the middle class in America. Oh Joe, you say it ain’t so, but prosperity and productivity made the middle class in America and without the entrepreneurial class to create new industries and businesses, the attenuated jobs that result would not exist and there would be no middle class. This is why most of the world outside of the West has only two classes: a poor and a wealthy class with little to nothing in between. China, India and the Middle East are desperately trying to create middle classes. This is why their economies are awash in cash to purchase our IOUs (i.e. U.S. treasury bonds and notes). Without a strong business and entrepreneurial, upper class, there is no middle class. The incentive to take risk, which is the engine of capitalism, is directly proportional to the ability to absorb loss. Put another way, the incentive to take risk is best borne by those who can afford the risk, who are the rich. This is why poor people seldom start new businesses or why none of us ever works for someone who has less money than we do. Remember: six out of ten new businesses fail in their first year even in the best of times. I think we can all agree that these are NOT the best of times. So should we make it easier or harder for the risk taking class in this country? If the objective is to create jobs, why should we declare a class war on these people who benefit us all?   

In a phrase that should send chills down every American’s spine, Joe the Vice said, “We must monitor outcomes.” It’s back to the future, again. This is nothing but a rehash of the old Marxist idea of “equality of outcomes” that has the Holy Grail of the American Left since the late 1960’s. FDR’s New Deal tried organizing businesses in similar industries into cartels to control wages and set prices as well as to determine outcomes from production rather than letting the market determine these things. Such a centralized, bureaucratic response on the part of the federal government did nothing but prolong the Great Depression of the 1930’s into the 1940’s. The dirty little secret: not until after the war ended and these controls were lifted, and soldiers returned home with a pent-up demand for goods and services, did the American economy really recover from the Great Depression that FDR’s policies help to prolong.

Joe the Vice’s “task force” is nothing but a thinly veiled payback to organized labor for helping them get elected and help further their agenda. Not since FDR, who built the modern political coalition that has served the Democrat Party ever since, has such a blatant quid pro quo been witnessed. Unions are a relic of the past that have outlived their usefulness. Collective bargaining, however, has not. Workers have the right to organize and collectively bargain for increased wages and changes in compensation and working conditions. They also have a right to work. I have advocated for years that workers labor hire high powered lawyers who specialize in collective bargaining when their contracts come up for negotiation. Think of the money they could save by doing this rather than paying out every month to support a professional labor union that really does very little for the workers on a daily basis except take their money. You need only look at what the United Auto Worker Union has done to General Motors.         

In this era of unity, harmony and hope, it appears that class warfare will be making a tremendous comeback in cities and towns near you soon. Class warfare is old hat, tired and divisive. There’s nothing “new” about any of this. Misters Obama and Biden’s time would be better spent reading some Edmund Burke who said, “Those who level never equalize.” In other words, you cannot make the poor rich by destroying the rich. It’s as simple as that. As John Kennedy, the last Democrat worth voting for, said, “a high tide lifts all boats.” He was correct. He also cut the top tax rate from 90% to 70% and a great period of economic expansion followed similar to the 1980’s with Reagan’s tax cuts.  

For somebody obsessed with “change” and new ideas, Chairman Obama seems determined to take us back to the future. By the way, have the waters receded yet? I have to end this and go out and check my mailbox. I’m expecting some checks from the government.