July 18, 2012

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James Pethokoukis posts on the latest collectivist wisdom from the One.

… That ranks right up there with “When you spread the wealth around, it’s good for everybody” as an Obama statement that seemingly confirms a collectivist streak in his economic cosmology.

1. The less damning interpretation is that Obama is merely parroting Elizabeth Warren’s blindingly obvious statement that private enterprise benefits from certain public goods that government provides, such as education and infrastructure, and thus investors and entrepreneurs and other wealthy Americans shouldn’t mind paying taxes for them.

But  that’s a strawman argument — and a divisive one at that. Demonization through distortion. Few opponents of higher taxes are arguing that the most successful Americans should pay no taxes — only that with the top 1% making 20% of the income and paying 40% of the taxes, that the system is already progressive enough. Indeed, you could quite plausibly argue that the United States already has the most progressive and lopsided income tax system among advanced economies.

2.  The more worrisome interpretation is that Obama is adding his own philosophical addendum to the Warren Doctrine: that there is no such thing as individual achievement or merit. All success is directly due to society’s collective effort as manifested by government. It takes a village — or at least its bureaucrats — to accomplish anything. There are no heroes, no great Americans other than The People who express the National Will through Government. As if the nation’s entrepreneurs all stand on the shoulders of the giants at the Commerce Department and the Small Business Administration and the Energy Department. If entrepreneurs really add no value to the efforts of government, why not not tax them at 90%? That way, more money for government — the “somebody else” in the Obama statement — to create more middle-class prosperity. …


Jennifer Rubin too.

… The philosophy is based on resentment toward wealth and ignorance about how it is created. On Friday, Obama told us, in what is certainly his most revealing comment, of the campaign:

There are a lot of wealthy, successful Americans who agree with me — because they want to give something back. They know they didn’t — look, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something — there are a whole bunch of hardworking people out there.

If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business — you didn’t build that. Somebody else made that happen.

I don’t think any president or major presidential candidate has ever articulated this view. It’s not very far from that to “property is theft,” after all. Notice how un-nuanced is his statement — no recognition that entrepreneurship is in fact the engine of growth or that government activity is not a undiluted good. …


Pethokoukis reports on Paul Ryan’s comments. Here’s Ryan;

… Every now and then, he (Obama) pierces the veil. He’s usually pretty coy about his ideology, but he lets the veil slip from time to time. … His straw man argument is this ridiculous caricature where he’s trying to say if you want any security in life, you stick with me. If you go with these Republicans, they’re going to feed you to the wolves because they believe in some Hobbesian state of nature, and it’s one or the other which is complete bunk, absolutely ridiculous. But it seems to be the only way he thinks he can make his case. He’s deluded himself into thinking that his so-called enemies are these crazy individualists who believe in some dog-eat-dog society when what he’s really doing is basically attacking people like entrepreneurs and stacking up a list of scapegoats to blame for his failures.

His comments seem to derive from a naive vision of a government-centered society and a government-directed economy. It stems from an idea that the nucleus of society and the economy is government not the people. … It is antithetical to the American idea. We believe in free communities, and this is a statist attack on free communities. … As all of his big government spending programs fail to restore jobs and growth. he seems to be retreating into a statist vision of government direction and control of a free society that looks backward to the failed ideologies of the 20th century.

This is not a Bill Clinton Democrat. He’s got this very government-centric, old 20th century collectivist philosophy which negates the American experiment which is people living in communities, supporting one another, having government stick to its limits so it can do its job really well … Those of use who are conservative believe in government, we just believe government has limits. We want government to do what it does well and respect its limits so civil society and families can flourish on their own and do well and achieve their potential. …


John Podhoretz calls it the biggest mistake of 2012 because there are so many small sole-proprietorships.

… In 2007, the last year for which we have data, according to the Census Bureau, there were 21.7 million businesses in the United States with no employees—meaning they were sole proprietorships, or free-lance businesses employing only their owner. Of the six million remaining businesses in the U.S., more than 3 million had 1 to 4 employees, and 1 million had 5 to 9. So, all in all, small businesses run by one person employing fewer than ten numbered an astonishing 25 million.

This is probably the matter of greatest pride for each and every one of the people who runs that business. He or she views himself or herself as a hard-working, go-getting, scrappy individualist. And it’s likely that many of them—many, many of them—are independent voters. Certainly that was the case 20 years ago when Ross Perot scored 20 percent of the vote, overwhelmingly from small businessmen who were angered by George H.W. Bush and yet couldn’t pull the lever for Bill Clinton. America is different demographically, but the class of people to whom Perot appealed is far larger than it was then.

And a man running for national office just said of their own businesses that they “didn’t build that. Somebody else made that happen.” This statement is a colossal opportunity for Mitt Romney and will prove a suppurating wound for the president, who revealed a degree not only of condescension but of contempt for the very people who are going to decide this election. …


Fiscal Times has 12 reasons why college costs keep rising.

University presidents and economists like David Feldman and Robert Archibald often cite the Baumol Effect (named after a Princeton economist) as a key reason college costs keep rising. They argue that higher education is a service industry where it is inherently difficult to raise productivity by substituting machines for humans. Teaching is like theater: it takes as many actors today to produce King Lear as it did when Shakespeare wrote it 400 years ago. While there is some truth to the argument, in reality technology does allow a single teacher to reach ever bigger audiences (using everything from microphones to streaming video). Moreover, a majority of college costs today are not for instruction –the number of administrators, broadly defined, often exceeds the number of faculty.

The second explanation comes from former Education Secretary Bill Bennett: rapidly expanding federal student financial assistance programs have pushed up college prices, so the gains from student aid accrue less to students than to the colleges themselves, financing an academic arms race. Recent studies support the Bennett Hypothesis. Student aid has fueled the demand for higher education. In the market economy, increased demand for a product made by one company (say the iPhone) quickly spurs competition (other smart phones), so prices do not rise. That fails to happen in higher education, as many providers restrict supply to enhance prestige. Harvard has an Admissions Committee, McDonald’s does not. …


Andrew Malcolm with late night humor. 

Leno: President Obama urges Americans not to read too much into the recent terrible jobs report. In fact, he said it’s probably best if you don’t read it at all.

Fallon: Obama says the biggest mistake of his first term was not telling a story that gave Americans a sense of unity. Then, Americans replied, “Fixing the economy would’ve been cool too.”

Leno: Joe Biden says Mitt Romney’s economic policies are “George Bush on steroids.” Well, Obama’s policies are Jimmy Carter’s on Ambien.


Great pics from The Great Demotivator.

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