Reportedly the President will, tomorrow, attempt to convince us that economies grow from the middle ‘outward’; that the Middle Class is the nexus for economic growth and job creation.
Having just finished re-reading Atlas Shrugged this speech has to potential of being a speech any one of the ‘looters’ could have given. Up is down and down is up. Less is more and more is less. What you believe is more important that what you see! It’s justified on the basis of an undefined a ‘greater good’, that greater good being an amorphous idea devoid of actual substance and ignoring fact and consequence.
No one would argue that vibrancy in the Middle Class is an important part of the economic engine; however the simple fact is that they are the working, saving and consuming class. They are not the capital investment class.
Our liberal friends like to castigate any mention of ‘trickle down economics’. But when the question is posed; ‘point to any example in all of economic history where a Middle Class, in and of itself, generated economic growth’ the answer is platitudes absent a set of facts to support them.
The Middle Class invests; typically their life savings or an inheritance to open a small business. They create jobs along the way and hopefully have the success to expand and grow. The economics of these investments is most often impactful on the immediate area of the investment. The foundation for these Middle Class investments is the vitality of the regional or local economy. As a kid I worked in a Pizza shop, it did well, until the factory that was across the street closed down. So did the Pizza shop soon after, my boss Nick lost everything he had invested not because he did not do a good job but because the fundamental demand for his product disappeared.
In a macro economic sense it takes large investments and high levels of capital to guarantee large enterprise: mills, manufacturing facilities, oil exploration, pipelines, and mines. These investments are what create thousands of jobs both directly and indirectly. The opening of a new cigar store is a good thing, but it will not motivate anyone to open up a new Diner across the street because the traffic flow will be so greatly increased or because so many new people will locate to the market because of the presence of the cigar store. A new factory is a different story, a new pipeline is a different story a new refinery is a different story!
To deny the impact of what we see in front of us, the reality of our personal job history and what our experience tells us is true is, seemingly, the Presidential goal. Knowing both the President’s rhetorical tendencies and an ideology that demands facts be put aside, it is also likely he will once again point his finger at the ‘rich’. Success must be castigated as unfair, no matter the personal brilliance, creativity or forbearance that produced it. Success must be punished in favor of those who produce little or nothing in the Progressive view, because it’s fair. Most folks think that an economy that promotes getting a job would be the fairer alternative. We can only hope that this thought occurs to them during the Presidential speech.
The President’s will no doubt reprise his constant references to fairness. ‘Fairness’ however, has never been defined in a way that we know what is meant. It is, as are so many of the President’s pronouncements a floating point in space. The definition changing with circumstance, or the weather or …….. something! But whatever the changes in the President’s position the core of his belief system has been too long on display to ignore the implications.
The implication is more of what we have seen in immediate years past: trillions of dollars on the sidelines, anemic economic growth, high unemployment, massive increases in dependency and a demand that there be more. The relatively easy things such as allowing a holiday for American companies to bring their overseas profits back home, is ignored. The potential for a three trillion stimulus package is not a good idea in the President’s world because government is not in the middle of handing out the goodies.
Rewarding the non productive is moral in the Progressive view. Rewarding the folks who pay that freight is immoral. Up is down, Down is up.