News reports say that the theme of President Obama’s State of the Union speech tonight will be fairness. I take this as an admission of failure. If his economic policies were working, he would be talking about growth. By focusing on fairness, he is implicitly admitting that things aren’t going to get any better. Not while he is in charge, anyway.
Of course, by “fairness” Obama means raising taxes on those who are already paying them, and spending even more money on those who aren’t. The problem with this approach is that the United States already over-taxes its higher income citizens more than any other developed country. The last thing we need to do is make that disproportion even worse.
Which is not to say that our country is perfectly fair, by any means. There are some things we can and should do. First, let’s have tax fairness: tens of millions of Americans pay little or nothing in federal taxes, or even profit via the earned income tax credit, while consuming vast amounts of government services. That should stop. If you are a citizen, and you earn money, you should contribute something.
Second, our economy is considerably less fair today than it was when Barack Obama took office. This is because of the pervasive cronyism that the Obama administration has introduced. For the first time in our history, the best way to make money is not to work hard, to innovate, and to supply goods and services that consumers want. Rather, the best way to make money is by having political connections with the Obama administration and the Democratic Party. One of the most shocking facts related in Peter Schweizer’s Throw Them All Out is shown in this chart. For every dollar that a member of President Obama’s campaign finance committee contributed to his campaign, that member’s company has received nearly $25,000 from the Obama administration. How’s that for a return on investment?
Another example: General Motors’s bondholders had a contractual right to be paid ahead of union members if the company got into financial trouble and went into bankruptcy. But, as part of his bailout of GM, Obama lawlessly crammed down the bondholders, violating their legal rights in order to compensate his political cronies. That was completely unfair, and it was the episode that caused Michael Barone to label the Obama administration “gangster government.”
Such examples could be multiplied endlessly, but the point is simple: if Obama really wanted a fairer society, he would abjure crony capitalism and return to the basic principles of free enterprise, where competition is fair and whoever works hardest and serves the public best profits the most. Somehow, though, I don’t think that is the sort of fairness we will hear about tonight.
Finally, how about inter-generational fairness? The Obama administration has run up unprecedented trillion dollar-plus deficits every year it has been in office. We have now stuck our children and grandchildren with $15 trillion in debt–a decision in which they could not participate. Is that fair? Moreover, while America’s state governments have for the most part responded competently to fiscal problems caused by the Obama recession, the Obama administration and Congressional Democrats have been lighting cigars with $100 bills. This chart, from the Senate Budget Committee, contrasts the economies that most states have imposed with the extravagance of the Obama administration:
So there is a great deal that the Obama administration could do to make America a fairer nation: Equalize the tax burden by collecting at least modest revenues from all. Cut spending. And, most of all, replace crony capitalism with free enterprise. If Obama proposes these measures tonight, I will give him a standing ovation.
UPDATE: He didn’t, of course. Michele Bachmann’s reaction to the SOTU was similar to mine:
President Obama’s State of the Union rhetoric called for ‘fairness’ but the reality is that this President is anything but fair. The President presented ideas tonight that demonstrate his willingness to pick winners and losers. First, the President introduced a new tax loophole for a certain sector of manufacturers. He believes that high-tech manufacturers should get double the tax break that other manufacturers receive. This is wrong. Instead, there should be a level playing field for our manufacturers. …
The President’s favoritism continues into his view on energy. Last week we saw the President side with his friends in the environmental lobby by denying the construction of the Keystone Pipeline. Then, while the President highlights massive cuts to the Department of Defense, he also announced that they will be forced to purchase his preferred type of energy – clean energy. …
These are just a few examples of the President governing with favoritism, not fairness. The President needs to follow the Constitution, given to us by the founders, and its one true fairness guide – equal protection under the law. America was not founded on redistribution of wealth, but on free markets and the idea that everyone is entitled to the fruits of their labors. …
Our country in is dire need of a solution that will help us recover our jobs, our economy and our hope for the future. The true state of the union is such that we simply cannot afford more of the hollow promises that President Obama presented tonight. He called for ‘no bailouts, no handouts, and no copouts,’ but his policies are rooted in these three things. Our country needs better and our country deserves better.