In a Financial Times column titled “The riddle of black America’s rising woes,” Edward Luce spins a convoluted alibi to absolve Barack Obama of his egregious policy failures. He may have been President for the past six years, and Democrats may have controlled Congress for two of them, but it’s all the fault of the racist Tea Party, don’t you know.
Let’s begin by giving Mr. Luce credit for noticing something U.S. liberals studiously ignore: Based on median household income, median net worth, labor force participation and other metrics, Obamanomics has been a disaster for black Americans. They fared far better under the heartless George W. Bush. But Mr. Luce assures us that “Obama is not to blame” for his sorry record because “by any yardstick – the share of those with subprime mortgages, for example, or those working in casualized jobs – African Americans were more directly in the line of fire” of the recession. “By no honest reckoning,” Luce avers, “can Mr. Obama be blamed for the decline in black America’s fortunes.”
Sorry. You Can’t Separate Obama from Obamanomics
Where to begin? The Luce narrative makes no sense because if blacks were particularly hard hit by the recession that would set up what Wall Street calls “easy comparisons” that made it all the easier for Obama to lift the incomes of poor blacks during the ensuing economic recovery. That didn’t happen; black median household income was lower in 2013 than the recession year 2009. Furthermore, Mr. Luce is actually insulting President Obama by insisting he was effectively a bystander during his own administration and had no substantive impact on the economy. Would that it were true. In reality Obama and the Democrats are responsible for the worsening plight of poor Americans, black and white (which is why inequality is increasing):
- Obamacare discourages businesses from having more than 50 full-time workers, so part-time employment is proliferating. The U.S. labor market is starting to resemble that of Italy, where there are strong incentives for firms to have fewer than 15 workers.
- Obamacare discourages hiring low-wage workers by promoting substitution of cheap capital (thanks to the Fed) for increasingly costly labor.
- Transfer payments such as Food Stamps and Obamacare have the perverse effect of making it financially irrational for poor people to work more. The CBO estimates the equivalent of 2 million jobs will not be filled due to Obamacare; other estimates are higher. It is impossible for a poor person to “get ahead” if he or she doesn’t work. Result: lower social mobility and greater inequality.
- Obama excoriated “millionaires and billionaires” (aka job creators) while sharply raising their taxes. Not exactly a confidence builder for entrepreneurs.
- Dodd Frank cut small business lending by wrapping community banks in red tape.
- Obama opposes charter schools, school vouchers, and school choice for inner city parents; terrible public schools are good enough for poor kids but not for Obama’s own daughters.
- Obama attacked fossil fuels, thereby killing jobs and raising the energy costs of the poor.
- Obama failed to reform America’s dysfunctional corporate tax code, which kept $2 trillion stranded offshore.
- Obama failed to negotiate new trade agreements that would promote exports.
Mr. Luce attributes the loyalty of blacks to President Obama, despite his economic failures, to the racism of the Tea Party, as evidenced by such “dog whistles” as Newt Gingrich accurately calling Obama “the food stamp President” and a Congressman calling Obama a “liar” during a State of the Union Speech. Luce must have a very low opinion of blacks if he thinks they lay greater emphasis on those trivial ephemera than on substantive economic blunders that consign millions of Americans to poverty.
Here is what the Tea Party (including such blacks as Herman Cain, Dr. Ben Carson, Senator Tim Scott, Thomas Sowell and Lieutenant Colonel Allen West) really think. Obama’s statist policies have been just as harmful to poor Americans as Tea Party folks feared back in 2009. My own prognostications in this regard have been depressingly accurate. What is needed to move poor people off “the liberal plantation” and toward economic independence is a decisive shift from Obama’s paternalistic statism to a dynamic, fast-growing free enterprise economy that fosters strong job growth and rising incomes. That is what we had in the late 1990s under President Clinton and a Republican Congress led by Newt Gingrich, who cut the capital gains tax in 1997. Despite “rising inequality” during the tech bubble, the unemployment rate plunged to 4% and the median household income of black families rose a stunning 18% between 1995 and 2000.
Copyright Thomas Doerflinger 2014. All Rights Reserved.
