March 23, 2011
Obama's War on the Middle ClassBy Jeffrey Folks
Whenever he is in campaign mode, President Obama goes to great lengths to remind voters that he is "struggling to defend the middle class." As he did in January 2010, Obama speaks of the middle class as "under assault" (by whom he does not specify). In his Labor Day radio address of 2010, he spoke of his "commitment to the middle class." As evidence of this commitment, Obama established a "Middle Class Task Force" early in his presidency chaired by Vice-President Biden. With Biden in charge, why worry?
It should be obvious that Obama and the left wing of the Democratic Party are not struggling to defend the middle class. Most of the time they are struggling to disenfranchise it by ignoring the basic rights of human liberty and of property that are guaranteed under our Constitution.
The 18% real rate of unemployment during Obama's first two years in office has not done much for the middle class. At the same time, there has been an enormous transfer of wealth from the middle class to the underclass. ObamaCare, financial services reform, mortgage reform, education reform, tax reform: in all of these areas, the administration's efforts have been to create and expand services for the poor at the expense of the middle class.
Whether it is the free health care promised to tens of millions of new Medicaid recipients or mortgage principle reductions ("cramdowns") promoted at every turn by his Justice Department, Obama acts like a political general in the class war -- the war of the government services-dependent poor and unionized public sector against the middle class. Among the first acts of his administration were the expansion "making work pay" and child credit benefits: welfare of the sort that had been trimmed by the GOP Congresses of the 1990s.
Whether it is benefits for the underclass or more power for public sector unions, Obama is intent on cementing power based on the loyal support of the underclass and unionized labor. But to complete the task, he must deceive the middle classes for a bit longer by appearing to move to the center. The independent middle class voter, the very class of citizen that is most endangered by his presidency, is key to his reelection. In order to win reelection, he convince them he is safe.
But nothing Obama has done has benefited the middle class. That much should be clear just from what is happening with consumers' pocketbooks.
The recent Bureau of Labor Statistics report on consumer prices is a telling indication of the effects of Obama's policies on the middle class. During the past 12 months, gas prices are up nearly 20%. While global markets largely determine oil prices, Obama's assault on drilling and his weak-dollar policy have not helped things. Had the President pursued a pro-drilling policy and defended the dollar, gas prices would have been substantially lower. Even at this late date, if the administration were to signal support for expanded drilling, world energy markets would respond by lowering the price of oil, thus lowering the price the middle class pays at the pump.
Gas prices hit the middle class disproportionately hard. Bill Gates spends an infinitesimal portion of his earnings on energy bills, and the urban underclass pay little. But the middle class, most of whom commute some distance to work, are shelling out a great deal more each month. The same for food prices, which are up substantially above the "core rate" of inflation. The underclass benefit from increased food stamp subsidies; Gates has probably never shopped. It is the middle class that bears all the burdens under Obama.
The passage of ObamaCare was supposed to lower the cost of health care for practically all Americans. This, in fact, was one of the main rationales for its adoption. Again and again, Obama promised that his health care reform bill would lower the cost of health care -- by $100 billion (he likes big round numbers, for some reason), by $200 billion, by $500 billion over the next ten years.
But since ObamaCare was passed, health care costs for the middle class are way up. Over the past 12 months the cost of private medical insurance, where it can be purchased at all, is up by as much as 59%. Hospital costs are up 6%, nearly three times the rate of core inflation. The cost of the most widely prescribed drugs has increased well above the rate of inflation, driven up by the prospect of future government regulation. None of this has helped the middle class. It is, in fact, part and parcel of a calculated transfer of wealth from the middle class to the underclass.
It's not just energy and health care. Other prices that are influenced by government policy have gone up disproportionately to those in the less regulated market. Educational expenses are up 4%, twice the rate of core inflation. Again, it is the middle class that has been hit. College tuition, private school tuition, and child care -- these costs impact the middle class, not the Warren Buffets of the world, and not the underclass who receive full "need based" scholarships, magnet school preferences, and subsidized child care.
It does not help that, as announced Monday, sales of previously owned homes fell in February to their worst level in nine years. Middle-class homeowners who are now under water on their loans will have to wait a bit longer to break even. Boomers eyeing a place in the sun are going to have a hard time selling their current home before moving.
As Obama understands all too well, one of the hallmarks of all socialist countries is the absence of an independent middle class. From the Bolshevik experiment in Russia to socialist Venezuela today, it is necessary for communist leaders to eliminate that class of citizens who are not dependent on government for their welfare.
Political theorists from Aristotle to Locke understood that a truly independent and prosperous middle class was essential to the collective well-being of any society. The middle class has always, in every society, been characterized by qualities of social restraint and economic realism -- a shrewd and skeptical conservatism that serves to restrain the grandiose plans of utopian revolutionaries and embittered reactionaries alike.
Throughout its history American society in particular has been the beneficiary of an aspiring middle class whose efforts have created the world's greatest democracy. It is an ominous sign that the political left, with the loyal support of more than a third of our population, is intent on its destruction.
Jeffrey Folks is the author of many books and article on American culture.