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Guest Post: President Obama On Inequality - Rhetoric Vs. Reality

Tyler Durden's picture





 

As we noted previously,

The last time the top 10% of the US income distribution had such a large proportion of the entire nation's income was the 1920s - a period that culminated in the Great Depression and a collapse in that exuberance.

 

...as John Taylor explains in his recent WSJ Op-Ed, using this as a lever for Obama's "middle-out" policies - higher tax rates, more intrusive regulations, more targeted fiscal policies - will not revive the economy. More likely they will perpetuate the weak economy we have and cause real incomes—including for those in the middle—to continue to stagnate.

Perhaps it is time to look at the rhetoric relative to the reality...

Submitted by Randall Holcombe via The Circle Bastiat Mises Economic Blog,

President Obama has recently promoted inequality as a fundamental threat to our way of life, saying, “The combined trends of increased inequality and decreasing mobility pose a fundamental threat to the American Dream, our way of life, and what we stand for around the globe.”  You can read the rhetoric here.  Let’s look at the reality.

 

The president suggested policy initiatives to address these issues, so presumably, the president’s policies can make a difference.  What has he done so far?

 

He has presided over corporate bailouts, not only declaring the Wall Street banks too big to fail, while a multitude of small businesses did fail, his policies continue to support the banking industry through low interest rates and the payment of interest on reserves held at the Fed. Banks holding bad mortgages were bailed out while individual homeowners were evicted from their homes.

 

While the president does not directly determine Fed policy, Bernanke was all-in on the president’s agenda, and now the president has appointed Janet Yellen as Fed chair because she supports a continuation of those policies.

 

The low interest rate policy has hurt small savers, who tend to keep their savings in fixed-interest assets, but has propped up the stock market where the wealthier tend to invest.

 

The president’s support for extended unemployment benefits has taken away some of the incentive for people to find work, which is the best way to escape poverty.

 

After campaigning against them, the president worked hard to preserve the “Bush tax cuts,” with ultimately just a small increase in rates for the highest-income individuals.

Then there is Obamacare, which provides financial incentives for employers to convert full-time jobs to part-time jobs to avoid the health insurance penalties, further eroding opportunities for those at the bottom of the income scale.

 

What has been the effect of the president’s economic policies?  The unemployment rate remains high, at 6.7%, and long-term unemployment has spiked to its highest level in history, largely because of the extended unemployment benefits. The labor force participation rate has fallen from 66% in 2008 to below 63% today, so fewer people are even looking for the jobs that could help them escape poverty.

 

In 2008 13.2% of Americans fell below the official poverty line.  By 2012 the poverty rate was 15%.  The president’s policies have increased poverty.

 

How about the rich?  The Dow Jones Industrial Average, which hovered around 8,000 when the president took office in 2009 has more than doubled to top 16,000 today.

 

Despite the rhetoric, the reality is that the president’s policies have created more inequality.  They have hurt the poor, but Wall Street has done well.

The numbers do not lie...(as we noted previously):

in the past year, the poorest 23.3 million Americans earned 36% less than the richest 2,915 Americans (and less than twice more than the richest 166). Needless to say, this excludes wealth from capital and asset appreciation, usually a benefit reserved exclusively for the latter; it also excludes the amount of taxes paid by either of these two income extremes.

 


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Sun, 01/19/2014 - 15:22 | Link to Comment ArkansasAngie
ArkansasAngie's picture

We have a political problem.

I personally have seen more anger amongst the broad swipe of folks I speak to.  

Sun, 01/19/2014 - 15:35 | Link to Comment TeamDepends
TeamDepends's picture

Of course he wants to redistribute your wealth, he's a socialist!

Sun, 01/19/2014 - 15:46 | Link to Comment booboo
booboo's picture

I would have to say that this is actually one thing that Oblame is good at doing. He was a community organizer and spent a few years on the circuit riding from church to church building animosity against the haves and spreading government largess around to the noisy preachers that could muster the troops. What he would never devulge or blacks refused to recognize was that Oblame was a "Have" and really was nothing more then a plantation owner field boss, as in "old nate, he's a good nigger and keeps the pickers heads down pickin cotton and not whining like a cut coon dog.

Sun, 01/19/2014 - 15:59 | Link to Comment Ray1968
Ray1968's picture

Anger is one thing Obama and rich liberals fear. That is why he is pro food stamps and hand-outs and very mcuh into gun control.

Nothing is scarier than a hungry mob with guns!

Sun, 01/19/2014 - 16:00 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Can we has our Obamafone now, since you've done so good for Massa, UncleTombama?

Sun, 01/19/2014 - 16:05 | Link to Comment Headbanger
Headbanger's picture

I want my ObamaGun right now!  MAke it a Ruger GP100 4inch or any Savage, thank you!

Sun, 01/19/2014 - 16:25 | Link to Comment CognacAndMencken
CognacAndMencken's picture

 

 

Reading the comments section gives me this creepy, time-traveling feeling that I'm on the front porch of some southern plantation, drinking lemonade amongst a bunch of dim-witted, backwater hillbillies who've still got some axe to grind about blacks, slavery and the Civil War. 

Amazing.  Did you guys actually read the above article?  The article blames Obama for NOT being a socialist, for NOT looking out for the little guy.... for catering towards the Wall Street masters, and continuing the same policies that created this gigantic divide of wealth in our nation, despite whatever populist rhetoric comes from his administration.  

You guys are like redneck Pavlov dogs.  You see an article about Obama, and you immediately begin to prattle on about socialism, blacks, slaves...having no idea WTF you're talking about nor what the article said.  

Fucking hillbillies.   

 

 

Sun, 01/19/2014 - 16:54 | Link to Comment TruthInSunshine
TruthInSunshine's picture

If you weren't so rigid in your interpretation, you might be able to understand that some of the comments (such as mine, for example) have NOTHING inherently to do with race, actually, but speak to (and use metaphors) the "plantation" style economy we now have, where the poor are further disenfranchised with token bribes by the welfare state, and where full bore CronyComradeCapitalism has driven a massive trend in further destroying the middle class/working class, destroying the myth that the America Dream can be achieved by hard work and what one knows rather than government connections and WHO one knows, leading to more of a rich man-poor man society in the U.S. than has existed in MANY decades, with Obama, regardless of his skin color, merely being the latest Installed-Puppet-In-Chief & Tool of the Oligarchy.

Expand your horizons and lose your own rigid paradigm.

I HOPE that you can CHANGE.

Sun, 01/19/2014 - 16:59 | Link to Comment ronaldawg
ronaldawg's picture

Like they would ever let him on the front porch.... pleeeeeeese.

Sun, 01/19/2014 - 18:49 | Link to Comment duo
duo's picture

I AM going to make me a mint julip, though.

Ahhhhh, magnolias....

Sun, 01/19/2014 - 16:38 | Link to Comment TeamDepends
TeamDepends's picture

You got a purdy mouth, boy.

Sun, 01/19/2014 - 16:54 | Link to Comment ronaldawg
ronaldawg's picture

Hillbillies are white niggers.  Are you confused?

Sun, 01/19/2014 - 18:35 | Link to Comment ArkansasAngie
ArkansasAngie's picture

Well ... since I'm a hillbilly ... 

Sun, 01/19/2014 - 17:14 | Link to Comment nmewn
nmewn's picture

"You guys are like redneck Pavlov dogs.  You see an article about Obama, and you immediately begin to prattle on about socialism, blacks, slaves...having no idea WTF you're talking about nor what the article said."

Idiot.

Did not the soviet elites have their dacha's far removed from the teaming masses of slaves they ruled over? Kinda like four million dollar Hawaiian vacations on the Obama "Inequality Scale", wouldn't you say?

Sun, 01/19/2014 - 17:41 | Link to Comment ronaldawg
ronaldawg's picture

Errrrr..........like in Sochi?

Sun, 01/19/2014 - 17:59 | Link to Comment kchrisc
kchrisc's picture

Try reading and thinking while you're on the porch.

Sun, 01/19/2014 - 16:02 | Link to Comment Headbanger
Headbanger's picture

But he's from Kenya!  And he's an insult to all African Americans (including his wife) who believed in such a liar to their race!

 

Sun, 01/19/2014 - 16:13 | Link to Comment Boris Alatovkrap
Boris Alatovkrap's picture

Barry is a frick'n moron, is make world to laugh at AmeriKa.

Sun, 01/19/2014 - 16:22 | Link to Comment Headbanger
Headbanger's picture

Boris is say again unfortunate truth of Amerika. 

Is Boris have Tokarev T33 and like?

Sun, 01/19/2014 - 16:51 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Obama, now @ a dismal 39% approval rating (the flip being an equally dismal disapproval rating of 53 percent), has pulled out the race card:

http://www.bloomberg.com/news/2014-01-19/obama-says-racial-animus-may-so...

Sun, 01/19/2014 - 18:12 | Link to Comment Stuck on Zero
Stuck on Zero's picture

I hate him for his white half.

 

Sun, 01/19/2014 - 18:30 | Link to Comment TruthInSunshine
TruthInSunshine's picture

I despise him and all like him who share the genetic trait of having (and speaking with) a forked tongue.

It's one thing to be a genuinely stupid, hapless, incompetent person; it's infinitely worse to be an intelligent, persistent, pathological liar that is willing to work for those with malicious intent to further one's own economic interests and/or to feed one's addiction to narcissism.

Sun, 01/19/2014 - 19:16 | Link to Comment Missiondweller
Missiondweller's picture

I see nothing about the guy that tell me he's intelligent. He's getting hi butt whooped in every single foreign policy arena.

Of course its always possible him getting played by the Russians and Iranians is furthering what he really wants but given his massive ego I can't imagine he'd willingly allow himself to be outsmarted to promote a secret agenda. The best explanaition is that he's just clueless.

Sun, 01/19/2014 - 18:27 | Link to Comment angel_of_joy
angel_of_joy's picture

Indeed he is ! But just because this moron keeps talking, it doesn't mean that other people should keep listening. Take a clue from his own wife...

Sun, 01/19/2014 - 16:34 | Link to Comment Tijuana Donkey Show
Tijuana Donkey Show's picture

Wookies are not from Africa!

Sun, 01/19/2014 - 20:47 | Link to Comment Boris Alatovkrap
Boris Alatovkrap's picture

Except for a frick'n wookie.

Sun, 01/19/2014 - 16:21 | Link to Comment izzee
izzee's picture

ever since I saw Django, the Quenton Tarrantino Film, I think of the Samuel Jackson character every time I see or hear the O.

Sun, 01/19/2014 - 17:53 | Link to Comment max2205
max2205's picture

He has a lot more flexibility after he gets re elected.....whhhAaaaaaa

Sun, 01/19/2014 - 16:29 | Link to Comment Tom_333
Tom_333's picture

Interesting. Wonder what the inevitable back-lash will look like? Those days when just rhethoric , duplicity and brinkmanship really doesn´t cut it. The super low rate, hyperleveraged good ole´profit days will have to end. No one knows when or how but come to an end it will.Something for everyone to ponder.

Sun, 01/19/2014 - 15:25 | Link to Comment A Lunatic
A Lunatic's picture

You want equality do you...?? Lets start with EQUAL treatment under the law you hypocritical asshole........

Sun, 01/19/2014 - 15:40 | Link to Comment dexter_morgan
dexter_morgan's picture

Making CONgress critters and potus have to live by the laws they pass would go a long way towards better, or hopefully, much less legislation and regulation.

Sun, 01/19/2014 - 15:30 | Link to Comment Dr. Engali
Dr. Engali's picture

If Zero had a son he wouldn't look like a pro football player:

Obama: 'I would not let my son play pro football'

http://thehill.com/blogs/blog-briefing-room/news/195895-obama-danger-of-...

Sun, 01/19/2014 - 15:37 | Link to Comment Midas
Midas's picture

I don't know about that.  I don't think of linebackers when I see Barack, but I sure do when I see Michelle.  Have you seen those shoulders?  Or course you have, she doesn't own any sleeves.

Sun, 01/19/2014 - 15:40 | Link to Comment Bearwagon
Bearwagon's picture

Well, I feel more reminded of oimplyc swimmers, but that may be because we don't play much football in europe ...

Sun, 01/19/2014 - 15:59 | Link to Comment knukles
knukles's picture

To paraphrase Vlad the Bad;

If you like your gays/trannies/lesbians/transgendereds, etc, you can keep your gays/trannies/lesbians/transgendereds.

Is that supposed to make us feel good?

Sun, 01/19/2014 - 16:57 | Link to Comment ronaldawg
ronaldawg's picture

Obama is not man enuf to have a son.  I hear Moochelle does'nt do doggy.....

Sun, 01/19/2014 - 17:55 | Link to Comment Make_Mine_A_Double
Make_Mine_A_Double's picture

Hey!

We're sending Billy Jean King or Martina Bendover or is it Robert Redford (he sorta looks like an old lesbian) to front the US Olympic team.

Yeah, that'll show old Vlad. Take that bitch! Here's a couple of old rug munchers in your face. Don't mess with the USSA and dick around (no pun intended) with our homos.

Yes, I'm sure Putin will be most impressed with this display of solidarity........barf 

Sun, 01/19/2014 - 15:41 | Link to Comment TeamDepends
TeamDepends's picture

How about tight-ends?

Sun, 01/19/2014 - 15:43 | Link to Comment dexter_morgan
dexter_morgan's picture

she shore is a hansome womin

Sun, 01/19/2014 - 15:53 | Link to Comment Shad_ow
Shad_ow's picture

They don't have affirmative action for football players but I'd like it if they allow it for Barry.  Let's line him up opposite a couple of NFL defensive lineman and see what happens.  He is a legend in his own mind in everything else, let's try that.

Sun, 01/19/2014 - 16:39 | Link to Comment Everybodys All ...
Everybodys All American's picture

No need to worry. It's laughable to think this no talent chump would have a kid good enough to play pro football. If you have ever seen Zero throw a baseball or shoot a basketball you would know why I say this.

Mon, 01/20/2014 - 08:33 | Link to Comment kralizec
kralizec's picture

If Obama had a son he'd be sporting tights and a tutu.

Mon, 01/20/2014 - 00:00 | Link to Comment pupdog1
pupdog1's picture

Pro football players work hard.

Sun, 01/19/2014 - 15:38 | Link to Comment Bearwagon
Bearwagon's picture

Forward socialism! (For the banks, that is ...)

Sun, 01/19/2014 - 16:04 | Link to Comment MFLTucson
MFLTucson's picture

Yes he is a fraud ...what’s the big surprise?

Mon, 01/20/2014 - 09:00 | Link to Comment Kobe Beef
Kobe Beef's picture

An interesting take on the Limosine Liberal phenomenon...

http://pjmedia.com/victordavishanson/mindless-progressivism/?singlepage=...

Sun, 01/19/2014 - 16:19 | Link to Comment Make_Mine_A_Double
Make_Mine_A_Double's picture

And just this morning he posited his approval ratings are in the toilet due latent YT rascism. Apparently the same ones that drank the multicult Kool Aid and elected him - twice no less.

So now he's pulled the 'inequality' and the 'race' card. We must be getting close to match point.

What a feckin' clown. But if your a communist, muslim homosexual it would be difficult not to be confused.

 

Sun, 01/19/2014 - 16:18 | Link to Comment q99x2
q99x2's picture

Don't waste time analyzing the Totos' Toti's I mean his words. Mans an imbecile. His handlers have purposely put his life in jeopardy and he is now running scared. He's about to be arrested and is turning to drugs, alcohol and tobacco again. Why doesn't he roll it up and get his sorry ass into rehab?

Sun, 01/19/2014 - 16:39 | Link to Comment lex parsimoniae
lex parsimoniae's picture

oh the possibilities!

echoing another post here.. does anyone give a rat's ass what this moron Barry says? seems completely irrelevant to almost everyone, even his typical shills.

Sun, 01/19/2014 - 16:20 | Link to Comment Heroic Couplet
Heroic Couplet's picture

When I see "Obama," I just substitute "Rothschilds."

Sun, 01/19/2014 - 16:31 | Link to Comment JR
JR's picture

ZH’s dizzyfingers spotlighted the ugly “reality” in America earlier today in the links below. The worst part? Welfare payments are equivalent to making $30 per hour for 40 hours a week. The median wage for non-welfare recipients is $25 per hour but because they pay taxes, unlike welfare recipients, the wage for the average working Joe is bumped down to $21 per hour. (Senate Budget Committee 2011)

Mainers using EBT cash in unusual places

AUGUSTA, Maine — They were at smoke shop ATMs when they used their welfare cards to withdraw cash. At race tracks. At tattoo parlors. Even at Disney World-area resorts in Lake Buena Vista, Fla....

http://bangordailynews.com/2014/01/19/politics/mainers-using-ebt-cash-in-unusual-places/

AND on January 14, 2014:

Last week Maine Gov. Paul LePage announced that some state residents have been withdrawing welfare money from ATMs located in liquor stores and other restricted places... In most states, including Maine, welfare recipients have Electronic Benefit Transfer cards that function like debit cards and allow them to withdraw cash at ATMs. A federal law enacted in 2012 banned the cards’ use at liquor stores, casinos and businesses that provide adult entertainment.

jwogan@governing.com @jbwogan

Sun, 01/19/2014 - 17:56 | Link to Comment kchrisc
kchrisc's picture

Good stuff, but remember it is not the recipient of this stolen loot that is to blame, it is the thief.

Also, who is more worthless, the person receiving "benefits" and producing nothing or the person being ostensibly "paid" to not only produce nothing but to do more harm?!

 

"I was robbed, all my gold was turned into green debt certificates."

Sun, 01/19/2014 - 16:38 | Link to Comment BeingThere
BeingThere's picture

What about the TPP? That wasn't even discussed here and it's going to really create disparity. That's Obama's fast track trade deal along with ones that work with Europe. Talking about speaking from both sides of your mouth.

Sun, 01/19/2014 - 17:07 | Link to Comment LMAOLORI
LMAOLORI's picture

 

 

Those trade agreement are a means to an end game.

 

Why Congress Is Held in Contempt

snip...

Today, Congress first surrendered to the executive the authority to negotiate trade deals, and then passed fast track, denying itself the right to amend those treaties. Congress has restricted itself to a yes or no vote on what the executive negotiates.

The transnational corporations that finance campaigns are delighted.

But as a consequence of NAFTA, GATT, and the WTO, a third of U.S. manufacturing jobs and a huge slice of our manufacturing base have been shipped overseas, and we have run $10 trillion in trade deficits since Bush I.

The stunning industrial decline of the United States has been matched in two centuries only by the USSR.

 

The biggest export from America? The middle class. The tradeoff for cheap goods and financial cronyism is coming back in a big way.

http://www.mybudget360.com/us-biggest-export-middle-class-jobs/

Sun, 01/19/2014 - 17:46 | Link to Comment kchrisc
kchrisc's picture

He's going to fix 'inequality!!!!"

Fantastic, as I want a bigger cock.

And I think that Obamacare will cover it as well. I can't wait for the "Get Covered" video ad pushing that 'benefit."

 

Sun, 01/19/2014 - 18:07 | Link to Comment U4 eee aaa
U4 eee aaa's picture

Aha! So, you finally admitted it huh? :)

Sun, 01/19/2014 - 18:03 | Link to Comment U4 eee aaa
U4 eee aaa's picture

I've long argued that profit sharing is what needs to be addressed and not so much minimum wage increases. That is a win/win since it boosts goodwill, employee loyalty and retention and it doesn't cost the company a dime if they don't make a profit.

This is another good reason why. With companies sitting on 1.25T of cash, that money is being kept out of the economy. If they only gave 5% of it to their employees, that would add a huge economic boost to the economy since it most likely would be spent or used to pay down debt

 

Companies Hoarding $1.25 Trillion  

...What they haven't been doing is giving extra cash to employees, despite a year of solid – and often record – profits and huge cash hoards. A survey by Aon Hewitt on compensation trends for 2014 shows that companies plan to raise salaries by just 3% this year – the highest since 2008, when the average raise was 3.7%. Economist Ed Yardeni notes that employee compensation and capital spending as a percentage of GDP has been the lowest since the mid-1950s.

But suppose each company with $1 billion in cash took 5% of that stash and give it to employees as a bonus. Unlike a raise, which is an ongoing cost, a bonus is simply a one-time payout – a way of thanking workers for a good year. What would each employee get?

Employees would get an average $3,086 apiece if all the S&P 500 companies gave a bonus equal to 5% of their cash holdings. For someone earning $51,017 a year, the median household income, that's the equivalent of 6% of salary. But the amount would vary widely according to company, because it's a function of the size of the company's cash stash and the number of its employees.

For Microsoft, 5% of cash and short-term equivalents would be $3.8 billion. Spread among its 99,000 employees, the software company could pay a bonus of $38,492 a worker. For Apple, 5% of its cash would be about $2 billion, spread among $80,300 workers. Bonus: $25,274....

 

Sun, 01/19/2014 - 18:05 | Link to Comment NOZZLE
NOZZLE's picture

The Brits should have shot his old man in the back of the head before he had the chance to travel to the US and spend his college days injecting his worthless DNA into white coeds with the collective IQ of road gravel. Woulda saved this country a lot of pain.

Sun, 01/19/2014 - 19:58 | Link to Comment Bitter Clinger
Bitter Clinger's picture

The real problem is the concentration of wealth, which is actually protected by high income taxes, let me explain.  According to the Federal Reserve, the top 20% of the population controls 85% of the wealth.  This same group earns only 47% (2008) of the income.  Obviously the remaining 80% of the population earns 53% of the income while controlling only 15% of the wealth.  As a measure of productivity of wealth, the bottom 80% is six times more productive.  To clarify; Bill Gates, a real rich guy, a few years ago paid $19 million income tax on $59 million of earnings but at the same times had a net worth of $5.8 BILLION.  He paid .03 percent of his net worth in income tax.  Theresa Heinz Kerry in 2004 paid $660,000 in income tax on a net worth of $200 million or .3 percent.  I am a Bitter Clinger who owns his own home and has a 401k and last year I paid 3% of my net worth in income taxes.  My daughter and her husband, who are just starting out, paid a stunning 30% of their net worth in income taxes and my son in LA is underwater and has a negative net worth.  The question is who should pay to support the status quo?  Since my son has nothing why should he be forced to pay?  For the last hundred years government has tinkered with the tax rates in the income tax to get the wealthy to pay more but as I have pointed out it is like fighting al-Qa'ida in Iraq, it just can’t be done.  When you raise rates on high-income earners you essentially destroy the ability for people to move from class to class.  Both the Tea Party and OWS see the problem but because they cannot discriminate between income and wealth are unable to see any feasible solutions.  Which 1% do you feel is the problem, the wealthy or the high-income earners, because they are <b>NOT</b> the same people! 

Sun, 01/19/2014 - 23:18 | Link to Comment Manic by Proxy
Manic by Proxy's picture

Thank you for supporting and rationalizing wealth seizure. Theft in the form of taxation isn't adequate for you. Your argument is to prevent anyone from accumulating wealth. Be clear that this is the end result of your argument. Bitter you are and bitter you shall remain. At least you have identified yourself as the enemy. So that's something.

Mon, 01/20/2014 - 04:12 | Link to Comment the0ther
the0ther's picture

The wealthy. They need to take a one time 50% haircut on all assets. Fuck those guys. See how much they can spend buying politicians after that. 95% haircut if that first one doesn't work.

Ready to hit the reset button on USA 1.0. Or USSA. This place is a cesspool. And not because of the powerless and poor. 

Mon, 01/20/2014 - 10:49 | Link to Comment Uni
Uni's picture

You speak as if the top 20% is fixed as opposed to being an end point in a generational change. Most of the top 20% by wealth is pensioners who are living off of after tax investments.

Reading comments like this on the thread I feel like I was transported to dailykos not zh!

Sun, 01/19/2014 - 22:37 | Link to Comment Musashi Miyamoto
Musashi Miyamoto's picture

Party like its 1929, BitcheZ. Let them eat Cake/McDonalds indeed...

Mon, 01/20/2014 - 00:07 | Link to Comment pupdog1
pupdog1's picture

“There’s no doubt that there’s some folks who just really dislike me because they don’t like the idea of a black president,” Obama said...

I'm such a silly rabbit.

I thought I disliked him because he's been ass-fucking the Constitution for five years, which my family has fought (and died) for in the US military since WWI to protect.

Do NOT follow this link or you will be banned from the site!