Democrats return to the economic politics of shame

Democrats continue an economic message designed to shame Americans into voting for them.

So, what IS the difference? (Cartoon by Branco, via Comically Incorrect. Reprinted by arrangement and with permission. See link below.*)

WASHINGTON, April 23, 2016 — As I listen to the speeches and the advertisements for the various candidates for president, it seems clear that there is a big difference between the message of the Republicans and the message of the Democrats. The Republicans seek voter support by offering a change from the past seven years while the Democrats continue an economic message designed to shame Americans into voting for them.

Income inequality is a major issue for both Bernie Sanders and Hillary Clinton. Sanders cites some data showing that during the last seven years 90% of the income generated has gone to the top 10% of income earners, leaving little for the majority of the population. As a result, the income inequality gap is worsening.

“Shame on Americans” the Democrats would say. “This must be corrected. Compassionate Americans have a moral and ethical responsibility to narrow the gap primarily by raising tax rates on the wealthy and giving free services, like healthcare and higher education, to the lowest income earners.”

The reality is that income inequality is not the problem. The problem is that the middle class and the lower income earners do not have the opportunity to earn. Instead of giving people free stuff, the answer is to accelerate the growth in the economy so there is opportunity for every American. The increased opportunity will lead to increased employment and increased income, both of which will reduce the inequality gap.

The idea is to raise those on the bottom rather than shaming Americans into pulling down those at the top.

Shame on Americans for allowing people to work hard and earn below a “livable wage” Democrats argue.  They say that regardless of the value of the output produced, every American should earn at least $15 per hour.

Of course, at that wage, which totals more than $36,000 per year in total cost to an employer after adding in Social Security and Obamacare penalties, employers would be reluctant to hire someone who has absolutely no skills and is not trained to do anything.

While the $15 per hour minimum wage may result in Democrats putting less shame on Americans, it would also result in a huge increase in unemployment for unskilled workers, higher prices for minimum wage sensitive products like fast food and products sold at discount retailers and a rippling effect on wages that would eventually skew labor markets.

Shame on Americans for being the only country in the industrialized world that does not provide health care coverage for all of its citizens, the Democrats say. This is the sentiment that President Obama used to shame all Democratic members of Congress in order to pass the Affordable Care Act. (He couldn’t shame even one Republican to vote for the ACA.)

Democrats claim the results of the ACA have been positive since the percent of insured Americans rose from 85% to almost 90% of the population. No longer, Democrats say, do Americans have to feel ashamed.

The problem is that Americans who actually pay for their health care, are now receiving poorer care from doctors they didn’t choose while going to hospitals they didn’t choose while paying much higher premiums after paying even higher deductibles. They also have fewer purchasing options, especially for those forced onto the ACA exchanges.

Democrats shamed Americans into supporting a health care plan that has helped about 5% of the population while causing harm to the vast majority of Americans.

Democrats’ latest proposals follow the same theme. Sanders and Clinton want to over-regulate or even break up large banks and Wall Street financial institutions. “Isn’t it a shame,” they might say, “that the system is rigged so that Wall Street gets rich and everyone else suffers.”

The truth is that there is no shame here either. The system is not rigged. Even with the great seven-year Obama stagnation in economic activity, every day there are people who learn to contribute to the system and who are justly rewarded. The only rigged part of the system is that you have to contribute something of value to earn something of value.

Those who have not made a contribution are the ones who have little income. Others should not be ashamed of their achievements nor the income they have earned

Regardless of who the eventual nominees are for both parties, the politics of shame will probably not work this time. It worked in 2008 for President Obama, but failed in 2010. It did work again for President Obama in 2012, but failed miserably in 2014. Americans are tired of feeling nothing but shame and will likely elect a president who will make them feel good about the future rather than feeling shame about the past.

*Cartoon by Branco. Reprinted with permission and by arrangement with Comically Incorrect.

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