WASHINGTON, July 9, 2015 — The sage of Coral Gables, GOP presidential candidate Jeb Bush, told the New Hampshire Union Leader that America can achieve 4 percent growth in GDP if her people “work longer hours and through their productivity gain more income for their families. That’s the only way we are going to get out of this rut that we’re in.”
That reminds me of the old line from comedian Steve Martin: “Do you want to know how to make a million dollars and not pay any taxes? First, you get a million dollars …”
Bush has no more clue how to grow an economy than Hillary Clinton or President Obama. El Maximo Bush speaks to hard-working Americans as though they just snuck across the U.S. border and got a low-wage job working for, well, El Maximo.
“Stop flapping your gums and get back to mopping my kitchen floor!” Jeb seems to be saying to you and me.
Politicians don’t grow economies, of course; entrepreneurs and free people do. But risk-taking is no longer an American trait recognized by clueless politicians in both parties, or even by a growing number of Americans.
If Republican and Democratic politicians sound more and more patronizing, it’s because Americans are more and more dependent on the crumbs they throw us in tax incentives and government subsidies.
Presidential historian Robert Dallek told the New York Times that Democratic primary voters “want to see government used to build the economy.”
So do the Chinese. Not that they have much of a choice.
China’s government leads its economy through government “investment” and incentives. And it has crony-capitalist favorites it prefers over others. It further limits the ways in which its people invest their savings, preferring they buy real estate and invest in Chinese equities.
Those equities took a battering over the past month, falling in value by 32 percent. “No doubt these are scary times in China,” said the New York Times, “It is understandable that government and industry leaders fear what the collapse will do to the savings of the country’s growing middle class, who have taken to stock investing in mass numbers in recent years.”
Notice that China’s “growing middle class” is a tenuous creation of government, an unsustainable fiction that teeters on the verge of extinction.
To maintain that fiction required Chinese banks to lower interest rates and loosen lending restrictions in order to spur growth (can you say “subprime”?). Then in June, China relaxed rules on margin trading, making it easier for investors to buy large blocks of stock with borrowed money. And the Chinese government rounded out its market manipulation earlier this month by creating a government investment fund to shore up its own markets through stock purchases.
In June, stock prices increased in value by 150 percent “without much fundamental improvement in earnings or growth in the Chinese economy to justify it,” said the Times.
If the hairs on the back of your neck are rising, it is likely you have a U.S. government-sanctioned, tax differed 401(k) investment plan through your employer. Have you noticed that the artificially low interest rates of the Federal Reserve have spurred a remarkable growth in stock values at a time the U.S. economy has shown little growth and the employment pool (labor participation rate) shrinks?
What exactly is the modern American middle class as defined by the elected and aspiring politicians in both parties?
“When I talk about the middle class,” said Obama during his 2012 reelection campaign, “I’m also talking about poor folks that are doing the right thing and trying to get to the middle class. … The middle class is also an attitude, it’s about knowing what’s important and not measuring your success just based on your bank account. It’s about your values and being responsible and looking after each other and giving back.”
If you are under-employed, have a small, dwindling bank account, pool your meager resources with those of your equally impoverished neighbors to survive, are willing to follow Jeb’s advice and flip those hamburgers for longer hours at less pay, but you have a delusionally positive attitude concerning your miserable condition, congratulations! You are a member of the new American middle class.
If you look in the mirror, what you see staring back is a government-manufactured fiction: a dancing marionette dangling from the strings our politicians yank for their personal entertainment.
Now dance, you dead-eyed puppet!