[Guest post by DRJ]
The financial news is gloomy as the sluggish economic recovery shows signs of faltering. As columnist Irwin Steltzer noted over a year ago, the Obama Administration is making America more like Europe everyday:
“In the end, Americans will live in smaller houses, drive cars more like those to which Europeans are accustomed, and will rely on European-style healthcare. In short, we will be more like you, which is after all the social democratic model to which Obama wants to convert America.
The president also intends to change the way our children are educated. He says he wants teachers to be compensated on a merit basis, and parents free to select schools they deem best for their children. But his allies in the teachers’ union won’t go along with this, and in the one test of his rhetoric so far he has allowed Democrats in Congress to kill a programme that provided funds to allow a few thousand poor, mostly black children to escape the horrors of the Washington DC school system and instead attend swanky private schools of the sort in which he has enrolled his daughters.
There is no doubt about one thing: the president intends to increase the number of students financially able to attend college. America will, in the end, have more degree-wielding students and fewer horny-handed sons of toil. That will produce another result the president has in mind as he rebuilds the American house on his rock: the earnings premium paid to highly educated workers will decline as the number of men and women competing for those jobs increases, and the relative wages of the fewer blue-collar – by then, green-collar – workers will increase.
This greater equality of income distribution is, for Obama, the summum bonum. He is redesigning the tax system to narrow the after-tax gap between “the rich” – family incomes above $250,000 (£170,000) a year – and lower earners, even if the economic cost of such a move (reduced risk-taking) is quite high. Equality, not economic efficiency, is his goal. Which is why he favours raising the rate at which capital gains are taxed even if the result is a fall, rather than an increase, in the Treasury’s net receipts.”
For someone who isn’t a socialist, he sure acts like one.