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Obama stirs passions but makes income inequality worse

By PETER MORICI, UPI Outside View Commentator   |   July 31, 2013 at 12:02 AM   |   Comments

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COLLEGE PARK, Md., July 31 (UPI) -- Slow economic growth and increasing inequality are ripping the social fabric of the United States -- vanquishing the dreams of working families, saddling the young with onerous student debt and frustrating retirement plans.

U.S. President Barack Obama is stirring passions by proposing government initiatives he hopes will stifle Republican efforts in the House of Representatives to curb federal spending but those can only end in tears.

Early in his first term, he pushed through more than $4 trillion in deficit spending on stimulus, broader Medicaid benefits, alternative energy projects and other industrial policies. Through last fall, growth was an anemic 2.1 percent and has since slowed by half.

He blames sequestration, which subtracted about $45 billion from government spending. However, his rhetoric ignores $200 billion in higher taxes he demanded from Congress in January, and the doubling of the trade deficit on oil and with China to $540 billion since the recovery began.

Sequestration will remove about 1 million jobs, while higher taxes and the trade deficit will cost Americans more than 10 times as many.

Instead of forcefully confronting Chinese for cheating on trade in ways recommended by liberal and conservative economists alike, Obama merely pleads with Beijing. The Middle Kingdom responds with criminal activity -- pirated commercial technology costs U.S. companies at least $300 billion a year and U.S. workers about 5 million jobs.

Oil and natural gas production is up on private and state lands in South Dakota and elsewhere but the president keeps drilling locked down on federally controlled reserves off the Atlantic and Pacific coasts and in the eastern Gulf of Mexico and Alaska.

Oil imports could be eliminated but instead the president promotes alternative energy projects -- similar to Solyndra -- that enrich his political friends.

Government subsidized electric cars are a bust, whereas private investments in more fuel-efficient internal combustion engines and hybrids are delivering big gains. Ford, which received no bailout money, is rolling out one eye-popping high MPG model after another.

Obamacare mandates are driving up healthcare costs for large businesses on full-time employees. No surprise then that since January 833,000 more Americans have reported working part-time, while 97,000 fewer have full-time positions.

Income inequality is getting worse. The pay of ordinary workers is stagnating, while CEO compensation at large companies increased 16 percent last year.

Top executives have accomplished a compensation cartel by serving on each other's boards of directors and tying up votes in shareholder elections through proxies. They vote one another outlandish salaries and block accountability to investors.

The U.S. Justice Department is charged with protecting Americans against such anti-competitive behavior but is too busy intimidating reporters, slow-walking investigations of IRS abuses and harassing Texas election officials for discriminatory conduct that has been dead 50 years.

Wall Street's big banks have exploited Dodd-Frank to scarf up smaller banks that cannot cope with the avalanche of new regulations and thereby monopolized the CD market in many cities. Even as mortgage rates have risen, the elderly aren't being offered decent returns that once helped finance their retirements. Increasingly, they work in grocery stores and wait on tables, competing down the wages of the younger working poor.

Don't look for the Justice Department to investigate CD rate rigging. Democrats raise too much campaign money on Wall Street for U.S. Attorney General Eric Holder to take an interest.

A roll-back of recent tax increases, tough responses to Chinese cheating on trade and theft of intellectual property, developing more domestic oil, scrapping Obamacare and a Justice Department that investigates monopoly behavior that hurts ordinary Americans would raise incomes and combat inequality.

The last thing American families need is more of the same failed Obama policies.

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(Peter Morici is a professor at the Smith School of Business, University of Maryland School, and a widely published columnist. Follow him on Twitter: @pmorici1)

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(United Press International's "Outside View" commentaries are written by outside contributors who specialize in a variety of important issues. The views expressed do not necessarily reflect those of United Press International. In the interests of creating an open forum, original submissions are invited.)

© 2013 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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