Obamanomics

So, it appears that President-elect Obama is already backing off one of his more controversial campaign promises.

In interviews given this week, Obama has shown a reluctance to discuss when or even if he will, as promised, raise taxes on the rich.

Whoa, whoa, whoa, wait a minute here. Wasn’t this one of the main policies of his campaign? Why is he doing this?

The reason is easy…it’s the economy stupid.

Due to the tough economic times that we’re currently facing, Obama is acknowledging it’s probably not the best time to be taxing the most productive members of society.

This development is both encouraging and terribly frustrating.

I give Obama credit in this display of flexibility. The tax increase was a vital element of his campaign and his willingness to alter this policy, this quickly, is a promising sign that he will not merely push his agenda, consequences be damned.

Yet, this development is also incredibly troubling to me as well. Why would candidate Obama make a policy, which by his own admission is bad for the economy, such a centerpiece of his campaign?

His answer? Fairness.

But what is fair? Isn’t fairness a purely subjective idea?

Clearly, Obama and I have different definitions of fairness. He believes that it’s fair to take from those who innovate, invest, work hard, succeed and produce to give to those that don’t, while I do not.

So isn’t it fair (pun intended) to say that a number of Obama’s ideas of fairness don’t jibe with most of mine or yours and mine or yours don’t jibe with most of Obama’s? In fact, I think it’s virtually impossible to find even two people on Earth that have the exact same opinions about what is fair and what isn’t.

So why would he base such a large portion of his economic policy on such an indefinable idea, this fairness that he’s so fond of?

No one knows this but him, but I believe this stance is just a byproduct of the old liberal viewpoint of merit and fairness versus productivity. Liberals would rather compensate employees based on their merit, rather than on the actual productivity of these employees. However, as you all know, this is not a viable way to expand an economy. It’s this very naïve view that shows that liberals fundamentally do not understand basic economics.

There are ample examples of the struggle of merit and fairness versus productivity in our everyday lives.

The first, executive pay. Liberals go on and on about how unfair it is that the corporate fat cats get rich on the backs of their poor, working class employees. But I ask which activity results in more productivity, the development and management of a multi-billion dollar merger or the assembly of automobiles? Clearly, the merger does. However, which job produces more merit? It’s fairly difficult to tell.

This further illustrates how difficult it is to compensate someone based on merit or fairness due to their subjective nature.

Here’s another example, the sick day referendum in the city of Milwaukee. Voters in Milwaukee overwhelmingly approved a city referendum that requires employers to provide nine, paid sick days to all employees. The liberal mindset believes that these businesses will now just suck up the losses from the reduced productivity, make less money and do what’s “fair” for their employees. We all know that that just doesn’t happen. Companies never just suck it up and make less money because they have an obligation to their employees and shareholders to be as profitable as possible. As a result, companies will just cut back on vacation time or personal days. Or, worse yet, they’ll just eliminate jobs.

On average, people work 250 days per year. Let’s say you’re a small business in Milwaukee that employs 28 people. These people are now entitled to a collective 252 days of paid, sick time. These 252 days of sick time are the equivalent of the total number of workdays for one employee in a calendar year. What do you think that employer is going to do, risk fewer profits or eliminate one worker? I think it’s clear that they’ll eliminate the worker and demand everyone else work harder. How many Milwaukeeans do you think voted themselves out of a job on November 4th?

Yet another example of this is minimum wage. Liberals love to scream about the evils of minimum wage, how no one can provide for their family working a minimum wage job and how the minimum wage needs to be raised.

They completely miss the point on this too. First, the number of people that try to support an entire family while working a single minimum wage job is so statistically insignificant that it’s foolish to discuss their impact on the economy as a whole. Second, the people that work minimum wage jobs are generally teenagers, the elderly, or part-time or seasonal workers that view these jobs as a way to supplement their overall incomes, not be their sole source of income.

The thing liberals don’t understand is that while they believe they’re assisting these people by raising their incomes, they’re really eliminating a great number of their jobs by demanding employers pay them more.

Listen, I do value fairness. I do not believe it’s right for employers to exploit or take advantage of their employees. However, fairness and merit should be secondary, not primary factors when determining compensation or tax burdens and they certainly shouldn’t be the centerpiece of the President of the United States’ economic policies.

That’s all for now folks. Until next time, take care and be well.

-John