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President Obama's agenda fails the middle class

By Peter Morici
web posted June 3, 2013

As President Obama travels the country speaking about immigration, student loans, taxes, and the like, increasingly Democratic leaders are lobbying him to tell voters how his agenda strengthens the middle class.

Otherwise Republicans, they fear, will use the IRS and other scandals to distract public attention and stall most of his legislative proposals.

Unfortunately, most of Mr. Obama's initiatives may appease liberal elites but don't do much to bolster opportunities for middle class and working families.

His immigration policy comes down to spending record sums to deport undocumented immigrants with criminal records, but letting just about anyone else who manages to get across the border stay and have babies—presumably, who will one day vote Democratic.

If he gets his way in proposed legislation, many undocumented workers will eventually become citizens, and businesses like GE and Apple will be permitted more visas in skill-short areas like engineering, but the border won't be secured. The ranks of semiskilled immigrant workers, who drive down wages in hospitality, construction, manufacturing and other sectors, will continue to swell, frustrating the middle-class aspirations of the working poor born in this country.

His massive expansion of student loans permits universities to jack up tuition, bloat administrative staffs and indulge faculty to teach even less and less effectively. Students are graduating encumbered by massive debt and too few marketable skills. Broke and unemployed, they are not marrying and starting families—that shrinks the middle class.

Despite the availability of loans, skyrocketing tuition mandates ever greater family contributions to finance college. This puts higher education further out of reach for many working class families, and fewer low income children are pursuing post-secondary education than in the past—that shrinks the middle class too.

Organized labor, academics and other progressives jealous of peers in business endlessly obsess about income redistribution and tax rates. The President has jacked up taxes on families earning more than $250,000.

Unfortunately, most businesses in America are either proprietorships or pass through corporations that pay those higher individual, as opposed to corporate, tax rates, raising the cost of investing and expanding businesses—that spells fewer jobs for the middle class and those that aspire to its ranks.

Unable to push  through Congress limits on CO2 emissions, President Obama has used executive orders and the EPA to impose limits by fiat. Unfortunately, those raise manufacturing costs, China has no such limits, and all this encourages business to outsource in China—again fewer jobs for the middle class and aspiring middle class.

Free trade agreements that permit trading partners to undervalue their currencies, subsidize exports and artificially under price their products on U.S. store shelves, health care mandates that raise the price of insuring employees instead of controlling costs, unnecessarily cumbersome regulations to run factories, mindless limits on developing U.S. oil reserves, and exporting abundant natural gas to countries that shut out U.S. products with high tariffs all encourage outsourcing, not just in manufacturing but for many supporting services too—yet again, fewer jobs for middle class Americans.

Performance not polemics is the problem. His progressive agenda has accomplished 2.1 percent growth and an anemic job market since the economic recovery began.

In comparable circumstances, Ronald Reagan engineered 5 percent growth and many more middle class jobs by rejecting the failed policies of the left and betting on American's competitive instincts.

Democrats are asking too much of President Obama to explain how his agenda helps the middle class. There's no there, there. ESR

Peter Morici is an economist and professor at the Smith School of Business, University of Maryland, and widely published columnist.






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