Morici: Obama Stirs Passions but Makes Income Inequality Worse
NEW YORK (TheStreet) -- Slow growth and increasing inequality are ripping the social fabric of America -- vanquishing the dreams of working families, saddling the young with onerous student debt and frustrating retirement plans.
President Obama is stirring passions by proposing government initiatives he hopes will stifle House Republican efforts 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% 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 American workers about 5 million jobs. Oil and 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 and Alaska. Oil imports could be eliminated, but instead the president promotes alternative energy projects -- similar to Solyndria -- 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. Obama Care mandates are driving up health care costs for large businesses on full time employees. No surprise, since January 833,000 more Americans have reported working part-time, while 97,000 fewer have full-time positions.
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