I received a comment in response to my essay "A Brief Look at Obama's Economic Plans" to which I promised a proper reply. As comments do not allow enough space, and as I think most readers could benefit from taking a closer look at what we know of Obama's economic ideas, I have decided to respond here. I do recommend anyone reading this take a look at the original essay, as well as my essay "How to Destroy the Economy", which examines Obama's energy policy, before proceeding. However, as I know most won't, if there are any points essential to my argument, I wil likely restate them here.

The comment to which this is a reply reads as follows:

[Very interesting but...] your analysis doesn't prove in any substantial way that such a policy will not spur economic growth, or that more Americans will benefit economically when compared to the Republican plan. Politics is a numbers game. If Obama's plan allows more average Americans to have more disposable income to inject into the economy then overall the plan is a fairly good one. The Republican's plan and policies as it stands makes it very difficult for families to have disposable income, which decreases competition between businesses. For example, think about it, if no one had any money, they will go to Wal-Mart. The small businessman can not compete with Wal-Mart. People's spending dollars will be concentrated to a very small number of corporations which reduces competition.

I will omit my original response, as it was given rather hastily, so let us proceed with the analysis.

Before we begin, I think I should state that anything I say will be, in part, supposition. As with all of his positions, Obama's economic position has been stated in the most general, vague terms possible. Obama's modus operandi throughout the campaign has been to provide as few details as possible, fill in the gaps with ringing rhetoric, mostly centering around "change" and "hope" and let the voters read their own beliefs into his nebulous statements. As a result, we have to guess at what he truly intends to do once in office.

However, in the economic arena, more than most subjects, tradition has forced him to adopt at least the semblance of a concrete plan. Admittedly, he has still worked in some weasel words such as "working families" which can be redefined to suit his whims, but, fortunately for us, he has been required to tie himself down to some specific economic agendas. They are still rather broadly drawn, but at least there are some details from which we can draw assumptions about the general outline of an Obama administration's economic policies. At least enough details to respond to the claims of my reader.

The complaint of my reader can be pretty much reduced tot he following: Republicans have no interest in the people, instead they want to impoverish the public at large, forcing them to shop at Wal-Mart and other big chains, concentrating economic power int he hands of a few. It is a common complaint, and is wrong on a number of levels. But, as it gives me a chance to address some topics I have been wanting to dispute for some time, it is worth examining.

Let us first look at this claim that Democrats are the champions of the "middle class", while the Republicans are interested in only a few ric cronies. This immediately brings up a few cheap shots about the party of George Soros, John Edwards, rich trial lawyers and the Hollywood elite representing "the common man", but I shall avoid those. I will also not bring up the fact that the rich and poor tend to vote Democrat while the middle class votes Republican. Instead, I will ask the even more obvious question, how, precisely, does the Democrat party show this concern for the middle class? Or, even more cogently, what exactly do Democrats consider to be the middle class? As judging from their records, they do not appear to do much to favor the middle class, at least as that group is conventionally defined.

Let us keep this simple and define the middle class as those who are self-sufficient while still needing to work daily. They are mostly employees, though many small business owners, and even management from many firms, fall into this category. Admittedly, my definition is quite broad, but it is intended to be so. The two essential points I need to make are that the middle class need to work on a day to day basis and they also depend on their own efforts for survival rather than government support or private charity. I think most readers would agree that is a fairly accurate description of what most people consider the middle class. Some might want to exclude the top wage earners, such as corporate CEOs , lawyers, doctors, and so on. But as long as they do not possess sufficient wealth to quit their jobs immediately and survive on their wealth, I would still consider them middle class. Upper middle class perhaps, but middle class.

So, what is in the interest of the middle class? First and foremost, those things which allow them to earn the most income, either by increasing the amount they earn or by leaving them the most of their earnings by taking as little as possible in taxes. As they are not dependent on government largesse for survival, they have little interest in extensive "social safety nets", as for most of them the costs are far greater than any benefits they will receive. They do have an interest in retirement, in medical care, in schools, in national defense, and so on, but their first interest is in maximizing their wealth.

So, how have the Democrats helped the middle class? Not very well. The Democrats are the party of soaking "the rich", of corporate taxes, of environmental restrictions, of safety laws, of tort liability, of union rules, all of which serve to reduce the wealth of companies which employ the middle class. It might seem a good populist stand to be for "the little guy" at the expense of the corporations, but those corporations employ the middle class, and by attacking them you are, effectively, attacking the middle class' paycheck. Even on the lower end of the income scale, pro-union rules are enjoyed by those with the seniority to keep their post, but once the added costs reduce labor forces, do those who can't find a job feel "protected"? Or those with a job but little seniority who are reduced to a few hours a week so the senior workers can get their required hours? Or those junior union workers who are laid off first when the increased union wages cause plants to slow down, or even close? The Democrat anti-business laws have been far from beneficial to the middle class.

Nor have the Democrats done well on the other side of he equation, leaving money behind after taxes. The Democrats tend to levy quite heavy taxes to provide for their social welfare schemes. As the middle class makes very limited use of these services, they tend to be hurt more than helped by the taxes that fund them. So, again, while claiming a new found fondness for the middle class (who they once called the bourgeoisie and looked down upon), the left does not have a very strong record of helping them.

But, this was not supposed to be about the left, but about Obama in particular. However, it really is much the same thing. In as much as he provides any specifics, Obama is still proposing the same old leftist plans which have harmed the middle class for many years. Increased job security legislation, increased mandatory leave, increased safety regulations, increased environmental laws. All of these make it more expensive to either hire new employees or to just conduct business, and so they will tend to either lower the incomes of the middle class, or make it more difficult for the poor to enter the middle class.

Nor does it seem he will be any more friendly to the middle class on taxes. He has promised extensive social programs, "investment" in cities and rural areas, "alternative energy" plans, and more, all of which will be massively expensive. And that means either higher taxes or monetary games which will result in inflation. In either case it will mean a net loss of wealth for the middle class.

Obama's one claim to help the middle class is his promise of tax cuts for "working families". However, because this term is never defined, I have no idea what he means. Does "family" mean you must have children to qualify? And what does "working" mean? I have a sneaking suspicion that, the same way Clinton redefined "rich" to mean anyone earning over $50,000 per year, that "working" will limit this tax break to the relatively poor workers who form part of Obama's base. But even if that is not true, I still doubt that the tax breaks will be as beneficial as Obama claims. Even if he gives a 5% tax break, if it comes after a 10% hike to fund his schemes, or comes after the Bush tax breaks are allowed to expire, it will hardly be a blessing for the middle class.

And now to deal with one final matter, the claims that somehow the Republicans made the economy worse. I dealt with this once already, but let me make something clear, the Bush tax cuts were hardly the nightmare the left claims. First of all,t hey did benefit all people who actually pay taxes. granted, they did not benefit the nearly 50% who get a full refund or pay not taxes at all, but how could they? A tax break (unless it is really a disguised welfare check like the EITC) only benefits those who pay taxes.

However, even if it had been the much maligned "tax break for the rich", it STILL would have benefited the middle class. The rich do not hide their wealth under a mattress or eat caviar by the metric ton. The money they have they either spend, creating jobs providing the goods they consume, or invest, creating jobs through investment. In either case, when the rich have more money, it benefits everyone. I know this is the supposed debunked "trickle down economics", but it also happens to be true. The government is a poor means for creating jobs, while the rich are not.

It is very simple. The government can get money whether it satisfies people or not, the rich only get rich by meeting the most urgent needs. So, the rich create jobs which tend to increase overall satisfaction, while the government does not. So why would we think it better to give our wealth to bureaucrats rather than let the most productive members of our society retain it? Does that make any sense?

POSTSCRIPT

I suppose, in reading the comment again, I didn't prove anything again. However, I thought it was common knowledge that things such as mandatory leave, workplace safety rules, union rules, etc increased the costs of hiring employees and decreased profits. If anyone needs a proof of such basic facts, I will provide it, but I thought those facts were of the "the sky is blue" sort, things we could all agree are true without requiring proof.