At nearly every campaign stop these days, the President convincingly declares that “the middle class is under assault.” Looking at the economic data produced by our own government, there can be no mistake that he’s right. But what he obviously doesn’t realize is that it’s his own policies that are besieging the working, producing, and taxpaying middle class of America.
We all like to think we’re part of that middle class economic stratum, and for the most part, we are. Those who are fortunate enough to have jobs, run businesses, hire people, pay taxes, are not on government assistance, and not rolling in dough are part of our middle class.
So it’s not surprising that he’d be targeting his reelection message to us. But we mustn’t get caught up in the grandiloquence of his oratory or his populist rhetorical appeals. We must instead look at the fruits of his first three years of labor, which are decimating to the middle class.
The average 16% real rate of unemployment and underemployment, based on the Department of Labor’s U-6 report, during Obama’s first three years in office has been devastating to the middle class. With over 15 million people not working (28 million according to the Wall Street Journal based on the U-6 data), there are that many fewer middle class taxpayers and consumers (and that many more on government assistance at the poverty level relying on income redistribution from producers.)
The job situation will not improve appreciably until the cost of doing business starts dropping. Last year, the Small Business Administration reported that regulation costs American business $1.75 trillion per year and costs small businesses as much as $10,585 per employee. Just the costs of Obamacare, Financial Regulatory Reform, and new EPA regulations are projected to increase that cost per employee by more than 30%, according to Investor’s Business Daily.
The federal budget has grown from $2.5 trillion to $3.8 trillion, a 40% increase, and our yearly deficit has quintupled from $240 billion per year to $1.3 trillion per year. Our debt-to-GDP ratio, a significant barometer of the fiscal health of a nation, has spiked to over 100%, a nearly 30% increase in just three years. The middle class will pay the costs of this government expansion. Even if Obama increases the taxes on “the rich” as he desires, the most it will raise is $65 billion, hardly scratching the surface of the deficit.
High energy prices hit the middle class harder than anyone, and the Recent Bureau of Labor Statistics report on consumer prices shows that gasoline costs are up 130% since Obama’s election. While not completely controllable domestically, Obama’s assault on domestic oil production and his weak dollar policy have contributed to an equivalent 130% tax increase on transportation costs.
And that’s not the only energy cost that’s increased. As a result of the administration’s assault on the coal industry, coal-fired power production has dropped from 44.6 to 36% in just one year. Coal is a cheap source of energy, and moving away from it will dramatically increase the cost of electricity. PJM Interconnection, the company that operates the electric grid for 13 Eastern and Midwestern states, indicates the new market-clearing price for projected 2015 capacity just cleared $136 per megawatt. That’s over eight times higher than the price for 2012, which was just $16. When these skyrocketing energy costs hit the middle class, it will be devastating.
ObamaCare was promised to lower the cost of health care for nearly everyone. Instead, private medical insurance costs have soared by as much as 59%, and hospital costs are up nearly three times the rate of core inflation. These costs adversely affect the middle class disproportionately, as the rich have no problem paying and the middle class is paying the cost of the lower income levels.
The Bureau of Labor Statistics (BLS) reported just last month that the U.S. average weekly wage declined nearly 2% percent between the fourth quarter of 2010 and the fourth quarter of 2011. This is only the fifth time wages have declined in the past 33 years.
Succinctly stated, we have shrinking income, inflation in energy and food “skyrocketing” (just like Obama predicted four years ago), a weaker dollar, a ballooning debt, and a national security-risking deficit. The costs of all this “hope and change” are landing squarely on the back of the middle class.
A strong middle class equals a strong America. We can’t have one without the other. And our current policies are killing both. So don’t listen to Obama’s rhetoric; for it rings hollow. Look at his actions and his policies (and what has been done to cripple the middle class.) It truly leaves one wondering how he can pander as he does to the middle class and keep a straight face while doing it.
AP award winning columnist Richard Larsen is President of Larsen Financial, a brokerage and financial planning firm in Pocatello, and is a graduate of Idaho State University with a BA in Political Science and History and former member of the Idaho State Journal Editorial Board. He can be reached at firstname.lastname@example.org.