Democrats aim for another depression
By JAY AMBROSE
SCRIPPS HOWARD NEWS SERVICE
More than anything, it has now become obvious, the Democrats want another Great Depression, the era of their most robust ascendancy, and if the facts won't give them one they will do what Sen. James Webb of Virginia did in his response to President Bush's State of the Union speech: They will invent one out of thin air.
They will tell you, as he did, that the middle class "is losing its place at the table," that wages and salaries are frighteningly low and that our "manufacturing base is being dismantled." About the only thing they leave out is references to breadlines.
Here is something that might surprise you, and would certainly surprise Webb, assuming that he was as sincere as he looked. The middle class has seldom had it so good.
The economic columnist Robert Samuelson has reported that the percentage of families with inflation-adjusted, before-tax incomes of more than 50,000 was 35 percent in 1980, 40 percent in 1990 and 44 percent in 2003. A progressive policy group economist, Stephen Rose, has reported that over a 25-year period ending in 2004, there was a 13 percent increase in adults between 25 and 59 in households with real incomes more than 100,000 and a 14 percent decrease of this age group in households with real incomes of less than 75,000.
I talked to Rose for a column last year after reading some other of his statistics about Americans in their prime working years. The median income of this group, he found through U.S. Census research, was 63,300. He also discovered that the median in this group for two-earner households was 80,000.
As for wages, they zoomed in 2006. According to The New York Times, they increased for rank-and-file workers by more than any year "from the late 1970s to the mind-1990s." The economic commentator Lawrence Kudlow shares an economist's finding that wages went up more during "the first five years of the Bush expansion" than over the first five years of the expansion that occurred under the presidencies of his father and Bill Clinton. Unemployment is an extraordinarily low 4.5 percent, with a record number of jobs, 146 million.
Our manufacturing base is not being dismantled. Alan Reynolds of the Cato Institute quotes a Federal Reserve document as observing, "Over the 12 months ending in December, total industrial production increased 3 percent to a level that was 112.4 percent of its 2002 average."
Webb is playing a demagogic game when he additionally says the benefits of high corporate profits and a booming stock market are "not being fairly shared." Sharing fairly as a matter of governmental coercion is a socialist program that forever fails while free markets have done more to produce prosperity and lift people out of poverty than any economic scheme ever. Corporate profits tend to profit everyone, and while depicting Wall Street as fat-cat territory gives endless pleasure to the populist left, Webb might want to notice that tens of millions in the middle class are dependent on a healthy stock market for retirement security.
But no, Webb conjures up the robber barons and "dispossessed workers" of the early 20th century, takes a shot at soaring CEO salaries and worries about an America "drifting apart along class lines." As I've noted, the middle class is more than holding its own, and those getting richer are not just the rich. Whatever you think of CEO salaries, they are not the cause of poverty increases, which are rather a consequence of immigration that also holds down low-range wages.
Whenever you point out that the American people are doing very, very well relative to where they have been in the past, people accuse you of callousness, as if facts were signals of insensitivity. I grant and wish it were not true that there is financial insecurity among many, more than a few matters to complain about and genuine suffering by some, but this is nothing new, whereas many of our modern conveniences and the extent of our overall abundance are.
The Webb remarks, echoing other Democrats, are laden with hints of an interventionism unwarranted by circumstances and that could be hugely counterproductive. If the Democrats get this wrong, they could ultimately produce something approximating the Depression-type horrors they have created in their politically inspired imaginations.
Jay Ambrose, formerly Washington director of editorial policy for Scripps Howard newspapers, is a columnist living in Colorado.