Patterson: What's really good for working class is good for America - Ahwatukee Foothills News: Valley And State

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Patterson: What's really good for working class is good for America

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East Valley resident Tom Patterson ( is a retired physician and former state senator.

Posted: Sunday, October 6, 2013 7:52 am

America’s middle class used to be the proud backbone of our economy. They made things, things of value that other people would pay for. Not only did the middle class prosper, they were the driver of America’s emergence as the world’s economic superpower.

Today, not so much. The money now has flown to finance and government. Middle class incomes have stagnated for decades. Median household income is lower than it was five years ago. In spite of the ginned-up unemployment figures, labor force participation is the lowest it has been in 35 years.

What happened? President Obama regularly professes his concern for the middle class, but government policies have been devastating to America’s workers.

For example, a recent study by the federal Small Business Administration concluded that the cost of federal regulations alone comes to over $10,000 per worker. That is obviously a significant disincentive to hiring new workers as well as a substantial reason job growth has been stagnant. Moreover, it is a massive wealth transfer from middle-class workers to the federal bureaucracy.

Employers who aren’t near the Fortune 500 have also been hurt by the new tax rates. While the truly wealthy can generally find ways to avoid the higher tax rates targeted at them and half of all Americans pay no income tax at all, job-generating small businesses now send over half their income to various governments. Again, bureaucrats win with real jobs becoming more scarce.

The easy money policies of the Federal Reserve have also come down hard on the middle class. Super low interest rates mainly benefit investors. Stock market indexes have roughly doubled in five years, yet real interest rates for consumer purchases remain high.

Meanwhile, workers are finding that their conservatively invested savings aren’t growing much. Retirement must be deferred if possible, yielding fewer slots open for young jobseekers.

The stimulus and the surging federal debt were touted as necessary relief for the middle class, you know “America’s hard-working families, blah, blah,”. But the money has been spent and the middle class is still stuck in place. Most of it went to bailing out well-connected banks, more subsidies for those not working, helping out government unions and shaky investments in green technology. Crony capitalism isn’t cheap.

On the other hand, millions of new job could be created by allowing more oil and gas leases on federal land or permitting construction of the XL pipeline from Canada. But pompous environmental elitists claiming the mantle of the compassionate liberal are able to control the decision making. The middle class suffers the higher prices and lost employment opportunities.

Unfortunately, the future doesn’t look much better for the middle class. Obamacare should be a good deal for the poor. More of them will get “free” or heavily subsidized health insurance, which by the way, will provide yet more disincentive for them to improve their lot. The rich won’t be affected much except by higher taxes. For those in the middle, though, the subsidies will be smaller or nonexistent. What they will get is soaring premiums, worse coverage and hard to obtain medical care.

When it comes time to retire, the middle class may be in for more disappointment. Few have been able to save enough to support themselves without working. Most are relying on promises from others, businesses, unions and especially government.

Yet almost none of those entities promising financial comfort to retirees of the future have actually had the prudence to provide adequate funding for the task. As baby boomers surge into their golden years, it is becoming sickeningly clear that the money is simply not there to sustain them.

What’s good for the middle class is good for America. One thing could get the middle-class moving again: economic growth. Tax and regulation policies which stimulate jobs — real value creating jobs, not government jobs — could turn things around.

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