VDH - America's Two Front War

America’s Two-Front War
by Victor Davis Hanson
Pajamas Media

America has the slows. Sometime about mid-2009 America began changing psychologically. True, to the naked eye, America retained the old hustle and bustle, but in an insidious fashion it began to think a bit differently. And that change in mentality explains in part why a year-and-a-half recession that officially ended in summer 2009 seems never to have ended at all.

In short, a sizable fraction of the upper-incomes is hesitant, defensive, unsure — and to such a degree that for a while longer it is not hiring, buying, or investing in the old way. It believes not only that there is no certainty in the tax code, the cost of new entitlements, or our national finance, but that even if there were their own successes would be suspect and earn antipathy rather than praise.

In mirror-image fashion, those of the lower incomes are likewise hesitant to take risks — unsure that the rewards of work in the private sector are all that much better than what government can offer through subsidies. The former group fears government will grow; the latter that it will not. The one suspects that Obama will confiscate more earnings; the other hopes that it will. Either way, there are fewer enterprising employers and fewer self-motivated galvanized workers.

The result of this two-front war is that America has been slowing down.

Or in crudely reductionist terms: the one asks “why hire another worker, when it is not worth it to pay out more in new healthcare costs and taxes down the road?” while the other answers “why get off unemployment or food stamps when it is more likely that they will be extended than curtailed?”

We now accept the notion of the peasant mentality — that all wealth is finite and more for someone means less for another. In this new them/us atmosphere, Barack Obama took the natural tensions between the classes and exploited them as few other presidents dared. Suddenly, there really were two Americas: the suspect top who made over $200,000 and the more noble majority below who made less. Lost in that cheap division was any notion of the value to others from those who did well, or the reasons why some prospered, or the fragility of their brief good fortune.

If the upper 5% paid nearly 60% of the income taxes, then the problem was more fundamental: how had they been so well compensated in the first place to have the wherewithal to pay such taxes? It did no good to remind Obama that confiscating all the wealth of the 1% would not end the debt, or that steep new income tax on the 5% per se will do little to balance the annual budget. His war was not about finding a remedy to his own profligate borrowing, but in retaining power through revving up anger at the better-off.

In the last three years, we have become so numb to Obama’s monotonous invective that it is now part of the national DNA: spread the wealth, fair share, fat cat, punish enemies, corporate jet owners, Super Bowl and Vegas junketeers, 1%, raise the bar, Grinch, millionaires and billionaires, at some point you’ve made enough money, no time for profit, and on and on. The subtext is always the same: the reason why, say, an orthodontist makes more than a Wal-Mart clerk is due to some sort of race, class, or gender discrimination, unfair advantage, or fatal flaw in the capitalist system, and only a technocratic elite in government retains the wisdom and morality to rectify that resulting inequality. One’s salary, then, is not quite his own, but more the collective’s — given that the professional’s good fortune results from an insidious system of exploitation from the moment he was born to the last bill he sent out for services rendered.

Republicans have no answer for all this, and the most recent polls reflect that fact. The more we watch Ron Paul talk about American culpability for 9/11, the more Newt Gingrich talks about hauling in federal judges for inquisitions, the more we hear that Romney is an opportunistic flip-flopper, the more a Cain, Perry, or Bachmann melts down, the more Obama plays cool — emerging from Hawaii or the golf links to sermonize on fairness while hoping that a Joe Biden, Eric Holder, or Steven Chu keeps his mouth shut for a little longer. In comparison to whom is to blame, it is as if near 9% unemployment, $16 billion in aggregate debt, pathetic GDP growth, a dead housing market, and a $1 trillion-plus steady annual deficit are no more than “whatever.”

Note here, however, that the president’s social sermonizing is predictably selective. On the top end, we hear about the horrors of the anonymous millionaire and billionaire, never of the real Jon Corzine who bankrupted MF Global, gave over $70,000 to the Obama campaign, and cannot remember what he did with over $1 billion of someone else’s money. In the world of Obama, human greed is not endemic, but of a particular conservative and grasping sort; in contrast, liberal conniving is always one of carelessness or can be recompensed by liberal activism.

So what I most resent in Obama’s pop socialism is not just its proven impracticality and moral pretensions, but its utter hypocrisy.

And the rub is not just that he sees no contradiction between railing at the 1%, while keeping utterly silent about a George Soros’s past, or a John Kerry’s tax evasion, or a John Edwards’ palatial digs, or Leonardo DiCaprio’s $75-million-a-year in recompense, or his own preferences for elite getaway spots and golf links. Rather, he seems to think that redistributionist rhetoric provides a sort of penance for the high life, as if we are all to go for a stint in reeducation camp — and in the Buffett manner express remorse over the system that enriched us, or in the Soros fashion to fund organizations devoted to stopping what we had ourselves helped foster and perpetuate, or more mundanely, to vote for an organizer like Obama, a sort of 3-5% tax-increase mordida that is the cost of doing business.

On the lower end, in the them/us war of Barack Obama, the president never stops to contemplate the impulses in flash-mobs that target high-end stores, or why the poorer off still have the capital to buy $190 sneakers, and will fight savagely to get them. Or why shopping days around Thanksgiving and Christmas have turned into bare-knuckles free-for-alls in a nation that apparently is ill-housed and ill-fed. For Obama, the massive importation of cheap consumer goods, the revolution in technology, the vast expansion of federal entitlements, off-the-books cash income, the redistributive help from relatives and friends, all these considerations simply do not factor and therefore cannot nuance his picture of a vast underclass without access to basic necessities, at once victimized by the well off and in need of far more borrowed federal redress.

In the last three years, we have also developed a different idea about collective national wealth. In material terms, America has never had so vast a supply of natural gas and oil, so many minerals, timber, and prime agricultural land. Yet now there is something deemed wrong in carefully tapping such riches, whether in Alaska, offshore, in the Gulf, or throughout the American West. There is no logic to this strange attitude. After all, the Obama creed is to use fossil fuels abundantly. He likes arugula. Hardwood floors and lithium batteries are nice. The administration hardly cares that the exporters of much of our imported oil are politically illiberal and environmentally reckless. Instead, there is a deep sense of pessimism that there is something inherently wrong with profiting from our own oil, gas, trees, minerals in the ground, or soil. Is it the idea that a few will do too well from the exploitation of national wealth that will so enrich the many? Or is the idea that our culture is too affluent, too crass? Will solar, wind, and biofuel energy along with forced reductions in resources alone make Americans live the lifestyle that is more in accord with nature?

For Obama, the great tragedy of a Solyndra was not the corruption of old-style fast-buck artists masking their greed through insider green lobbying with members of his administration, but rather that such scandals (along with Climategate and the implosion of Al Gore) have sidetracked the entire green philosophy that mandated more government unionized employees, government technocrats, and government tax collectors to reorder society itself.

The result of all this is a sort of unending but rarely expressed war. The business man does not know what his taxes are, only that they should go up, given his privilege. He is judged not by the good that he does but by the excessive money he makes. The corporation does not know what the rules of the game are, whether his energy is too polluting, his workers not unionized enough, or his product not regulated enough. None believe Obamacare, as promised, will reduce costs. None believe that government borrowing and massive new entitlements are reducing unemployment and raising GDP. None believe that wealth can be created by record deficits and aggregate debt. None believe that printing ever more money will not lead to inflation.

What we have, then, is a war on two ends: the better off are hesitant to work more, given their fears that additional profits will either be more difficult to come by or not remain their own; the poor are hesitant to work more, given their expectations that entitlements will be extended and will be easier to come by. They both expect more government and they both as a result are not so eager to take risks and seek greater income in the private sector.

The result of Obama’s war is the current three-year slowdown. Obama in response counts on two strategies to nevertheless be reelected: either at some point the private sector will conclude that it is not going to get any better, and thus it is preferable to shrug, take its medicine, and get back to work, and so the economy picks up a little in 2012; or, to the degree that Obama can blame the lengthy pause solely on the minority of the undeserving rich, he believes that an angry and fearful bare majority may agree.

©2011 Victor Davis Hanson