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Tuesday, February 23, 2010

The Corrosive Effect of Class Warfare

The debate of the moment is all about jobs.

A bipartisan jobs bill cleared a GOP filibuster on Monday with critical momentum provided by the Senate's newest Republican, Scott Brown of Massachusetts.

The 62-30 tally to advance the measure to a final vote on Wednesday gives both President Barack Obama and Capitol Hill Democrats a much-needed victory — even though the measure in question is likely to have only a modest boost on hiring.

Brown and four other Republicans broke with GOP leaders to advance the measure. Most other Republicans opposed the bill because Democratic Majority Leader Harry Reid of Nevada stripped out provisions they had sought and wouldn't allow them to try to restore them.

While it seems everyone has their own opinions of the best way to gain jobs, almost everyone agrees that we need to help two groups: small business owners and local banks.

I have nothing against small businesses or local banks. Still, to target small businesses while ignoring big businesses is entirely political not economic. Big businesses provide millions of jobs, just look at WalMart. The same is true of big banks and small banks. Big banks provide needed capital for millions of businesses and individuals. Yet, giving them aid has turned into a politically toxic proposal. At the same time, politicians are jumping over each other to provide a way to make life easier for community banks.

This has everything to do with class warfare. Small businesses have become a sympathetic group. Meanwhile, big businesses are viewed as powerful and corrupt. As such, you can get all sorts of populist cred if you provide help for small businesses while demonizing big businesses. There's a similar process for banks. Yet, these are entirely political calculations. There's no economic logic to helping small businesses while punishing big businesses. It's an entirely political logic and it's rooted in class warfare.

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