Obama's Elitism and Economic Reality

Sometimes politicians try too hard to make a point and end up looking quite foolish. For instance, here is what Barack Obama recently said about the violence the Chinese have perpetrated upon Tibet...

It's very hard to tell your banker that he's wrong," Obama said, after talking about the need to restore America's stance in the world, "And if we are running huge deficits and big national debts and we're borrowing money constantly from China, that gives us less leverage. It give us less leverage to talk about human rights, it also is giving us less leverage to talk about the uneven trading relationship that we have with China."

Now, clearly Obama wants desperately to drive home the point that our economic policies have lead to us borrowing from the Chinese, however Obama doesn't really understand the sophisticated level of U.S. treasury debt when he makes such a statement. While it is true that the Chinese have in effect loaned America trillions, the manner in which they have done it is by buying up lots and lots of U.S. treasury bonds. Now that they own the bonds, it is the U.S. in position of power. The bonds are sold and at this point the only thing that can happen is that it can be a good or bad investment for the Chinese. They hold absolutely no leverage (and it should be noted that they have recently stopped buying more bonds and yet the offerings get swallowed up regardless). They could dump the bonds however that would cost them trillions. The bonds would temporarily lose value however soon enough they would return to normalcy. Their investment would be halved if not worse. In other words, Obama's statement is utter financial nonsense.

Then, Barack Obama recently said this comment...

You go into these small towns in Pennsylvania and, like a lot of small towns in the Midwest, the jobs have been gone now for 25 years and nothing's replaced them...And they fell through the Clinton administration, and the Bush administration, and each successive administration has said that somehow these communities are gonna regenerate and they have not.

And it's not surprising then they get bitter, they cling to guns or religion or antipathy to people who aren't like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations.

Once again, Obama is desperate to point out that our current economic policies leave the average person behind and thus he made this statement. The problem is that this rhetoric belies the econcomic reality of the last twenty five years, and furthermore simple demographics. Since Reagan's third year, we have had nearly 25 years of nearly uninterrupted economic growth. Twenty plus million jobs were created under Reagan. Clinton's economic numbers were nearly as strong and under Bush we are near 10 million new jobs. The current unemployment rate is 5.1% and it has been south of 5% far more than north.

Now, I don't know which small towns Obama is talking about but it is just not possible to have this kind of economic growth and not have small towns be a part of it.

Furthermore, I grew up in a small town, and most of the folks in that town lived in the small town and worked in the big city it was near (Chicago). Small towns are not necessarily where you go to for job opportunities. That is what big cities are for. Small towns are where you come home from work and raise your children.

Of course, Obama may very well be talking about small towns in the middle of nowhere. In that case, they have always had problems generating much economic growth and thus they are small towns in the middle of nowhere. This is not a phenomenon of the last 25 years, but rather it is a phenomenon of demographics. If they experienced an economic explosion they would cease to be small towns.

It is lost on no one, that in his haste to make a populist economic statement, he also made himself look like a narcissistic elitist. Here is how a McCain aide responded...

a remarkable statement and extremely revealing.""It shows an elitism and condescension towards hardworking Americans that is nothing short of breathtaking," Schmidt said. "It is hard to imagine someone running for president who is more out of touch with average Americans."

People don't turn to religion and the second amendment because they are struggling financially. They do it because they genuinely believe in those things. The idea that small towns missed out on the national economic explosion of the last twenty five years is just not supported by an economic data. Furthermore, the idea that folks turn to god and guns because they struggle financially is an idea from a narcissistic elitist.