Saturday, June 30, 2012

Obama and the Middle Class: I Delve into Political Thoughts

I don't write political issues on my family blog, but this is my thoughts blog, and few people see it anyway so here goes.

I am perturbed by notion that the Democrats are the party of the middle class, when it appears to me the opposite is true.  Jose Hernandez, who is running under the Democrat ticket for congress said in his ads vote for me and stop the Republican attack on the middle class.  Class warfare is silly, but it seams to me the opposite is true: Vote Republican and stop the Democrat attack on the middle class.  Obama has not been a good president for the middle class.  Let me give some examples.

1) Obama Care is a tax on the middle class.  It is a drain on the economy, and effects all.  You may say, not everyone has to pay the tax, only those who don't have insurance.  Take my situation.  My employer pays for insurance.  However the cost of insurance has gone up with new regulations.  My employer passes this on to me in the form of no cost-of-living increases and forced furlough hours.  It is hard for a Union to negotiate when they start in the whole because of the increase in insurance costs.
 Also Obama Care drains the economy, as the cost of employing someone goes up.  Small businesses, especially, are wary of hiring, and highers unemployment effects us all.  So under Obama Care it is nice my children are covered to age 26.  However since young people have the highest unemployment as a result of this economy, partially due to the new taxes of Obama Care, they are more dependent on this as finding jobs with insurance becomes harder and harder.  It is a catch 22.

2) Environmental policies under Obama have added regulation, slowed down energy production, and effected us all.  When Obama took office, they decided to review drilling permits issued in the last year, to make sure the Bush administration had done it right I guess.  This put energy production behind a year; adding expense to process.  He then put a  moratorium on drilling the the gulf.  Obama never admitted it, but his decisions had an effect an doubled the price of gas.  Now, I am one family, middle class.  Calculating quickly, his energy policy has cost us about $5000 a year.  We have two vehicles and fill them about a week.  Thanks Obama.

3) Obama's crippling debt increase--$ 5 trillion and counting will effect the middle class for years to come.  Our children's children's children, as Hook says, will be paying of this debt.  Obama tries to blame it on Bush, but we are not stupid.  Most of the increase from the first year was Obama's Stimulus.  Why he tries to blame this on Bush is beyond me.

4) While developing alternative form of energy is noble, throwing money to political donors for crock pot ideas is disturbing.  Algae will not be made into fuel without a process that takes more energy than it produces.  Solyndra is crazy.  How many Solyndras are out there?  At least the executives got their bonuses to donate money to Obama's campaigne.


  1. 1. It is hard to imagine the tax burden being much for the middle class. The CBO projects tax revenues of about $400B for the period from 2013-2019. Spread across the 310M Americans, that is about $185/year in taxes. Now that is an average, so that actual amount paid by those actually paying the taxes will be higher. The estimates for the consequences of the savings because of that various provisions of the ACT are estimated to be about 8.2% for the insurance premiums paid by small businesses. Depending upon how much of those savings are passed on to employees (either through premium reductions or as increases in wages) remains to be seen. In any event, it will lower, not increase the cost of employment for many employers.

    2. The consequences of the Obama administrations policies with respect to energy have had at worst only a negligible effect on energy supply or costs. First, those costs are primarily influenced by world supply and demand. World supply is not increasing nearly as fast as the enormous increases in demand in developing nations, particularly the most populous, China and India. In fact, last year the US domestic production of oil was the greatest it has ever been. In addition, some of the projects the Republicans have been touting will actually increase the domestic cost of energy. For example, the Keystone project will significantly reduce the Canadians cost of delivering their oil to the world markets. So they will no longer sell the oil they have been selling to the upper midwest. It will have to be replaced with higher cost oil.

  2. 3. There is absolutely no question the debt increase is a problem - a real one that we need to get serious about. And by being serious, that means we need to deal with the real drivers of the federal budget - defense, Social Security, Medicare and Medicaid. Each will have to be reformed in significant and painful ways to reel in the deficit and allow progress to be made on the debt. We currently have military spending that is almost 40% more than the total military expenditures of the 15 or so countries with the world's largest military expenditures. That is just absurd. There are insufficient or no means testing procedures for Social Security, Medicare and Medicaid. Those need to rationally revised. Finally, we still have to work hard on making progress in the cost of medical care. It is absurd that a medical company can reformulate a drug that comes off patent into a new patented drug that can be sold at 15 or more times the price with virtually no evidence that it is any better than the now generic drugs. We need to devise a mechanism that will encourage physicians and patients to be cost conscious about their drug and treatment choices. This particular effort will be long term, filled with lots of little victories and mistakes, but we must be persistent. If you look at the make up of the deficit through most of the Obama term, the most significant portion of the increase is due to programs begun during the Bush administration - his tax cuts and the unfunded wars. See these two columns: and

    4. Whether the Solyndra transaction was based upon any kind of political cronyism has yet to be determined. It looks like no, but the investigation continues. While I agree that government investment in science and research is hit and miss, we certainly cannot fail to do it. Recall the purpose of the deals done under the program Solyndra was part of. Non-fossil fuel based energy sources are the future. Some are hopelessly ineffective on a cost basis for one or both of the following reasons - the science just isn't there; and/or we are not up to scale on production. Recall that Henry Fords great contribution to the car industry was not any particular mechanical innovation, but rather a way to manufacture the vehicles at a greatly reduced cost. The US had a very small solar panel manufacturing sector. Most was based in China. The effort, therefore, was to boost US manufacturing capabilities. That required someone to help make up the near term cost advantage the Chinese manufacturers have. A government guarantee of loans was the method chosen since financing was so difficult. It turns out that the effort to increase panel manufacturing came at the beginning of a perfect storm. World demand dramatically decreased because of changes in governmental policy, particularly in Europe. World capacity also increased in anticipation of the increased demand expected that never came. That seriously wounded the industry, particularly the newcomers. Solyndra was simply at the top of the list.

    This ended up being longer than I expected. Thought you might be interested in another perspective.