By now you might have heard or seen a few moments from President Bidens address to Congress. If you didnt, heres what was outlined: The Democratic Party has made government its god, the Congress their place of worship, and the White House their rectory.
The key point in Mr. Bidens speech was when he said this: Our Constitution opens with the words as trite as it sounds, We the people. Well, its time we remember that we the people are the government. You and I.
So, we the people are the government. Got that? Well I dont think so. So heres a refresher for Mr. Biden. Its from a reputable source, namely, the Declaration of Independence:
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.
In other words, the ranking goes like this: 1) Our Creator. 2) The People. 3) Government.
Perhaps Im making too much of this, but I dont think so. President Biden has said time and again that he wants to transform the economy and society. And hes not pulling his punches.
The idea that we the people are the government is the most transformative statement possible. On the economy, he wants government, not the private enterprise system or markets to run our transactions, our trade, and our commerce.
On social policy, Mr. Biden wants the government to pass out cash benefits to the middle- and lower-income individuals with no work or education requirements.
This breaks the 25-year-old bipartisan deal between Bill Clinton and Newt Gingrich to incentivize employment with work requirements.
Every president up to now has stayed with that. Its been a great success. But as the Wall Street Journal editorializes, this is Mr. Bidens cradle-to-grave government.
That was from the LBJ Great Society days and lasted until the 1970s, until Reagan and Clinton and Bush and Obama and Trump stayed with the reforms because it worked.
This will not work. Even worse, these social policies undermine the dignity of work, which is at the center of our economy and, along with the family, the center of our whole social fabric.
Knocking it down is literally demoralizing. This may be the most pernicious aspect of Mr. Bidens transformational vision.
Its worse than taxes. Worse than spending. Of course, one cant ignore the endless spending spree, financed by high taxes on successful entrepreneurs and by free money from the Federal Reserve.
Just listen to the president again:
Its time for corporate America and the wealthiest 1% of Americans to just begin to pay their fair share. Were going to reward work and not just wealth, and theyre actually going to crack down on millionaires and billionaires who cheat on their taxes.
As a quick aside, todays real GDP number was 6.4%, following 4.3% in the fourth quarter. The economy is booming. Housing is up 11%, business equipment investment advanced 10%, and aggregate demand called private domestic final sales was up 11% annualized in the first quarter.
That is a boom. But the inflation rate in the first quarter came in at 4.1%. Not good. So nominal GDP is up 10.7%. Thats real output plus inflation, and thats really way higher than a 1.6% Treasury bond.
So I dont know about massive spending, taxing, and free money. Somethings got to give at some future point. Just saying, but I digress. Mr. Biden stood firm on his tax hikes, essentially an assault on private investment.
Heres where we disagree. Team Biden believes that government drives investment. I believe that the free enterprise market driven private economy drives investment, and when you attack profits and capital, you are attacking businesses, workers, and wages, and family income.
In an interview, Senator Rob Portman reminds us that 70% of the savings from Mr. Trumps corporate tax cuts flowed directly into higher wages for workers, contributing to 19 straight months of wage growth before the pandemic.
Research and development jumped by 25%, amounting to $707 billion, and capital expenditures soared by 20%, and $1.6 trillion in overseas earnings came back to America. Those are, to coin a phrase, true factoids.
Whats more, studies from the nonpartisan Congressional Budget Office show that workers will bear most of the burden of higher tax rates in the form of lower wages and lost jobs.
President Biden sells his gigantic tax grab as a scintillating, Democratic base-exciting tax-the-rich scheme. In fact, the tax assault on investment and capital gains and elsewhere will destroy jobs, reduce wages, and damage the economy. Thats what history shows.
To defeat Mr. Bidens plan, Republicans have to educate the public that huge tax hikes will destroy jobs, not increase them. Its not a hard case to make.
Everybody wants a good-paying job. To meet that end, though, there has to be a healthy business. Healthy businesses, including startups, require investment. Attack the investment and you are attacking jobs, wages, and family incomes.
Well make it real simple as we have in the past. If we penalize success, and attack investment, where are the new Apples, the new Microsofts, the new Spacex, the new Uber?
Higher tax rates that kill incentives would make our dynamic economy stagnant and sclerotic. After all, the Green New Deal will reduce our power and our energy, cost millions of jobs, and greatly damage the economy.
Mr. Bidens first one hundred days includes about $6 trillion of new spending and probably $4 trillion in higher taxes. That is a nice piece of work.
I worked for President Reagan, and he had a strong first year cutting taxes and beefing up the military. I worked for President Trump, and he had a strong first year.
Those esteemed presidents, though, are pikers compared to Mr. Bidens $6 trillion in spending. Some piece of work. And, again, if it isnt broken, no need to fix it.
Again, vast spending, giant tax hikes, and free money is a weird economic strategy. Just to refresh, it is the creator who endows us with unalienable rights, whereas government works for the people and must have consent of the governed.
Government is certainly not to be confused with the people. Perhaps the American people are already starting to see this.
Just 51% of people watched the presidents address to Congress Wednesday.
They told CNN they had a very positive reaction. Thats 6% fewer than President Trumps first speech, and 17% lower than President Obama.
Adapted from Mr. Kudlows broadcast on Fox Business News. Image: Declaration of Independence, painting by John Turnbull. United States Capitol, via Wikipedia.
New York Sun