WASHINGTON — Democrats are flabbergasted that so many modest-income people in middle America voted against the self-anointed party of the little guy. Conditioned to believe that Republican is synonymous with corporate fat cat, they conclude that the people must either be misinformed, obsessed with moral values, or both.
When will they ever learn that steep tax rates, protectionism, excessive regulation, heavy-handed unionism, uncontrolled subsidies, tax-code complexity, lawsuit abuse, and other aspects of big government are not in the economic interests of most people, regardless of whether they live in "red" or "blue" states?
Economic interest is based on such things as the availability of well-paying jobs, an abundance of goods and services at reasonable prices, quality health care, affordable health insurance, good schools, a comfortable retirement, and an absence of excessive taxation. And by deciding against Kerry, the people of America's heartland did indeed vote in their economic interest.
Let's look at some of those issues one-by-one.
In the vast majority of cases, rising wages don't result from labor union agitation. Rising wages result from labor scarcity. If enough businesses are established so that there is an abundance of jobs, business owners have a harder and harder time finding and keeping workers. They are forced to compete against other businesses for workers. They do that by raising workers' pay and/or improving their benefits.
A key to raising wages, therefore, is to have lots of businesses. That's done through business-friendly policies such as lower taxes, fewer onerous and expensive regulations, and keeping the trial lawyers at bay. Guess which party scores better in that regard?
Certainly, some regulations and taxes are OK. But they can get excessive. We reached that point long ago.
This ties into well-paying jobs, since a better education leads to higher earnings. Pouring money into schools only works to a point; witness the Washington, DC school district, which spends the most amount of money per student in the nation, yet has one of the lowest average test scores. What's needed are incentives to boost the quality of education. This includes merit pay for teachers, school vouchers, school choice, standardized testing, and the ability to dismiss bad teachers. But the teachers' unions - the National Education Association (NEA) and American Federation of Teachers (AFT) - stand in the way of these reforms.
The NEA (along with the trial lawyers) is the biggest donor to the Democratic Party. One in 10 delegates to the Democratic National Convention last summer was a teachers' union member. So a vote against Kerry was a vote against teachers unions, and in favor of education reform.
Kerry was the anti-candidate here, too. He talked about revisiting trade agreements, a euphemism for protectionism. Barriers to imports not only mean higher prices for consumers, but lower-quality products as well. Less competition from abroad means less pressure to make the best product. And domestically, pro-business policies relating to such matters as taxes, torts, and regulations, increase the number of businesses and improve competition, with positive effects regarding goods and services.
So many people are uninsured because health insurance is so expensive. Many factors, mostly relating to misguided government policies, drive up those costs. Among them is the institution of employer-provided health insurance, resulting from a tax break/subsidy. This gives patients little incentive to shop around, taking pressure off health care providers to lower their prices. We all pay for it in the form of high health insurance costs. Other factors driving up such costs include mandated benefits (i.e., laws requiring heath insurers to cover specific procedures) and medical malpractice costs. Voting for Kerry would not have assuaged any of these factors.
Nationalizing health care, moreover, would only worsen things. Based on other countries' experience, the quality of care would decline and health care rationing would proliferate.
It is common knowledge that our current Social Security system is unsustainable. Without reform, what's in store in coming decades is either massive benefit cuts, massive tax increases, or both. To fix the situation, Social Security needs to be converted from a spending program to a savings program. Kerry is against that.
Economics 101 teaches that more savings equals more investment. More investment equals a stronger economy. A stronger economy benefits everyone. If you reduce the tax on savings - namely dividends and capital gains - then you'll have a stronger economy. Yes, rich folks will benefit because they're the biggest savers. But one should not let one's resentment of the rich override one's desire for a stronger economy. Across-the-board tax cuts, meanwhile, also benefit everyone, not just directly but indirectly by rewarding work.
To be sure, if economic interest is defined by how many government favors one gets, it perhaps could be argued that a Kerry presidency would have helped the pocketbooks of people such as heavily subsidized farmers and labor union members. But they constitute only a small minority of voters in middle America. And whenever a small minority gets a government handout, the vast majority has to pay for it. That certainly is not in the latter's best interest.