Allan Meltzer explains why the Obama economic plan — stick it to the rich and give their stuff away to everybody else — doesn’t help anybody:
During the early twentieth century, the United States absorbed millions of immigrants, many unskilled. Many began employment at low wage jobs. Minimum wage laws did not come until the 1930s. By working, the immigrants learned new skills; their productivity increased and with it their wages. That narrowed the gap between the incomes of the top and the bottom earners. But many did something else. They sent their children to colleges and universities where they learned professional skills that earned middle class incomes.
This process continued in recent decades for immigrants from Korea, China, Mexico, and Latin America. That history sends an important message. The growth of the middle class and the narrowing of the income distribution was in large part a result of working to acquire new skills and higher productivity.
President Obama’s program works against this process. It doesn’t reward work. It gives the unemployed and underemployed food stamps, healthcare, housing allowances, and income. Instead of working, many learn to live on the government benefits, supplementing them occasionally by working in the underground economy. Instead of acquiring productive skills, they learn how to live without working at regular jobs.