Bernanke’s statements on the so-called income gap between undefined groups of rich and poor Americans echo President Bush’s January 31 remarks on Wall Street that “income inequality is real; it’s been rising for more than 25 years. The reason is clear. We have an economy that increasingly rewards education and skills because of that education.”
Our economy does not increasingly reward education and skills. Our economy rewards those willing to invest their education and skills in a demanding career, or those willing to take entrepreneurial risks to succeed. To argue otherwise is to deny nearly every economic achievement in American history.
The president and his hand-selected Fed chairman seem oblivious to the underlying principles of our free market economic system. Did Bush and Bernanke suddenly forget the litany of economic metrics that have risen since the 2003 tax rate cuts became law? They are arguably more concerned with scoring political points with the Democratic-controlled Congress. As the Times report went on to state, “Mr. Bernanke's remarks . . . were received warmly by Democrats.”
In other words, Mr. Bernanke pandered to the Democrats’ desire to not make the 2003 tax cuts permanent, increase spending on entitlement and discretionary programs, and meddle with the dynamics of our successful free market economic system.
Democrats in Congress will spend the next 21 months before the 2008 presidential election criticizing phantom inequities in the economy, and singing a never-ending chorus of class warfare rhetoric. Republicans have two choices.
They can remain quiet and avoid the inevitable media characterization of favoring the wealthiest among us. Or they can go on the offensive and boldly explain how low tax rates on income and investment create jobs and increase personal wealth for all American families who participate in the economy.
The administration and Republicans in Congress will either defend their convictions and the principles that have created the greatest economy in the world, or relegate themselves to a permanent minority.
Herman Cain is the National Chairman of the Media Research Center’s Business & Media Institute. He is the former president and CEO of Godfather’s Pizza, Inc., and currently is CEO and president of T.H.E. New Voice, Inc., a business and leadership consulting company.
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