So which is Barack Obama? He says he's running for president to "transform the country." But until he delivers on policy specifics that clearly show how, we've got to conclude he's really just another smooth politician who wants to be somebody.
I have good news for Senator Obama. He can capture the high ground he's trying to claim, reinvent his party, help the country and improve the lives of low income folks, all with a single, courageous swath.Obama should embrace two important reforms that heretofore have been identified with the Republican Party. He should come out in support of transforming Social Security into a regime of privately owned retirement accounts and in support of school choice.
The private retirement account reform initiative has, of course, gone nowhere. School choice, included in the initial version of No Child Left Behind and then stripped out, has made selective inroads through local initiatives around the country.
An important reason why both these key and innovative reforms have made so little progress is that, although they have been proposed by Republicans, their primary beneficiaries are low income voters who traditionally vote Democratic.
Because of this disconnect, the large and energetic political constituency essential to any major reform has never crystallized for either issue.
For higher wage earners, the payroll tax is an annoyance, but not a major obstacle to wealth creation. After paying in their portion of the 12.4 percent tax, and reaching the $97,500 cap, they have plenty of disposable income left to invest in real wealth creating assets.
For low-income earners, however, this is not the case. All or most of the income they might have had to invest is locked into paying the payroll tax that yields payments at retirement that equate to returns hovering around zero percent.
Unfortunately, these low income earners have been subjected to disinformation campaigns by Democratic Party politicians, unions, the AARP, the NAACP and others that contributions into a highly diversified portfolio of stocks and bonds over 45 years is a risky proposition not worth taking over the guaranteed zero return of Social Security.
Thus, these individuals are deprived of the opportunity of prudent accumulation of hundreds of thousands of dollars of wealth over their lifetime.
Blacks, whose median income is about 70 percent of the national average, and whose median household net worth is about 7 percent that of whites, would benefit enormously by such a reform.