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More at the source.By
George Melloan
Feb. 27, 2014 6:52 p.m. ET
President Obama's recent disquisitions on "income inequality," foretelling another Democratic class-warfare campaign in the fall, brought to mind that delightfully satirical Coen Brothers comedy set in the 1930s South, "O Brother, Where Art Thou ?" A candidate for governor campaigns with a dwarf at his side to advertise his support for the "little man." An aide to the worried incumbent suggests that their campaign counter with a smaller dwarf.
Ever since politicians figured out that the "little guy" is where the votes are, they have employed variations of the "O Brother" gambit. Have you ever heard a politician declare that he will fight for the rich and powerful? Still, championing the little guy has generally worked better for Democrats than for Republicans, probably because the Democrats are more ardent promoters of the welfare state.
Yet how well has Mr. Obama's presidency served the little guy? Not very well. Inequality is best measured not by wage levels, which can be deceptive, but by living standards. Whether living standards are lower than they should be due to governmental idiocies is the best test of political performance.
To be sure, Mr. Obama's temporary reduction in the payroll tax to 4.2% from 6.2% in 2011 and 2012 benefited little guys, saving $1,000 for someone earning $50,000 a year. But it expired in January 2013 and few in Washington, least of all Mr. Obama, wanted to extend it.
Costs originating from government policies that are passed along to the public hit the little guy hardest. A boost in the light bill can be shrugged off by someone making $100,000, but not for the $25,000 earner. A coal-industry study, admittedly self-serving but hardly challengeable, says that energy takes nearly a quarter of the budget of a household earning $20,000 to $30,000 but less than 10% of a $50,000 income. Mr. Obama's war on fossil fuels has sent energy costs up.
According to Electric Power Monthly, a publication of the U.S. Energy Information Administration, the average cost of a kilowatt-hour last November was 12.09 cents, up 2.9% from 11.75 a year earlier and 39% from 8.72 in 2003. Utility use of cheap coal and petroleum is declining as Mr. Obama's Environmental Protection Agency applies ever more stringent controls on carbon emissions, and as the president showers subsidies on "renewable" sources like wind and solar. The use of renewables other than hydro was up 36.4% in November from a year earlier. Relatively inefficient renewables raise costs.
