Yesterday in the Wall Street Journal, David Malpass, president of Encima Global LLC penned his opinion in an editorial titled “How Big Government Drives Inequality”. The following quotes are from his article. Mr. Malpass also served as deputy assistant secretary in the Reagan administration and deputy assistant secretary of state in the George H.W. Bush administration.

Inequality is the wedge issue that Democrats will carry them through the 2014 and 2016 elections, neutralizing the Obamacare fiasco. The issue has popular appeal because median incomes (after inflation) have been falling throughout the recovery while high end incomes are increasing rapidly. For progressives this situation seems made to order: if you want a flatter income distribution, don’t you need bigger government to get it? Experience shows the opposite: Washington’s increased size and power has concentrated income and wealth in fewer hands. Making government bigger will exacerbate this problem-it is already too big.”

President Ronald Reagan rejected class warfare advocating sound money and lower tax rates to boost growth and living standards….the economy grew faster than 7% in real terms for five quarters in a row….gross domestic product (GDP) grew on average 4.6% per year in real terms during the 1983-1988 expansion while median incomes grew 2.1%.”

Since the Reagan years growth policies have faded, the government has increased its control over the economy and national income. Top marginal federal income tax rates have risen to nearly 44% from 28% (also too high-my opinion) in 1988. The dollar has weakened while consumer prices have doubled in 25 years. Federal non-defense spending has nearly quadrupled in 2013 from 1988 adding a huge burden on taxpayers as national debt grows.”

Today, almost five years after the recession ended, job growth from new business formation is running one-third below historical average. Real GDP growth has averaged a weak 2.3 over the past three years while real median incomes have fallen 0.6% per year.”

Progressives may concede the weakness of the economic recovery yet they urge more government spending and higher taxes claiming that their policies will achieve higher growth and a fairer distribution of income.”

Big government expansions in recent years have harmed individuals with modest incomes while exempting or benefiting people with higher incomes. These include the federal takeover of the mortgage industry and the Federal Reserve’s decisions to keep interest rates near zero and buy some $3 trillion in bonds. Both of these expansions channel credit to the government and the well connected at the expense of savers and new businesses.”

Middle income earners used to be the primary beneficiary of the rise in value of their houses. Housing gains now lift Washington, allowing the government to pay itself huge “dividends” from Fannie Mae, Freddie Mac and the Federal Reserve which owns nearly $1.5 trillion in the government’s housing-related bonds. The government (naturally) promptly spends the windfalls, fueling a further accumulation of wealth and income for those with Washington access.”

The financial industry is making billions in profits fueled by the provision of zero-rate loans for those with connections and collateral. Wall Street’s upper crust is the epicenter for financing the contractors, lobbyists and lawyers that help the government spend money. Meanwhile government grabs a huge share of the profits generated by small businesses. It piles on opaque regulations, complex tax rules and countless independent agencies, producing a system that works against small businesses and the middle class. The Affordable Care Act takes pains to exempt Congress, government, corporations and unions but leaves the rest of us severely exposed adding to the inequality.”

This week’s congressional budget deal saw a narrow group of Washington’s elite legislators and lobbyists working over the weekend to divvy up nearly $1.1 trillion in discretionary spending for 2014. Much of the spending and all of the lobbying and debt underwriting costs will benefit those with high incomes while the extra debt falls heavily on the middle class.”

There is nothing wrong with an appropriate level of government services-it is necessary. But we are long past that level. Growing the government shrinks the rest of the economy and after-tax paychecks.”


Fast & Furious-providing weapons to criminals leading to a loss of American life. No one held accountable. The president was unaware.
The loss of 4 American lives at our embassy in Benghazi, Libya. No one held accountable. The president was unaware.
The IRS targeting conservative political groups for tax-exempt status. No one held accountable. The president was unaware.
The National Security Administration eavesdropping on the phone calls of American citizens. No one held accountable. The president was unaware.
The software program created for the Affordable Healthcare Act, at a cost of $650 million (thus far) and 3 ½ years to “perfect”, has been unusable to the American people. No one held accountable. The president was unaware.
Spying on our Allies, specifically Angela Merkel of Germany. No one held accountable. The president was unaware. (although these things go on knowingly between countries all the time, the fact that our president denies knowledge of this is just another sign of his incompetence as the leader of the most powerful country on the planet).
“If you like your current insurance plan you can keep it. Period” Barack Obama
“If you like your doctor, you can keep him. Period” Barack Obama

Have a great weekend and….

Hug your children and grandchildren, tell them you love them.
Buy American made products whenever you can.
Hire a Veteran: they are patriots, honest, hard working, disciplined, loyal and …. They need and deserve our support.

God Bless America