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Oh, The Changes We'll See

The Age of Obama, low pay, and tiny cars.

12:00 AM, Apr 24, 2009 • By IRWIN M. STELZER
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The President also intends to change the way our children are educated. He says that he wants teachers compensated on a merit basis, and parents freer to select schools they deem best for their children. But his teachers' union allies won't go along, and in the one test of his rhetoric so far he has allowed his party to kill a program that provided funds to allow a few thousand poor, mostly black children to escape the horrors of the Washington, D.C school system and instead attend swanky private schools of the sort in which he has enrolled his daughters.

There is no doubt about one thing: the President intends to increase the number of students financially able to attend college. America will, in the end, have more degree-wielding students and fewer horny-handed sons of toil. That will produce another result the President has in mind as he rebuilds the American house on his rock. The earnings premium paid to highly educated workers will decline as the number of men and women competing for those jobs increases, and the relative wages of the fewer blue-collar -- by then, green-collar -- workers will increase.

This greater equality of income distribution is, for Obama, the summun bonum. He is redesigning the tax system to narrow the after-tax gap between "the rich" (family incomes above $250,000 per year) and lower earners, even if the economic cost of such a move-- reduced risk-taking--is quite high. Equity, not economic efficiency, is his goal. Which is why he favors raising the rate at which capital gains are taxed even if the result is a reduction, rather than an increase, in the Treasury's net receipts.

There will be more changes pushed through by a man who regards himself as a "transformational" President, in the tradition of Abraham Lincoln and Franklin Roosevelt. Women will be "empowered" to bring more law suits if they feel discriminated against, either currently or in years gone by; more Americans will work in the public sector as it expands relative to the private sector, and as Washington displaces New York as the nation's financial capital. Love him or loathe him, Barack Obama will leave an America vastly different from the one he inherited. Unless, of course, sooner rather than later, voters decide they rather liked the older model.

Irwin M. Stelzer is a contributing editor to THE WEEKLY STANDARD, director of economic policy studies at the Hudson Institute, and a columnist for the Sunday Times (London).