I nominate Simon Johnson for an award as an economist who has managed to reach the remarkable conclusion that economic incentives do not matter. He joins a long list of politicians who seem to think that government policies that take money from one group of Americans to give it to another have no effect on behavior.
Save and save and save and then find out that the government will take the proceeds of your savings away from you. That's the message of the recent Obama message and Simon Johnson's column today in the New York Times. Obama's new war on the IRA promises to slap the hands of any American who decided to forego that extra TV or car or who bought a house that they could afford, putting the money into an IRA account instead.
The new crime is saving, investing and accumulating assets. According to Obama, that is un-American and he proposes bringing it to an end. Somehow eliminating what paltry private savings the American economy generates doesn't seem to bother Obama and his economic advisers. After all, I suppose, China can continue to supply whatever savings we need as the Chinese own an increasing share of American assets and Americans own less and less of their own country.
Meanwhile those who don't save and who splurge on consumer goods and purchase homes they cannot afford will continue to receive bailouts, special new program proposals from the Obama-led White House, and higher levels of dependency on government. Already the number of Americans even remotely interested in working for a living is at a forty year low and the number of Americans collecting disability checks is at a record and a new record is achieved every day.
Reward the indolent and punish the thrifty and those with a work ethic -- that is the Obama mantra, ringingly endorsed by his adoring economists. Simon Johnson thinks he hasn't gone far enough. I suppose Johnson would like to raise the minimum wage to $ 100 an hour as well. That should go far to eliminate poverty (at least for the handful of Americans who would still have jobs).