DRI-232 for week of 11-2-14: What President Obama Calls the Economics of Women’s Issues is Really Pure Politics

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What President Obama Calls the Economics of Women’s Issues is Really Pure Politics  

On Friday, Oct. 31, 2014, President Barack Obama delivered a speech to an audience consisting mostly of Rhode Island College students and faculty members. The topic of the speech was the ostensible need to involve women in the U.S. economy to a greater extent. This speech was widely reported. One thorough report appeared on the website of the cable news network MSNBC, msnbc.com. The title of the piece was “The New Women’s Issues;” the author was salon.com reporter and progressive political partisan Alex Seitz-Wald.

Mr. Seitz-Wald noted the change in emphasis by the President and Democrats generally in their references to women since the Democrat National Convention in 2012. Formerly, abortion rights or contraception provided the context for references to women. Beginning with the 2012 campaign, the putative Republican “war on women” became the frame of reference. This year, though, the focus has shifted to economics.

Since the singular focus of this space is on economics, that makes it the ideal venue to examine this shift by Democrats. Anybody who takes economics seriously might consider taking a sedative or antacid before reading further.

Obama’s Speech

The President began with the usual acknowledgments and pleasantries. When he got down to business, he uttered a lunker-size platitude: “…I want to zero in on the choices we need to make to ensure that women are full and equal partners in the economy.” According to the transcript, this line drew applause from the spectators. An economist would expect to read “(spectators exchange puzzled looks)” instead. Does the President mean to suggest that women do not participate in economic activity? Enough? Women constitute a majority of the U.S. population. The most recent Gross Domestic Product weighed in at over $16 trillion. In per-capita terms, this is still among the world’s largest. And what in the world does it mean to be a “partner” in “the economy,” anyway? How can an aggregate of 160 million diverse individuals be said to be a “partner” in the production of over $16 trillion worth of heterogeneous goods and services in final output? We won’t waste any further time trying to parse this statement because it is clearly meaningless gibberish, intended to induce a rosy glow on the visages of the women in the audience without saying anything meaningful.

At this point, what pops into an economist’s mind is: Given that the President is speaking nonsense, what might he mean and what caused him to say it? Mr. Obama goes on to explain why he has chosen to focus his attention on the participation of women in the economy. “…Because I was raised by a single mom and I know what it was like for her to raise two kids and …work at the same time.” But he has provided us with an example of a woman who did participate in the (monetary) economy despite a formidable handicap – not somebody who was prevented from doing so or chose not to. Semantically speaking, this is not promising.

Perhaps sensing his rhetorical gaffe, Mr. Obama quickly continues: “And my grandmother, who never graduated from college but worked her way up to become vice-president of a bank… I know what is was like for her to hit the glass ceiling, and to see herself passed over for promotions by people that she had trained.” In trying to bail himself out, he has dug himself an even deeper hole. Somebody who never graduated college but became a bank vice-president obviously participated big-time in the economy. Are we supposed to believe that she “hit the glass ceiling” because she never made president? Since there can be (and typically are) multiple bank vice-presidents but only one president, it’s not exactly shocking that a non-college-graduate might stall out just short of the top job. And that same fact makes a liar out of the President on the promotion issue, since his grandmother could hardly have been bypassed multiple times while she herself was rising to vice-president, unless she leapfrogged over (or laterally next to) those same people later on. Where did these undeserving trainees get promoted to – they weren’t all being groomed for president and if they got promoted to something else she must have gone right back over them later on.

Why are three introductory lines of text worth this much attention? They set the tone for the rest of the speech. The President of the United States gives a speech that he considers important. Yet he cannot explain his purpose simply and directly. He insults the intelligence of his audience by blatantly lying to them because he won’t or can’t provide a coherent rationale for his proposed plan of action. It is worth noting that President Obama is often contrasted with former President Clinton by media commentators. President Clinton was a superior politician, media mavens contend, because he appealed successfully to the emotions of his audience, while President Obama’s towering intellect will not allow him to stoop to our inferior level with base emotional appeals. That Barack Obama is nowhere to be found in this speech.

After this awful lead-in, the President finally works up to his payoff point. “For more than two decades, women have earned over half the higher education degrees awarded in this country…In colleges nationwide, there are more women graduating than men… the RIC student body has almost 70 per cent women… [but] our economy and some of the laws and rules governing our workplaces haven’t caught up with that reality… women are working hard [but] they’re still facing unfair choices, outdated workplace policies. That holds them back….So women deserve a day off to care for a sick child or sick parent without running into hardship.”

At last we know what the President is driving at. He is making a pitch for federal mandatory-workplace-leave legislation. Employers will be required to offer paid time off for employees for covered contingencies. This is the crown jewel of the Democrat program of economic security for women. To say the very least, this is a very peculiar position.

It is well-recognized by everybody that mankind’s traditional division of labor has tended to assign certain functions by gender. This flows naturally from the fact that woman bear children and men tend to be better equipped structurally to perform certain functions requiring upper-body strength. As child-bearers, women have also been child raisers and nurturers, while men have been hunters and providers. (The latter is by no means true of other species.) The necessity of bearing children and the desirability of caring for them has caused women to suffer planned and sporadic absences from the labor force, which has reduced their comparative long-run earning power. Nonetheless, feminism has long viewed this gender-specialization as patriarchal oppression rather than evolutionary inevitability. Since the political Left dominates feminism and the Democrat Party is a wholly owned subsidiary of the Left, this perspective has been a Democrat staple for years.

The President’s speech runs athwart this stance. It isn’t merely that Mr. Obama is acknowledging the fact that women are the predominant caregivers, although that is surprising enough. The President is proposing to confer a benefit on women – that is his whole purpose. Moreover, the inherent nature of the benefit is redistributive – he says in so many words that “women deserve a day off” and he will make employers give it to them. But the only way to confer a redistributive benefit on women as a group is by taking it away from men as a group. The implication is inescapable; President Obama is implying that men are the employers and women are the employees. More than that, he is implying that it will always be that way; otherwise, the redistribution would work against women and for men.

For decades, Democrats have tenaciously fought to preserve the welfare system they created in order to keep blacks shackled on the plantation as a permanent victim class indebted to government for their subsidies. Now they are striving to entice women with the same Faustian bargain; vote Democrat and receive a guaranteed income in exchange for a life in the underclass.

Just in case this point it too subtly made by the President’s family-leave proposal, Mr. Obama hammers it home in his discussion of the minimum wage. The right wing has it wrong by stressing the teenage recipients from wealthy families who retain their jobs due to their social skills and superior work habits. No, it seems that the average minimum-wage earner is 35 years old and – female! And – guess what? according to the President, she deserves a raise. Now a minimum-wage earner is by definition somebody whose economic productivity and skills are the lowest extant. By positing that this class of individuals is not randomly distributed with respect to gender but rather skewed female – now and in the future – the President is giving his game away. He wants to hold women in low-productivity, low-skilled, low-responsibility positions, where they will earn the minimum wage and be a reliable voting bloc that Democrats can lure with subsidies like parental leave and minimum-wage hikes.

To be sure, this “economic” game plan has almost nothing to do with economic theory and logic. How could it? The President is innocent of economics as a newborn baby is innocent of reality. Democrats reject economics the way baloney rejects the grinder, to appropriate a metaphor minted by the late William F. Buckley, Jr. Virtually every aspect of the Obama/Democrat economic approach to women’s issues runs aground on the rocks of economic logic.

In Obamaland, an employer “gives” money and benefits to “his” passive employees as a parent gives clothing, shelter and candy to dependent children. In economic reality, businesses operate in competitive markets where money wages and in-kind benefits are substitute means of compensation for labor. Different workers may prefer a different mix of wage and benefit increases, which is one very good reason for not imposing “one size fits all” rules like parental leave on businesses. The President proudly cites his pre-speech conference with local businesses, in which some entrepreneurs ostensibly told him that their own experiments with a system of leave had convinced them that it “actually helped them do a better job recruiting and retaining outstanding employees.” Incredibly, Mr. Obama is unaware that he has just refuted his own argument. There is obviously no need for a federal law because businesses in the very town where he is now speaking are telling him that they adopted the policy without a federal law having been passed! Of course, they were acting in response to a law passed in Rhode Island. (Because they were too bloody stupid to have ever dreamed up the idea themselves, right?) But now Mr. Obama has told the world about this triumph, right? It’s been reported in newspapers and on the Internet around the world, right? So what’s to stop every other state from passing the same law? In fact, what do we need a law for if it’s really such an overpowering, logical, irresistible notion for increasing labor productivity for business? Since when do businesses need to be ordered to do what is in their best interest?

In reality, businesses have hesitated to adopt parental leave because it is one of those ideas that may work reasonably well for some businesses but poorly for others. The obvious thing to do is let businesses make their own decision on the subject. Neither President Obama nor Democrats are willing to do this because economic efficiency and labor productivity are the farthest things from their minds. Their only objective in arguing for “women’s issues” generally and parental leave in particular is political, not economic. President Obama made his speech on Friday, October 31, 2014, because an election was impending on Tuesday, Nov. 4, 2014, and he wanted to subliminally suggest that Democrats were predisposed to transfer real income away from men and to women. He hoped that the vast majority of those knowledgeable enough to see through his arguments were destined to vote against Democrats anyway, while the less sophisticated would be viscerally attracted by his combination of innocuous platitudes and self-righteous exhortations.

We are so acclimated to government giving orders to private business that it takes a second glance to hammer home exactly what President Obama is doing to us. We know that leave benefits employees just as a wage does – the former is an in-kind benefit and the latter a cash benefit. We know that, all other things equal, employees would ordinarily prefer the cash benefit if the two have equal value. But we also know that the in-kind benefit is not taxed while the cash benefit is, so the question of preference becomes complicated and will vary depending on each employee’s particular circumstances and tastes. We know that some businesses are willing to provide leave and some aren’t. This situation cries out that each business and each employee should be left free to decide the situation according to their own lights and circumstances.

President Obama is arguing that because some businesses find it beneficial and convenient to offer a program of parental leave to employees, all businesses should be required to do so. He is obliterating the distinction between “voluntary” and “mandatory.” This distinction is the difference between voluntary sex and rape. If a man argued that because some women find it pleasurable and beneficial to have sex with him, all women should be required to do so, Democrats and feminists across the nation would howl with outrage. But President Obama is using exactly this sort of logic as the centerpiece of a program of supposed economic benefits for women.

Even if we stipulate that women figure disproportionately among low-income earners and minimum-wage recipients, that hardly argues for the minimum wage – even if you happen to believe that women are special and deserve to benefit from redistributive largesse. The purpose of a minimum wage is to hold the market wage above its market-clearing level. When successfully achieved, this creates a surplus of low-skilled labor, or unemployment. In other words, the higher minimum wage for those low-skilled workers still employed must be balanced against the zero wage earned by those low-skilled workers thrown out of a job by the minimum wage.

The story doesn’t end there. Which workers will be laid off? Remember, the whole Democrat narrative of a “war on women” is based on an oppressive campaign of male discrimination against women, not only by Republicans but also by male employers in the job market – that is the whole idea behind the “a women earns just 77 cents for every dollar earned by a man” slogan, remember? Any microeconomics textbook worth its salt will explain how a minimum price (of which the minimum wage is one species) will encourage discrimination by buyers since it reduces the cost of discrimination to zero by creating a surplus of the good. (When there is a surplus, the buyer needn’t fear losing out by rejecting a particular seller since there are multiple other unsold or unemployed units available.) Since Mr. Obama and Democrats are enthusiastic proponents of the discrimination hypothesis, their support of the minimum wage as an economic development tool for women is utterly perverse.

Still need convincing that the President has produced that rara avis of rhetorical defeatism, the self-refuting argument? Consider this juicy passage: “Even though it’s 2014, there are women still earning less than men for doing the same work. And women of color face an even greater wage gap.” Yes, it’s the good old Democrat standby, the wage gap. Well, it’s not really good, since to date nobody has actually produced the unicorn of left-wing labor-market studies – that “woman who earns less than a man for doing the same work.” And for decades there have been some years in which (for example) black women had higher average earnings than white women – are the Democrats trading their longtime most-valuable-victim (blacks) for an rising star in the discrimination league (women) and a victim to be named later?

The decisive point here, though, is that the President has already consigned women to the role of low-income wage earner. But by the terms of his own wage-gap argument, there are women of all races, creeds and colors waiting around impatiently for a wage that reflects their true productivity because they are still “earning less than men for doing the same work.” And black women are really getting screwed, not in a good way. If this were really true, each one of these women would be a million-dollar bill lying on the pavement waiting for an entrepreneur to come pick her up. If President Obama really believed his own words, he would be screaming for women to become entrepreneurs and hire all those undervalued women who are the victims of labor-market discrimination – and he would be adopting policies to match by lowering regulatory barriers as fast as he could drop them.

But the President doesn’t believe what he is saying. Indeed, there is no evidence that he appreciates the actual economic implications of his words or would change anything he said even if he did. His case is economically stillborn. It isn’t Republican arguments that condemn it but rather internallogic based on its own arguments, coupled with insistence on using economics as the underpinning for them.

No, there is no economics in President Obama’s speech or in his professed economic program to benefit women. The evidence of President Obama’s political intent lies in the speech itself; he stands convicted out of his own mouth. What about the Democrats, most of whom have been putting ideological distance between themselves and the President throughout 2014 as though they were escaping inmates and Obama was jail? What are the motives behind their embrace of “the new women’s issues?”

The Economics of the New Women’s Issues, As Seen by the News Media

Alex Seitz-Wald, the onetime progressive activist-turned-journalist, sees the President’s speech as one more tactical pivot that is “emblematic of the way that Democrats across the country, including those on the campaign trail, are talking about issues important to women this year.” The reference to “issues important to women this year” puts politics on a par with hemlines in importance to women. Is there an arbiter of economic trends (comparable to Mr. Blackwell, say) who signaled the coming of economics to the fore? For whatever reason, “the moralistic ‘war on women’ has taken a back seat to messages about economic security, and even abortion and contraception are now filtered through an economic lens.”

“What we’re seeing Democrat candidates evolve to do is to make the connection between economic security and the health benefits of reproductive rights.” Ilyse Hogue, President of NARAL ProChoice America told MSNBC. “It’s long overdue.” While Charles Darwin assured us that evolution through natural selection took centuries to eventuate, the electoral process apparently accelerates it so dramatically that we can watch it transform Democrat candidates in real time. Alas, this speeded-up version is mutagenic – brain cells lose the ability to absorb economic logic. Termination of pregnancy via homicide is termed a “health benefit” undertaken to realize “economic security.” This comes as a surprise to an economist. Except when delivery threatens the mother’s health, it is grotesque and Orwellian to treat pregnancy as a disease and call abortion a “health benefit.” The link to economic security rests on the premise that “a woman can’t finish school or compete in the workplace if she can’t control when she’s going to become a mother” – which is Seitz-Wald’s summary of the “extensive research” underlying the Democrat “move to pocketbook issues” affecting women.

It seems that President Obama’s reflexive tendency to vitiate his own arguments is more contagious than the Ebola virus; it has spread like wildfire among Democrats without even the need for physical contact, let alone the exchange of bodily fluids. The exchange of ideas is enough. The lead salient in the Democrat “War on Women” offensive against Republicans was the notorious “wage gap” factoid that “women earn 77 cents for every dollar earned by a man.” History will record this as one of the all-time great lies, since it implies – without actually saying so – that otherwise-identical male and female workers differ in their wages by 23%. In fact, this is presumably never true because nobody ever points out an actual case of it happening. The 77 cent figure (which has risen over the last quarter century from 55 cents) is derived by calculating average aggregate male earnings and average aggregate female earnings and comparing the two figures. Females tend to work in lower-paying jobs than do males. Females tend to leave the labor force to bear and care for children, so their career paths and average salaries suffer compared to males. None of these factors comport with the left-wing, feminist narrative of male oppression and discrimination. Indeed, women on the staffs of President Obama and Democrat Senator Durbin of Illinois earn – in the aggregate – about the same relative to male colleagues as do women nationally compared to men. But Democrats remain oblivious to the realities of the workplace in the world at large and in their own offices; they continue to cite the spurious wage gap as proof of discrimination against women.

Now, though, the same people who cherished their blissful ignorance of labor markets have cheerfully abandoned it in order to announce – to a media fanfare – that “a woman can’t … compete in the workplace if she can’t control when she’s going to become a mother.” In other words, a woman’s labor compensation will suffer compared to a man’s when she bears children and/or cares for them. In order to embrace the “economics” of the “new women’s issues,” Democrats are blithely abandoning their old issue of discrimination and the wage gap. Or, at the very least, they are abandoning one position on days when they support the other one.

A plurality of Congressional representatives consists of lawyers who can surely appreciate the cogency of the litigator’s courtroom gibe: “Are you lying now or were you lying then?” Apparently, the answer is “I was lying then.” Seitz-Wald cites American University Jennifer Lawless, who observes that “They [Democrats] tried the ‘war on women’ rhetoric this [election cycle] and it just doesn’t seem to be resonating.” The biggest egg was laid by the Mark Udall campaign in Colorado, which went so far as to suggest that incumbent Sen. Udall’s Republican opponent’s support for “personhood laws” and opposition to abortion constituted a denial of all access to birth control. This was too much for even the liberal Denver Post to stomach; it withdrew its endorsement of the Senator’s candidacy.

So it’s goodbye to the War on Woman and all that, and hello to the economics of women’s issues. “It’s all economic issues,” asserted Stephanie Schriock, of Emily’s List. “What’s driving this election and what’s motivating our women voters in particular are equal pay for women, minimum wage increases, access to full healthcare, paid sick leave. These are the driving issues.”

Uh huh. They’re driving issues, all right – driving economists to distraction. As we discovered when we parsed the President’s speech, none of these so-called women’s issues has any special nexus to economics. They are all political; economic logic tells against the Democrat position, not for it. It’s as if the Democrats are speaking a foreign language, in which the words are the same as those in English but they have the privilege of assigning their own proprietary meanings to them.

“Birth control is only a social issue if you haven’t had to pay for it,” is Shriock’s way of justifying the Democrat reclassification of reproductive freedom as an “economic issue.” Since the Democrat answer to every economic issue comes from a box marked either “tax,” “regulate,” “subsidize” or “borrow,” an economist cannot avoid the creeping suspicion that Democrat women want men to pay for birth control in the broadest, most totalitarian sense – and they want government to effect the implied income transfer. In the Democrat vocabulary, “economics” means politics. Real economics is foreign to them.

George Bernard Shaw once described Great Britain and the United States as two nations divided by a common language. “Division by a common language” is increasingly becoming the best way to describe the division between the political Right and Left today.

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