Why America Needs "The Rich"
Let's look at what the rich do for the economy. They're overwhelmingly the investors and entrepreneurs that start new businesses. These activities make the rich the economy's leading employers, providing millions of jobs and the payroll that goes with them.
The rich are big spenders, contributing a large share to the consumer demand that keeps the economy percolating. Every dollar they spend becomes income to somebody else.
From telephones and cars generations ago to cell phones and plasma TVs more recently, the rich are also the early adopters of new technologies. They encourage innovation by paying the high prices that cover producers' startup costs. Their money lets companies expand output, driving prices down for middle-class consumers.
Obama can expand the ranks of the rich by choosing policies that encourage honesty over fraud in business, work over entitlement in consumption, productive risk taking over speculation, freer trade over protectionism, and economic dynamism over saving jobs and industries.
The goals should be more entrepreneurs, more investors, more innovation and more of what economist Joseph Schumpeter called "creative destruction." In short, Obama needs policies that expand the economic pie, increase tax revenues and tame the deficit monster: lower taxes, less regulation and smaller government to energize the economy.
~W. Michael Cox editorial in yesterday's IBD