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Equitable Distribution

Did Barack Obama say 'a strong government hand is needed to assure that wealth is distributed more equitably'?

Published Aug 1, 2008

Claim:   During an interview with the Wall Street Journal, Barack Obama said, "a strong government hand is needed to assure that wealth is distributed more equitably."

Status:   False.

Example:   [Collected via e-mail, July 2008]

Well, Barack has finally decided to step up and tell us what he has in mind for us with his promises of 'change.' Just a few short days ago, he had an interview with the Wall Street Journal to further discuss his economic plans/policies for the future and he spelled it out quite clearly. As you can see from the excerpt quote from that interview (below), he plans on officially doing away with capitalism and replacing it with his much favored system of socialism. Many of us already knew of his strong socialist tendencies in the past, but he has now put it out there officially on record. It is amazing that this article, and specifically this quote, is getting overlooked, especially when he is so direct and brazen about his plans. Every single American who works for a living should be absolutely scared spitless. Pass this along to everyone you can.

Quote from Wall Street Journal:

"a strong government hand is needed to assure that wealth is distributed more equitably."

Barack Obama, WSJ, 6/17/08

If this doesn't scare Republicans to get out the vote, I don't know what would!!

Origins:   This item comes from a 17 June 2008 Wall Street Journal article about Senator Barack Obama's economic plans for the U.S., some of which was based on an interview Senator Obama gave to that publication.

not, as claimed above, a direct quote from Senator Obama. As the lack of quotation marks around those words in the passage below indicates, the phrase is the reporters' summary/interpretation of Obama's position, not his own words (the direct quotation portion of the sentence having ended with the word "workers"):

Sen. Obama cited new economic forces to explain what appears like a return to an older-style big-government Democratic platform skeptical of market forces. "Globalization and technology and automation all weaken the position of workers," he said, and a strong government hand is needed to assure that wealth is distributed more equitably.

(The phrase "a strong government hand is needed to assure that wealth is distributed more equitably" also does not appear in the Wall Street Journal's transcript of Senator Obama's interview.)

As for whether the phrase in question is a fair summary of Senator Obama's economic philosophy (whether or not he actually uttered those words), here is what he said during the portions of the interview apparently summarized by that phrase:

I do believe the tax policies over the last eight years have been badly skewed towards the winners of the global economy. And I do think there is a function for tax policy in making sure that everybody benefits from globalization or at least the benefits and burdens are shared a little more easily. If, as some talk about, we've

got a winner-take-all economy where the highly skilled, highly educated are reaping huge rewards and the unskilled or even semi-skilled are getting a much smaller share of the economy, then our tax policies can help cushion some of the blow through providing health care. So if people lose their jobs they're not losing their health care as well. That actually makes a more flexible work force that makes workers more mobile and less resistant to change.

If we've got investments in education, that will make us more competitive in the long run. We've got to pay for that like anything else. But it would be a mistake to say I view our tax code only as a distribution question. I also think that our tax code has come to distort a lot of economic decision making so I'd like to see simplification as part of an overall tax agenda. On the corporate side, for example, one of the things I've asked my folks to look at is: Are there ways we can close existing loopholes in tax havens at the same time as we're lowering overall rates? We've got this new problem: The biggest problem with our tax code when it comes to the business side is that we have one of the highest tax rates — corporate tax rates — on paper but our effective tax rate is one of the lowest ... You know, how much you pay in taxes as a corporation a lot of times is going to depend on how good your lobbyist is, as opposed to any sound economic theories. So those distorting effects I'd like to actually remove and eliminate from our tax system, but obviously that's a complicated and difficult task. The last time we did it was in 1986. We're going to have to, I think, revisit that.

I say that the combination of globalization and technology and automation all weaken the position of workers. I would add an anti-union climate to that list. But all weakens the position of workers, particularly blue-collar workers, in the economy, and some of it is just historical. You know after World War II,
we were in this unique position where Europe was decimated, Japan was decimated. China was off the grid because of Mao. And so we didn't have a lot of competition out there, and now other countries are rising and automation has supplanted a lot of work that used to be done by middle-class workers.

We have drastically increased productivity since 1995, and there was the theory that if you increase productivity enough some of these problems of living standards would solve themselves. But what we've seen is rising productivity, rising corporate profits but flat-lining or even declining wages and incomes for the average family.

What that says is that it's going to be important for us to pay attention to not only growing the pie, which is always critical, but also some attention to how it is sliced. I do not believe that those two things — fair distribution and robust economic growth — are mutually exclusive.

You get to a point, I think, if you have a participatory income tax, for example, where you might be discouraging work because marginal rates are so high. You might undoubtedly get to a point where the capital gain and dividend taxes are so high that they distort investment decisions and you're weaker economically. But you know if you've got a sensible policy that says, we're going to capture some of the nation's economic growth ... and reinvest it in things we know have to be done, like science and technology research or fixing our energy policy, and then that is actually going to be a spur to productivity and not an inhibitor.

Last updated:   17 August 2008


  Sources Sources:

    Davis, Bob and Amy Chozicks.   "Obama Plans Spending Boost, Possible Cut in Business Tax."

    The Wall Street Journal.   17 June 2008   (P. A1).

    Davis, Bob and Amy Chozicks.   "Barack Obama on Economics: 'We're Going Through a Big Shift.'"

    The Wall Street Journal.   17 June 2008.

David Mikkelson founded the site now known as snopes.com back in 1994.

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