10/08/2010 06:32 am ET | Updated May 25, 2011

The President's Misdirected Class Warfare

The president's militating against the extension of the Bush tax cuts for those families earning over $250,000 has become the banner issue of a cumulatively focused campaign being perceived by more and more of the nation's citizens as stirring the dangerous specter of class warfare.

According to Martin Feldstein, the noted economist and Harvard University professor,
"The president has given the impression that he just doesn't like business. That's not his constituency. He doesn't like high-income individuals, and he makes that very clear." That he wants to extend the tax cuts for households earning under $250,000 dollars and permit the cuts to lapse on December 31 for those earning more. Yet according to Feldstein the economy is too weak to raise taxes on anyone. In two years perhaps one could revisit the issue, but not now:

Hearing Obama's Labor Day speech one can understand where Feldstein is coming from:
"Anyone who thinks we can move this economy forward with a few doing well at the top, hoping it will trickle down to working folks running faster and faster just to keep up, they just haven't studied our history."

Yet, in a way both miss the mark. There is anger across the land at those few who did well, but did it unfairly and destroyed our faith in what was once viewed as the vaunted 'American meritocracy'. Obama, by painting all with the same brush is kindling the dangerous depths of the nation's psyche: the politics of envy. Far better would he be to focus his recriminations on those who warrant the anger. (As an aside, how many Americans feel anger toward the likes of Bill Gates? Very few I would venture. Rather they celebrate him for his achievement and vision, proud of his example of what can be realized in America.)

Far better to vent on those who, through greed and influence, have played the system to their own benefit and at painful cost of livelihood, home and sense of self respect of so many millions of Americans.

In a lucid article in the New York Times ("Still Stuck in Denial") Joe Nocera clearly spelled out Obama's failings, citing Roosevelt's 1936's invocation over Wall Street, "They are unanimous in their hatred for me and I welcome their hatred." Nocera goes on to expound:
"The big banks aren't being broken up the way they were in the 1930's. Bankers aren't being hauled off to jail. No serious effort has been made to rein in executive compensation or even to claw back millions of dollars in bonuses that were based on what turned out to be illusory profits. Most of the financial practices and products remain legal under the new Dodd-Frank legislation though they will finally be regulated. All things considered, Wall Street has gotten away pretty easy."

And that is the rub. Instead of class warfare, Obama could harness the rightful indignation and anger on a financial system that made literally billions selling products that were "ticking time bombs" exploding all over Main Street America and gravely impoverishing a middle class who have seen the value of their homes, if they still had one, their investments, their livelihood diminish drastically or vanish. If any of them can pick themselves up and rekindle the American dream again by becoming millionaires or billionaires, why more power to them and they should be held up as examples of what can be accomplished in this nation and not dismissed as a "few doing well at the top."

But the excesses and abuses of Wall Street with their billions of dollars bonus pools while families all over America were being evicted from their homes is another matter altogether.

Perhaps the most feared action by those who gamed the system, and that would be cheered through the length and breadth of the land, would be to initiate actions necessary to implement the claw-back of the billions of dollars that were disbursed as bonuses ($23 billion at Goldman Sachs alone) to the Wall Street multitude who feasted on those illusory profits, and whose payouts were made possible by placing taxpayer monies at grave risk through the TARP and other governmental programs. Programs that in essence saved the banks as otherwise they would have brought the whole system down. And then for them to reward themselves (please see "The Administration's "Pay Czar" Soft Pedaling Bank Bonuses as "Ill Advised." What is this Man Talking About?" 07.25.10) is what so deeply grates Americans.

No, it is not whether families earning $250,000 are paying more or less taxes that is of visceral concern. The public feels they have been held up and the perpetrators are laughing all the way to bank which is probably still in business thanks to the bailout risks, they, the taxpayers undertook and for which they received little or no benefit, but rather foreclosed homes and lost jobs.