No deal: Obama has presented himself as the president with the lowest opinion of business in America's history (PA)

President Obama has just taught the people of the United States a very big lesson. If you want to hurt the poor and workers by destroying jobs and draining animal spirits, then do all in your power to discourage the rich from investing in new discoveries, new products, new industries. In his first three years in office, Obama has presided over the loss of more than one million jobs a year.

So in the US we now have proof positive that promoting class warfare freezes economic growth and puts jobs in frigor mortis. This is a bipartisan point. Ronald Reagan understood it. Bill Clinton understood it. In his two terms, Reagan inspired and assisted in the growth of 16 million new jobs. In his two terms, Bill Clinton (with the wind of the post-1989 "peace dividend" at his back) supported the creation of almost 23 million new jobs. 

The two presidents accomplished this in the teeth of the Carter depression of 1977-80, which left interest rates at 20 per cent, unemployment at 7.5 per cent, and inflation at 12.5 per cent. Because of this inflation, older people on fixed incomes lost about half the value of their incomes. Millions of them suddenly slid below the official poverty line. (In 1980, that line was at just $8,414 for a family of four, and $4,190 for a single person living alone. Today's poverty line is just over $22,000 for a family of four, and just under $11,000 for a single person.)

This is how Americans learned that it is foolish to drive the rich away from investing creatively and productively. The rich have many ways to spend their high income. The least creative and productive way is to spend it on idle living for themselves. Another unproductive way is to spend it lavishly somewhere overseas, which does not really help the poor even there. 

It is wiser public policy to arrange both public honours and sound incentives (incentives both real and psychological) that challenge the rich, give them an opportunity to prove their mettle, and to show the world that they can be as inventive and dynamic as their ancestors.