Read, every day, something no one else is reading.
Think, every day, something no one else is thinking.
Do, every day, something no one else would be silly enough to do.
It is bad for the mind to be always part of unanimity.
Christopher Morley
The State of the Union: My Take
Gov. Daniels' Response Speech: Thumbs UP!
President Obama's Speech: Thumbs DOWN!
The State of the Union is NOT "getting stronger"; it's very serious. As Governor Daniels reminded us during his rebuttal speech, gains in the unemployment rate to a large extent reflect the fact to a large extent unemployment is declining because long-term unemployed people continue to leave the work force, discouraged and unable to find work. We are 2.5 years into the Obama recovery; the President can talk all he wants about 3 million jobs added after a loss of 8 million during the recession (a recession, by the way, that started when Democrats were in charge of both chambers of Congress). What do economists say? It's disputed, based on the implications of an escalating number of Baby Boomers requiring (these numbers reflect some confounded effects, like Boomers opting for earlier social security given bleak job prospects, but others needing to work longer because of inadequate retirement savings). Here are some relevant ballpark figures: "Typically the figure economists cite as the minimum number of additional jobs needed to keep the unemployment rate flat is about 150,000 to 200,000. But economists at Barclays Capital, who have been analyzing how the graying of America may affect employment trends, estimate that going forward 75,000 to 100,000 jobs added per month may be sufficient. But the situation is particularly bad for workers within 10-15 years shy of retirement age (this statistic is from a year ago and I believe the numbers have worsened): ""The average jobless person over age 65 has been looking for work for 43.9 weeks. For someone between the ages of 55 and 64, the typical duration is 44.6 weeks, just a few weeks shy of a year. The average unemployment spells for both of these groups are at record highs."
Anyway, even if you argue only the lower bound of both ranges (75,000 a month) is just to accommodate newly eligible workers, that means at least 2,700,000 had to be generated over the Obama Administration to date just to keep pace with new workers, never mind the 8M whom lost their jobs over the recession. But as once again, the President is playing winners and losers. Note that Daniels was spot on when he said, "Out here in Indiana, when a businessperson asks me what he can do for our state, I say, 'First, make money. Be successful.'" Successful businesses grow (and inspire the development and growth of other businesses: consider, for example, when a Wal-Mart, supermarket or bank agrees to open in an underserved inner-city neighborhood), and they need to hire people to make that success happen.
The President's speech was unsatisfactory. I'll probably go into the speeches a little more fully in an upcoming post, but let me give a quick critique (I spent much of the speech screaming at my television set); this is just a short list:
- Populism has no place in a State of the Union address. This nonsense about banks run amok flies in the fact that banking has been one of the most regulated industries out there. The problem is that regulators didn't anticipate the risks to the industry, regulators were in over their head, and government policies (e.g., guarantees) have transferred risk to the taxpayer. Adding regulations increases burden on business. Again, he plants a false choice between an overgrown regulatory empire, which he favors, and anarchy. He talks about regulatory--only when it affects small business. (He fails to understand that regulations must be manageable and consistent; undue government burden is a de facto tax on businesses and consumers, and small businesses are not "more equal" when it comes to burdens.)
He's inconsistent on the discussion of regulation, arguing that there is a bipartisan buy-in to regulatory growth: he is implicitly charging that the GOP has been hypocritical by pointing out Bush added MORE regulations (after having run on the progressive talking point that (not-so-conservative) Bush and McCain were ideological deregulators). In fact, it's not just thousands of pages of the radical expansion of SPECIFIED financial and healthcare regulations: there's the HIDDEN burden of unpredictable new regulations gushing out each day by unaccountable boards and bureaucrats (a hundred times worse than the BP oil spill), and ObamaCare alone has imposed a new federal burden on the health care system, which accounts for roughly 17% of GDP.
I have to smile because he tried to talk about SMART regulations. That's right, ladies and gentlemen: the Fed and other regulators have done such a splendid job in past performance (with 3 massive bubbles over the past dozen years: stock market, real estate, credit) that we'll concentrate even more authority in the vested failed regulators (as in a Regulatory Superbubble): they'll get it right THIS TIME, because, well, he's Barack Obama, and he said so... It's not like they are already finding it nearly impossible to cope with their existing workload competently... You would have thought all this progressive ideological HUBRIS would have dissipated in the aftermath of the 2008 economic tsunami, which is just as much the result of GOVERNMENT FAILURE as well as business failures. But while the government sees fit to scapegoat businesses for its own failures, Obama fails to do a proper post-audit of the government's part of the tsunami, because it would challenge his own government empire-building agenda.
- Obama wants to use the tax code to punish successful international corporations and "spread the wealth around:" by redistributing the proceeds of tax hikes on the "rich internationals". This is ignorance of basic economics: most of the world's population (and consumers) exist outside the US, and US headquarter personnel grow with success. He is fixated on maximizing business tax revenues and a zero-sum game between domestic and international businesses (ignoring the tax base problems associated with higher tax rates). He fails to grasp that existing (and his own) policies DISCOURAGE business growth with globally uncompetitive tax and regulatory burden. What we need is a simpler, more consistent, lower tax and regulatory burden on business ACROSS THE BOARD
- More of the same old same old talking points and soundbites: Bush bashing, loyal opposition "obstructionist" bashing of the GOP, class warfare tax cuts for millionaires, spending more on teachers, infrastructure, clean energy, etc. He disingenuously tries to take credit for the Baaken formation oil boom in North Dakota, which had NOTHING to do with him, claims he'll open up 75% of offshore drilling (the proof is in the pudding, but he hasn't done it in the past); he largely ignored the Keystone XL pipeline controversy, the countless crony environmental lawsuits against drilling, particularly in the West, and bureaucratic stonewalling of permits.
Queen, "Bohemian Rhapsody". I remember when this unlikely glorious hit fusion of rock and opera was released in the 70's. For some odd reason, it's been probably one of the most covered songs during the history of American Idol....
