Patience has its limits. Take it too far, and it's cowardice.
George Jackson
Parsing Obama's 2012 SOTU Address: Part I
Think about the America within our reach: A country that leads the world in educating its people. An America that attracts a new generation of high-tech manufacturing and high-paying jobs. A future where we're in control of our own energy, and our security and prosperity aren't so tied to unstable parts of the world. An economy built to last, where hard work pays off, and responsibility is rewarded.This passage just strikes me as odd in several respects. Let's start with the unusual soundbite at the end "responsibility is rewarded". What exactly does that mean? Responsibility is "the act of carrying out prescribed roles and duties without supervision in home, school, community and society. Responsibility is a force that binds you to your obligations." If I assume the role of a husband and/or father (NB: I've never been married and don't have children), I am responsible for providing financial and emotional support for my wife and kids. I don't expect to be rewarded for doing the right thing by my family. It would be nice if my efforts were noticed and appreciated, but my duties are not contingent on whether family members love or even respect me. Now, certainly government can remedy the situation (e.g., garnish wages) if you are financially able but don't meet the obligations to your family, but it's not the role of government to confer its blessings on the heads of households.
I think what Obama is really saying here is insidious: he is subtly and unconscionably subordinating liberty of the individual or business to the authority of the state, e.g., "we are going to reward businesses which are entitled [the right size, industry, ownership, etc.] or do right by [fill in the blank with a relevant progressive ideological goal: are environmentally conscious, accommodate union demands, achieve lending targets for small businesses or minority home ownership, etc.]" What are the rewards? Things like exemptions from economic growth-choking regulations, tax breaks. In other words, industrial policy/crony capitalism as usual. Picking winners and losers in the economy. Obama is implicitly defining "responsibility" as accommodation to progressive ideological objectives and is also implying that he wants to punish "irresponsible" individual or business behavior. Is there no end to this counterproductive, megalomaniac delusion? All these not-that-subtle anti-business threats do absolutely nothing positive for the economy, including jobs.
Now let's review the earlier part of the passage: he's talking about "America that leads the way in educating its people". First, our universities are world-class. He's referring to K-12 and generally public education, traditionally managed at the local and state level. This is clearly a situation where public policy is part of the problem, not the solution. We find that administrators often have at best limited ability to manage resources, hamstrung by union contracts; we have legally enforced public monopolies with little or no effective competition, where parents who choose a private/parochial school for their children are not given the right to use their own tax money for a school of their choice and have to pay twice.
Barack Obama is completely clueless here; for all the money thrown at public education over the past 50 years, we have seen little, if anything to show for it on any desired criterion (test scores, graduation rates, etc.) In other societies, doing well in school and passing board exams can mean the difference between a comfortable middle-class lifestyle and a lifetime of financial struggle. If we are going to continue to subsidize education, we need to acknowledge (1) the status quo is not working, (2) the amount of resources government can contribute is limited and needs to be more efficiently allocated, preferably by encouraging real (not token) K-12 competition, and (3) our children are too important to delegate responsibility of their education to dysfunctional government and legislators, bought and paid for by crony union interests.
"An America that attracts a new generation of high-tech manufacturing and high-paying jobs." This really, really annoys me. First, America, with a single-digit percentage of the world's population accounts for nearly a quarter of the global GDP, and we continue to lead in manufacturing, particularly high value-added manufacturing. MJ Perry in his Carpe Diem blog (see blog top-right recommended blogs) routinely features news clips with a positive spin on our manufacturing sector. Some manufacturers that relied on high-cost low-skilled labor, no longer globally competitive, have shut down, but consumers with more money in their pockets spend and invest in other parts of the economy. It's called the law of comparative advantage. Unfortunately, the Democrats can't put the genie back into the bottle: businesses are not charities; they have to be profitable in the long run.
But Obama is ignoring the unbelievable damage that that his high-tax/high-regulation rhetoric, globally uncompetitive business tax structures, and industrial policies are having on American economic growth. He has got to stop cherry-picking which industrial sectors win and lose, and doubling down on regulations, a hidden tax on consumers, with an anemic economy is extraordinarily counterproductive. It took forever to get three free trade treaties negotiated by Bush passed (only during the last year), never mind any new initiatives.
" A future where we're in control of our own energy". One of the problems here is that Obama is continuing to throw money at alternative energy which is only profitable as a result of massive, unaffordable, unsustainable subsidies. On the other hand, while Obama tried to take credit for the North Dakota oil boom helping to displace some foreign imports, which has zero to do with his policies which have been generally negative towards oil and gas exploration; he has done nothing to end countless environmentalist lawsuits against development of shale properties in the West-Central-North US. There were his notorious moratoriums against Gulf exploration and development after the BP oil spill, and he has released only something like 5% in relevant acreage of offshore areas for exploration, including almost no new exploration off the shores of blue or purple states (e.g., West Coast and the Northeast).
And don't get me started on the Keystone XL pipeline project which is a transparent concession to his crony environmentalist allies. The point is that Obama's political grandstanding does undermine a stronger dollar, and we are going to face a severe economic crunch if and when other countries don't need to accumulate dollars to pay for oil, which props up demand for the dollar. Probably the single best thing Obama could do to facilitate energy independence for ourselves and our allies is to get out of the way of domestic oil and gas exploration. Alternative energy will play more of a role--but that will reflect the supply and demand for energy, and we're still years away from that.
The defining issue of our time is how to keep that promise [ if you worked hard, you could do well enough to raise a family, own a home, send your kids to college, and put a little away for retirement] alive....We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules. What's at stake are not Democratic values or Republican values, but American values.I absolutely reject the implicit assertion of FDR's Second Bill of Rights, expounded in his 1944 SOTU address:
- The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;
- The right to earn enough to provide adequate food and clothing and recreation;
- The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;
- The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;
- The right of every family to a decent home;
- The right to adequate medical care and the opportunity to achieve and enjoy good health;
- The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;
- The right to a good education.
These are so-called positive rights: in essence, obligations that the government must do or guarantee for you. The issue isn't so much the worthiness of these ideals, but the use of the term "rights" and thus the implicit mandate of the government to guarantee them. Government simply doesn't have the resources or the know-how to underwrite these guarantees or effectively micromanage the economy, but even if it did, there would be moral hazard: why should I work hard or save to buy a house or for retirement or a rainy day if, no matter what I do or say, the government is going to guarantee I'm going to be fed, have a decent roof over my head, be treated for even preventable illness, etc?
Obama provides a false choice: either we accept a world where this unsustainable government does everything for you or we settle for a free economy where some might do very well. Obama sees the economy as a zero-sum game, not a win-win game. There's a saying in the financial services industry: past performance is not a guarantee of future results. Ask Ted Turner whom at one time was worth nearly $10B and is reportedly down to about $2B or former employees of Enron whose retirement savings in the company's stock were wiped out.
The problem is that government intervention adversely effects economic growth; we need to encourage economic growth, a rising tide that lifts all boats. There are a number of misleading income inequality statistics behind Obama's rhetoric: we need to remember a key reason that "the rich got richer" has to do with the fact that government policy had been burdensome with respect to pre-1980 tax rates. High tax rates discourage the incentive to earn more and/or to invest; if and when the government tax or regulatory burden on individuals and business decreases, it restores an incentive for individuals and businesses to earn more and/or deploy more assets. It may very well be the case that the economically successful will benefit considerably from these policies, but they are also taking on economic risk--say, new competitor products or services undermine their business model.
"Fair shot"? "Fair share"? "Same set of rules"? Oh, but who exactly decides what is "fair" or the "same set of rules"? That is the rub; Obama wants you to believe that he and other progressive Democrat elitists stand in judgment of just what is "fair" or the "same set of rules"... Tell me, what was the "same set of rules" when Obama rammed through managed auto company bankruptcies which stiff-armed bondholders and rewarded lower-standing union interests? What was "fair" about other oil and gas vendors in the Gulf of Mexico which were forced to shut down because of the BP oil spill, regardless of their own safety procedures and regulatory compliance? What was "fair" about union groups and/or other companies in (say) former Speaker Pelosi's district offered waivers from certain aspects of ObamaCare? What's "fair" about Obama and his cronies growing the national debt by 50% in less than one term of office and leaving future generations to pay an unconscionable burden in addition to their own while he refused at all turns to make any substantive cuts to live within the government's means? What's "fair" about using money from Medicare, needed to shore up a program which will be insolvent in roughly a decade, to help pay for another entitlement program? What is "fair" about payroll tax holidays which further undermine the long-term financial stability of the social security system?
The fact of the matter is that Obama and his Democrat cronies have been picking winners and losers in the economy: alternative energy companies, teacher and/or public safety unions, auto companies, etc. Whatever convoluted special-interest rules exist in this house of cards we call our tax system, Obama and company have added their own special-interest groups. Obama's attempt to stake out a claim on "fairness" is arbitrary and laughable.
I agree that American values are at stake--but the danger is from an overreaching elitist federal bureaucracy, dedicated to self-preservation at the expense of an increasingly threatened free market. What we need to do is to foster liberty, self-reliance, hard work, thrift, perseverance, and other virtues, NOT an undue dependence on a paternalistic bureaucracy which undermines our very self-actualization.
Let's remember how we got here. Long before the recession, jobs and manufacturing began leaving our shores. Technology made businesses more efficient, but also made some jobs obsolete. Folks at the top saw their incomes rise like never before, but most hardworking Americans struggled with costs that were growing, paychecks that weren't, and personal debt that kept piling up.Actually, Obama is rewriting history. For example, we had a number of shocks to the economy during the last decade--9/11, the financial scandals, and 3 asset bubbles (fueled by easy money policies by the Fed). It's not true that the same people did as well over the past decade: the stock market was flat over the decade. Some businesses did well (e.g., Google and Apple) but most struggled--as well as the shareholders. It is true that the 2001 and 2003 tax cuts did encourage growth in the tax base: what Obama deliberately ignores to report in his heavily edited version of reality is that federal revenues grew to an all-time time under the Bush tax cuts, and the income tax burden was the most progressive in history; people at the very top have been contributing twice their share of national income while the bottom half of earners, if anything, were net beneficiaries.
What Obama also conveniently ignores and/or tries to explain away the failure of government regulators, the role that public policy played in artificially raising home ownership beyond the historical average, the inability of the Congress to live within its means, and the failure of the government to shore up unsustainable entitlements as Baby Boomer retirements continue to escalate.
I will likely continue my analysis of the SOTU in a future post. I dislike Obama's rhetoric because it's fundamentally dishonest and misleading, and I feel it underestimates the intelligence of the American people. I mean, does he seriously expect people to believe he and his fellow partisans are the arbiters of "fairness" or "special interests" are exclusively the backers of the opposition, not his own side? This smacks of the same kind of elitism that led him to wonder during the 2008 campaign what was it about those Midwesterners to vote against their own self-interest, to cling to their guns and Bibles? He just couldn't understand why, after 3 dozen speeches, he had failed to get the American people to see the wisdom of ObamaCare--it surely wasn't the legislation itself: it was far more reasonable to believe that he just hadn't found the right words to say in casting his spell over the American people...
No, Obama can't co-opt the truth by mere assertion, and analyzing Obama's speeches is like trying to pull teeth.
Political Potpourri
Busy weekend as we head down the stretch to Tuesday's primary in Florida, with polls now showing Romney beginning to pull away from Gingrich. What's peculiar is Herman Cain's decision to endorse Gingrich. Cain (as well as Santorum) had backed Romney in 2008. Sarah Palin is trying to repeat her South Carolina endorsement of Gingrich against the "Establishment". In the meanwhile, everyone is talking about money making the difference in Florida as Romney forces outspend Gingrich's.
There has been a lot of discussion about a couple of points regarding Gingrich's ethics charges and the nature of his resignation, which have been cited in the Romney PAC ads. Byron York, in particular, has been cited in arguing that the IRS "exonerated" Gingrich. Gingrich had taught a college course which sponsors had promised was tax-exempt but others alleged served a political purpose, putting the tax-exempt status in jeopardy. The IRS later investigated the course and did not find it partisan in nature. However, Gingrich had submitted letters from lawyers during the investigation which the committee felt was incomplete, inaccurate or unreliable. (Anyone believing that a combative Gingrich in 1997 meekly agreed to a $300K fine and a lopsided bipartisan vote against him over a trumped-up charge is in a state of denial.) There was a suggestion in the Romney ads that Gingrich resigned in disgrace after the ethics charges. In reality, there was a failed attempt to bring Gingrich down after the vote, but Gingrich, who was in trouble with fellow Republicans for other reasons as well, was principally undone by a loss of seats (but still retaining control) following the 1998 mid-term elections. I think the ad was probably a bit of a stretch, but Gingrich was on thin ice for multiple reasons heading into the 1998 elections. Whether it was his erratic behavior, rumors of an affair, and/or the unprecedented ethics rebuke to a sitting Speaker, Gingrich should not be surprised that his resignation as Speaker and from the House is an issue; the Romney campaign did not invent the issue, and even if Romney didn't make it an issue, Obama certainly would have.
I don't know if other pundits have noticed this, but Gingrich's lead over Romney in the Gallup daily tracking poll has shrunk to 2 points, 28-26, down 6 points from Friday (Romney +2, Gingrich -4). I think Romney learned a valuable lesson in South Carolina; after Gingrich had finished #4 and #5 and leading early the week of the primary, Romney was playing prevent defense. I think the campaign isn't likely to let that happen again.
Musical Interlude: My Favorite Groups
Queen (with David Bowie), "Under Pressure". Bring together two of the greatest rock vocalists of all times and a brilliant anthem-like pop arrangement, melody and harmony, and you have one of the best tracks ever recorded in the rock era, hands down one of my favorites from the 1980's.
