The State of the Campaign

Here’s the thing that struck me as I read Obama’s State of the Union address: very little of this is going to happen. There is no way he will get even 10% of his agenda through a Republican House. Most of it would not even go through a Democratic House. This read less like a SOTU speech and more like a rally for liberals.

That would be fine except that … there are some things that kind of need to happen. Entitlements need to be reigned in. Our tax and regulatory structure are desperate for an overhaul. We need to cut spending and in a smarter way than the sequester does. So, in the end, this is fiddling while Rome burns. Or, more accurately, making MSNBC fawn over themselves while the country stumbles and bumbles.

Let’s go through a few talking points.

Over the last few years, both parties have worked together to reduce the deficit by more than $2.5 trillion – mostly through spending cuts, but also by raising tax rates on the wealthiest 1 percent of Americans. As a result, we are more than halfway towards the goal of $4 trillion in deficit reduction that economists say we need to stabilize our finances.

Technically, this is true. In reality, almost all of these “cuts” are in future budgets, not current ones. Spending has been flat over the last couple of years (after the 2009 runup) and it is now likely our deficit will fall under $1 trillion this year. If we can maintain that semi-discipline, the deficit will be a little less disastrous. But that budget control has come over the frothing opposition of the President’s party and every liberal commentator out there. And it’s still more like a few hundred billion, at most. You can’t really claim budget cuts that haven’t happened yet, especially when the rest of your agenda amounts to MOAR SPENDING!

Obama comes out against the sequester, which is indeed a crude and likely destructive tool compared to more targeted cuts (of course, he happily ignores his role in creating the sequester). It also doesn’t address, as he notes, entitlements. Oh, but on that subject:

On Medicare, I’m prepared to enact reforms that will achieve the same amount of health care savings by the beginning of the next decade as the reforms proposed by the bipartisan Simpson-Bowles commission. Already, the Affordable Care Act is helping to slow the growth of health care costs. The reforms I’m proposing go even further. We’ll reduce taxpayer subsidies to prescription drug companies and ask more from the wealthiest seniors. We’ll bring down costs by changing the way our government pays for Medicare, because our medical bills shouldn’t be based on the number of tests ordered or days spent in the hospital – they should be based on the quality of care that our seniors receive. And I am open to additional reforms from both parties, so long as they don’t violate the guarantee of a secure retirement. Our government shouldn’t make promises we cannot keep – but we must keep the promises we’ve already made.

Let’s get this straight: Obama’s healthcare reforms have not slowed the cost of healthcare costs. That slowing began before Obamacare was passed and was likely related to the Great Recession. Furthermore, his healthcare reforms have completely screwed young people, saving money by restricting what insurance companies can charge older people and therefore jacking up insurance rates on young people. (Yeah, how do you feel about voting for Obama by 24 points now, young people?)

He then talks about tax reform. But unless the mortgage interest deduction is on the table, such talk in unserious. That is not only one of the largest deductions (and one that heavily benefits the wealthy; for most middle class people, the mortgage interest deduction is less than their standard deduction), the unwillingness to challenge it is a sign of fecklessness. If you’re not willing to at least have it one the table at some point, you’re not serious about tax reform. Obama isn’t.

Obama then pivots to the economy for about the eighth time this week.

After shedding jobs for more than 10 years, our manufacturers have added about 500,000 jobs over the past three.

Almost all of those jobs were created by 2012. It’s nice they are coming back. But that has nothing to do with government policy and everything to do with smart business. Many businesses have realized that outsourcing wasn’t such a hot idea. They are bringing back some of their manufacturing. But most of it will remain overseas. And those trends have nothing to do with Obama’s policies.

Obama then talks up science and technology — fair enough. But then we get this whopper:

We produce more oil at home than we have in 15 years. We have doubled the distance our cars will go on a gallon of gas, and the amount of renewable energy we generate from sources like wind and solar – with tens of thousands of good, American jobs to show for it. We produce more natural gas than ever before – and nearly everyone’s energy bill is lower because of it. And over the last four years, our emissions of the dangerous carbon pollution that threatens our planet have actually fallen.

Good Lord, there’s a lot of BS in here. First of all, we have not doubled the distance our cars will go on a gallon of gas. That’s a goal in the law, but it is not reality. We encounter this over and over with Obama. He thinks that just passing a law calling for something to be done is the same as actually doing it. He fundamentally believes that law has the ability to change reality, alter the laws of physics and create the future. So, in his mind, we have doubled the mileage of cars. We passed a law, didn’t we? So.. done! QED. It’s the same logic by which he claims we have cut spending by $2.5 trillion because we passed a law calling on future Congresses to do so.

Second, jobs are being created in renewables but government investment is hurting that trend by funneling money to politically connected dead ends. Third, production of oil and gas have boomed over liberal protestations. Fourth, energy bills are not down (even with subsidies, renewables cost more per kwH than fossil fuels). And fifth, our emissions are down, in large part, because we have moved energy production from carbon-intensive coal to less carbon-intensive natural gas. None of this, none of it, is because of Obama’s policies. It is all because of innovation in the private sector.

He then talks of supporting McCain’s cap-and-trade scheme — the one that would put strings in every corner of industry and create hundreds of billions in federal slush funds. He propose that revenues from energy sources on federal lands go to an “Energy Security Trust” — another slush fund. This is the same stuff he has rolled out every year and it has gone nowhere.

America’s energy sector is just one part of an aging infrastructure badly in need of repair. Ask any CEO where they’d rather locate and hire: a country with deteriorating roads and bridges, or one with high-speed rail and internet; high-tech schools and self-healing power grids.

Tonight, I propose a “Fix-It-First” program to put people to work as soon as possible on our most urgent repairs, like the nearly 70,000 structurally deficient bridges across the country. And to make sure taxpayers don’t shoulder the whole burden, I’m also proposing a Partnership to Rebuild America that attracts private capital to upgrade what our businesses need most: modern ports to move our goods; modern pipelines to withstand a storm; modern schools worthy of our children.

I’ve gone over the massively overstated case that our infrastructure is crumbling (such statements come from groups that lobby for more infrastructure spending). The Partnership to Rebuild America sounds very iffy. I’d much rather see privatization.

After talking about re-inflating the housing bubble, he turns to Universal Union Employment, er, Pre-K:

Study after study shows that the sooner a child begins learning, the better he or she does down the road. But today, fewer than 3 in 10 four year-olds are enrolled in a high-quality preschool program. Most middle-class parents can’t afford a few hundred bucks a week for private preschool. And for poor kids who need help the most, this lack of access to preschool education can shadow them for the rest of their lives.

Tonight, I propose working with states to make high-quality preschool available to every child in America.

I have taken on this subject before. There is no evidence that universal pre-K — yes, even in Oklahoma and Georgia — does anything. In fact, American kids start school performing quite well compared to international peers. But the longer they are in the public system, the more their performance decays. There is simply no good case to be made — other than wishful thinking and good feelings — that a lack of universal pre-K is the biggest problem with our education system. There’s frankly not a lot of evidence that it’s a problem at all. The logic amounts to “other countries have universal pre-K (even though many don’t) and other countries have better educational performance, therefore …” That ain’t logic. That’s rationalizing millions more union jobs.

Sandwiched in between Obama’s bullshit about pre-K and bullshit about college education is a not so bad idea:

Let’s also make sure that a high school diploma puts our kids on a path to a good job. Right now, countries like Germany focus on graduating their high school students with the equivalent of a technical degree from one of our community colleges, so that they’re ready for a job. At schools like P-Tech in Brooklyn, a collaboration between New York Public Schools, the City University of New York, and IBM, students will graduate with a high school diploma and an associate degree in computers or engineering.

We need to give every American student opportunities like this. Four years ago, we started Race to the Top – a competition that convinced almost every state to develop smarter curricula and higher standards, for about 1 percent of what we spend on education each year. Tonight, I’m announcing a new challenge to redesign America’s high schools so they better equip graduates for the demands of a high-tech economy. We’ll reward schools that develop new partnerships with colleges and employers, and create classes that focus on science, technology, engineering, and math – the skills today’s employers are looking for to fill jobs right now and in the future.

This is, in fact, something that Bobby Jindal has been pushing in Louisiana. Most people do not need a college education to get a good job that matches their skills. A better high school education — focused more on skills than abstraction — could obviate the need for crushing student debt and bloated universities.

Oh, about that higher education. Obama claims to have brought down costs (he hasn’t) and proposes that student loans be more conditional on education utility rather than just being handed out. Of course, that could be achieved very easily and cheaply if we 1) re-privatized the student loan market; and 2) made student loans dischargeable in bankruptcy. This would guarantee that $100,000 loans for degrees in puppetry wouldn’t happen. But, of course, that wouldn’t create more government spending and control.

Obama then digs into immigration, which I’ve already blogged about. He urges passage of the Violence Against Women Act (a bad piece of legislation wrapped in good sound bites) and the Paycheck Fairness Act. He proposes raising the minimum wage and linking it to the cost of living (as Romney proposed). Of course, that ignores that the COLA fell in recent years. Would the government then cut the minimum wage appropriately? I think not.

And this year, my Administration will begin to partner with 20 of the hardest-hit towns in America to get these communities back on their feet. We’ll work with local leaders to target resources at public safety, education, and housing. We’ll give new tax credits to businesses that hire and invest. And we’ll work to strengthen families by removing the financial deterrents to marriage for low-income couples, and doing more to encourage fatherhood – because what makes you a man isn’t the ability to conceive a child; it’s having the courage to raise one.

Spend, spend, spend on dead towns. Create collaborations between local government, federal government and business to maximize corruption. That’s the way to move an economy!

Obama then shifts to foreign policy. He promises to get out troops out of Afghanistan and adds this:

Different al Qaeda affiliates and extremist groups have emerged – from the Arabian Peninsula to Africa. The threat these groups pose is evolving. But to meet this threat, we don’t need to send tens of thousands of our sons and daughters abroad, or occupy other nations. Instead, we will need to help countries like Yemen, Libya, and Somalia provide for their own security, and help allies who take the fight to terrorists, as we have in Mali. And, where necessary, through a range of capabilities, we will continue to take direct action against those terrorists who pose the gravest threat to Americans.

I don’t disagree entirely with this. But it seems like this has been obvious for quite some time and it took a disaster in Benghazi for the Administration to figure out that they were wielding the guns of august.

Here is the biggest whopper of the night:

As we do, we must enlist our values in the fight. That is why my Administration has worked tirelessly to forge a durable legal and policy framework to guide our counterterrorism operations. Throughout, we have kept Congress fully informed of our efforts. I recognize that in our democracy, no one should just take my word that we’re doing things the right way. So, in the months ahead, I will continue to engage with Congress to ensure not only that our targeting, detention, and prosecution of terrorists remains consistent with our laws and system of checks and balances, but that our efforts are even more transparent to the American people and to the world.

This is, frankly, a lie. The Administration only recently shared their drone policies with some members of Congress after being excoriated for the ambiguities in their “white paper” on the subject. They have asserted just as much executive authority as Bush did and with even less transparency. This Administration has killed an American citizen and his son and refused to disclose the rationale. They have asserted their ability to kill American citizens without any kind of due process of external review. To talk as though they were the most accountable transparent Administration ever is absurd and offensive.

After burbling inanities on Russia, Iran, North Korea and third world poverty, he gets to his final issue, which is gun control:

Overwhelming majorities of Americans – Americans who believe in the 2nd Amendment – have come together around commonsense reform – like background checks that will make it harder for criminals to get their hands on a gun. Senators of both parties are working together on tough new laws to prevent anyone from buying guns for resale to criminals. Police chiefs are asking our help to get weapons of war and massive ammunition magazines off our streets, because they are tired of being outgunned.

Most of this I don’t have a problem with (although I don’t like citing victims of tragedy in support of any law). The problem here is the last sentence which claims that our citizens have “weapons of war” and the police are outgunned. This is simply false. Automatic weapons are heavily regulated and illegal in most areas. And the proliferation of para-military SWAT teams and no-knock raids that results in such things as the killing of Jose Guerena (a military man who responded to what he thought were robbers with a military weapon) cries against this bleating about police being outgunned. In fact, police fatalities have been declining steadily for nearly four decades.

All, in all, it was what I expected. A huge declaration of a big liberal agenda that will never happen. Punting on the most important issues and staying the course of this bumbling presidency. And always deferring to the state and the law for progress.

SOTU’s are never very substantive. With each one, I become more and more convinced that Thomas Jefferson got it right and the SOTU should be a letter instead of a monarchial speech. But it does give us a chance to see what kind of agenda that President’s party thinks they should be flogging. And this agenda is … well, what we expect after four years. Bigger government in the language of smaller; “new ideas” that aren’t; bold initiatives that are throwbacks to yesteryear; Bush policies in prettier packaging.

Change!

Comments are closed.

  1. Miguelito

    Jumping to $9/hr Fed minimum wage is brilliant. In fact, it doesn’t go far enough. We should just go to $216.35/hr so we all hit the new $450k higher-tax bracket and all our deficit/debt ills will be solved overnight. Genius!

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  2. FPrefect89

    Jumping to $9/hr Fed minimum wage is brilliant. In fact, it doesn’t go far enough. We should just go to $216.35/hr so we all hit the new $450k higher-tax bracket and all our deficit/debt ills will be solved overnight. Genius!

    I think I may steal this for a signature.

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  3. CM

    Second, jobs are being created in renewables but government investment is hurting that trend by funneling money to politically connected dead ends.

    Hal, I keep hearing this suggestion but when I look into it the evidence is either non-existent or tenuous at best. Clearly I’m looking in the wrong place. Where should I be reading up on this?

    On the minimum wage, Klein has posted a graph illustrating how as corporate profits have risen since 1970 while labour’s share of those profits has fallen.
    http://www.washingtonpost.com/blogs/wonkblog/wp/2013/02/14/this-graph-is-the-best-argument-for-raising-the-minimum-wage/

    Jumping to $9/hr Fed minimum wage is brilliant. In fact, it doesn’t go far enough. We should just go to $216.35/hr so we all hit the new $450k higher-tax bracket and all our deficit/debt ills will be solved overnight. Genius!

    That is good.
    Alternatively, pay people nothing, and watch corporate profits (and the tax take from those profits) go through the roof.

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  4. Mook

    Alternatively, pay people nothing, and watch corporate profits (and the tax take from those profits) go through the roof.

    Can’t make corporate profits “through the roof” or otherwise without employees who are willing to work. If a company doesn’t pay people, they’ll have no employees, no output, and no profit.

    Employers want to pay as little as possible in wages and employees want to make as much as they can in wages. Companies want to charge top dollar for their products but customers may not be willing to pay the asking price. The market is the fairest, most efficient way to sort out those competing interests.

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  5. CM

    Can’t make corporate profits “through the roof” or otherwise without employees who are willing to work. If a company doesn’t pay people, they’ll have no employees, no output, and no profit.

    Well, yes, it was also ridiculous, also taking things to such an extreme that they become nonsense.
    It’s the opposite of literally making the minimum wage level so high that nobody can afford to hire anyone.

    Employers want to pay as little as possible in wages and employees want to make as much as they can in wages. Companies want to charge top dollar for their products but customers may not be willing to pay the asking price. The market is the fairest, most efficient way to sort out those competing interests.

    I understand. I’m a supporter of the market as a way of organising the economy.
    Unfortunately this arrangement doesn’t include any sort of relationship between what people are paid and the cost of living. The labour market equation operates in a vacuum in that sense. Corporate profits have increased so much since 1970, but labour’s share has fallen (and real wages have either stagnated or fallen for vast majority). If employers hated minimum wage legislation so much, they could premptively do something about it. But of course that doesn’t happen, because business owners have other things they want to do with that profit, and feel under no pressure to maintain or increase the share of profit going into labour.
    For the reasons outlined by Klein in that piece, tax credits would seem to be a better alternative to minimum wage hikes. But that still sucks, beacuse it’s effectively subsidising business owners who could be paying their staff more. Either way, these are all attempts to fix chronic (and unsustainable) market failure.

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  6. Hal_10000 *

    CM, I did not understand the point of Klein’s graph at all. Very very few workers make minimum wage. Half are under 24 and most are in temporary positions on their way to better positions. Raising the minimum wage will do dick for the guy who’s been stuck at $40k per year for the last decade unless I’m missing something. The companies making the biggest profits — oil, banks, etc., pay their employees a LOT more than minimum wage.

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  7. Hal_10000 *

    I do worry a bit about rising corporate profits with no advance in salaries. It’s complicated by high unemployment rates hurting negotiation power and rising benefits (specifically healthcare). But it is on my mind quite a bit.

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  8. Hal_10000 *

    I’ll write a full post on that Klein graph but I’ve seen that sort of thing before and it always seems to advance some agenda that has no clear relation to the problem: raising taxes on the rich, raising minimum wage, etc. I have to hear anyone — conservative or liberal — give me a good explanation for it that wasn’t about supporting Policy X that they already believed in.

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  9. AlexInCT

    Can’t make corporate profits “through the roof” or otherwise without employees who are willing to work. If a company doesn’t pay people, they’ll have no employees, no output, and no profit.

    Not to mention that unpaid employees don’t buy much leaving practically every company out there to go broke. Of course, you can have government confiscate all company money, erm I mean collect in an effort to protect the company from nefarious accountants and management, and then hand out all the unpaid employees government provided “fairness payments” – the myriad of existing collectivist wealth redistribution schemes – and then they will have money to spend. I think this shit was tried a number of times before, but I am not sure despite all the evidence of how this always goes wrong that the people that think government should be the arbitrator of fairness get the problem picture. being driven by envy and jealousy of what others have usuall does that to you though.

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  10. AlexInCT

    CM, I did not understand the point of Klein’s graph at all. Very very few workers make minimum wage. Half are under 24 and most are in temporary positions on their way to better positions.

    YOU PHILISTENE BASTAGE! LIVING WAGE! EVIL GREEDY KAPITALISTS! NOT FAIR!!!1!!eleventy!!!!!!

    The ugly and well known fact is that minimum wage earners are young people entering the work force and doing shit jobs like serving burgers, sandwiches, coffee, or donuts, building experience on their way to better paying jobs. Anyone with two firing neurons should be able to see through this ruse whenever it is used.

    If you are a grownup making minimum wage, and more importantly supporting a family like the collectivists constantly pretend is the case, you did something absolutely fucking wrong and are such an outlier that you are statistically insignificant. We should ask why someone with a family is suddenly making minimum wage, because there is a problem with them. To earn minimum wage they must have no working skill or experience.

    That leaves very few options that can explain the situation these collectivists are so desperate to have us believe justifies their changes. Seriously, who has a fucking family and have been able to do that on minimum wage? The only logical possibility is that they had a life chagrining event. They had lived on the dole until they had to go find work. They were being kept by someone else, and now lost that source of income. They have no skills, and either have other problems that simply make them unqualified to do any work, or worse, have serious problems that no employer would tolerate from an employee. Or they are aliens from another country/planet which should not be working in the first place.

    I guess, with a lot of imagination, you can concoct a few incredibly odd and insane scenarios that would make this minimum wage family earner possible. But again, these people will be statistical outliers, and hence, they should never, ever, drive policy, especially since that drive is completely based on faulty emotional rather than good fiscal logic.

    So that brings us to the question of why these collectivists push for this nonsense. As I pointed out, the people that champion the ludicrous “living wage” thing know damned well that raising the minimum wage will drastically and negatively impact those seeking entry level work, but somehow, they do not care. That is because their purpose is not what they advertise it as. It is to hand their biggest voting block a win.

    That voting bock are the unions. Practically all union pay is tied to minimum wage. Raise the minimum wage, and you literally raise people’s pay with the employer having no say in the move other than to lay off enough workers to overcome the financial burden the across the board minimum wage raise caused. Union bosses score big when government helps fill their coffers this way.

    This is about paying off your special interest. They sell it as something noble, but it is a despicable and economically damaging thing. Basically it is government interfering in the market. The foreseen and unforeseen consequences then serve that same government well as the pain ebbing caused helps grow dependency on more government. It is a scam of the highest order by evil people pretending to be helping you out. And they screw you, hard, without the benefit of even a reach around.

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  11. Dave D

    About the ONLY thing an increase in minimum wage would do is to make it LESS glamorous (for some) to stay on welfare, but of course any increase in MW will be accompanied by a subsequent increase in Food Stamps/Disability/Welfare payment becasue “we can’t have our main voting block….er…. poor living that far below a minimum wage”.

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  12. Miguelito

    Dave, they also just claim it’s COLA increases since raising MW tends to push up the cost of goods across the board (though some might take time) anyway. This is why it was such a facepalm moment when he made the MW comments irt people living in poverty while working full time. You raise the MW, the cost of goods goes up and the poverty line goes up with it… and basically the same people below the line now will be below the line again anyway.

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  13. CM

    Only just remembered to check back in on this thread (weekend got in the way) . Some excellent points made, which remind me again why tax credits are probably a better way to mitigate for the fundamental structural deficiencies. Still doesn’t seem sustainable though; it’s increasingly covering a body with sticking plasters. It doesn’t address the actual problem.

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  14. CM

    Hal, any leads for me on “jobs are being created in renewables but government investment is hurting that trend by funneling money to politically connected dead ends”? You may have missed it because my comment is hidden.

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