Rebuttal to The State of The Union

February 14, 2013

Tuesday night’s State of The Union address by President Obama will likely go down in history as one of the least inspiring – mostly a themeless chronicling of the woes we face, followed by a brief attempt at cheerleading an agenda for a brighter tomorrow, seemingly led by one who hadn’t listened to the first part of his own speech. 

It began in the usual fashion:

Fifty-one years ago, John F. Kennedy declared to this Chamber that “the Constitution makes us not rivals for power but partners for progress…It is my task,” he said, “to report the State of the Union – to improve it is the task of us all.”

Tonight, thanks to the grit and determination of the American people, there is much progress to report. After a decade of grinding war, our brave men and women in uniform are coming home.

Good.  That’s a relief.  OK, what else have you got? 

After years of grueling recession, our businesses have created over six million new jobs.

Uhhh, wait a minute, that’s just a little disingenuous.  Yes, the economy has added six million new jobs, but we’ve also added that many workers to the labor force, thanks to growing the population by twelve million.  In other words, no progress has been made in putting the unemployed back to work, and our labor force participation rate is left incrementally lower than it was four years ago.  That’s not really good news, Mr. President.  Got anything else?

We buy more American cars than we have in five years, and less foreign oil than we have in twenty.

In other words, sales of American cars hasn’t grown in five years, while our population has grown by 15 million people, so our per capita consumption of American cars has actually declined even further.  And our consumption of foreign oil has declined because people can no longer afford bigger cars.  Yeesh.  I’m still looking for some evidence of “progress” here.  Anything else?

Our housing market is healing, our stock market is rebounding, and consumers, patients, and homeowners enjoy stronger protections than ever before.

The stock market is rebounding, thanks mostly to the Fed’s quantitative easing programs to buy up treasuries and mortgage-backed securities, effectively crowding other investors out of those markets into the only market left – the stock market.  It has little to do with economic recovery.  And are you sure about that housing market part?  A rise of a few percent from a 50% decline is scant evidence of a recovery, and just yesterday morning the Mortgage Bankers’ Association announced that mortgage applications fell 10% last week, erasing much of the previous gains. 

Together, we have cleared away the rubble of crisis, and can say with renewed confidence that the state of our union is stronger.

Stronger than it was at the depths of the Great Recession, that’s for sure, but weaker than it was before the onset of the recession and, one could argue (especially based upon what’s happened to our national debt), that it’s weaker than it’s been in decades. 

And that was it.  That was the extent of the “much progress to report.”  One paragraph, the first paragraph, in a speech approximately 80 paragraphs long.  Most of the remainder of the speech dealt with slowing the growth of our national debt, raising revenue and cutting spending, sharing the burden and trying to breathe life back into the middle class.  In other words, the minutae involved in managing our decline. 

The key to reinvigorating out economy is bringing manufacturing jobs back home, and that fact isn’t lost on the president:

Our first priority is making America a magnet for new jobs and manufacturing.

After shedding jobs for more than 10 years, our manufacturers have added about 500,000 jobs over the past three. Caterpillar is bringing jobs back from Japan. Ford is bringing jobs back from Mexico. After locating plants in other countries like China, Intel is opening its most advanced plant right here at home. And this year, Apple will start making Macs in America again.

Remember the six million jobs the president boasted of adding during his first term?  Half a million – or 8.3% – were in manufacturing.  Sounds good until you realize that the manufacturing sector accounts for 12% of our economy.  So, in other words, while we’ve grown the economy by stoking it with population growth, manufacturing’s share of the economy has actually declined.  And for every example of companies bringing manufacturing jobs back home that the president cited, I could give you two examples of companies outsourcing more jobs.  For every step forward there have been two steps backward that the president doesn’t mention. 

There are things we can do, right now, to accelerate this trend. Last year, we created our first manufacturing innovation institute in Youngstown, Ohio. A once-shuttered warehouse is now a state-of-the art lab where new workers are mastering the 3D printing that has the potential to revolutionize the way we make almost everything. There’s no reason this can’t happen in other towns. So tonight, I’m announcing the launch of three more of these manufacturing hubs, where businesses will partner with the Departments of Defense and Energy to turn regions left behind by globalization into global centers of high-tech jobs. And I ask this Congress to help create a network of fifteen of these hubs and guarantee that the next revolution in manufacturing is Made in America.

Mr. President, there’s no mystery about how to revive manufacturing.  Stop importing everything we consume and leave something for us to manufacture.  Government-funded showpieces that will vanish as soon as the funding dries up (and it will dry up) isn’t the way to do it. 

The president then launched into a long laundry list of ideas for putting Americans back to work – supporting research, achieving energy independence, infrastructure modernization, support for homeowners, pre-school education, upgrading high school curriculums and making college more affordable.  All of it followed by this:

Our economy is stronger when we harness the talents and ingenuity of striving, hopeful immigrants. And right now, leaders from the business, labor, law enforcement, and faith communities all agree that the time has come to pass comprehensive immigration reform.

After rattling on for half an hour about the challenges of putting Americans back to work, the president then slaps all American workers in the face by intimating that Americans are too stupid to do the job and we need to import people who are better-equipped.  He’s falling back on economists’ age-old macroeconomic crutch:  we need more people.  In other words, what business  needs is more customers.  So much for the preceding issues of unemployment, over-dependence on foreign oil and global warming.  To hell with all of that!  Business wants more total sales volume, so we’ll give it to ’em regardless of the fact that it will exacerbates all of the overpopulation-driven problems he just spent 45 minutes addressing. 

And speaking of exacerbating our problems, then comes this:

To boost American exports, support American jobs, and level the playing field in the growing markets of Asia, we intend to complete negotiations on a Trans-Pacific Partnership. And tonight, I am announcing that we will launch talks on a comprehensive Transatlantic Trade and Investment Partnership with the European Union – because trade that is free and fair across the Atlantic supports millions of good-paying American jobs.

Mr. President, has it escaped your attention during your four years in office that, thanks to the drive toward free trade, we now have a trade deficit with the EU of $116 billion (the final tally for 2012) – a figure that’s seven times worse than it was just 15 years ago?  And you want to make it worse?  Are you nuts?

The second terms of the last two presidents both ended the same way – in recession.  Clinton left office with the stock market in a state of collapse.  Bush left office with the stock market and the global economy and financial system in a state of collapse.  Both made the mistake of attempting to cut the federal deficit without addressing the root cause of deficit spending – the trade deficit.  Now, under intense pressure to unwind the deficit spending necessary to stave off the near-depression he inherited, President Obama is headed down the exact same path.  How much worse will things be next February after he’s sucked more taxes out of the economy and put less of that money back into it, while turning us into more of a trade patsy and exploding our population with more immigrants?  How bad will things get before he finally, mericfully leaves office?


My Take on the State of the Union Address

January 27, 2012

Now that I’ve had a couple of days to digest the president’s State of the Union address on Tuesday night, I’d like to share some thoughts.

The constitution requires that the president shall “… from time to time give to Congress information of the State of the Union…”  So, first of all, what is the current state of the union?  There was virtually nothing in the president’s speech that addressed it.  One could argue that the president failed in his constitutional duties in that regard.  It was much more of a campaign speech. 

Our homeowner’s association begins its annual meeting with a treasurer’s report.  Perhaps the president should do the same, or should have the Treasury Secretary lead off with such a report.  What were our revenues vs. spending?  How much did the national debt increase during the past year?  What was our current account deficit (or trade deficit) during the year?  How much did our population grow?  What is the current unemployment rate compared to last year?  What is our labor force participation rate compared to last year? 

Aren’t these some of the very basics that should be covered at the outset so that proposals regarding revenues and spending, trade and job creation can have some context?  Add this to my list of deficiencies in the constitution – that this requirement for a “State of the Union” address needs to be much more specific.  It seems that, as in the case of Congress, the president also can’t be trusted to perform his duties.  That’s not a knock on President Obama alone.  Every president has been guilty of the same thing.

Secondly, I give the president credit for recognizing that restoring our manufacturing base is absolutely critical to any economic revival.  For how long have we listened to our economists and political leaders dismiss manufacturing with talk of “the new economy,” or “a services-based economy” or a “high tech economy?”  It’s been decades and, all the while, our economy has steadily worsened.  Now the pendulum seems to be finally swinging back.  But talking and wishing won’t make it happen.  Nor will simple tax measures designed to lure manufacturing jobs back home.  Foreign nations will simply counter with tax breaks of their own.  We’re still a long way from an understanding that it’s trade policy that has to change. 

I also detected a change in the president’s approach to manufacturing.  Two years ago, he set a goal of doubling exports in five years.  That was going to lead the manufacturing renaissance.  However, although he made mention of that export goal in the address on Tuesday night, there was a much heavier emphasis on bringing jobs home and making products for Americans right here in America.  Perhaps the president and his economic team are recognizing that attempting to export our way out of our manufacturing decline isn’t going to work, as evidenced by the fact that exports have begun to lag the president’s goal.

Then there was the pandering to the Hispanic vote with his pitch for “comprehensive immigration reform” which is nothing more than another round of amnesty.  The president expressed sympathy for foreign students who return home instead of being offered work here, and sympathy for foreigner eager to find work.  Not a word of sympathy for the American workers that they displace. 

Finally, there are a few specifics that I can’t let pass without comment:

Let’s remember how we got here.  Long before the recession, jobs and manufacturing began leaving our shores.

Yes, indeed, let’s remember exactly how we got here and exactly why jobs and manufacturing left our shores!  And let’s not kid ourselves about it either.  It was the shift in trade policy to the blind, across-the-board application of free trade, abandoning 150 years of successfully using the full range of trade policy available to us, including tariffs, to assure that we maintained a surplus.  But I suspect that this isn’t what the president wants us all to remember.

Then there was this: 

Those are the facts.  But so are these:  In the last 22 months, businesses have created more than 3 million jobs.  (Applause.)

Maybe so, but that has just barely kept pace with the growth in the labor force.  Truth be told, unemployment has barely budged from its worst level of the recession.  It’s only thanks to the labor department’s claim that millions have left the work force that official unemployment has fallen from 9.8% to 8.5% during that time frame.  The fact is that just as many people remain jobless today as they did 22 months ago. 

On the day I took office, our auto industry was on the verge of collapse.  Some even said we should let it die.  With a million jobs at stake, I refused to let that happen.  In exchange for help, we demanded responsibility.  We got workers and automakers to settle their differences.  We got the industry to retool and restructure.  Today, General Motors is back on top as the world’s number-one automaker.  (Applause.)  Chrysler has grown faster in the U.S. than any major car company.  Ford is investing billions in U.S. plants and factories.  And together, the entire industry added nearly 160,000 jobs.

We bet on American workers.  We bet on American ingenuity.  And tonight, the American auto industry is back.  (Applause.)

Give the president credit for this one.  He’s exactly right.  In fact, virtually all increase in manufacturing employment in the past 22 months has been tied to the resurgence of GM, Ford and Chrysler.  But also give credit to American consumers.  There’s been a measurable uptick in the percentage of people who favor buying American.  And a car is one product they can still find that’s made in the U.S.  But let’s also give a lot of credit to the UAW.  As part of the bankruptcy settlements, the UAW became a partial owner of GM.  As part of the deal, the UAW insisted that certain manufacturing operations be returned to the U.S.  It’s the very reason that the highly successful Chevy Cruze and the new Chevy Sonic is made in the U.S. today.  Otherwise, the Sonic would be imported from South Korea, as was the Aveo that it replaced. 

I will go anywhere in the world to open new markets for American products.  And I will not stand by when our competitors don’t play by the rules.  We’ve brought trade cases against China at nearly twice the rate as the last administration –- and it’s made a difference.  (Applause.)  Over a thousand Americans are working today because we stopped a surge in Chinese tires.  But we need to do more. 

I almost gagged on that one.  No one has done more than the president to block Congress’s attempts at labeling China a currency manipulator.  “We need to do more.”  Do you think?!?  A thousand jobs?!?  It seems that we need to do about 10,000 times more than that if we want to bring home 10 million manufacturing jobs.   It may be safe to say that no president has ever done less to bring home American manufacturing jobs.

Tonight, I’m announcing the creation of a Trade Enforcement Unit that will be charged with investigating unfair trading practices in countries like China.  (Applause.)  There will be more inspections to prevent counterfeit or unsafe goods from crossing our borders.  And this Congress should make sure that no foreign company has an advantage over American manufacturing when it comes to accessing financing or new markets like Russia.  Our workers are the most productive on Earth, and if the playing field is level, I promise you -– America will always win.  (Applause.)

We’ve heard all of that before for decades.  It’s the same old song. 

I also hear from many business leaders who want to hire in the United States but can’t find workers with the right skills.  Growing industries in science and technology have twice as many openings as we have workers who can do the job.  Think about that –- openings at a time when millions of Americans are looking for work.  It’s inexcusable.  And we know how to fix it.

Is the problem a lack of skilled workers, or a lack of workers willing to do the work at the wages they’re offering?  And how much of it is a function of employers’ unwillingness to spend a few bucks training workers who may need just a little training?  Oh wait, that’s the government’s job now:

Join me in a national commitment to train 2 million Americans with skills that will lead directly to a job.  (Applause.)

I could go on, but I’m just getting myself all worked up again, like I did Tuesday night.  It was all a rehash of the same old rhetoric.  Lower taxes.  (No mention of how to offset the revenue loss.)  Retraining workers.  (Never mind the fact that recent college graduates are one of the groups with the highest unemployment.)  Cut regulations.  Blah, blah, blah. 

Of course, if the President left the Democratic Party and ran against himself as a Republican, he’d fit right into the primary debates since, with a few minor exceptions, we hear all of the same rehashed rhetoric there as well.  And can we believe any of it from any of them?  Don’t be ridiculous.


State of the Union: “Winning the Future” or Embracing the Status Quo?

January 27, 2011

Obama’s thrown in the towel.  Swept into office two years ago with pledges to tackle the tough issues confronting the nation, he as much as threw up his hands Tuesday night and admitted that he’s willing to muddle along with compromise on trivial issues that, at best, will sustain the status quo.  It was a speech long on platitudes about past American greatness and talk of out-educating and out-innovating other nations to restore the American dream, but woefully short on any details about how we’ll get there.  It was more a patchwork of catchy slogans cobbled together from any and every state of the union speech that preceded it.  There was little worthy of comment, but there are a few things that I thought needed addressing.

At stake right now is not who wins the next election — after all, we just had an election. At stake is whether new jobs and industries take root in this country, or somewhere else.

Translation:  we won’t even try to bring back the jobs of our existing industries.  That would involve a change in trade policy that Obama doesn’t have the courage to make.  Yet, somehow, “new jobs and industries” will be unaffected by the same trade policies that devastated the old ones.

In a single generation, revolutions in technology have transformed the way we live, work and do business. Steel mills that once needed 1,000 workers can now do the same work with 100. Today, just about any company can set up shop, hire workers, and sell their products wherever there’s an Internet connection.

Meanwhile, nations like China and India realized that with some changes of their own, they could compete in this new world. And so they started educating their children earlier and longer, with greater emphasis on math and science. They’re investing in research and new technologies. Just recently, China became the home to the world’s largest private solar research facility, and the world’s fastest computer.

Bull.  China owes their rise to global economic super-power status to one thing:  America foolishly granting them MFN status and not insisting that trade between the two nations be balanced.  He’s blaming technology and productivity for our economic decline instead of stupid trade policy, while at the same time promoting technology and productivity as our future salvation.

So, yes, the world has changed. The competition for jobs is real.  But this shouldn’t discourage us. It should challenge us. Remember — for all the hits we’ve taken these last few years, for all the naysayers predicting our decline, America still has the largest, most prosperous economy in the world.  No workers — no workers are more productive than ours. No country has more successful companies, or grants more patents to inventors and entrepreneurs.  We’re the home to the world’s best colleges and universities, where more students come to study than any place on Earth.

Wait a minute, isn’t the whole premise of this speech that we’ve fallen behind the rest of the world in terms of competitiveness and an educated work force?  So now you’re saying that, although we’re the best, we have to be better in order to compete with less productive nations and less educated work forces?  Something doesn’t add up.

The first step in winning the future is encouraging American innovation. None of us can predict with certainty what the next big industry will be or where the new jobs will come from. Thirty years ago, we couldn’t know that something called the Internet would lead to an economic revolution. What we can do — what America does better than anyone else — is spark the creativity and imagination of our people. We’re the nation that put cars in driveways and computers in offices; the nation of Edison and the Wright brothers; of Google and Facebook. In America, innovation doesn’t just change our lives. It is how we make our living.

That’s not true.  A very small fraction of our work force made its living by inventing things.  The vast majority of Americans have always made their living by manufacturing those things, by farming and mining natural resources, and by providing the services we all need.  It’s impossible to build an entire economy out of “innovating.” 

This is our generation’s Sputnik moment. Two years ago, I said that we needed to reach a level of research and development we haven’t seen since the height of the Space Race. And in a few weeks, I will be sending a budget to Congress that helps us meet that goal. We’ll invest in biomedical research, information technology, and especially clean energy technology, an investment that will strengthen our security, protect our planet, and create countless new jobs for our people.

“Biomedical research?”  Aren’t we trying to cut medical costs?  You can’t build an economy around a sector you’re trying to shrink.  “Information technology?”  Wasn’t that the “new economy” of the ’90s, the one whose manufacturing was quickly outsourced to China and others?  “Clean energy technology?”  That’s fine, but we pretty much already know how to build nuclear plants, wind turbines and solar farms.  The question is what change you’re going to make to trade policy to stop the outsourcing of that equipment as well.

We’re telling America’s scientists and engineers that if they assemble teams of the best minds in their fields, and focus on the hardest problems in clean energy, we’ll fund the Apollo projects of our time.

The Apollo project was funded back in the ’60s, before our financial resources were completely drained by a three-decades-plus trade deficit.  Now there’s no more source for such funding. 

At the California Institute of Technology, they’re developing a way to turn sunlight and water into fuel for our cars. At Oak Ridge National Laboratory, they’re using supercomputers to get a lot more power out of our nuclear facilities. With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have a million electric vehicles on the road by 2015.

Get serious.  Breaking the hydrogen-oxygen bond in water requires more energy than burning hydrogen could ever deliver.  It was a pipe-dream that serious scientists gave up on long ago.  It’s the very reason that fuel cell technology has stalled.  The only viable source of hydrogen is stripping it from hydrocarbons.  Might as well just burn the damn stuff in an internal combustion engine and get it over with.  And more power from our nuclear facilities by using “supercomputers” to run them hotter?  Oh, boy, can’t wait for that one.

Now, clean energy breakthroughs will only translate into clean energy jobs if businesses know there will be a market for what they’re selling. So tonight, I challenge you to join me in setting a new goal: By 2035, 80 percent of America’s electricity will come from clean energy sources.

That goal was set two years ago.  Have we made any progress?  I wonder how long this goal will be repeated before folks realize that, to get there, we needed to start making progress twenty years ago?  And, oh, by the way, wouldn’t it help if we just stopped importing an additional 1.1 million oil consumers each year?

Over the next 10 years, nearly half of all new jobs will require education that goes beyond a high school education. And yet, as many as a quarter of our students aren’t even finishing high school. The quality of our math and science education lags behind many other nations. America has fallen to ninth in the proportion of
young people with a college degree. And so the question is whether all of us — as citizens, and as parents — are willing to do what’s necessary to give every child a chance to succeed.

The ranks of the unemployed are loaded with college graduates, even those with advanced degrees, who can’t find work.  We have no shortage of educated workers.  We already give them the education they need to succeed.  What we don’t have are jobs.  Where are all these mythical jobs that are going unfilled due to a shortage of educated workers?  Obama’s been listening to too many lobbyists eager to import cheap labor through the H-1B visa program.

That responsibility begins not in our classrooms, but in our homes and communities. It’s family that first instills the love of learning in a child. Only parents can make sure the TV is turned off and homework gets done. We need to teach our kids that it’s not just the winner of the Super Bowl who deserves to be celebrated, but the winner of the science fair.  We need to teach them that success is not a function of fame or PR, but of hard work and discipline.

There’s a hell of a lot of young graduates out there who have been taught these things all their lives and still have a hard time finding work.  We need jobs, not just for the kids who win the science fairs, but for every other kid too, even the ones who came in dead last. 

Because people need to be able to train for new jobs and careers in today’s fast-changing economy, we’re also revitalizing America’s community colleges. Last month, I saw the promise of these schools at Forsyth Tech in North Carolina. Many of the students there used to work in the surrounding factories that have since left town. One mother of two, a woman named Kathy Proctor, had worked in the furniture industry since she was 18 years old. And she told me she’s earning her degree in biotechnology now, at 55 years old, not just because the furniture jobs are gone, but because she wants to inspire her children to pursue their dreams, too. As Kathy said, “I hope it tells them to never give up.”

It would be interesting to follow this story to find out if Kathy has retrained herself to be an unemployed biotechnologist instead of an unemployed furniture-maker.  There’s plenty of biotechnologists out there who can’t find work either.  Trade policy has shipped most of those jobs overseas, just like manufacturing jobs. 

One last point about education. Today, there are hundreds of thousands of students excelling in our schools who are not American citizens. Some are the children of undocumented workers, who had nothing to do with the actions of their parents. They grew up as Americans and pledge allegiance to our flag, and yet they live every day with the threat of deportation. Others come here from abroad to study in our colleges and universities. But as soon as they obtain advanced degrees, we send them back home to compete against us. It makes no sense.

I agree.  We shouldn’t bring them here and educate them in the first place.  Let’s save those seats at the universities for American students and save the jobs for American graduates. 

 And let’s stop expelling talented, responsible young people who could be staffing our research labs or starting a new business, who could be further enriching this nation.

Is he actually saying that American students are too stupid to staff labs and start businesses?

Our infrastructure used to be the best, but our lead has slipped. South Korean homes now have greater Internet access than we do.

Could that be because their population is so dense that one wi-fi connection serves a lot more people than one connection does here?

Countries in Europe and Russia invest more in their roads and railways than we do.

They’re also even more bankrupt than we are.

China is building faster trains and newer airports.

That’s because they have a huge stockpile of trade surplus money to work with.

Within 25 years, our goal is to give 80 percent of Americans access to high-speed rail.  This could allow you to go places in half the time it takes to travel by car.

It will also cut the per capita consumption of cars, putting thousands more out of work.

To help businesses sell more products abroad, we set a goal of doubling our exports by 2014 — because the more we export, the more jobs we create here at home. Already, our exports are up. Recently, we signed agreements with India and China that will support more than 250,000 jobs here in the United States. And last month, we finalized a trade agreement with South Korea that will support at least 70,000 American jobs.

Exports are up, but not at a pace that will double them in five years.  And imports are up even more.  The result is a net loss of jobs.  And notice that the president says that his trade deal will support X number of jobs.  That’s because these exports are already baked into the existing capacity of manufacturers like Boeing.  No new jobs will be created.  We don’t just need orders for a few more planes.  We need for entire industries to return to our shores.

Now, before I took office, I made it clear that we would enforce our trade agreements, and that I would only sign deals that keep faith with American workers and promote American jobs. That’s what we did with Korea, …

Oh, really?  Signing a trade deal that caps U.S. auto exports at 75,000 while leaving South Korean imports unlimited is your idea of promoting American jobs?  Only a fool would enter into such an agreement.  This was the most disturbing portion of the speech – Obama’s willingness to sign more destructive free trade deals, not to help American workers, but out of desperation to show bipartisanship with Republicans, perhaps giving him a small boost in the polls.

We are living with a legacy of deficit spending that began almost a decade ago. And in the wake of the financial crisis, some of that was necessary to keep credit flowing, save jobs, and put money in people’s pockets.

… So tonight, I am proposing that starting this year, we freeze annual domestic spending for the next five years.  Now, this would reduce the deficit by more than $400 billion over the next decade, and will bring discretionary spending to the lowest share of our economy since Dwight Eisenhower was President.

First of all, a 5-year freeze in domestic spending is chump change relative to the size of our fiscal mess.  Secondly, it’s completely bogus to state spending as a fraction of the economy.  GDP has grown many times over since the Eisenhower administration while the population – the people who have to pick up the tab – has only doubled, while their incomes have barely grown.  In per capita terms, the spending has skyrocketed. 

Let me take this one step further. We shouldn’t just give our people a government that’s more affordable. We should give them a government that’s more competent and more efficient. We can’t win the future with a government of the past.

We live and do business in the Information Age, but the last major reorganization of the government happened in the age of black-and-white TV.

Yeah, that’s bad.  But, hell, that’s nothing.  Our constitution hasn’t been amended in any meaningful way since passage of the 19th amendment, giving women the right to vote in 1920.  Our consitution and the bill of rights pre-date the discovery of electricity and the entire field of economics.  Land west of the Mississippi was unexplored. 

Our founding fathers couldn’t conceive of a day when speech would be controlled by the media and sold to the highest bidder, or that something like pornography would ever be considered “speech.”  They couldn’t envision global corporations or imagine that they would ever be interpreted to be “the people.”  Since no trade theories had yet been formulated, they couldn’t imagine spending any more on imports than we’d earned for our exports.  Surely no one would be dumb enough to do such a thing on a consistent basis.  Nor could they imagine spending more than revenues taken in, year-in and year-out.  That our population could ever grow to the point where it would outstrip the resources of this seemingly infinite new land was unfathomable.  The constitution was meant to be a statement of high principles, not a mundane laundry list of common sense approaches that should go without even saying.  Yet it seems that that’s exactly what we need, since a dearth of common sense has us in the fast lane on the road to ruin.  It’s high time for a constitutional convention to define the kind of country we want to have in the future.  The executive and legislative branches will never take us in that direction without it. 

To be fair, the Republican response was little better.  There was more emphasis on cutting the debt, but in the belief that smaller government will somehow grow our economy.  I’m always amazed at logic that hasn’t been tested at its limits.  If this were true, then the most prosperous nations on earth would be those without central governments at all – nations existing in a state of anarchy.  I don’t think Tunisia will be taking the title of World’s Most Prosperous Nation any time soon. 

Conversely, the nation with the most rapid growth, China, is also arguably the one with the most central control of its economy.  I’m not arguing for bigger central government.  The fact is that it isn’t so much the size of the government that’s important, but whether it’s acting in the best interest of its people.  Ours does not, placing the principle of free trade – a failed 18th century economic theory – ahead of the interest of the American people.

So the president has abandoned his vision of tackling the tough issues and rewriting trade deals to benefit U.S. workers in favor of a new agenda:  tinkering at the margins.  Cut a little spending here and move it over there.  Eliminate a few tax loopholes while enacting some new ones.  Build a few token clean energy plants.  Create a few new jobs and pretend we don’t notice others that are being eliminated.  Boost exports and ignore imports.  Use more immigration to stoke “economic” growth.  When we run out of rugs under which we can sweep our problems, simply install wall-to-wall carpeting. 

I’ve heard it all before, year after year, decade after decade.  Each president puts in his time, puts out a few fires, and writes his memoirs congratulating himself on a job well-done.  Just what we need – another care-taker president maintaining the status quo.  Another opportunity lost and another 4-8 years wasted.  America is a rudderless ship adrift amidst a school of sharks.


Obama Transitions to Caretaker President

January 28, 2010

 

As evidenced by the State of the Union address last night, Obama has chosen to respond to falling poll numbers and rising anger among the electorate by taking the safe route and morphing into yet another caretaker president.  Aside from waxing eloquent in his opening and closing remarks about the historic challenges we face, he sounded exactly like George Bush and every president preceding him for the past two generations, offering a littany of tax cuts and credits to get the economy moving in the right direction, while closing with vows to reduce the budget deficit. 

“Change we can believe in” is dead.  There were still echoes of the campaign trail when he spoke of eliminating tax breaks for companies who outsource jobs, enforcing trade deals, health care reform, green jobs and an energy policy, but there was no conviction in his voice and everyone watching knew that it was merely nostalgic rhetoric.  The efficacy of the speech was best summed up in one moment when, after speaking at length about fiscal restraint and reining in the budget deficit, he concluded with “but that will have to wait till next year,” deservedly drawing loud guffaws from the Republican side of the room. 

Most disappointing of all was his comments on trade.  Contrary to his campaign promise to stand firm against any more free trade deals that have devastated our manufacturing sector, he now supports conclusion of the Doha round of World Trade Organization talks, with its agenda of opening another artery in America’s economy upon which more parasitic economies will feed.  And his vow to double exports by opening new markets is nothing more than a retreat into the same dumb trade policy that has amassed a trade deficit of ten trillion dollars while simultaneously dismantling our manufacturing sector over the past three decades.  We’ll “open new markets.”  Right.  That means opening our market first,  in return for  markets so badly stunted by low per capita consumption that an even bigger trade deficit is the only possible outcome.  This part of the speech was a slap in the face to every voter, like me, who put faith in Obama’s promises to reduce the trade deficit and bring manufacturing jobs home.

The practitioners of old-school, 18th century economics have won the day again.  A few more tax breaks here.  Sprinkle in some token cost cuts there.  Pump up the economy with immigration and population growth.  Drill, baby, drill.  “Spin, baby, spin.”  (The unspoken platitude to the green crowd.)  Boost exports.  Pay no mind to those nuisance imports.  Crank up the printing press at the mint.  Don’t rock the boat.  Everything will be fine.  This is our future.  We now have another caretaker to see to it.

Just one problem.  This isn’t the middle of the 20th century.  Those approaches have culminated in economic ruin.  Continue on this path and you can take one of two outcomes to the bank:  far worse unemployment or a $20 trillion national debt in ten years that collapses our economy, perhaps forever.  Obama has chosen the well-worn path and crossed his fingers in the hope that it doesn’t happen on his watch.


State of the Union Address

January 30, 2008

A few words are in order regarding the President’s State of the Union address on Monday night.  The president raised two issues that are of particular interest to me, of course.  First of all, he raised the issue of free trade, imploring Congress to pass free trade agreements with Columbia and South Korea.  And he did some “cheerleading” for free trade in general, observing that exports are up and that we need to open more markets to American goods. 

Secondly, he implored Congress once again to pass immigration reform with features that make it easy for immigrants to arrive legally to do the work that “needs to be done.” 

I have no problem with a free trade agreement with Columbia.  With a population density of 103 people per square mile, they are very similar to the density of the U.S. (83 per square mile) and so they represent no threat to American manufacturers.  South Korea, however, is a far different story.  With a density of 1257 people per square mile, more than 15 times as densely populated as the U.S., their market is very badly stunted by over-population.  They have virtually no market to offer in return for access to ours.  This deal would be a guaranteed loser for American manufacturers.  If fact, it already is.  Cars from South Korea – Hyundais, Kias and even Chevy Aveos – have been pouring into this country for years, contributing to the devastation of our domestic auto manufacturers.  In return we get absolutely nothing.  It’s a crime against the American people to permit such a situation to persist. 

Regarding his general cheerleading for free trade, yes, exports are up a little.  As a result, our annual trade deficit is something like $710 billion per year instead of $720 billion.  The result is a loss of 14 million jobs.  Free trade cheerleaders like president Bush always conveniently ignore the import side of the trade equation.  Opening new markets is fine, as long as they are markets that are equivalent to ours, where their customers are likely to buy as much from us as we buy from them.  I am not opposed to free trade.  On the contrary, I believe that free trade in natural resources and between countries of roughly equal population density is truely beneficial.  However, free trade with countries that are much more densely populated than us is a sure-fire loser for domestic manufacturers and should never be pursued. 

Regarding immigration, we do need immigration reform.  We need to seal the border and then work to reduce legal immigration by 95%.  Rampant population growth is the number one challenge facing this country.  No progress on problems like energy independence and global warming is possible without first stabilizing our population, not to mention the damage done to Americans’ finances and quality of life by increasing our population density. 

We need a president who’s willing to face realities and take meaningful action to address the real problems instead of symptoms.

Pete