Tag Archives: barack obama

State of the Union Live-Blog

Here it is, with a few typos corrected. Otherwise unedited.

8:35 Test

8:37 I am glad that my commute to work, unlike the President’s, is not televised.

8:40 Quote from last year’s State of the Union: “We will continue to go through the budget line by line to eliminate programs that we can’t afford and don’t work.” He did propose and enact repeals of a few billion dollars worth of regulations in 2011, and I’m glad he did. Seeing as the total federal regulatory burden is roughly $1.75 trillion, here’s hoping he does more in 2012.

8:44 Here’s Wayne Crews’ take on regulation and the State of the Union over at Forbes – http://www.forbes.com/sites/waynecrews/2012/01/24/president-obamas-state-of-the-union-hyper-regulated/

8:49 Taxes and spending get all the press. And they are important. But I’m more interested in what he has to say about regulation. It’s a neglected issue that is just as important. Moreso, as far as job creation is concerned.

8:55 The choreography sure is elaborate. Glad I went into policy, and not politics.

8:56 Big round of applause for Rep. Gabrielle Giffords. Best wishes for her continued recovery.

9:01 It’s an election year, and that means even more partisanship than usual. This political independent is curious to see how that affects Obama’s rhetoric tonight.

9:04 I’d be curious to see a public choice-influenced analysis of the State of the Union tradition.

9:05 Here comes the Big Guy.

9:06 Much applause, many hellos. It’ll be a few minutes until the speech.

9:11 Here we go.

9:12 CEI takes no foreign policy positions. Any offered are strictly my own.

9:13 That said, I am glad we are winding down Iraq operations. As a fan of Hayek, I’m not a believer in top-down nation-building.

9:14 He is quick to tout Osama bin-Laden’s death. Can’t say I blame him. I would, too.

9:14 Jobs. Energy independence.

9:16 Class rhetoric.

9:17 Uh, manufacturing output is actually near an all-time high.

9:18 American manufacturing is healthy. Fewer jobs, yes. But those few are doing more with less. That’s how prosperity happens.

9:19 As though the president has much to do with employment levels. Bush had terrible economic policies. But Obama’s are largely the same. They differ in degree, but not in kind.

9:20 Bailouts, wealth transfers from taxpayers to corporations, and other Bush-Obama policies hurt the economy. He should abandon them.

9:21 Defending the GM bailouts again. Much more stridently than before.

9:22 If taking money away from taxpayers and giving it to corporations helped the auto industry, why not do that with the rest of the economy?

9:24 “Bring manufacturing back.” Uh, it never left. Domestic output hit an all-time high in 2008. And it’s still very close to that.

9:24 Great. proposing more corporate welfare.

9:25 And proposing higher corporate taxes for multinationals. Seeing as consumers pay all corporate taxes — businesses pass on their costs — consumers should be up in arms over this.

9:25 Tonight’s rhetoric is astoundingly nationalist. Not cool.

9:26 Touting trade agreements passed during last year. Right on! Let’s see more of them.

9:27 Trade Enforcement Unit. Uh-oh.

9:28 If China takes money away from its people to subsidize American consumers, thank them. It isn’t fair to the Chinese people, but it is polite to thank people when they give us free gifts.

9:29 It also frees up American ingenuity for other pursuits.

9:30 Mispronounced “Louisville.” Badly.

9:30 Proposing still more transfers from taxpayers to businesses. Small ones this time.

9:32 Spend more on education. Check out this graph: http://www.cato.org/pub_display.php?pub_id=12775 The problem lies elsewhere.

9:32 Nice! Get rid of bad teachers, localize curricular choices. The NEA must be livid right now.

9:33 All kids must stay in school until they’re 18. Hmm.

9:34 Transfer more money from taxpayers to students.

9:34 Given that most college students end up relatively wealthy, he’s asking poor taxpayers to subsidize wealthy young people. Regressive.

9:35 Nobody likes sky-high tuition. But federal rules are responsible for much of it. More federal rules aren’t the answer.

9:35 Immigration. Sounds like he’s touting the STAPLE Act, which is something I’m very much on board with.

9:36 Uh, fewer illegal crossings have more to do with tough economic times than the fact that Obama happens to be in office.

9:37 Overall, he sounds fairly welcoming to immigrants. If his policies actually reflected that, the economy really would be in better shape.

9:38 “Take money from taxpayers and give it to small businesses.” This is zero-sum at best. Given the usual politicking, likely much worse.

9:39 ‘Take money from taxpayers and give it to energy companies.”

9:40 Energy independence is a sham.

9:40 Gearing up for renewable rhetoric.

9:40 If it’s viable, it doesn’t need a subsidy. If it’s economically viable, it sure doesn’t need a subsidy.

9:41 Hey, energy companies, drill for more gas. Also, here are more regulations to comply with.

9:43 “I will not walk away from the promise of clean energy.” Nor will I. But it will come from entrepreneurs, not Washington. Witness the ethanol and Solyndra debacles, among others.

9:44 He will flight climate change, apparently.

9:45 “Let’s give more taxpayer dollars to energy corporations.”

9:46 Uh, America’s infrastructure spending is the highest it’s been since the Interstate highway system buildup, as a percent of GDP.

9:47 The money we’re no longer spending at war, eh? Afghanistan? Libya? Also, over $1 trillion in debt?

9:48 He wants to set mortgage rates now? The housing crisis will never end until the bubble is allowed to finally, mercifully, and painfully, pop. But that’s bad politics. So it goes.

9:49 Smart regulations to prevent irresponsible behavior. I’m interested. Go on…

9:49 They make the free market work better…

9:50 ‘I’ve approved fewer regulations in my first three years than Bush did.” Mainly because the first year was slow. He’s exactly the same as Bush on this issue, frankly.

9:50 Touting the EPA milk spill = oil spill rule being repealed. Rightly so, though the laughter was awkward.

9:50 Nice segue to the Gulf oil spill.

9:51 I hope that wasn’t a defense of the EPA’s methylmercury rule. That is the most expensive regulation of all time.

9:51 Wall Street never did play by its own rules. There’s a reason they have all those DC offices.

9:53 Touting Corday. Sounds like fewer people who need them will be able to get loans. So it goes.

9:54 Oh boy, lending really will go down. This is bad for investment, and for job creation.

9:54 Extend the payroll tax cut.

9:55 Some of my colleagues disagree with me, but a tax cut now is a tax increase later — with interest.

9:55 The deficit.

9:55 OK. Extend the payroll tax cut, but increase income taxes?

9:56 Uh, capital gains income is double taxed. People pay income tax, invest some of what’s left, then pay capital gains tax.

9:58 Obama has actively proposed subsidizing millionaires several times tonight. Now he wants to tax them more. Pick one, please.

9:59 Again, Buffett’s capital gains income was subject to the income tax before he invested it and than paid capital gains tx on the investment income. He pays more than his secretary, not less.

9:59 Pardon the typos.

10:01 “Nothing will get done in Washington this year. Or next year.” The problem isn’t the man, or the party. It’s the system. Unless he enacts systematic changes at the institutional level, this will continue.

10:01 Ban insider trading by Congress. Fair enough.

10:01 Then again, prices reflect conditions on the ground. The faster those prices reflect the truth, the better.

10:02 Then again, Congress’ Buffett-like investment acumen is surely not due to chance. That colors their decisionmaking.

10:02 Congress; give me more power.

10:03 Sounds just like his predecessor.

10:04 Of all people to bad-mouth the perpetual campaign…

10:04 Way to call out big-government Republicans! Nice.

10:05 When Congress and the President act together, there is nothing America cannot achieve. He is clearly unfamiliar with public choice theory.

10:06 More foreign policy hornblowing in his closing flourish.

10:06 Comment From FMY
Buffet doesn’t have income, only cap gains which he reinvests to make more cap gains

10:07 Comment From bisek
more trade impediments. good!

10:08 Everyone wants a free and prosperous Middle East. But it can’t happen top-down. It has to come from the bottom up. (My opinion, not CEI’s)

10:08 Comment From Guest
And the $3000 per year that Obama just saved homeowners will be gone in 2-3 weeks when lenders pass the increased fee onto borrowers.

10:09 I am not liking this saber-rattling towards Iran.

10:10 America is a pacific power — uh, we’re at war in multiple countries.

10:11 Amurrica!!!

10:12 Keep an eye out for more power grabs at the Internet, under the guise of national security. I expect CEI analysts will have a lot to say about this.

10:13 More tax credits to corporations.

10:13 Simplify the tax code, please. It’s already 70,000 pages. It should be under 100.

10:14 Comment From FMY
VA spending up because of large war casualties

10:14 Good point, FMY.

10:16 65 minute speech. Wow.

10:17 Here are some more reader comments:

10:17 Comment From Mancur Olson
Small distributional coalitions tend to form over time in countries. Groups like cotton-farmers, steel-producers, and labor unions will have the incentives to form lobby groups and influence policies in their favor. These policies will tend to be protectionist and anti-technology, and will therefore hurt economic growth; but since the benefits of these policies are selective incentives concentrated amongst the few coalitions members, while the costs are diffused throughout the whole population, the logic of collective action dictates that there will be little public resistance to them. Hence as time goes on, and these distributional coalitions accumulate in greater and greater numbers, the nation burdened by them will fall into economic decline.

10:17 Comment From Bruce Arians
Could he bring my job back as offensive coordinator of the Pittsburgh Steelers?

10:17 Comment From Freddy Hayek
The results of the individual’s efforts are necessarily unpredictable, and the question as to whether the resulting distribution of incomes is just has no meaning. There is no point in calling the outcome just or unjust. The principle of distributive justice, once introduced, would not be fulfilled until the whole of society was organized in accordance with it. This would produce a kind of society which in all essential respects would be the opposite of a free society.

10:17 Comment From Paul Krugman
“If there were an Economist’s Creed, it would surely contain the affirmations ‘I understand the Principle of Comparative Advantage’ and ‘I advocate Free Trade’.”

10:18 Comment From Freddy Bastiat
Whence we arrive at this unexpected conclusion: “Society loses the value of things which are uselessly destroyed;” and we must assent to a maxim which will make the hair of protectionists stand on end—To break, to spoil, to waste, is not to encourage national labour; or, more briefly, “destruction is not profit.”

10:18 Comment From Thomas Jefferson
I just sent in a letter describing State of the Union..

10:18 Comment From Guest
Awesome… loosen the underwriting guidelines that are in place to prevent another crisis.

10:22 I’m honored that so many distinguished economists, many of them deceased, are commenting tonight. Keep ’em coming!

10:22 Mitch Daniels’ GOP response coming up.

10:25 Three big themes from tonight are jobs, jobs, and jobs. It is an election year, after all.

10:26 There are also the conflicting themes of giving more to businesses and taking more away.

10:27 Can’t say I care for his isolationism on manufacturing and trade, though he did say good things about the FTAs with Panama, Colombia, and South Korea.

10:28 He didn’t say nearly as much as I would have liked about regulation. He mentioned his minor rollbacks, but the net effect over the last three years has been a Bush-level massive increase.

10:29 Here’s Daniels.

10:29 “I am the loyal opposition.”

10:29 Praise for his education policy rhetoric.

10:30 The State of the Union is grave. Obama has made it even worse. Also, jobs.

10:30 The debt problem is getting worse. Duh.

10:31 Predictable middle class rhetoric.

10:32 I like the line about “haves and soon-to-haves.”

10:32 2012 is emphatically not our last year of opportunity. Too many entrepreneurs are seeing to that.

10:33 Proposals to cut that deficit? Waiting…

10:34 Shot across the bow on the Keystone XL pipeline. Nice.

10:35 Also decries over-regulation. But no specific reform proposals.

10:35 CEI has plenty, by the way.

10:35 Means-test Social Security?

10:36 Timid. Personal accounts would be better. And IRA for everyone.

10:36 *An* IRA for everyone.

10:37 “The other party tends to reject my party’s legislation.” Cuts both ways sir.

10:37 The problem is at the institutional level.

10:38 Here are some institution-level solutions – http://www.amazon.com/Better-Congress-Proposal-Citizens-Legislative/dp/1587332337

10:39 Nice lightbulb-ban reference.

10:40 Comment From FMY
Like the personal responsibility message.

10:40 Ugh. Reagan reference.

10:41 Overall, a timid response to a timid SOTU.

10:45 Light on specifics. Then again, he only had a few minutes. And politicians are generally reluctant to propose reducing their job description.

10:46 He also probably wants to leave platform ideas up to whoever the GOP nominee will be. Since most of them want a bigger federal government, they probably wouldn’t take kindly to Daniels favoring a smaller one.

10:47 And that wraps it up. Thanks for reading, and keep an eye out for more CEI coverage tomorrow!


Tim Carney on Rick Perry

Washington Examiner columnist (and former CEI Warren Brookes Fellow) Tim Carney has a must-read column today on Texas Governor and presidential candidate Rick Perry’s economic policies. They appear suspiciously similar to Bush and Obama’s policies:

“I’m a pro-business governor — I don’t make any apologies about it,” Rick Perry told the crowds in Iowa this week. He’s right, but we can get more specific. Perry is pro-Merck, pro-Boeing, pro-Mesa Wind, pro-Texas Instruments, pro-Convergen, and pro-dozens of businesses that donate to his campaigns and hire his aides as lobbyists.

Perry promises to “get Americans back to work,” but his policies — from backroom drug company giveaways to green energy subsidies — eerily mirror the unseemly big business-big government collusion that has characterized President Obama’s presidency. Judging by his record in Texas, Perrynomics might just be low-tax Obamanomics.

Pro-business politicians like Perry and Obama are a dime a dozen. What the economy needs to recover are more pro-market politicians. Instead of putting their thumbs on the competitive scales to favor one business or another, Congress and the president should allow an open, competitive market process.

That means the rules of the game would be both clear and few; they would also be consistently enforced. Unlike Perry and Obama, markets respect no special interest. If they did, no company would bother with a Washington office.

Consumers do a much better job of picking winners and losers than politicians with campaigning and fundraising on the brain. They should be allowed to try it sometime.

What a shame that no presidential aspirant is likely to admit that; such is the curse of “do-something” bias.

CEI Podcast for April 14, 2011: Avoiding a Government Shutdown

Have a listen here.

Warren Brookes Journalism Fellow Kathryn Ciano analyzes the Continuing Resolution passed by the House today that will keep the federal government open for another 6 months. She also looks at proposals from President Obama and Rep. Paul Ryan to reduce the budget deficit over the next decade.

Bush’s Third Term Continues

President Obama’s policies are remarkably similar to President Bush’s. Most of their differences are in matters of degree, not principle. Both presidents believe in expanding federal involvement in health care, education, energy, you name it. Both grew regulation, spending and deficits at tremendous rates. Even their foreign policy is almost identical.

Over at the Daily Caller, I analyze last night’s State of the Union address (I also live-blogged it here) and find it wanting. There are some real stretches of logic:

In 1957, the Soviet Union launched a satellite into space. Therefore, taxpayers should give more money to politically favored corporations. This is not a rigorous line of thought. But it was typical of yesterday’s State of the Union address.

It wasn’t all bad, though:

There was some good in yesterday’s speech. The president would like to lower corporate tax rates. After Japan’s recent rate cuts, America now has the highest corporate tax rate in the developed world — nearly 40 percent in most states. This is not the way to encourage businesses to invest in America.

I wish the president had spent a little more time on the rate cut. He could have explained to the country and his party that businesses don’t actually pay corporate taxes. That’s because businesses pass on their costs. Consumers — you and I — foot the bill.

Read the whole thing here.

Foreign Money Is Not the Problem

President Obama has caused a stir recently by declaring that the Chamber of Commerce, which is running ads critical of his policies, is funded with foreign money.

It’s a weak criticism. And not just because the amount of foreign money involved is trivial. Or because labor unions and other political groups across the spectrum also accept small amounts of foreign money.

President Obama seems to be saying that people are smart enough to know whether or not a candidate or a political party is bamboozling them in their campaign ads. But people suddenly lose their wits when an outside group, or – gasp! – someone from another country does the exact same thing. That kind of cognitive dissonance must be difficult to live with.

Because arguments against foreign money in politics are so weak, people who use those arguments are either ill-informed or lying.

Lying is much more likely in this case. If your own arguments are weak, a common tactic is to distract your audience and hope they don’t notice. It works more often than not. Here, President Obama is taking advantage of the fact that almost all people suffer from anti-foreign bias. Not racism. Anti-foreign bias. They’re different. And pandering to that bias can be extremely useful politically.

Why does such a cheap tactic work? It’s because anti-foreign bias is in our DNA. Our hunter-gatherer ancestors lived in small bands. Anybody outside that band was a very real threat to steal food, clothing, or potential mates. So people learned to be wary of outsiders. It was good for one’s life expectancy.

As tribes became villages, towns, cities, and now nations, the number of people we consider insiders has grown. And we treat outsiders much better than we used to. Trade is more common than war in most places. But most people are still instinctively leery of outsiders. It is our nature.

That’s why it’s disappointing to see President Obama so cynically play that card. Clearly he and the Chamber of Commerce prefer different policies. It would be nice to see the President engage the Chamber at a higher level than the ad hominem.

Political Pessimism, Human Optimism

Despite my pessimism (realism?) about politics, ever since reading Julian Simon, I have been an optimist when it comes to progress and the human condition. Since the industrial revolution, each generation has lived longer and better than the last. By that measure, the last decade was the best in human history.

This despite the last decade being an unmitigated political disaster, at least in America. President Bush grew government faster than any president since Lyndon Johnson. Between new health care entitlements, massive energy and farm bills, two wars, and more than 30,000 new regulations, the Bush administration was no friend of limited government.

President Obama has so far been no better. If anything, his policies are George W. Bush’s on steroids.

Fortunately, the institutional foundations of the market economy are stronger than any bumbling politician. Wherever there is peace, stability, tolerably low corruption, and secure property rights, people will make their lives better over time, despite meddlesome regulators getting in the way. The pattern is global.

Via Ronald Bailey, a brilliant article in Foreign Policy reinforces that point. Things really are getting better. The last decade was the best in human history. Read the whole thing. If you’re despairing over the state of the world, the data are a wonderful cure for pessimism. Here’s a taste:

Consider that in 1990, roughly half the global population lived on less than $1 a day; by 2007, the proportion had shrunk to 28 percent — and it will be lower still by the close of 2010. That’s because, though the financial crisis briefly stalled progress on income growth, it was just a hiccup in the decade’s relentless GDP climb.

The Kagan Nomination: What Matters, What Doesn’t

One of the criticisms being hurled at Elena Kagan from the right is that she might be a lesbian. This concerns me.

Not the lesbian part; few things are less important to one’s judicial qualifications. My worry is that Republicans have so atrophied intellectually that this is their loudest reason for opposing her.

A thoughtful soul (I forget who) recently remarked that twenty years from now, almost everyone currently on the wrong side of gay rights issues will be embarrassed to admit it. Yet the obsolete epithets being hurled at Kagan — which may or may not be accurate, and frankly, who cares — are what many of Kagan’s opponents seem to care about the most.

And people wonder why I often take visible offense when someone tries to call me a conservative.

There are substantive reasons to be skeptical about Kagan. One of them is how she views the executive branch. “She is certainly a fan of presidential power,” one scholar remarks. This is important.

Chief Justice Roberts has similar views. He was picked in part because the Bush administration knew he wouldn’t strike down that administration’s more controversial power grabs. Harriet Miers was not rejected for her views, which are utterly conventional. Her nomination was only struck down because her lack of subtlety in expressing those views was considered gauche.

While I have never been an Obama fan, one of my hopes for his administration was that he would repudiate Bush-era excesses such as the PATRIOT Act. He embraced them instead. Having all those cool powers at his disposal was just too much to pass up.

President Obama’s Supreme Court nominees so far seem no different from Roberts or Miers: what the other branches of government want, they shall get. The exceptions, such as the Citizens United decision, are so rare that they garner weeks worth of headlines; such outbursts must be kept to a minimum. Hence Kagan.

What the Supreme Court needs is a healthy dose of judicial activism. Kagan, like Roberts, Sotomayor, and other recent nominees, is a judicial passivist. They reflexively defer to the executive and legislature, right or wrong.

What we need are Justices who will stand up and say “no” when Congress passes a law that is unconstitutional, or when the president abuses his powers. That’s why judicial review exists in the first place. This tradition goes all the way back to Marbury v. Madison, often the very first case that students read in undergraduate constitutional law classes.

As Kagan goes through the pomp and circumstance of the confirmation process, maybe she’ll prove better than her likely soon-to-be colleagues. Maybe she won’t. But so long as her Republican opponents are fixated on something so trivial as her sexual orientation, we may never find out. Given her relative youth, three decades or more of jurisprudence are at stake.

Senate Passes $18,000,000,000 Spending Bill: Will it Create Jobs?

The Senate just passed an $18 billion spending bill. Since the House already passed it, the legislation is now headed to President Obama’s desk to await his signature and become law.

The hope is that the spending will create jobs. If you’re reading this blog, then you probably know enough about economics to know that isn’t what will actually happen. Remember: anything that Washington giveth, it must first taketh away from somewhere else. It’s a zero-sum game. All those new jobs that politicians will be touting for the cameras will have come at the expense of other jobs elsewhere. On net, they’re not creating a thing.

Take the payroll tax break for small businesses that’s in the bill. Yes, those small businesses benefit. Maybe the money they save will even be used to hire more workers. That’s easy enough to see. But that money had to come from somewhere. That is harder to see. Too hard for the Senate to see, at the very least.

The reason is this: the government is foregoing some payroll tax revenue. But since it isn’t cutting spending to match, it has to borrow more. And there’s only so much investment capital to go around. Because Washington is borrowing more, less is left over for private investment opportunities. At the very least, companies will have to offer investors higher interest rates to lure them away from government bonds.

That makes getting loans more expensive. And when something gets more expensive, there tends to be less of it. Because of today’s bill, about $18 billion less capital will be available for the private sector to create jobs.

The legislation the Senate passed today is no jobs bill, at least on net. It is a spending bill. It doesn’t create jobs, it only redirects them.

The Hayekian Approach to Health Care

George Will has a good column today. He does a wonderful job contrasting Hayek’s philosophy of humility before complexity with the early 20th-century progressive mindset of planning and scientistic design. The framework applies surprisingly well to today’s health care debate, with President Obama playing the role of Woodrow Wilson. Very thought-provoking.

The Lede Says it All

Gene Healy’s latest column begins: “This Thursday, Barack Obama will swing by Oslo to pick up the Nobel Peace Prize — just over a week after he announced that he’d escalate the war in Afghanistan. Awkward.”