My Response to the State of the Union: Let's Just Pretend That It Never Happened

It would be for the best.

First, some general thoughts. I had the distinct sense Obama was trying to run the clock out. He knew he had to say something, but has no room to maneuver. Thanks to his mediocre first two years and his enabling of conservative talking points (which one wonders if that's not strategic, but ideological), the Democrats lost control of the House and have been boxed into a corner rhetorically. Related to that, he set the stage over and over again to box Republicans in, but then he mostly chickened out and rarely offered concrete proposals that would put them in a bind. Anyway, onto the specifics of the speech:

1) The good (for the Mad Biologist anyway): More spending on scientific research. Caveat emptor though--this is going to be aimed at translational research and probably larger projects (there's a reason NIH is dinging R01 grants...).

2) Credit for ending some tax credits: I liked "instead of subsidizing yesterday's energy, let's invest in tomorrow's." It won't survive the House, but I like it.

3) Education lies: When Obama claimed "The quality of our math and science education lags behind many other nations", that's true, but only because schools where 25 percent or more of the student body are low income do miserably (roughly one third of schools). That's as much an issue of poverty as anything else. Didn't mention that, however... Anyway, most of our schools are 'competitive.' Not that all of our schools shouldn't be good--they should be!--but maybe there are 'factors exogenous to the school system' going on here.

4) Race to the Top: It might have been good for 40 states (unless you include science, in which case, it wasn't very good at all), but, in Massachusetts, it might have damaged an excellent school system. Why not make poor-performing states more like Massachusetts, instead of Arne Duncan's failed Chicago experiment?

5) The 'progressive' reflexive tick of teacher bashing: "We want to reward good teachers and stop making excuses for bad ones." If we follow this logic, then Massachusetts must have brilliant teachers, while Arkansasan teachers must suck. Or maybe things like poverty and curriculum matter too. But those, for the Rockefeller 'progressive', aren't transformational, so teacher bashing it is.

6) Infrastructure proposals are good, will we pay for them? I like revitalizing our infrastructure--it needs to be done and it creates jobs. Lots of jobs, especially for men who haven't finished college, who are getting hammered right now. And when Obama said, "So tonight, I'm asking Democrats and Republicans to simplify the system. Get rid of the loopholes. Level the playing field.", I thought, "This is how he's going to pay for it, assuming he won't deficit spend" (not that there's anything wrong with that). And then, "And use the savings to lower the corporate tax rate for the first time in 25 years - without adding to our deficit." Ugh. And I would like a Magick Pony too....

7) Economic inanity, part I: Obama:

Now, the final step - a critical step - in winning the future is to make sure we aren't buried under a mountain of debt.

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.

But now that the worst of the recession is over, we have to confront the fact that our government spends more than it takes in. That is not sustainable. Every day, families sacrifice to live within their means. They deserve a government that does the same.

Families can't print more money. Nations with sovereign fiat currencies can. If the economy is running at full capacity and full employment, deficit spending will lead to inflation and crowding out (competition with business for resources). But the strictest measure of unemployment ("U3") is at 9.4%, and we are using 75% of our industrial capacity. Inflation is non-existent (for those wondering about food price inflation, that's largely due to futures speculation, something that could be cured with a financial transaction tax). The worst is not over; millions of Americans are still living it, both the un- and underemployed (near twenty percent) and those whose wages are stagnating. This leads to the next idiotic utterance...

8) A spending freeze? He said it:

So tonight, I am proposing that starting this year, we freeze annual domestic spending for the next five years. 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.

And this is a good thing because? The balance of accounts dictates that when we cut government spending, we lower aggregate private savings (unless Obama has a magic plan to massively cut the trade deficit--if he can't stand up to the Republicans, what makes you think he'll do so with China?). You can't beat the accountants. So whose savings do you think will be lowered? Suckas.

(An aside: For those sputtering, "Keynesian!", first, you can call me dogshit if that means we'll pay people to do stuff that needs to be done. Second, if you knew what you were talking about, you would call me a Post-Keynesian Chartalist, you fucking nimrod.)

9) A spending freeze, part deux: Have we learned nothing about negotiating? Obama should have proposed spending increases so he could bargain them away. Although since he seems to think 9.4% unemployment is no big thing, maybe this is intentional...

10) Protecting Social Security: We've been through this before--Social Security is only 'insolvent' if the economy continues limping along as it has been for the next three decades, give or take (the Trustees are required by law to provide historical unfounded pessimistic estimates). Every year for thirty years. Even in that scenario, if we removed the cap on payroll taxes (something even most Republicans support), we're in the clear. There is no crisis. I'm fine with raising the payroll tax cap--it would make the tax code less regressive, but it's not about 'saving Social Security.'

11) Nice noises about the Bush tax cuts for the wealthy. This is good:

And if we truly care about our deficit, we simply cannot afford a permanent extension of the tax cuts for the wealthiest 2% of Americans. Before we take money away from our schools, or scholarships away from our students, we should ask millionaires to give up their tax break.

As Ezra Klein notes, this would make up the supposed Social Security shortfall (which is actually bogus).

Out of mercy for you, dear reader, I'll avoid foreign policy all together.

"We do big things."

Not so much.


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Well played, sir.

I too continue to be flabbergasted by this Administration's use of major concession as a means to open negotiations. But SOTU's are not exactly designed to make sense. They do things like insert coal in a list of clean energy sources. Or rattle off a bunch of new domestic discretionary spending initiatives while announcing a freeze on domestic discretionary spending. Or they include empty threats about vetoing bills with earmarks. By now we should know the term "bills with earmarks" is actually redundant.

I think where the speech was at its best was - not surprisingly - when it focused on the style and not the substance. Placing such strong cultural emphasis on "the kid who wins the science fair" is actually quite important - to me it represents a beginning in a very long process of making science more relevant to everyday joes in everyday life and more important culturally.

Tuesday morning, I had this vision of Obama pulling a Mission Impossible and ripping off the mask, revealing that he is really Ronald Reagan.

Apparently he actually did that without the mask bit.

Obama = poser.

This is news?

Tuesday morning, I had this vision of Obama pulling a Mission Impossible and ripping off the mask, revealing that he is really Ronald Reagan.

Could have been worse -- I dreamed that he announced that he had switched to the Republican Party. The good part was that Glenn Beck and Rush Limbaugh performed seppuku live on air.

By D. C. Sessions (not verified) on 27 Jan 2011 #permalink

Obama also failed to address the state budget crises around the country. He could do a lot to help relieve that - the danger of losing state aid to the poor and to state universities most prominent in my mind - but... nothing. This is a huge deal. When he wants to "race to the top," we need stronger university curricula and not cuts to humanities departments or grad student positions.