Posted by: Debby Durkee | January 26, 2011

Obama’s speech: Living in a world of his own.

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Obama’s speech: Living in a world of his own.

Some stories over the past few days reflect a president who seems to be living in a world disconnected from the reality of the American people. It seemed even more obvious when the president didn’t address seriously the problems of our economy and unemployment in his State of the Union speech last night. Is Obama living in a world of his own?

Deregulation.

President Obama was caught carrying a book about Ronald Reagan a few weeks ago. I guess he was getting ready for his State of the Union speech and wanted to recapture some of Reagan’s sunny outlook. Or maybe he wanted to fool Americans into thinking that he was going to be the new Reagan – who was a great deregulator during his presidency. Deregulation coupled with tax cuts led to a revitalization of the United States’ economy under Reagan. “Fool” is the operative word as Tony Blankley can attest. This is from http://www.realclearpolitics.com.

Last week, the president wrote in the Wall Street Journal an article titled “Toward a 21st-Century Regulatory System” in which he announced that he had issued an executive order to review all government regulations on a cost-benefit ratio basis. In itself, this is a good idea, although the president makes it explicit that the cost-benefit analysis must take account of — as benefits — intangible factors such as “equity, human dignity, fairness, and distributive impacts.” Plenty of leeway there for career regulators and liberal political appointees to justify almost any oppressive regulation they may stumble over.

But what startles one is the that such a proposal could come from the same administration that has for the last two years been saddling the American economy and our personal lives with more new legislatively mandated regulations than we have ever experienced in such a short time.

Consider that the president’s enacted health care and financial laws, by themselves, rigorously increase regulation over 25 percent and 30 percent of the entire economy. Health care now embraces about 17 percent of the economy, while finance is about 10 percent. So that by those two laws alone, the health and finance industries will be subjected to years of new regulatory oppression. In fact, it will take years just to promulgate and bring into enforcement those new regulations.  Snip –

But what does it say about the seriousness of purpose and steadiness of policy of an administration that first regulates with abandon, then proclaims the opposite policy?

So while this president has done nothing but saddle the economy with an endless supply of regulations, he head fakes the nation into thinking he really plans to address those mountains of regulations. If he’s not living in a world of his own, what’s the only other alternative explanation … purposely lying? Or, is he just stupid? Other alternative explanations? Read all of Blankley here:

http://www.realclearpolitics.com/articles/2011/01/26/regulations_and_rhetoric_108664.html

Crisis? What crisis?

Yuval Levin over at National Review Online says that last night’s State of the Union speech was mainly a display of the president’s dereliction of duty. Now does that sound like a president who is living in reality or in his own little world?

This is certainly not a time when the economy is strong or steady, or when the public’s concerns are elsewhere. It is certainly not a moment for business as usual.

The Obama White House tonight seemed to be betting that the public thinks…that everything is basically fine again, and it is safe to go back to the usual kind of Clintonian chatter about solar panels; indeed, that doing so (as opposed to creating more massive new entitlements and taking over more car companies) would be seen as moderate; that we should be careful to learn nothing from the past three years, and from the glimpse they have given us of what a debt crisis might look like. But the result was a speech wholly and oddly divorced from the moment. That is not what a move to the center would look like today. It not only offered no concession to the strong public mood evident in the last election, it evinced no awareness—not even in passing, for rhetorical effect—of the economic facts and pressures underlying that mood and defining this time in our nation’s life. The president merely notified us that he had appointed a commission to look at the deficit, he noted that we ought to think about entitlements, he mentioned the terms “Medicare” and “Medicaid.” But he proposed to do nothing about any of it.

I think the president and his team are wrong about the public mood, but we shall see. I’m quite sure, however, that they are wrong about this moment on the merits. We have an opportunity in the next few years to avoid a truly disastrous entitlement and debt crisis and foster the conditions for vibrant growth again. We still have a chance to implement reforms that could do this without crushing austerity or terrible disruptions for seniors and other vulnerable Americans. That chance won’t last long, however, and it is profoundly irresponsible to just pretend we needn’t worry about it and can go back to the petty distractions of 1996, or (on the domestic front) 2006.

This speech was worse than bland and empty, it was a dereliction of duty. Let us hope that Republicans do not succumb to the same temptation, but rather follow Paul Ryan’s fine example.

Read all of Levin here: http://www.nationalreview.com/corner/258016/what-crisis-yuval-levin

Misallocation.

The Wall Street Journal says that the appointment of GE CEO Jeffrey Immelt to the president’s commission on competitiveness and jobs is just a reflection of Obama’s unseriousness in actually addressing either of those issues. Obama has succeeded in putting a likeness of himself, only in the business sense, in charge of addressing, by not addressing, the country’s serious problems. The Journal calls it a “misallocation of resources,” a talent both GE and Obama share.

…The pairing is also instructive because both Mr. Obama and GE symbolize a major reason the U.S. has become less competitive—the misallocation of resources.

…consider how an economy can grow faster… Snip –

The third way (an economy can grow) is through the more efficient use of capital, both human and monetary. These resources are scarce in any economy, and growth will be fastest if they are allowed to find their highest return. If resources are allocated to less productive uses or create asset bubbles due to bad policy, then overall growth will be slower than it should be.

In our view, this third point has been the largest but least appreciated problem in the U.S. economy in recent years. First the Federal Reserve’s subsidy for credit and other policies pushed resources into the financial industry, and especially into real estate. When that bubble burst, triggering the 2008 financial panic and recession, the U.S. responded over two years with a huge expansion of the federal government.

Both periods were marked by the misallocation of trillions of dollars into wasted investments. One reason the current recovery has been so lackluster is that it takes time for an economy to retool from these mistakes…

The Journal goes on to vet GE Capital and Immelt’s similar misallocation.

…without federal loan guarantees for debt issuance, among other government aid during the (2008 financial) crisis, GE Capital might well have taken the entire company down. Snip –

Less laudable is Mr. Immelt’s habit of inviting government to be his business partner and promoter. In his 2008 letter to shareholders, the CEO declared that the financial crisis and election of Mr. Obama meant that the U.S. economy had been fundamentally “reset.” Snip –

This is an invitation to the same kind of capital misallocation that led to the housing bubble. Mr. Immelt’s particular goal is to promote policies and subsidies that aid green energy, in which GE is deeply invested…Snip —

Will the president truly be a champion of business as he was touting in his speech last night?

…Tuesday night can’t erase the fact that in his first two years Mr. Obama has overseen an historic expansion of government. He has increased federal spending to as much as 25% of the economy from a modern average between 20% and 21%. In terms of allocating resources, this means that 4% of annual economic output was suddenly taken out of private hands and put under government control.

Government “investments”—Mr. Obama’s favorite word last night—are by definition made for political purposes, rather than for their highest potential return. They are allocated by politics rather than by prices. In our view, that 4% of GDP a year could have contributed far more to economic recovery had it stayed in private hands.

Would you rather have Congress allocating that 4% of GDP, or millions of individuals deciding among Apple, Gilead Sciences, or the next great idea?

The path back to faster growth, more jobs and a more competitive U.S. economy does not travel through more political mediation…

So the “smartest” president we’ve ever had refuses to learn from the mistakes of the past and wants to continue to make them because he’s so smart that he knows this time they will work? If this president is smart, why would he do things that he must know by now will stall the economy even more? Is it dereliction of duty as Levin said in the post above? Is it just that he is so blinded by ideology that he cannot see the true Reagan way? Or does he simply not care about maintaining the United States as a strong economic power and only desires to tear down the Reagan legacy, leaving his own in its place? A true narcissist wouldn’t care one way or the other whether anything worked, just that he would go down in history as a “transformational figure.”

http://online.wsj.com/article/SB10001424052748704698004576104172158318768.html?mod=WSJ_Opinion_LEADTop

There are many, many more articles that focus on similar things, such as lying to the American people by saying one thing and doing another. Here are the editors of National Review:

The president’s speech last night wore a flag pin. But to paraphrase the president on another occasion, safeguarding the American experiment takes more than expressions of patriotism. President Obama made a Reaganesque joke about the ham-handedness of government. But he nonetheless seems oblivious, quite unlike Reagan, to the dangers that unconstrained government poses to the American future.

http://www.nationalreview.com/articles/258013/can-do-collectivism-editors

Richard Pollack at The Tatler blog at http://pajamasmedia.com takes note of what Obama left out of his speech:

The housing crisis: If you had tuned into planet Earth from outer space, you would not know there was a housing crisis in America. Not a word about the near bankruptcy of government mortgage giants Fannie Mae and Freddie Mac. Nor did he mention the rising number of foreclosures. It was the president who unveiled his HELP program to keep people in their homes.  Most evidence is that it has been a failure. Tonight, not a word about it.

Jobs: Yes, there was the feeling of pain. But you would not know the country is still in a jobs emergency. There were words like “competition,” “innovation,” and “Sputnik,” but not a road map to explain how he will spur jobs in the private sector.

States facing bankruptcies: Our biggest state governments are in a debt crisis, most of them led by Democrats. Does he recognize this is a looming problem? Does he wish to bail them out? Tonight there was no word. Snip –

Greece, Italy, Ireland, Portugal, Spain and the UK: They are all flirting with economic catastrophe.

Much more at the link.

http://pajamasmedia.com/tatler/2011/01/25/what-obama-didnt-mention-in-his-speech/

Reason TV has a video that captures the fact that Obama has promised a focus on jobs for over a year, but still just cannot bring himself to do it. Watch it here:

http://www.youtube.com/watch?v=cfZdmeJLPNY

It is all like watching a train wreck in slow motion. You know what the outcome will be, but you feel helpless to stop it. It’s best to address the president we have. We cannot afford to address the president we might want him to be. Time to stop mincing words – this president doesn’t care whether the country recovers or not as long as he gets his way.

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