State of the Union Cheat Sheet
I haven’t been able to pilfer an advance copy of the president’s State of the Union address, but I hereby offer some guesses as to what he’ll say tonight.
The president will assert, against the evidence, that the state of our union is strong. He will boast that during his first term, we averted another great depression, achieved history-making reforms of health care and banking, saved the auto industry and began to conclude two wars. He will caution though, that we face great challenges. Obama will acknowledge that our economy is not as vibrant as it could be and will stress that the way to achieve prosperity for all, not just for the few, is to focus on the great middle class. He will say that it’s time to do “nation building” here at home and that we must reduce deficits in a “responsible” way.
Here’s what he won’t acknowledge: Labor force participation is at a three-decade low. Poverty is higher than at any time since the 1930s. The Federal Reserve Bank of St. Louis reports that long-term unemployment is at the highest levels since World War II with the average length of joblessness having doubled to 40 weeks under Obama, compared with an average of 20 weeks during the three previous recessions. And we are technically in a recovery, not a recession. Obama will not mention that health insurance premiums are going up, not down, as promised, and that many employers are preparing to cease offering insurance after 2014 (again, in contrast to Obama’s pledge that “if you like your health insurance, you can keep it”).
President Obama knows that Americans are more concerned about the economy and jobs than about gun control, immigration, gay rights or “climate change,” though each of those will get a mention, along with “making college more affordable” (which inevitably makes it less affordable) and universal preschool so that every child arrives at school “ready to learn.” (Note: Real spending on education has tripled since 1970 with no effect on scores.)
My guess is that the president will address Americans' economic anxiety by attempting to use it as a cudgel against Republicans. In the past, he has blamed the tsunami, the European debt crisis, automatic teller machines, oil prices and, most popular, George W. Bush for the economy’s terrible performance under his leadership. Tonight the president will tweak this theme by arguing that constant partisan bickering in Washington – lurching from one crisis negotiation over taxes and spending to another – has undermined confidence in American leadership. He will say that this discord has created terrible uncertainty and that this uncertainty accounts for the economy’s doldrums. He will pledge that he wants to end these high-wire acts and pass a big compromise that will apply a balanced approach of spending cuts and tax increases.
It’s a seductive theory, and the press will believe it. But look at the GDP growth chart from Obama’s first term. The great recession ended in the third quarter of 2009. By early 2010, before any of Obama’s policies had been implemented, the economy was growing at almost 4 percent (an acceptable, though hardly vigorous, recovery). If Democrats had simply done nothing at that point, the economy would probably have resumed the kind of snap back growth that has characterized previous responses to recessions.
That’s not what happened. With Democrats controlling both houses of Congress, Obama got the policies he wanted. No fiscal cliffs, no drama. Democrats added 11,327 regulations to the Federal Register in the first three years of the Obama administration (and that was before the big drivers – Obamacare and Dodd/Frank really got going). As the Economist magazine noted, America “is being suffocated by excessive and badly written regulation,” including “flaws in the confused, bloated law (Dodd/Frank) passed in the aftermath of America’s financial crisis.”
Democrats also passed an $800 stimulus bill and extended unemployment benefits. They vitiated the work requirement for welfare, vastly expanded food stamp eligibility and dramatically increased the number of working age Americans receiving disability payments. What was the result?
The Obama administration added more to the federal debt that all previous administrations combined. As for economic growth, it slumped after the first quarter of 2010 and has remained mostly anemic since. Economic growth slipped into negative territory in the last quarter of 2012.
This is the Obama economy – a shrinking private sector drowning in regulations, a voracious public sector always in search of new ways to waste money (wind cars! solar stethoscopes!) and the inexorable ticking, louder every passing day, of the debt bomb.
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