State of the Union

Democratic Process: Not How the Future is Won

by Kathryn Ciano on January 27, 2011

in Politics as Usual, Zeitgeist

So much for the democratic process. Politicians like to think that voters listen for what’s important to them, move with their issues and, in a worst case scenario, vote with their feet.

When it comes to a word barricade, like the speech that launched a thousand sips this week? We just hear what’s strange.

New York magazine ran a word cloud of Obama’s actual State of the Union speech alongside the word cloud from what viewers remembered hearing.

Here’s the cloud for Obama’s actual speech — text size corresponds to the number of times a word was used:

All America Heard Last Night: ‘Salmon’

Those who believe in a healthy democratic process imagine that what viewers hear will skew towards our issues, but will roughly mimic the word proportions Obama actually used. Right?

Wrong. NPR asked listeners what they remember hearing. Here’s that word cloud:

word cloud

All we heard was “salmon.”

You’d think a population so disenchanted with the issues would vote with their feet.

Turns out we’re just thinking:

Fin.

Image credit: Robert Couse-Baker’s flickr photostream.

Bush’s Third Term Continues

by Ryan Young on January 26, 2011

in Economy, Personal Liberty, Sanctimony

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.

Obama State of the Union Flunks Fact Check; More Wasteful Spending and “A Million Points of Trite”

by Hans Bader on January 26, 2011

in Economy, Employment, Politics as Usual

The Associated Press fact-checked Obama’s State of the Union address last night, and found it to be misleading in many ways: “The ledger did not appear to be adding up Tuesday night when President Barack Obama urged more spending on one hand and a spending freeze on the other.” Michelle Malkin panned Obama’s call for even more rapid increases in education spending, calling it “Cash for Education Clunkers.” Neil McCluskey responded with an op-ed entitled, “For the Nation’s Sake, Cut Education Spending.” I earlier discussed the President’s proposed spending increases, noting that learning and studying have declined in America’s universities even as education spending has exploded, and that ever-more costly college educations aren’t yielding better jobs or economic growth.

Obama talked a lot about the need for more government “investment,” a euphemism for spending on pet projects favored by liberals. Professor Jacobson called Obama’s address “a million points of trite” for all the recycled talking points it contained. Even the liberal Robert Scheer called the speech “platitudinous hogwash.”

Image credit: Robert Couse-Baker’s flickr photostream.

Thoughts on the State of the Union and Education in America

by Hans Bader on January 25, 2011

in Culture, Economy, Employment, Politics as Usual, Zeitgeist

In the Washington Examiner, I discuss some of the president’s anticipated proposals in his State of the Union address today. The president is expected to call for even more increases in education spending. That might not be a good idea, judging from the recent book Academically Adrift. George Leef, of the Pope Center for Higher Education Policy, argues in the New York Times that rising college attendance rates have led to “lower academic standards” as colleges cater to marginal students who are interested in getting paper credentials, not learning. Leef says that due to “the mistaken notion that the country needs to have far more people going through college, the federal government is making it easier for students to borrow the money for it. Consequently, we will lure more marginal students into college, further increasing the pressure to lower standards. It has been accurately said that college is the new high school; the way we are going, soon it will be the new middle school.”

Why Supreme Court Justice May Have Been So Annoyed at the President’s State of the Union Address

by Hans Bader on February 1, 2010

in Employment, Labor, Legal, Nanny State, Personal Liberty, Politics as Usual, Sanctimony

At the president’s recent State of the Union address, he misleadingly attacked the Supreme Court for supposedly “reversing a century of law“ restricting corporate spending on political campaigns in its ruling this month in Citizens United v. FEC.

In response, an annoyed Supreme Court Justice Samuel Alito, who was attending the speech as an invited guest, apparently mouthed the words “not true,” although his words were not audible and did not interrupt the president’s speech.  (Obama was criticizing a Supreme Court ruling that struck down a recent federal restriction on corporations’ ability to criticize politicians.  The ruling, which was based on the First Amendment, said it was not invalidating a century-old 1907 law that bans corporations from making donations to politicians, who have long leaned on corporations to give money to their pet causes.  The ruling also did not lift restrictions on foreign corporations.  I earlier explained in the New York Times why corporations logically do have free speech rights.)

Maybe Justice Alito’s annoyance was cumulative, and based as much on the president’s past lies about an earlier Supreme Court ruling authored by Alito, as on his misleading criticism of the Supreme Court’s recent ruling.   Past lies make later falsehoods seem less like innocent mistakes.

In his 2008 campaign, and again in 2009, Obama criticized Justice Alito’s decision in Ledbetter v. Goodyear, which did not, contrary to the president’s claims, create a rigid 180 day deadline for bringing pay discrimination claims after an employee’s pay is set, regardless of whether the worker couldn’t have discovered the discrimination until years later.  (The deadline was 180 days, with various common-sense exceptions for hoodwinked employees, under one federal law, called Title VII.  But it is generally three years under another federal law, the Equal Pay Act, that also has more generous accrual rules.  Most employees could evade the short deadline of Title VII simply by having the sense to sue under the Equal Pay Act as well.  Alito’s ruling left workers with ample time to sue over discrimination, contrary to what Obama claimed.  Lilly Ledbetter lost her discrimination case because she waited until 1998 to file a complaint, despite admitting in her deposition that she knew her pay was low by 1992.)
I documented this in my commentary about the Supreme Court last year.  National Journal’s Stuart Taylor (a critic of the Supreme Court’s recent ruling in favor of corporations), and lawyers Paul Mirengoff and Ed Whelan, also described how Obama repeatedly distorted what the Supreme Court said in the Ledbetter case.

State of the Union Live-Blog

by Ryan Young on January 27, 2010 · 1 comment

in Economy, Politics as Usual, Regulation, Zeitgeist

8:46 Welcome to CEI’s live-blog of the 2010 State of the Union address. President Obama will be touching on all kinds of issues tonight. And I’ll have something to say about them all. But I’ll be paying special attention to what he has to say about regulation and spending. Keep refreshing this post every few minutes for fresh commentary.

8:54 Important people are filing in. Pundits are bloviating. Welcome to Washington.

8:58 Here comes the cabinet.

9:00 Peter Orszag and Christina Romer are there. Romer has done some excellent research on the Great Depression, by the way. Any monetarists out there would find much to like about what she has to say about monetary policy vs. fiscal policy.

9:06 The President enters. Much applause.

9:06 While waiting for the applause to die down, I’ll add that Romer thinks that monetary policy is what drives business cycles. Fiscal policy, such as stimulus spending, has little effect. I largely agree.

9:10 Speaker Pelosi introduces the President. Much applause. Many “thank yous.”

9:11 It begins.

9:11 He refers to the Constitution. Heh.

9:12 American exceptionalism. Neocons cheering somewhere, no doubt.

9:13 He inherited a bad situation. True enough. We must act? Not so much. The recession is largely a creation of over-active monetary and regulatory policy. Not a lack of policy.

9:14 First reference to “the children.”

9:15 He has said both “hope” and “change” already. Campaign 2012 has begun.

9:17 First standing ovation.

9:18 A government that matches our decency? Public choice theory is unknown on Capitol Hill, apparently.

9:18 He hates the bailout. Good! Why did he go through with it, then?

9:18 It was necessary. Unemployment would have doubled. Hyperbole. Now banks know they can continue taking stupid risks and get bailed out for it.

9:19 touts his fee on big banks that received bailouts.

9:20 20 tax cuts. Net tax cuts. While spending goes through the moon. Tax cuts are great, but spending cuts are more important. A tax cut now is a tax increase later if spending isn’t cut to match. An increase. Not a decrease. An increase.

9:22 Many jobs created. Touting the stimulus. Which takes money out of the economy, wastes some of it on bureaucracy, then puts it back into the economy. First instance of the broken window fallacy.

9:23 Anecdotes, people helped by stimulus spending. He sees what is seen. But not what is unseen. Those jobs, and that money, came from somewhere else. Each job created is one lost elsewhere.

9:25 Jobs, jobs, jobs. Bryan Caplan’s make-work bias lives.

9:25 Business creates jobs. Government can help. But only by taking money from somewhere else, and hurting businesses elsewhere. No net effect.

9:26 $30 billion transfer from “Wall Street” to “small businesses.”

9:27 small business tax credit. Eliminate capital gains tax on small businesses. Nice, but tax code simplification would be better. Lobbyists will be all over this one.

9:28 Infrastructure!

9:28 Rail! It’s the 19th century all over again.

9:29 Clean energy. Higher energy bills for all!

9:29 Keep jobs in America! Efficiency be damned! USA! USA! USA!

9:30 Jobs bill, ASAP. But full employment requires…

9:31 still waiting…

9:32 still waiting… the virtues of China’s economy…

9:33 financial reform! For starters. But don’t punish banks. Prevent recklessness. Good. Prevent dumb risks. House has already passed some reform. But lobbyists are all over.

9:34 And they will be as long as Washington is doling out money.

9:34 Plank 2: Innovation and science. More clean energy. More nuclear power. More offshore oil. More biofuels and clean coal. Comprehensive clean energy bil. Cap-and-trade light?

9:36 Consensus on global warming. Jeers from the crowd. Acknowledges doubts, touts clean energy again.

9:37 Plank 3 – trade. More exports! Double them in 5 years = 2 million jobs. National export initiative. Trade, of course, has almost zero effect on the number of jobs. It only affects the kinds of jobs. Also take measures to decrease imports. Renegotiate Doha. Is this a new protectionism?

9:40 4th plank – education. Only reward success. Not failure. Nice. Of course, that would mean less federal involvement in education, not more. Washington has no idea how to educate kids hundreds or thousands of miles away.

9:41 End taxpayer subsidy to banks for college loans. Substitute a tax credit and increase Pell grants. Forgive student loans after 20 years. Why bother paying back, then? This will bode well for future deficits.

9:43 Social Security fix – lend more to homeowners. Yeesh.

9:43 Health care!

9:44 Acknowledges unpopularity.

9:44 Anecdotes!

9:45 Blames insurance industry for regulatory failures. Emphasis on preventive care; no empirical research is cited for obvious reasons.

9:46 We can save money by spending money.

9:46 Reduce deficit by $1 trillion over 20 years. Last year and this year alone will incur nearly $3 trillion in deficits.

9:47 Temperatures cooling? Oh wait, he’s talking about health care.

9:48 Open to other proposals. Not bloody likely.

9:48 Pass a health care bill, any health care bill.

9:49 Spending.

9:50 Blames Bush for the deficit. Rightly so! Where’s he going with this, though?

9:51 Adding debt was the right thing to do. No mention of “the children” who will ultimately pay for it.

9:51 freeze certain types of discretionary spending for three years. This excludes most spending.

9:52. Save $20 billion this year. Or less than one percent of total spending.

9:53 Bi-partisan fiscal commission. Not exactly the Gramm Commission. Good idea, but beware the execution. Wayne Crews and I have done some research on this.

9:54 Pay-Go budget keeps spending in line. The data say otherwise.

9:54 Oh, the freeze won’t take effect until next year. The crowd laughs.

9:55 Says Bush cut regulations. Actually, he passed more than 30,000. See CEI’s Ten Thousand Commandments study for the exact numbers.

9;56 Deficit of trust in Washington, not just dollars. There’s a reason for that, you know. Two of them are the Republican and Democratic parties.

9:57 Excluded lobbyists from policymaking jobs. That isn’t actually true.

9:58 Doesn’t like the Citizens United decision. Or the First Amendment, for that matter. Wants a new campaign finance regulation bill. Presumably so it can be struck down on First Amendment grounds like the last ones.

9:59 I’m liking what he has to say on earmarks. Good luck to you, sir.

10:00 “can’t wage a perpetual campaign.” Tell that to Organizing for America.

10:01 Partisan politics get in the way of doing things. He’s right. And that’s exactly why I like gridlock.

10:02 Hey Republicans, no filibusters, please.

10:03 Will be talking more to the other side of the aisle.

10:03 National security!

10:04 Hope again. I haven’t been keeping track, but that’s at least 3.

10:05 Start getting out of Afghanistan in mid-2011. Good!

10:06 Out of Iraq by August. Good! Foreign aid to Iraq. Bad for Iraq!

10:07 Pork for veterans. Taking a page right out of the Gracchi playbook.

10:08 Nuclear deproliferation. I applaud the sentiment, but prohibition doesn’t work. Good luck to you, sir.

10:11 Would love to hear what Bill Easterly has to say about all the government-to-government transfer programs he’s touting.

10:12 Haiti. I completely agree with the ends. But the effectiveness of the means needs to be questioned.

10:13 Hate crimes. Thought crimes?

10:14 Let gays in the military. Nice! About bloody time.

10:14 Immigration. He has a positive view of immigration. Let’s hope that means much-needed liberalization. The more immigrants, the better. Those who are illegal, make them legal. It is the right thing to do. Obama says this is bi-partisan. I wish he was right.

10:16 Decries cynicism. There’s a reason for all that, you know.

10:19 Anecdote!

10:19 Another anecdote!

10:19 A third!

10:20 A fourth!

10:20 “I don’t quit!” Reminds me of Brett Favre’s advice to a startled referee: take two weeks off, then quit.”

10:21 End of speech.

10:26 Here comes Bob McDonnell’s Republican response. Get ready to be disappointed!

10:30 Thank yous and much applause.

10:31 Jobs. Jobs for all! Good end. The means?

10:31 So far, indistinguishable from Obama.

10:32 Calls for less taxation, regulation, etc. Quotes Jefferson. Says government is trying to do too much. Now he sounds different.

10:33 Likes Obama’s spending freeze. Says it’s small. Not often one hears a politician calls a spending non-increase anything other than draconian.

10:34 Likes bipartisanship. I like gridlock. Boo!

10:34 Likes the Shadegg health insurance reform. And medical malpractice reform. No specifics, though.

10:35 Energy. More of everything! Why isn;t anyone saying, “let the market decide?” Why must government, no matter the party, pick winners and losers?

10:36 Government energy policy can create jobs. Oh, wait, that costs money and jobs from elsewhere. Broken window fallacy again.

10:37 Education. Likes merit pay and school choice. Nothing about reducing federal involvement in this state and local issue.

10:38 Wars abroad. Daughter served abroad. Laudable. But nothing to do with the merits of nation-building.

10:39 Doesn’t like giving due process to the underwear bomber. Well, he’s probably guilty. Let’s find that out for sure and then punish him accordingly, then! What’s to be gained from denying due process?

10:40 I’m liking his rhetoric about taxes, spending, and regulation. But I’ll believe it when I see it. Which is probably never.

10:41 Haiti. Less than a paragraph.

10:42 Big role for government in creating opportunity.

10:43 One more call for bipartisanship, and a big sop to the Religious Right. An utterly conventional speech. If you thought liberals and conservatives have fundamental philosophical differences, think again. Two sides of the same coin.

10:44 That’s all for tonight. CEI scholars will have more in-depth analysis for you tomorrow. Thanks for reading!

SOTU: Irish Entrepreneurs Put Politics to Productive Use

by Ivan Osorio on January 26, 2010

in Culture, Deregulate to Stimulate, Economy, International, Nanny State, Personal Liberty

The Washington Examiner’s David Freddoso reports that Paddy Power, Ireland’s largest bookmaker, is taking bets on President Obama’s State of the Union speech tomorrow — from the first cliche uttered to the color of the president’s tie.

Why Ireland? Quite simply, because online gaming is an industry that the American government has literally chased out and away from our shores, for no good reason.

Meanwhile, back in America, all we can do legally is engage in drinking games.

For more on online gaming, see here.

lolprez Strikes Again

by Gary Howard on February 26, 2009 · 1 comment

in Economy, Odds & Ends, Personal Liberty, Politics as Usual

lolprez and the “do-something-anything” Congress is at it again

Foreclosure and the ‘forgotten man’ in Obama’s SOTU speech

by John Berlau on February 24, 2009 · 1 comment

in Bailout Watch, Odds & Ends, Politics as Usual

Perhaps with the popular reaction to Rick Santelli’s ‘tea party’, in which the CNBC commentator elicited cheers for saying that the thrifty should not have to subsdize foolish borrowers and banks, President Obama took pains in his State of the Union address to argue that his foreclosure plan will not benefit the spendthrift and irresponsible. “It’s a plan that won’t help speculators or that neighbor down the street who bought a house he could never hope to afford, but it will help millions of Americans who are struggling with declining home values,” the President claimed.

Whether it will or it won’t, we’ll see when the full plan is unveiled next week. Regardless, in Obama’s foreclosure rescues there are two overlapping groups that would fall into the category of, in the title of Amity Shlaes’ great economic tome, the “forgotten man.” : they are taxpayers and savers who not only will be at risk for more than $275 billion in tax dollars for the plan (in additon to the trillions for the Obama’s stimulus and the Bush-Paulson-Obama-Geithner bailouts) but will also be at risk for further losses in their pension and mutual funds from the proposed bankruptcy “cramdown” by Obama and Democrats that would radically change contract law regarding mortgage securities.

Because they were rated AAA, mortgage-backed securities sold by the banks were picked up in some degree by nearly all pensions and mutual funds. The losses on loans that politicians were asking, and under Obama’s plan paying, banks to take, are most often not even the banks’ own losses. It’s investors, including middle-class folks with 401(k)s who will take it on the chin.

Yet the bankruptcy “cramdown” –in which bankruptcy judges can reduce payments and modify mortgage contracts in lieu of the foreclosure that both parties agreed to as a remedy for default — as well as policies encouraging banks to ignore their contracts to the investors who own the mortgages will prevent investors from having their contracts honored. Right now, there is a vicious villification campaign targeted at William Frey, an investor in mortgage-backed securities who is suing Countrywide Financial for modifying mortgages without regard to investor interest.

If both borrowers and banks are encouraged to disregard the terms of the contracts they signed, the U.S. will face a longer road to recovery. And the trust badly needed for credit markets to function will not be restored, despite President Obama’s good motiviations and uplifiting speeches.

SOTU Watch: Energy Claims

by Iain Murray on February 24, 2009 · 2 comments

in Economy, Employment, Energy, Environment, Global Warming, Stimulus to Nowhere

The President might make various remarks relating to energy tonight. These are likely to center around grandiloquent claims as to the effectiveness of “green jobs” and alternative energy in saving the economy, not to mention the planet. Here are a few notes on the reality of these claims.

Green Jobs: The President will probably claim to be creating millions of “green jobs” to save the economy, fight global warming and end dependence on foreign oil together. In fact, “green jobs” have a number of problems, outlined in my Examiner piece from yesterday. To summarize:
• “Green jobs” come at the expense of traditional energy jobs. At the moment, the wind industry employs 85,000 people in all its facets (including support staff and suppliers). The coal industry employs 81,000 miners alone, and probably over 1.4 million in all, including support staff and suppliers.
• “Green jobs” are more expensive to society in general. Those 85,000 people in the wind industry contribute to the generation of just 1.3 million MegaWatt-hours of electricity, while the coal industry generates 155 million MWh, making each coal industry job seven times more productive than a wind industry job. The difference in cost is born by the rest of us.
• “Green jobs” are mostly low-paid and transitory, according to a recent report by, among others, The Sierra Club and the Teamsters union.
• A German government report found that “green jobs” are only beneficial to the economy as long as Germany remains a net exporter of green technology and power. As soon as other countries utilize their comparative advantages in manufacture and power generation, “green jobs” become a drain on an advanced economy.
• Most “green jobs” are related to the generation of electricity, which is not used to power cars yet, and so do nothing to lower our “dependence” on foreign oil (and most oil we use comes from the US and Canada in any event).

Alternative Energy: The President may repeat his promise to double the use of alternative energy, again claiming effects in terms of climate and energy independence. This claim is, in all probability, disingenuous.
• A doubling of alternative energy electricity production by 2011 would require the main alternatives – solar, wind, geothermal and biomass – together to generate 144 billion KiloWatt-hours of electricity by then. However, under the Energy Information Administration’s “business-as-usual” projections, these industries are expected to supply 150 billion KWh by then, with no additional policies needed. (Note the EIA includes hydropower and wood in its renewables calculations, for the solar/wind/geothermal/biomass figure, see here.)
• Reduction in greenhouse gases as a result of this policy is not likely to occur, as the EIA predicts a similar increase in the use of coal to generate electricity by 2011. In all probability, therefore, we will be emitting greater amounts of greenhouse gases by 2011, not less.
• A “smart grid” is probably a useful technology, but the President and the stimulus plan gold-plated it in order to boost their renewable energy rhetoric. William Tucker has a good summary of what is wrong with the President’s version of a “smart grid” here.
• If the President means that he will double the use of biofuels, this is likely to mean a significant increase in corn ethanol production, resulting in greater diversion of the corn supply into fuel production. This will likely increase already-inflated food costs (the recent price drop would have been significantly greater were it not for ethanol manufacture) and thereby increase food insecurity in a recession. Increased ethanol production is opposed by most major environmental groups as well as free-market groups. See Facts About Ethanol for more.

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