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Samson Blinded has posted a new item, 'Obama's State of the Union address: a
review'
One year ago, I took office amid two wars, an economy rocked by a severe
recession, a financial system on the verge of collapse, and a government deeply
in debt.
American troops started withdrawing from Iraq despite resurgent violence.
American surge in Afghanistan is insufficient, and Taliban posed to retake
power.
It was speculative rather than financial system which was about to collapse, and
the government made taxpayers to bail out their institutional oppressors. The
government debt skyrocketed.
One in 10 Americans still cannot find work.
The government must deport illegal labor migrants, cut down welfare benefits to
force spongers to take jobs, and abandon the minimum wage to create many more
unskilled jobs.
This recession has also compounded the burdens that America's families have been
dealing with for decades - the burden of working harder and longer for less; of
being unable to save enough to retire or help kids with college.
Short of statistical tricks, no one can imagine that Americans today are less
affluent than decades ago. Everything from cars and home appliances to health
care and universities became better. Lower savings rate reflect high consumer
confidence rather than hardships because people are certain they can find a
job.
And if we had allowed the meltdown of the financial system, unemployment might
be double what it is today.
Would not have been a bad deal. Say, 15 million more unemployed for three years
instead of something like two trillion dollars which the Obama bailout would
cost, including interest. That's about $40,000 per worker per annum. Even with
the most far-fetched assumptions about unemployment, the bailout was too
expensive, let alone unjust.
More homes would have surely been lost.
True, but mortgages would have went down, and many young or poor families would
be able to afford their houses.
To recover the rest [of bailout money], I've proposed a fee on the biggest
banks.
Great. So the stable banks would subsidize speculative banks. An appropriate fee
is already levied on banks through FDIC insurance. Now, as the government had
effectively bailed out the FDIC, it seeks a parallel insurance scheme, which
would go the same path.
We also took steps to get our economy growing again, save as many jobs as
possible, and help Americans who had become unemployed.
Those are mutually exclusive objectives. Assistance to unemployed beyond a bare
minimum reduces economic growth and reduces job market.
We extended or increased unemployment benefits for more than 18 million
Americans.
Why increase unemployment benefits during a crisis when people must be glad they
are receiving any support at all?
We cut taxes for 95 percent of working families.
Obama did not say that the cuts were minuscule.
Millions of Americans had more to spend on gas.
The administration had no guts to push its clients - Iraq, Kuwait, and Saudi
Arabia - to abandon the oil cartel which costs American hundreds of billions
dollars.
Because of the steps we took, there are about two million Americans working
right now who would otherwise be unemployed.
No one can calculate that number with any certainty.
Two hundred thousand work in construction and clean energy; 300,000 are teachers
and other education workers. Tens of thousands are cops, firefighters,
correctional officers, first responders.
Obama contradicts himself: the alleged two million jobs are either saved in the
private sector or, as he says here, were added in the public sector. Such
policies are socialist rather than Keynesian. Keynes advocated temporary
increase in public spending during crises, but increased hiring enlarges state
sector in perpetuity. No one is going to lay off the police offers or teachers
once the crisis is off.
Talk to the window manufacturer in Philadelphia who said he used to be skeptical
about the Recovery Act, until he had to add two more work shifts just because of
the business it created.
Can we get a phone number, please?
I'm proposing that we take $30 billion of the money Wall Street banks have
repaid and use it to help community banks give small businesses the credit they
need to stay afloat.
Community banks are generally more conservative than large banks. Why would they
start financing small businesses when large banks see that as too risky? Obama
will have to resort to government guarantees, thus effectively distribute $30
billion as grants to minority businesses.
I'm also proposing a new small business tax credit-– one that will go to over
one million small businesses who hire new workers or raise wages.
The last thing you need to do during a crisis is to raise wages. The objectives
of hiring more workers and increasing wages are contradictory.
Let's also eliminate all capital gains taxes on small business investment.
The government is going to discriminate against businesses based on their size.
That's a trademark socialist policy of tolerating small manufacturers, but not
"exploitative" big corporations.
I'll visit Tampa, Florida, where workers will soon break ground on a new
high-speed railroad funded by the Recovery Act.
If the railroad were feasible it would have no shortage of private investment.
Revenues from high-speed railroads do not come from nowhere but are chipped away
from airlines and car manufacturers.
We should put more Americans to work building clean energy facilities.
That means American goods will be more expensive than those manufactured in less
eco-friendly countries.
And to encourage these and other businesses to stay within our borders, it is
time to finally slash the tax breaks for companies that ship our jobs overseas.
If the administration pushes clean energy, the remaining business would flee en
masse. In the corporate legal structure, it is impossible to ascertain whether
the jobs were "shipped overseas" or outsourced. Tax breaks make too small
difference for the companies to suffer Obama's clean energy regulation and pay
higher wages in America than in China.
These steps won't make up for the seven million jobs that we've lost over the
last two years.
So why the increased benefits to 18 million unemployed? Out of the 7 million,
most have found new jobs, so the fallout from the crisis is perhaps two to three
million jobs. A two-trillion-dollar bailout seems like too much to prevent
doubling that figure.
We can't afford another so-called economic "expansion" like the one from the
last decade... where the income of the average American household declined...
where prosperity was built on a housing bubble and financial speculation.
Why, then, Obama supports that housing bubble instead of allowing it to burst?
If the bubble is that bad - as indeed it is - then by all means allow the
irresponsible homeowners to default, and bring housing prices down. Looking at
the number of new cars and houses in that decade, it is hard to believe that
incomes have declined then.
Germany is not waiting [to revamp its economy].
Germany would be a very bad example for the United States. Its economy is
crippled by trade unions, government regulation, welfare, - and is only
supported by hordes of immigrant workers. German economy quickly loses its
engineering age as younger generation opts for fashionable MBA specialities.
[China and India are] making serious investments in clean energy because they
want those jobs.
Not in my universe.
We can't allow financial institutions, including those that take your deposits,
to take risks that threaten the whole economy.
Regulation won't achieve that end. Financial institutions have long proved
their ability to outsmart governments. The only solution is to set up separate
currencies licensed for real markets and speculation, respectively. This way,
real economy will be largely insulated from financial gambling.
But to create more of these clean energy jobs, we need... building a new
generation of safe, clean nuclear power plants in this country. It means making
tough decisions about opening new offshore areas for oil and gas development.
Offshore oil development is the opposite of clean energy.
It means passing a comprehensive energy and climate bill with incentives that
will finally make clean energy the profitable kind of energy in America.
Clean energy, in Obama's weasel words, can only become profitable if the
government subsidizes it and institutes punitive taxation of traditional energy
producers.
I know that there are those who disagree with the overwhelming scientific
evidence on climate change.
Like the evidence forged by East Anglia University.
Third, we need to export more of our goods. Because the more products we make
and sell to other countries, the more jobs we support right here in America.
In contemporary technological economy, added value is concentrated in R&D.
Manufacturing is outsourced to undeveloped countries precisely because it is not
a feasible occupation for citizens of developed countries.
We will double our exports over the next five years.
That recalls the Soviet five-year economic plans.
We're launching a National Export Initiative that will help farmers and small
businesses increase their exports, and reform export controls consistent with
national security.
American farmers are heavily subsidized, so increasing their exports means
increasing subsidies and constitutes a net loss to the economy. The part on
export controls is very suspicious: what kind of technology Obama seeks to
export without restrictions?
We have to seek new markets aggressively, just as our competitors are.
Obama the liberal embraced mercantilism and is willing to apply political
pressure in the interests of American corporations.
We will strengthen our trade relations in Asia and with key partners like South
Korea and Panama and Colombia.
Panama and Colombia are by no means America's important trading partners.
And let's tell another one million students that when they graduate, they will
be required to pay only 10 percent of their income on student loans, and all of
their debt will be forgiven after 20 years.
Students, accordingly, will be given a free pass for taking many of the
economically worthless courses in community colleges. They will be able to study
just for the fun thereof without prospects of employment, on public account.
But if anyone from either party has a better approach that will bring down
premiums [on healthcare], bring down the deficit, cover the uninsured,
strengthen Medicare for seniors, and stop insurance company abuses, let me
know.
Easy: end the AMA monopoly on licensing doctors, set limits on malpractice
suits, and allow insurance companies to sell coverage for less-than-ideal
treatment. Regulation drives costs (premiums) up rather than down. It is
completely implausible that government expenditures would become less while
coverage increases.
Starting in 2011, we are prepared to freeze government spending for three years.
(Applause.) Spending related to our national security, Medicare, Medicaid, and
Social Security will not be affected.
Those are the largest part of the budget.
We've already identified $20 billion in savings for next year.
On the background of the expected $8 trillion deficit over the ten years.
That's why North Korea now faces increased isolation, and stronger sanctions
–- sanctions that are being vigorously enforced. That's why the international
community is more united, and the Islamic Republic of Iran is more isolated.
This is important. Obama uses North Korea as a model for Iran. His idea is that
Iran gaining a nuclear bomb or two does not spell apocalypse. Ayatollahs won't
be able to sue their nuclear weapons, and in the meanwhile will face increasing
sanctions that would eventually force them to dismantle the weapons. That
strategy so far does not work with North Korea, which keeps its nuclear
stockpiles and export nuclear technology. Iran's case would be similar to
India and Pakistan's. International community cannot afford to isolate
politically and economically important countries, and will come to terms with
Iran's nuclear weapons.
You may view the latest post at
http://samsonblinded.org/blog/obamas-state-of-the-union-address-a-review.htm
