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A Voice from Fly-Over Country
February 27, 2009
“… Because Nobody
Messes with Joe”
by Robert L. Hale
MINOT, NORTH DAKOTA — On Tuesday, the President addressed a joint session of Congress. He outlined his assessment of the financial crisis gripping the U.S. and his plan to resolve it.
One of the tragedies of Obama’s speech is the disappointment he will inflict on those who have placed so much trust and hope in his promise of leadership and change.
This is certainly a harsh assessment of a new President, particularly after little more than a month in office. It is an assessment, however, which is based on the President’s own words.
What he said — for those who actually read the speech rather than simply listened to a rosy word-picture filled with platitudes — demonstrated a significant lack of understanding of what makes an economy vibrant.
If the speech is an indication of his understanding of the financial mess and how to meaningfully address it, the country should prepare for bitter disappointment. A review of what he said demonstrates this.
1. “The ability to get a loan is how you finance the purchase of everything… and [how] businesses make payroll.” Businesses do not make payrolls with loans. Those that do, don’t stay in business; they fail.
2. “A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future.” The President believes that taking less from those who earn it is a transfer of wealth to those people. Government redistribution has never created wealth. Wealth is created when those who earn it are permitted to invest it as they see fit, not as government deems.
3. “Over the next two years, this plan will save or create 3.5 million jobs. More than 90 percent of these jobs will be in the private sector.…” Since 2000, total private sector jobs increased by 3,456,000. In this time of contracting economic activity, can this happen or is it just wishful thinking?
4. “Because of this plan, there are teachers who can now keep their jobs and educate our kids…. And we have provided the resources necessary to prevent painful cuts and teacher layoffs that would set back our children’s progress.” Has anyone heard of a single public school district in the U.S. that is laying off teachers, except where the student population has dropped?
5. “So I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America.” How many understand that this proposal will artificially and unnecessarily increase the utility bill for more than 80 percent of America’s households?
6. “I understand that when the last administration asked this Congress to provide assistance for struggling banks, Democrats and Republicans alike were infuriated by the mismanagement and results that followed. So were the American taxpayers. So was I.” Why was he infuriated? He was a major proponent urging Congress to pass the Troubled Assets Relief Program (TARP). The “mismanagement” and lack of transparency came about because the measure specifically did not require transparency or accountability. If the members of Congress are infuriated, all they need to do is amend the bill. They have done nothing. And only half of the funds were distributed under Bush; the balance is being distributed under the Obama administration.
7. “We have done more to advance the cause of health care reform in the last thirty days than we have in the last decade.” What has been provided is health care insurance — not health care reform. Nothing has been done to reform a health care system that is bloated by massive Medicare and Medicaid mismanagement, the failure of tort reform, and the lengthy approval process for new medications imposed by the Food and Drug Administration that delays the availability of new drugs and adds substantially to their costs.
8. “But I also know that nearly a century after Teddy Roosevelt first called for reform, the cost of our health care has weighed down our economy and the conscience of our nation long enough.” The cost of health care did not begin to “weigh down” our economy until after the full impacts of Medicare and Medicaid that began in the 1960s. The advent of the third-party payer system that effectively removed accountability and oversight on medical billings has done more to increase medical costs than all the electronic efficiencies will every save.
9. “And a twilight struggle for freedom led to a nation of highways, an American on the moon, and an explosion of technology that still shapes our world.” This is certainly a delightful sound bite. The question is, what was the twilight struggle for freedom and how did it lead to a nation of highways? Hollow rhetoric does not advance real reform.
10. “We will soon lay down thousands of miles of power lines that can carry new energy to cities and town across this country.” I am uncertain who “we” is. I am confused as to what the point of this statement is. What does it have to do with this “recovery plan,” if anything?
11. “And we will put Americans to work making our homes and buildings more efficient so that we can save billions of dollars on our energy bills.” As a builder for more than 30 years, I can state unequivocally this is a fiction. It is simply cannot be done.
12. “In fact, the recovery plan provides a tax cut — that’s right, a tax cut — for 95 percent of working families. And these checks are on the way.” If there is a tax cut, why does a check need to be issued? Shouldn’t less simply be taken in withholdings?
13. “I’m proud that we passed a recovery plan free of earmarks.” Yet news reports identified up to 9,000 earmarks in Congress’ $410 billion omnibus spending bill.
14. “In order to save our children from a future of debt, we will also end the tax breaks for the wealthiest 2 percent of Americans.” This should be a relief for 98 percent of Americans. However, does it seem a realistic that 2 percent of Americans are going to pay off a federal debt estimated to be between $12 trillion and $19 trillion?
The particularly troubling aspects of the President’s speech include the following:
• The recovery plan will be directed entirely from Washington, DC.
• The plan is being managed and directed by the same people who were in charge when the problems occurred — the members of Congress.
• Apparently, Congress was powerless to stop the mess we are in and had little or no responsibility for it.
• He believes 2 percent of taxpayers will save our children from a future of debt.Words do not repair decades of financial and regulatory mismanagement, nor do unrealistic promises. More to the point, the wishful rhetoric and the President’s clear misunderstanding of how markets work demonstrate a failure to grasp the fundamental problems of our financial system and the most effective means to fix them.
For those who listened carefully and understand how sustainable jobs and prosperity happen, the President’s speech was a terrible disappointment.
See press release of this column.
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A Voice from Fly-Over Country is copyright © 2009 by Robert L. Hale and the Fitzgerald Griffin Foundation. All rights reserved.
Robert L. Hale received his J.D. in law from Gonzaga University Law School in Spokane, Washington. He is founder and director of a non-profit public interest law firm. For more than three decades he has been involved in drafting proposed laws and counseling elected officials in ways to remove burdensome and unnecessary rules and regulations.
See a complete biographical sketch.
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