After President Clinton took a drubbing from voters in the 1994 Congressional election, he realized his policies weren’t working.  He promptly declared, “The era of big government is over,” and he then went about making good on that declaration:

• He reduced spending by a miraculous 3 1/2 percent of GDP.

• He attacked entitlement spending and abolished the ballooning open-ended welfare system.

• He signed what amounted to the biggest capital gains tax cut in American history.

• He delivered the only four budget surpluses in four decades.

• And he produced a period of prolonged economic expansion.

President Obama faced a similar cross-road as he delivered his fourth State of the Union Address to Congress.  If he had followed the example of his successful Democratic predecessor, he could have redeemed his presidency, revived the economy and rallied the country.

Instead, he succumbed to the basic ingredient of hubris: that the more we invest in our mistakes, the less willing we are to correct them.

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Following President Barack Obama’s self-congratulatory State of the Union address, Rep. Dave Camp (R-MI), chair of the House Ways and Means Committee, produced a simple chart that tells the real story of the Obama administration:

America Before President Obama Took Office and Now

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Tuesday’s State of the Union address is noteworthy because it appears to signal a change in the Administration’s approach to US energy development. If so, this is welcome news. Truly embracing an “all of the above” energy strategy that allows for the robust development of our oil and natural gas resources in the immediate term would boost economic development, lessen our dependence on hostile oil regimes, and save American consumers from record-high fuel costs.

However, while these words are encouraging, the Administration’s actions over the last three years tell a different story.

One highlight was the President’s emphasis on natural gas — a game-changer for the US economy. President Obama mentioned the words “manufacturing” and “manufacturers” fifteen times. This is because manufacturers of such commodities as steel, paint, fertilizer and chemicals, who use natural gas as a feedstock, have seen record low prices for the commodity in the United States. The boom in natural gas, created by the combination of two old technologies – horizontal drilling and hydraulic fracturing — has made the resource abundant and extremely affordable. Low energy prices, driven by an increased supply, benefits all Americans. This resource has been and should continue to be developed safely and without jeopardizing our environment. Unfortunately, the Environmental Protection Agency has spent considerable time and effort over the past few years trying to impose new regulations on natural gas production that could, in effect, render future production uneconomical.

The President also failed to mention the Keystone XL pipeline. His Administration’s decision just last week to reject the Keystone XL pipeline, a $7 billion energy infrastructure project built completely with private funds, could bring over 700,000 barrels of oil from Montana, North Dakota, and our trusted friend Canada and create thousands of union jobs during construction. If his Administration is serious about generating new jobs and economic growth through energy policy, there is no better, or more immediate, way than approving this “shovel ready” project.

While his emphasis on the return of domestic manufacturing rightfully deserves attention, he left out several other key energy issues – some of which could strengthen energy security and put Americans back to work in weeks, not years. (more…)

Last night President Obama renewed his calls for a so-called “middle class tax” cut that would all but kill Social Security:

“Right now, our most immediate priority is stopping a tax hike on 160 million working Americans while the recovery is still fragile. People cannot afford losing $40 out of each paycheck this year. There are plenty of ways to get this done. So let’s agree right here, right now: No side issues. No drama. Pass the payroll tax cut without delay.”

And yet only two paragraphs later, he said this:

Alas, in calling for a renewed payroll tax holiday, President Obama continues to raid Social Security and imperil the retirement account that many Americans have paid into and continue to depend upon.

On the one hand, he raids the Social Security trust fund, while on the other he attacks Republicans for threatening Social Security.  Republicans ought not let him get away with such transparent chutzpah.

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President Obama’s plea to ban Congressional insider trading may poll well and have bipartisan support, but it’s already facing stiff resistance from lawmakers the morning after his State of the Union address.

On Tuesday night, the president spoke in no uncertain terms: “Send me a bill that bans insider trading by Members of Congress, and I will sign it tomorrow,” he said. “Let’s limit any elected official from owning stock in industries they impact.” The remarks were cause for celebration for Breitbart editor Peter Schweizer, who authored a 2011 book exposing Congressional insider trading, and 60 Minutes, which ran a widely-viewed segment based on his book (CBS quicklyuploaded the portion of the speech last night). But early reactions from Congress (Republicans and Democrats) shouldn’t encourage much optimism.

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I’ve already bragged that the Cato Institute is America’s best think tank, highlighting the fact that we took the lead in battling against Obama’s faux stimulus at a time when many were dispirited and reluctant to fight big government.

I’m biased, of course, so I’ll understand if you discount what I say. But I hope you’ll agree that my colleagues have put together an excellent video response to the President’s state-of-the-union speech.

As part of my contribution to the video, beginning around 6:35, I debunk the President’s class-warfare tax agenda by citing IRS data from the 1980s to explain that higher tax rates don’t necessarily mean higher tax revenue.

After a night’s sleep, here are a few additional observations on the President’s remarks.

• I was disappointed, but not surprised, that he repeated the economically foolish assertion that Warren Buffett pays a lower tax rate than his secretary.
• I also was not surprised that he didn’t say much about jobs and the economy. These four charts show he doesn’t have much to brag about.
• It was also noteworthy that he didn’t spend much time talking about Obamacare, which suggests that White House pollsters understand that government-run healthcare isn’t very popular.
• It was equally revealing that he didn’t spend much time on the so-called income inequality issue. Redistribution was implicit in what he said, to be sure, but the Occupy-Wall-Street crowd is probably disappointed that he didn’t explicitly embrace their agenda. More evidence that the pollsters played a big role in this speech.
• I’m definitely not surprised that he talked about eliminating Osama bin Laden. Kudos to the Commander-in-Chief.
• I was amazed that he had the gall to say “no bailouts,” particularly given his support for TARP, the Dodd-Frank bailout bill, and the giveaway to GM and the auto unions. And if the GM bailout is supposed to be a success, I’d hate to see his definition of failure.
• And I was stunned that he could talk about the housing meltdown and mortgage crisis without mentioning the Federal Reserve, Fannie Mae, or Freddie Mac. Sort of like analyzing World War II and pretending Germany and Japan didn’t exist.

Since most of the previous observation are critical, I want to stress that I’m not being partisan. I also was disappointed in the Republican response. Was the GOP smart to showcase a governor who was part of the big-spending Bush Administration? Especially one who has said nice things about the value-added tax?

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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Congressman Raul Labrador to discuss last night’s State of the Union address, how the Tea Party can impact the races for the House and Senate this year, and how Congressman Labrador’s path to politics began with Ronald Reagan.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

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Haven’t We Heard this Before?
FACT CHECK: Obama pushes plans that flopped before
State of the Union? More Like State of the Campaign

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Barack Obama is no Lincoln

“[Barack Obama] didn’t get it right,” says Harry V. Jaffa, professor emeritus of Claremont McKenna College, senior fellow at the Claremont Institute, and author of two influential books on Lincoln.

Jaffa was referring to this quotation from President Obama.

“I’m a Democrat. But I believe what Republican Abraham Lincoln believed: That Government should do for people only what they cannot do better by themselves, and no more.”

Professor Jaffa noted that this quotation leaves out a great deal. The 93-year-old Jaffa recited the full statement from Lincoln’s speech, “The Nature and Objects of Government, with Special Reference to Slavery” (July 1, 1854) by memory:

“The legitimate object of government is to do for a community of people whatever they need to have done, but cannot do at all, or cannot so well do, for themselves in their separate and individual capacities.”

Notice the difference? The emphasis is on the need to have done, not on government doing the action. “That distinction was missing from his quotation,” Jaffa explains. Yet Obama has repeatedly invoked this misleading Lincoln quotation on both the campaign trail and during his presidency.

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Tonight, President Barack Obama will deliver his third State of the Union Address–and his sixth address to a joint session of Congress. That’s more than either President Bush or President Clinton had addressed in any single term.

Despite his purported skill as an orator, none of Obama’s addresses to Congress has been particularly successful. They are typically remembered more for the rancor they caused than for any positive effects.

Obama is expected to make inequality the focus of his address. That’s an important campaign theme, as well as a refrain of the Occupy Wall Street movement that Obama supported in the fall of 2011.

Yet it is not a significant departure from the tone of previous addresses, in which Obama bullied opponents and Supreme Court justices; fabricated health insurance horror stories; and called upon “millionaires and billionaires” to pay.

For reference purposes as you watch tonight’s State of the Union, here is a concise summary of Obama’s five previous speeches to Congress, and how they were received:

Obama's first address: February 24, 2009

***

Address to Joint Session of Congress, February 24, 2009

In his first speech as the 44th President, Obama wanted to put his stamp on the presidency and introduce his ambitious policy agenda–one “that begins with jobs,” he said. The highlight of his address was the American Recovery and Reinvestment Act–i.e. the stimulus–which he promised would receive “tough, unprecedented oversight” under Vice President Joe Biden.

Obama also announced a government lending program to ease credit, a new housing plan to prevent foreclosures, and assistance to struggling banks. He asked for “long-term investments” in green energy; for a commitment to health care reform; and for new funding for schools, along with education reforms. And he promised to cut the deficit in half by the end of his first term, partly by letting “tax breaks” for the wealthy expire.

In addition, Obama touched on national security, reiterating his promise to close the detention facilities at Guantánamo Bay, hinting that he would press for civilian trials for terrorists, and promising to “defeat al Qaeda and combat extremism.” On foreign policy, Obama declared “a new era of engagement” through negotiations with hostile powers, and announced the appointment of a new envoy to help end the Arab-Israeli conflict.

The reaction to Obama’s speech was somewhat negative: he apparently intended to govern from the left, not from the center (as some had hoped). Stock prices fell sharply the next morning, recovering by the afternoon but ending firmly in the red. In retrospect, though Obama kept his promises on assisting banks and fighting al Qaeda, he broke many other pledges, and saw many of his policies–especially the stimulus–fail badly. (more…)

President Obama has decided to make “income inequality” — one of Occupy Wall Street’s central themes — the focus of both his State of the Union address and 2012 presidential election campaign, according to CNN.

In his last State of the Union speech before the 2012 election, President Barack Obama will pitch a series of proposals and will address the topics of economic inequality and a government that should ensure “a fair shake for all.”

And…

Given the treacherous state of the economy, the president’s campaign aides are attempting to make the theme of the upcoming election a choice about the role of government and the future of the middle class — not a referendum on the president’s handling of the economy.

They say this speech and its underlying theme — income inequality — go a long way to shaping that message.

The Obama Campaign has posted a video this morning that hits on this theme of “Income Equality”, which means the President is piggybacking the central theme of his re-election campaign on the framing that Occupy Wall Street created. That is the major reason to keep a close, critical eye on the #Occupy movement.

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As President Barack Obama prepares for his State of the Union address in Congress, where he will no doubt claim credit for signs of economic recovery, new analyses by economists suggest that growth will slow and unemployment will remain virtually unchanged by year’s end.

According to economists surveyed by USA Today, much of the excitement around December retail sales was “hype,” and the fourth-quarter bounce was largely driven by post-earthquake/tsunami activity in Japan, not domestic policy. (When the economy suffers, the President blamed the earthquake; when it recovers, curiously, no earthquakes merit mention).

No longer buying Obama - in China or at home (Photo: CNN)

There is continued uncertainty in Europe, and even new uncertainty about slower Chinese growth. But the great drag on the economy remains the American housing market, according to economists, even though many of them expect prices to stop falling this year. Government interventions and bailouts under Obama and his predecessor may have deferred some pain but have prevented markets from full correction and recovery, reinforcing deep uncertainty. (more…)

Just prior to the introduction of Rep. Paul Ryan’s response to the State of the Union Address,  a cohort of mine tweeted, “But first, Paul Ryan’s rebuttal, which will be like Ayn Rand hosting Picture Pages.”  I couldn’t help but laugh at this thought which for the most part ended up being spot on, though I don’t necessarily think Jon Galt’s Picture Pages would be such a terrible idea.  As many of us know, Rand speaks a great deal of truth in her works, and a portion of it has seemed almost prophetical over the last several years.  Spoon feeding progressives Rand sounds like a great solution since they are having such a difficult time understanding the big boy versions.

That being said, Ryan’s speech was for the most part what I wanted – and expected – to hear with the exception of one key failure.  Towards the end of the speech Ryan remarked that,

“We believe government’s role is both vital and limited – to defend the nation from attack and provide for the common defense … to secure our borders… to protect innocent life… to uphold our laws and Constitutional rights … to ensure domestic tranquility and equal opportunity … and to help provide a safety net for those who cannot provide for themselves.”

I grabbed my pocket copy of the Constitution and thumbed through it desperately looking for the section in which the U.S. Republic is given the authority to provide public safety nets.  It simply wasn’t there.

The Congressman spent a great deal of time speaking on limited government, free enterprise, founding principles, and individual responsibility. In fact, toward the end of the speech he contradicted his earlier statement about safety nets by remarking that the “American system of limited government” had “done more to help the poor than any other economic system ever designed.”

The fact that the initial statement was made, and then additionally contradicted is concerning.  It impresses upon me the notion that our representation still does not get it. It is still…not yours to give.

I invite Congressman Ryan along with anyone else serving our country in any area of leadership or bureaucracy to read through the story of Colonel Davy Crocket in Not Yours to Give.  Feel free to argue the validity of the occurrence, but the principle within remains which I present in part:

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Sometimes I wonder why the Republicans wanted to win in 2010 so badly.  I hope it wasn’t in a quest for job security because if they’re really serious about putting the country’s fiscal house in order they are not going to have a happy electorate come 2012…Tea Party small-government rhetoric notwithstanding.

Sure, the majority of Americans claim to be for reducing the size of the state to get our fiscal house in order, but do they really understand just how drastic an impact reverting back to a more laissez-faire market-oriented national model would have on their lives?  Certainly, if the transcript of the SOTUS I skimmed through yesterday is any indication – and, most revealing, where the applause breaks are noted – I think we have a way to go yet.

Consider:  One out of six Americans now receives some form of government assistance.  [U.S.A Today.]  Fifty million are on Medicaid, a record high.  Food stamp enrollment now stands at 40 million, or one in seven people. Ten million Americans receive unemployment benefits, and 4.4 million get direct cash assistance.  And these numbers are from only four of the more than seventy welfare programs funded by the federal government!  These figures are not anomalies caused by a recession, but a reflection of the trend towards an entitlement culture that has been growing steadily since the 1960s “Great Society” pipe dream.

This is a recipe for doom yet no politician, from the President on down, Democran or Republicrat alike, will ever muster the courage to address the meat and potatoes of our spending suicide…so they will whip up ire aimed at the parsley garnish like private jets and federal salaries instead.  So a tipping point is at hand.  Almost 50% of Americans pay no income tax, yet so many in this country suckle up to the government teat in one form or another courtesy of the American taxpayer that I see no possibility of this entrenched political system of careerists doing a necessary ‘reset’ to bring us back to a sustainable, market-driven model.  Rather it will be the eventual verdict of raw and unfeeling mathematics that imposes what we refuse to do voluntarily in the form of defaults, declining and eventually disappearing government services, and reduced if not eliminated entitlement benefits.

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The one good thing about sitting through the painful lies and propaganda of Obama’s State Of The Union address was seeing the new Speaker of the House, John Boehner, in Nancy Pelosi’s seat. Seriously, you know it was killing her. I am sure they had to pry the gavel from her stone cold hands.

As for Obama’s speech, don’t make me laugh. That was not a State Of The Union Address as much as it was a campaign speech. Obama will do what he needs to do to get elected and that’s it. Period. Listening to this collectivist laud individualism was insulting. He was stealing my material, which is more than OK, but in deed, my good man. In deed. Do it.

His solution for the incomprehensible 14-trillion-dollar debt is more debt. More stimulus. More enslavement of free men. And, of course, the political fraud of more environ-mentalism, aka “clean” energy. It is insanity to create massive unemployment, destroy whole industries, make rich annihilationist jihad nations and bankrupt America in pursuit of a hoax. All these nature lovers should move out of technologically advanced nations and start their own society in nature. There are plenty of unpolluted places; let these self-made savages move there.

Foreign policy is a disaster. Look around; the world is descending into chaos. Ambassador John Bolton tweeted, “With no foreign policy victory of his own & many failures, bizarre that Obama would take credit for restoring America’s leadership in world.”

Bizarre and worse than bizarre.

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I agree with the liberal blogosphere- Obama’s State of the Union was “Reaganesque.” Well written and well delivered. Awe-inspiring. Except that it was all distortions, false promises, and bait and switch. Don’t believe a word. It was pure sales and marketing, with zero substance. It was the same old “Cash for Flunkers.” Failed programs renamed “investments” in order to sell the con.

Obama’s State of the Union reminds me of the Taco Bell lawsuit in the news this same week. California consumers are suing Taco Bell for calling an item on their menu a “beef taco.” The class-action lawsuit claims that the “beef taco” barely has any beef in it — less than 35% to be exact. Instead, the lawsuit claims it contains isolated oat product, binders and extenders.

Well, that beef taco would make Obama proud. There’s no meat in Obama’s product either. Obama knows his audience likes meat, so he mixes in a spoonful of meat, along with isolated oat product, binders, extenders and other assorted artificial rubbish that tastes a little like meat. He wins your support with the bait and switch. But there is no substance. Where’s the beef? When Obama is done with the Presidency, he has the perfect skills to serve as CEO of Taco Bell.

Obama’s real State of the Union is just more campaign payola. Can you imagine if we played a game of “What does he really mean?” Just substitute “wasted government spending and debt for the same old failed programs” every time Obama used the word “investment” in the State of the Union speech. That’s the unvarnished truth — without the sales and marketing, without the bait and switch.

Why call it “Cash for Flunkers?” Because spending billions of extra dollars on education is not an “investment.” It’s just more money down the drain for the same programs and ideas that have already led to the disastrous catastrophic failure of the U.S. education system. We already spend the most in the world for the worst results. Why would we reward failure with extra billions of dollars?

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Whether or not you’re buying the sudden, unlikely, belief in American Exceptionalism that Barack Obama displayed during his State of the Union speech, one thing is clear.  However great we, as a nation are, we cannot “win the future.”

In his address, Obama spent a lot of time talking about our “Sputnik Moment.”  In the mid 50’s, the United States was on the receiving end of a space-race smack down.  The Russians had been the first to put a satellite in orbit.  Soon after, they would outpace us again, by putting a human in space and returning them safely to Earth.  Despite the objections from Democrats like Walter Mondale, America funneled its collective will into rectifying the situation.  According to the President, we had recognized our “Sputnik moment” and were on our way to “winning the future” by beating Russia to the Moon.

That was 50 years ago.  In the following decades, we maintained our space-age dominance through multiple lunar missions, Skylab, the space shuttle, and unparalleled advances in satellite technology.   We’re now seeing our leadership status erode.

When George Bush left office, we were on pace to return to the moon – ahead of our new space-rivals, the Chinese.  Barack Obama put an end to that program.  He gutted NASA’s budget and all but eliminated manned space flight, while paying lip service to a nebulous, underfunded, Mars mission that many believe will never come to fruition.  Liberals regularly tell us that there’s nothing a human can do in space that a machine can’t.  According to the scientific mind of Barney Frank, “Manned space travel adds far more cost than is justified in terms of scientific return.”

Predictably, while the left decimates American space exploration, China is ramping up its Space initiative. The CNSA (China National Space Administration) is aggressively pursuing a series of orbital missions and moon shots, which will be funded by the interest paid on the money Barack Obama is currently borrowing. As a result, where space exploration is concerned, China has become the new Russia, and once again we’ve fallen behind.

Only this time, we’ve done so by choice.

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During Tuesday’s State of the Union address President Obama mentioned the word “jobs” 31 times, topping last year’s tally by two. Back then he promised to make jobs his “number-one focus in 2010″ and then promptly focused on passing ObamaCare, regulating Wall Street, slapping a moratorium on drilling for oil in the Gulf–he even made time to chat with the gals on The View (Prez doesn’t know who Snooki is!).

Although Obama did make some attempts to fight unemployment directly (especially for public-sector workers), today the unemployment rate stands at 9.4 percent, almost as high as it was one year ago.

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During his State of the Union address, the President said, “If you have ideas on how to improve this law by making care better or more affordable, I am eager to work with you.”

Mr. President, I accept your invitation. As a small business owner, I know the devastating impact the current law will have on our economy. We all agree that the system is broken and health care reform is necessary. I would love to speak with you about the concerns I have with the law and work together to create health care solutions that serve all Americans. I’m eager to begin the dialogue and work with you to give consumers more choice in their health care decisions.

(more…)

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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Jim Pethokoukis and Pejman Yousefzadeh to discuss last night’s State of the Union speech.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

Thoughts on Obama’s SOTU speech
FACT CHECK: Obama and his imbalanced ledger
The laundry list from Obama’s non-laundry-list State of the Union address
Rep Paul Ryan (R-WI) Delivers the Republican Address to the Nation
James Pethokoukis on Reuters
Pej at Chequer-Board
(more…)