State of the Union: My analysis

Like every other politics geek out there, I sat poised on the edge of my seat on Wednesday when the President gave his annual State of the Union address to the joint session of Congress. I even took notes. (I've since lost those notes, but A for effort at least)

You can find the full text of the speech here. (Note, that text is not a transcript per se, but instead a copy of the speech the White House released as the address was happening, but it's good enough for government work) If I manage to find a series of youtube videos of the address I'll post them as well, in case you missed it.

The theme of the night was sort of like a swanky apartment building downtown; build a really nice, shiny facade; that will keep them from looking at the roach infested kitchen inside. Half the speech, the part about values and goals, was written by a capitalist out of an Ayn Rand novel. The other half was written by a college student who keeps the Communist Manifesto under her pillow.

The speech starts with bland platitudes about how fantastic America is and how badass we were after WWII. After the easy points he throws in a reference to the housing collapse.

"In 2008, the house of cards collapsed. We learned that mortgages had been sold to people who couldn’t afford or understand them. Banks had made huge bets and bonuses with other people’s money. Regulators had looked the other way, or didn’t have the authority to stop the bad behavior."

Unfortunately, the facts are that banks made these loans in large part because there were huge safety nets, called Fannie Mae and Freddie Mac, which were more than happy to gobble up bad debts because they were government sponsored and could afford it. This removal of risk distorts the market, which in turn made it possible for the banks to make bad loans with no repercussions.

Then PBO channeled St Ronald.

I want to...lay out a blueprint for an economy that’s built to last – an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values...This blueprint begins with American manufacturing.

Fantastic! Unfortunately, FDR immediately rolled in on wheels of death.

On the day I took office, our auto industry was on the verge of collapse. Some even said we should let it die. With a million jobs at stake, I refused to let that happen. In exchange for help, we demanded responsibility. We got workers and automakers to settle their differences. We got the industry to retool and restructure. Today, General Motors is back on top as the world’s number one automaker. Chrysler has grown faster in the U.S. than any major car company. Ford is investing billions in U.S. plants and factories. And together, the entire industry added nearly 160,000 jobs.

That's right. The reason that American Auto is #1 is because it was nationalized (remember, at one point GM was more than 50% owned by Uncle Sam) and the government got it fixed! Because if there's something the government does great, it's selling automobiles by golly.

Bypassing the fact that nationalizing industries like that is textbook socialism; bypassing the fact that badly run businesses fail all the time and jobs don't just go up in smoke (Those factories would not have simply died. More likely, other, better run businesses would have taken them to use for themselves); instead look at his claim that GM of all people are #1 in the world.

For this we turn to PolitiFact.

• While true that GM sold more cars than anyone else in the world, many of their sales come from joint ventures in China, which GM doesn't fully own.
• Toyota, GM's leading competitor, had to contend with a record breaking earthquake, tsunami, and other disasters. So, when your competitor has bad luck, naturally that helps you, but it doesn't mean that the bailout had anything to do with it. To support that, remember...
  
• ...that Ford, who he touts as part of his success, didn't take the money. It saw it's sales go up 11% without any of the TARP funds. So, if both GM and Ford saw an increase in sales, and one took the funds and one didn't, perhaps the causality isn't there? Also, remember, GM did go through bankruptcy, and companies tend to rebound straight out of bankruptcy.

Moving along, cue more capitalism:

So we have a huge opportunity, at this moment, to bring manufacturing back. But we have to seize it. Tonight, my message to business leaders is simple: Ask yourselves what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed.

We should start with our tax code. Right now, companies get tax breaks for moving jobs and profits overseas. Meanwhile, companies that choose to stay in America get hit with one of the highest tax rates in the world. It makes no sense, and everyone knows it.

So let’s change it.

Hell yeah! Let's change it! Let's lower our tax rates so that they aren't the second highest corporate rates in the world!

First, if you’re a business that wants to outsource jobs, you shouldn’t get a tax deduction for doing it. That money should be used to cover moving expenses for companies like Master Lock that decide to bring jobs home.

Second, no American company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas. From now on, every multinational company should have to pay a basic minimum tax. And every penny should go towards lowering taxes for companies that choose to stay here and hire here.

*sigh* Or we could do that.

This sounds great, right? Yeah, screw those terrible companies that make profits overseas! How dare they steal our jobs!? I'll tell you how dare they: Because companies exist to make a profit, stupid. And if they can do that better somewhere else, they can, will, and should.

We are one of the only countries which taxes corporations for their overseas earnings. In fact, according to the OECD, we are the only nation with a worldwide tax system and effective corporate taxes above 30%. No wonder companies are leaving!

It's not a competition of us vs. them with the corporations as the bad guys. It's a competition where we should be doing everything we can to make America an attractive place to invest. If we build it, they will come.

Instead, PBO rattles off tax deduction after tax deduction, making our tax code even more complex and distorting the market to suit his whims.

Next, he turns his sights on bad businesses overseas.

Tonight, I’m announcing the creation of a Trade Enforcement Unit that will be charged with investigating unfair trade practices in countries like China. There will be more inspections to prevent counterfeit or unsafe goods from crossing our borders.

My reaction to this is: Meh. I mean, it's good to have the government enforce the laws. A market requires stability, and if incoming products don't have to meet the same standards or are breaking American laws, they shouldn't be sold here. At the same time, I'm not a fan of yet another government entity...But whatever. If that's what's gotta happen to enforce the law, so be it. Then again, the protectionist measure could mean bad things between us and China.

PBO goes on about education, how we need to be the best, cut regulations, etc., etc. All good stuff with no substance. Tucked at the bottom of all this fluff is a shocker:

We also know that when students aren’t allowed to walk away from their education, more of them walk the stage to get their diploma. So tonight, I call on every State to require that all students stay in high school until they graduate or turn eighteen.

Mandating that students stay in High School, no matter what, until they are 18. At least he gives a nod to the 10th Amendment and says the States should do this, but still. Does nobody else see why this might be a bad idea? I know this might be earth shaking to some people, but what if little Johnny doesn't need the diploma? What if he's going to be an auto mechanic, or a farmer, or a factory worker, or something else where a different certification or a GED is adequate? Rather than the Government telling Americans how to plan their life, why should we not let the citizens determine how best to chart their future? Not every American needs to go to college.

PBO then puts on his 9th level Cleric hat and casts Raise Dead on the DREAM Act.

Let’s also remember that hundreds of thousands of talented, hardworking students in this country face another challenge: The fact that they aren’t yet American citizens. Many were brought here as small children, are American through and through, yet they live every day with the threat of deportation. Others came more recently, to study business and science and engineering, but as soon as they get their degree, we send them home to invent new products and create new jobs somewhere else.

That doesn’t make sense.

At the face of it, I agree with him. If a child has been raised in America, gone to American schools, and is in every way American, then that's one thing. Unfortunately, the unintended consequences of this are dangerous. By granting an exception for this group of illegal immigrants over here, you risk encouraging lawbreaking with all the other groups. Compassion we must have, but we need to tread carefully and err on the side of enforcing the law. Also, though it may be true when he says that "there are fewer illegal crossings than when I took office", that's just as easily explained by the fact that there aren't as many jobs to attract illegals as there were.

He goes on to claim that he's supported drilling for oil and natural gas at home (Not even going to grace that with a response), and that "We have a supply of natural gas that can last America nearly one hundred years, and my Administration will take every possible action to safely develop this energy. Experts believe this will support more than 600,000 jobs by the end of the decade."

I mean, it could support jobs...that is if Congress doesn't succeed in passing legislation to confiscate the profits of natural gas companies that make too much money. (To be fair, Obama didn't propose that. Just his party.)

There is one conspicuous industry missing in the list of technologies for clean energy: Nuclear. You know, the one that actually exists, isn't based on future tech that might not happen, we have the resources and technology to produce it in abundance, and is being used successfully to generate nearly all the power in France, of all places?

"There is no question that some regulations are outdated, unnecessary, or too costly. In fact, I’ve approved fewer regulations in the first three years of my presidency than my Republican predecessor did in his."

This is technically true. The devil is, as always, in the details. From FactCheck.org:

Obama is right, as far as his statement goes. Bloomberg News, based on a review of Office of Management and Budget data, reported that the Obama administration approved 613 regulations in the first 33 months. That was 30 fewer than Bush approved in his first 33 months.

However, Bloomberg also found that it cost more to comply with Obama’s regulations than either Bush’s or President Bill Clinton’s during that same time period.

Bloomberg News, Oct. 25, 2011: The number of significant federal rules, defined as those costing more than $100 million, has gone up under Obama, with 129 approved so far, compared with 90 for Bush, 115 for President Bill Clinton and 127 for the first President Bush over the same period in their first terms.

Skipping down, PBO once again goes after those evil rich people, saying that it isn't right that Warren Buffet pays a lower percentage in taxes than his secretary. (As the local radio guy quipped, "It never occurs to him to lower the taxes on the secretary.")

He says that tax reforms should follow the Buffet rule, that nobody who makes more than $250k should pay less than 30%, so that they pay their "fair share". I suppose PBO went to a different school than I did, because when I learned the meaning of fair, it meant equal. As in, everyone pays the same percentage. I guess fair isn't as fair as it used to be?

The difference between that billionaire and his secretary is this: That secretary isn't giving me, or anyone else, a job. Rich people make investments, which drive businesses, which create jobs. If anything, we should lower their tax rate and reward the behavior which allows the rest of us to prosper.

In a bit of irony, PBO suggests that Congress pass a rule saying that any nomination receive an up or down vote in 90 days. Which is funny, because he's demonstrated the rules don't much matter if he wants to appoint somebody. But hey, what's the big deal about completely violating the Constitutional bounds of your office to appoint someone without the consent of Congress? No big deal.

The speech rattles on for a little while longer, talking about increased security in Afghanistan, how much our allies love us, our position of strength abroad, etc. He closes with a tangent about how we need to be like soldiers in battle. "When you’re marching into battle, you look out for the person next to you, or the mission fails. When you’re in the thick of the fight, you rise or fall as one unit, serving one Nation, leaving no one behind."

I guess one of his advisors who actually wore the uniform must have told him about that over a beer once.