Here is the reaction of many Heartland Institute staffers, scholars, fellows, and policy advisors to President Obama’s first second-term State of the Union address.
“President Obama’s State of the Union was a hubris-filled laundry list of his typical pablum. His promises on entitlement reform were barely existent and would do little to address the rising costs of Medicare, which will go bankrupt by 2023.
“And his insistence upon raising the minimum wage, which would increase low-skilled unemployment by one to three percent, seems like the worst possible solution for our current unemployment crisis. Hiking the minimum wage will be a real kick in the pants for this economy, and not in the back of the pants, and I suggest that states which voted for Mr. Obama ought to try it first to see how it works out.”
“The one part of the president’s speech that concerns me most is he would pursue global warming actions by executive actions. There is no role laid out for Congress, or for the courts for that matter. The agenda is an 80 percent reduction in energy consumption by 2111 and a 40 percent reduction by 2030. Those goals cannot be achieved without serious reduction in the standard of living in the United States and the rest of the world. Be afraid. Be very afraid.”
“The Union cannot be strong when the economy is weak. Our economic weakness is readily apparent. It’s apparent to those who have jobs and watch as the value of both their wages and assets decline. It’s apparent to the unemployed who struggle to find work.
“The current economic malaise is the fourth time in the past century the U.S. experienced an extended period of weakness. Each of these periods involved rapid increases in federal spending and control over the economy. In each instance, the power and influence of the federal government had to be rolled back before strong growth and higher living standards could resume.
“In his State of the Union speech the President not only failed to recognize the cause of the recent malaise. His plan is to increase the very policies that produced it.”
“President Obama believes the federal government should involve itself in every important aspect of our lives – preschool, K-12 education, college, housing, transportation, medicine, marriage, our workplaces, retirement, and more. He was utterly contradictory in his calls for government action. He spoke of spending cuts, yet federal spending keeps rising.
“He spoke of creating more jobs yet called for a higher minimum wage, which would price more young people and unskilled workers out of jobs. He spoke of raising taxes on high earners and ending tax ‘loopholes,’ which would leave the people who provide jobs with less money to hire people.
“He outlined a host of additional spending on technology, energy, and infrastructure, and said it would be paid for, which is to say taxes would be raised. Technology and energy companies should spend their own money on technology and energy. For government infrastructure, other government spending should be cut – not just slowed in its rate of growth but actually cut – to pay for it. A good place to start would be the military budget, which should shrink as the country’s military adventures in Afghanistan and Iraq wind down.
“The overarching problem with the president’s talk was the expansiveness of his vision. The government is too big and he wants to make it bigger. Democrats like to speak of the strong economy during the Clinton presidency. During his presidency the federal government’s share of the economy shrank to barely 18 percent. Today it is about 25 percent of the economy. To improve this nation, the federal government should shrink as it did under Bill Clinton.
“I don’t believe Obama’s talk was serious. The clearest evidence of this was his call to ‘eradicate poverty’ around the world in 20 years. That’s utopian. Most of the talk was more or less utopian, like a pie-in-the-sky campaign speech. He’s never stopped campaigning.”
“It is hard to reconcile the fiscal demands of an expansive welfare state with the budgetary realities facing President Obama, which, fortunately, constrained significantly the typically exuberant new program proposals that normally would have been advanced. Thus I felt Obama was straining to build enthusiasm for his rather shopworn agenda advanced in previous years.
“One exception: instead of merely endorsing congressional efforts at immigration reform, Obama advocated expansion of legal immigration, which is overdue on a variety of economic grounds. He even dampened that positive note, however, by implying it should be limited to workers from the so-called STEM disciplines. What is wrong with bringing in productive immigrant accountants, investment advisers, auto repair experts or even poets? Why are we keeping bright and energetic resources away – we need new blood, and new minds.”
“I agree with the president that it’s not just the job of the military to protect our rights and liberties. That’s what the Second Amendment’s right to keep and bear arms is for.”
“The president’s speech can be summed up as follows: Government is not the problem, government is the solution. More taxes, more spending, more regulations, more Fed funny money. Obama thinks that adds up to more jobs and growth. I think it adds up to another recession, fewer jobs, and continued decline for America.”
“The universal preschool piece of President Obama’s even-bigger-government vision for his second term would drain state budgets, add to the federal deficit, and put out of business most of the private providers who meet 80 percent of demand for early childhood education. As opposed to a massive government takeover, a rational approach would target aid to needy children who might benefit from an early boost toward school readiness. That could be accomplished with vouchers for preschool choice. Unfortunately, once again the Obama agenda is all government, no individual choice.”
“In his speech, the president proposed a nationwide preschool program. He might start by taking a look at what the federal government has already done with preschool, because it’s an utter failure. Head Start has spent $160 billion since 1965 to provide poor children early childhood programs. In December, the president’s administration quietly released a study on Head Start it had delayed for years. The study showed that kids who attended government preschool are no farther ahead by third grade than kids who did not.
“In short, current federal preschool is a massive waste, and children do not benefit. The results for state-led preschool are similar. If the president really were concerned with ‘evidence-based decision making’ and the best interests of kids, he would not have proposed to spend money the nation does not have on a failed idea.
“The evidence from Sweden, which has universal government childcare, indicates that such programs reduce the health of mothers and children, make kids more neurotic and anxious, and create social pathologies dangerous to democracy. The best things we know to do with small children are to help them have a married mother and father who read to them a lot and limit TV. Anything that doesn’t start there has and will fail.”
“The president offered up nothing more than the usual incorrect global warming platitudes during his speech. The president could not have been more wrong in claiming ‘extreme weather’ was ‘now more frequent and intense’ and he failed to note that global temperatures have not increased in 16 years.”
“President Obama talked about the threat of climate change, but glossed over the threat of a nuclear-armed North Korea – which just launched a successful nuclear test. Apparently, he believes that the mitigable impacts of possible climate change are more of a threat than North Korea’s ability to wipe parts of America off the map.
“The promise to direct his ‘cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy’ is a promise to ignore his past green energy embarrassments such as Solyndra, A123 Battery – now in the hands of the Chinese – and the failed cellulosic ethanol efforts such as Range Fuels that received approximately $300 million in government funding before going bankrupt without producing one gallon of the fantasy fuel. It is also a promise for more green energy and crony corruption.”
“President Obama delivered a State of the Union address that made no secret of his essentially Left Wing political-economic philosophy. Apart from the details, the major message was that Americans must become part of a herd whether they actually want to, involuntarily serving the country. Even the conservative commentator Charles Krauthammer characterized Mr. Obama’s viewpoint without reference to its coercive nature.
“There was absolutely no reference to the quintessential American political idea, individual liberty. Instead he promoted regimentation of the citizenry into a collective that would be guided – no, led – by him and his friends. He didn’t propose that Americans volunteer to serve each other. He asserted that they will be forced to labor for common objectives.
“As a naturalized citizen who escaped to America from communism, I saw Mr. Obama’s political vision as sadly reactionary. It aims to take us all back to an era when kings, czars, and other forceful rulers herded populations into armies to serve impossible ideals. What Mr. Obama completely ignored in his speech is that America is supposed to be a community that respects and protects everyone’s rights to pursue their own version of human happiness! And he promoted this idea on the back of one of the most despicable Leftist mantras, namely, rich-bashing. He evidently is counting on the prejudice of millions against those who are well off. He is, in short, counting on the envy of Americans.
“One can only hope that Mr. Obama is misreading the American people’s general outlook on social-economic issues. Do Americans really accept that the country is involved in a class war, a war pitting those who are striving to improve their lives against those who have attained that objective? I am hoping that the liberty I and millions of others came to America to enjoy as a matter of our individual human right will once again resume its place as America’s public policy priority.”
Tibor R. Machan
Professor Emeritus of Philosophy
R. C. Hoiles Endowed Chair in Business Ethics and Free Enterprise
Argyros School of Business & Economics
“Regarding the minimum wage: If you have to wait for the government to force your employer to give you a raise, you’re doing it wrong.”
“For President Obama, asking something from the ‘wealthiest’ translates into raising taxes on economically productive businesses, instead of reducing federal spending on the wealthy. If we gradually raised the Medicare eligibility age, for example, the net effect would be to prevent taxpayers from subsidizing the health care of wealthy retirees, because the means-tested exchanges would gradually replace the universal Medicare program.
“But Obama is enamored of the opposite approach: raising taxes and hurting economic growth, so as to ensure that the federal government can continue to support health spending on people who don’t need the government’s help. Obama once again brought up the canard about Warren Buffett’s secretary having a lower tax rate than Warren Buffett, but he was silent on the question of why a secretary pays taxes to fund Buffett’s health coverage.”
“It was interesting to hear Obama tout the supposed scientific consensus on global warming, and yet ignore the clear consensus among economists that increasing the minimum wage is a bad idea. You don’t create jobs by making job creation more expensive.
“On illegal immigration, Obama sounded very much like Marco Rubio. What Rubio has suggested is a reasonable trade-off between two competing values. First, there is the rule of law, which suggests that illegals not be given an entirely free pass, with no penalties nor consequences. But second, there is the reality that it’s both impractical and inhumane to deport all illegals. It remains to be seen, however, whether Obama will actually play the role of a bipartisan conciliator, rather than a harsh partisan, on this issue.”
“Marriages have broken up for less cause than President Obama has given the American people over the course of his first term. His second term begins with the same litany of empty promises in his State of the Union speech. While surely every sentence will be parsed for some hidden or deeper meaning, the result is the same; the feeling he is lying to those who look to him to reverse the trends and events he put in motion and for which he blames everyone but himself.
“‘Nothing I’m proposing tonight should increase our deficit by a single dime.’ We’ve been here before. Obama has not cut the deficit. He has tripled it. And he wants more taxes to pay for more ‘investments’ to satisfy his addiction to spending when anyone else would have put the brakes on long ago. His speech was testimony to why massive unemployment has not been resolved during the course of his last term and continues into the present one. Instead, his legacy is one of having expanded dependence on a government that is deeper in debt than at any previous time in the nation’s history.
“If this was a marriage, Americans who grasp the true state of the union would be asking for a divorce.”
“The address calls to mind Shakespeare’s Macbeth:
… a walking shadow, a poor player
That struts and frets his hour upon the stage
And then is heard no more: it is a tale
Told by an idiot, full of sound and fury,
“We hope that the collateral damage that may be done to the Country in the interim is ultimately repairable.”
“Let’s see, if we increase the minimum wage to $9.00 per hour, or better yet index it to the cost of living, will it enable hard-working Americans to afford $20,000 per year in Obamacare premiums, and to stay ahead of the destruction of the dollar?
“Now that we have ‘cleared away the rubble of crisis,’ what are we going to do about borrowing 40 percent of what we spend?
“If we pay doctors for ‘quality’ rather than for giving service, how will this affect the $50 trillion (or so) in unfunded Medicare liabilities? Will it mean a drastic reduction in the Medicare population?”
“In sum and substance, the president offered little more on the domestic front than continuing failed progressive policies: (1) an expert-driven energy policy to ensure energy independence and to reduce global warming; (2) a 1930s’-style public works program to rebuild roads and bridges; (3) another housing stimulus bill of the kind that led to the 2008 mortgage bubble; (4) more government subsidies to education at all levels; and (5) a national increase in the minimum wage. To say that these policies have been tried before and found wanting would be at best an understatement.
“Before closing with two of his favorite causes, voting rights and gun control, the President was most impressive and bipartisan in proposing comprehensive immigration reform: improved border security, a responsible pathway to citizenship that requires learning English, and a shortened wait for highly skilled legal immigrants. These are policies that the Congress can and should get behind, and with vigor.”
“President Obama said: ‘After years of grueling recession …’ The recession lasted from December 2007 to June 2009, a total of 19 months, not even two years and therefore not years.’ What followed the start of the recovery has been years of tepid economic growth, ‘grueling’ if you will.
“Lack of vigorous economic growth is the problem we’re facing. The Keynesian focus on fighting recession represents a continuing misdiagnosis of the problem. To address the problem of tepid economic growth, the focus should be on encouraging investment, prudent risk-taking and entrepreneurship.
“Instead, the focus of the president was on yet increased spending and higher taxes, and continuation of the politics of class envy.”
“The proposed hike in the national minimum wage to $9.00 per hour from the present $7.25 per hour would have devastating effects on the poorest and most disadvantaged workers, keeping them mired in poverty and raising the overall unemployment rate by as much as 2.5 percentage points relative to a free-market baseline with no minimum wage.
“Increased minimum wages help those who are able to hang onto their minimum-wage jobs, while hurting those who lose their jobs because their employers can no longer afford to keep them. The latter far outweigh the former. Since 2007, when the minimum wage was hiked from $5.85 to $7.25 per hour, the unemployment rate has risen from 7 percent to 15 percent for those lacking high school diplomas, and from 29 percent to 38 percent for black teens. Latino teens have been similarly devastated.
“Economic research at the Federal Reserve finds that for every 10 percent rise in the minimum wage, the minimum economically feasible unemployment rate – what economists call the Non Accelerating Rate of Inflation, or NAIRU – is increased by 0.5 percentage points. The president’s proposal results in a cumulative increase in the minimum wage of more than 50 percent relative to pre-2007 levels, implying an increase in the NAIRU of as much as 2.5 percentage points above the levels prior to 2007, when, following a 20-year freeze on the minimum wage, the unemployment rate fell from 10 percent to less than 5 percent.”
Thomas Walton, Ph.D.
Director, Economic Policy Analysis
General Motors (retired)
“The president closed his state of the union address by saying that this country ‘only works when we accept certain obligations to one another and to future generations; that our rights are wrapped up in the rights of others …’
“On one level, this is a truism – unexceptional and uninteresting. Societies are based on interactions between their members. What is striking about this president is his apparent belief that this interaction must be facilitated and controlled by the state. Whether it be health care mandates, restructuring of the private economy through environmental and financial regulation, or reallocation of resources through taxation, this president appears to have little regard for the autonomy and health of those organs of civil society which exist outside of the federal government.
“One could just as readily say that the United States only works when individuals and voluntary associations of individuals are free to exhibit the creativity and initiative that has made it a singular beacon of freedom and prosperity. But that idea was nowhere to be found in last night’s speech.”