The State of the Union

by Burt on January 26, 2011

Many pundits are suggesting that President Obama has made a political shift to the center to appeal to those many independent voters who cast Republican ballots in the 2010 elections. His State of the Union message, however, showed tactical shifts, not philosophical ones. He simply does not have the votes in Congress any more to push through programs like Obamacare and massive stimulus spending. Therefore, he has rephrased his ideas–for example, using the word “investment” to describe “spending.” But he still clearly believes that progress starts when government swings into action, not when entrepreneurs attract capital to invest in new ideas. Therefore, we need more government spending. He gave lip service to cutting the defecit, but gave his heart to proposals for subsidies for clean energy and high speed rails.

Two parts of his speech show his passion for more government. First, when he talked about “innovation,” he said this was our nation’s “Sputnik moment.” The space race, of course, is a reference to a past government program–and one of the few with some record of success. The president genuinely believes that innovation comes when planners pick and choose various industries to endow with tax dollars. As I showed in THE MYTH OF THE ROBBER BARONS, when government tried to pick winners and losers in the 1800s in steamships and transcontinentals, the losers were picked every time. Fortunately, private capital emerged to fund Cornelius Vanderbilt and James J. Hill, and they built the successful steamships and transcontinental railroad that helped launch the U. S. into world economic leadership.

The second example of the president’s passion for government solutions was his section on education. He said we need to”reward good teachers and quit making excuses for bad ones.” Competition is the way to do this, but the president never spoke about the need for charter schools or private schools to enter the market and give students an alternative to the often disfunctional public school system. Neither did the president criticize the teacher unions, which almost never promote the firing of bad teachers. He simply suggested that if we plow more tax dollars into schools and into teacher training (which we have been doing for the last fifty years) then we will this time finally get good results.

Time will tell whether the president’s rhetorical shift will translate into more popularity, or into effective political action. Most Republicans in the House and Senate know they were sent to Congress to stop the spending and allow a freer economy to produce the recovery that Americans so deeply want to experience. Republicans, however, will have to be alert. When FDR lost 81 House seats in the 1938 midterm elections, he too shifted his rhetoric, but when a better moment came, he used his 1944 State of the Union message to announce that when World War II ended he wanted new programs to use government to give Americans good jobs, good educations, and “decent” homes. President Obama probably hopes that he, too, can make a rhetorical shift now in trade for a thrust later for more spending and bigger government.

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January 26, 2011 at 11:01 am

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