This is an excerpt from my commentary on the State of the Union Address:
Could we have some explanation of why cutting the incomes of federal employees is a fair idea? Sure we can do it, but that doesn't mean it's right to do it. As long as there's one highly profitable industry that gets a tax break, or one wealthy citizen who is not shouldering a fair tax burden, why should we cut the salary of a worker simply because that person is a federal employee? Doing this sends the message that somehow working for our -- our! -- government is not quite valuable. This is part of the Republican propaganda position that "government is the problem." Government is the problem mostly for people who want to cheat or endanger the rest of us. Government was not the problem when we fought WWII or protected our elderly with Social Security and Medicare. Government was not a problem when we abolished child labor and sweatshops or when we cleaned up our air, rivers, lakes and harbors. Working for our government and being paid a decent and fair wage for doing so is a very honorable thing for an American to do. Why should we be freezing government wages simply because we can?
Saturday, January 28, 2012
Annotated State of the Union Address, part II
My comments are in blue.
Over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries. Those with accountants or lawyers to work the system can end up paying no taxes at all. But all the rest are hit with one of the highest corporate tax rates in the world. It makes no sense, and it has to change.
So tonight, I’m asking Democrats and Republicans to simplify the system. Get rid of the loopholes. Level the playing field. And use the savings to lower the corporate tax rate for the first time in 25 years – without adding to our deficit.
The thing about the corporate tax is that it is largely passed on to the consumer -- something to think about when arguing about whether to increase or decrease it. Certainly taking away grotesque loopholes is a good idea, as is ceasing to reward companies that transfer their operations overseas.
To help businesses sell more products abroad, we set a goal of doubling our exports by 2014 – because the more we export, the more jobs we create at home. Already, our exports are up. Recently, we signed agreements with India and China that will support more than 250,000 jobs in the United States. And last month, we finalized a trade agreement with South Korea that will support at least 70,000 American jobs. This agreement has unprecedented support from business and labor; Democrats and Republicans, and I ask this Congress to pass it as soon as possible.
The Republicans have been screaming about China, but history shows that negotiating with the Chinese is far more productive than threatening them. After all, they hold more of our debt than any other country, and are our second-largest trade partner (after Canada). China is also an important source of solar and wind energy products -- and inexpensive ones at that.
Before I took office, I made it clear that we would enforce our trade agreements, and that I would only sign deals that keep faith with American workers, and promote American jobs. That’s what we did with Korea, and that’s what I intend to do as we pursue agreements with Panama and Colombia, and continue our Asia Pacific and global trade talks.
To reduce barriers to growth and investment, I’ve ordered a review of government regulations. When we find rules that put an unnecessary burden on businesses, we will fix them. But I will not hesitate to create or enforce commonsense safeguards to protect the American people. That’s what we’ve done in this country for more than a century. It’s why our food is safe to eat, our water is safe to drink, and our air is safe to breathe. It’s why we have speed limits and child labor laws. It’s why last year, we put in place consumer protections against hidden fees and penalties by credit card companies, and new rules to prevent another financial crisis. And it’s why we passed reform that finally prevents the health insurance industry from exploiting patients.
Industries do not like to be regulated; many tend to throw financial support to the Republicans to oppose most regulations in a knee-jerk way, whether they protect miners or oil workers from on the job injuries, or all of us from severe environmental damage.
In fairness, however, we have to weigh the damage that a large hydroelectric project may do to an obscure creature like a snail darter against the good that such a project will do to thousands of other organisms -- such as ourselves -- by eliminating dangerous pollutants caused by burning fossil fuels.
Also, we have to realize that so-called "clean fuels" may not be as clean as is claimed. If the cost of making coal "clean" is taken into account (as well as the dangers of mining it), coal becomes a very expensive fuel indeed. Similarly, atomic energy still has the same problem it always has had: No one knows what to do with radioactive waste. I haven't heard Obama or the Republicans suggest which area in which state we're going to dump all that stuff.
Now, I’ve heard rumors that a few of you have some concerns about the new health care law. So let me be the first to say that anything can be improved. If you have ideas about how to improve this law by making care better or more affordable, I am eager to work with you. We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses.
What I’m not willing to do is go back to the days when insurance companies could deny someone coverage because of a pre-existing condition. I’m not willing to tell James Howard, a brain cancer patient from Texas, that his treatment might not be covered. I’m not willing to tell Jim Houser, a small business owner from Oregon, that he has to go back to paying $5,000 more to cover his employees. As we speak, this law is making prescription drugs cheaper for seniors and giving uninsured students a chance to stay on their parents’ coverage. So instead of re-fighting the battles of the last two years, let’s fix what needs fixing and move forward.
Yes: the correct strategy is to ask people exactly which part of healthcare reform they would like removed. Do they want to get rid of keeping their kids on their insurance? Do they want their healthcare rationed by income or the whims of big insurance companies? If they don't like the "individual mandate" but don't want to be bumped because of "pre-existing conditions," they ought to be ask how insurance companies can afford to insure only sick people. The Republicans ought to explain why they supported (even invented) the idea of an individual mandate, but now oppose it.
Now, the final step – a critical step – in winning the future is to make sure we aren’t buried under a mountain of debt.
We are living with a legacy of deficit-spending that began almost a decade ago. And in the wake of the financial crisis, some of that was necessary to keep credit flowing, save jobs, and put money in people’s pockets.
But now that the worst of the recession is over, we have to confront the fact that our government spends more than it takes in. That is not sustainable. Every day, families sacrifice to live within their means. They deserve a government that does the same.
This is not really correct. It's the size of the deficit that matters, not deficits themselves. We had fairly large deficits before Clinton took office, but we eliminated them by the time he left office. The problem is that now we are accumulating debt so fast that if it continues this way we will never be able to pay it off before we go bankrupt. But it doesn't have to be done tomorrow or even next year. There is nothing like a recovery to help with turning things around. More people working and more products being sold will generate more tax revenue and fewer unemployment benefits being paid. Taxing millionaires so that they share the same tax burden as the rest of us will help. These things won't solve the problem themselves, but they will help. Containing medical expenses is crucial, and continuing in anything like the way we were before "Obamacare" will be ruinous. In the long run, our only hope is a single-payer plan. We will eventually have it since there really is no alternative; whether we get to it soon enough to avoid disaster is the question. Nevertheless, all the other industrialized countries pay less for their healthcare and have healthier (and happier) citizens; we must learn from them, not sneer at them.
So tonight, I am proposing that starting this year, we freeze annual domestic spending for the next five years. This would reduce the deficit by more than $400 billion over the next decade, and will bring discretionary spending to the lowest share of our economy since Dwight Eisenhower was president.
This freeze will require painful cuts. Already, we have frozen the salaries of hardworking federal employees for the next two years. I’ve proposed cuts to things I care deeply about, like community action programs. The Secretary of Defense has also agreed to cut tens of billions of dollars in spending that he and his generals believe our military can do without.
Could we have some explanation of why cutting the incomes of federal employees is a fair idea? Sure we can do it, but that doesn't mean it's right to do it. As long as there's one highly profitable industry that gets a tax break, or one wealthy citizen who is not shouldering a fair tax burden, why should we cut the salary of a worker simply because that person is a federal employee? Doing this sends the message that somehow working for our -- our! -- government is not quite valuable. This is part of the Republican propaganda position that "government is the problem." Government is the problem mostly for people who want to cheat or endanger the rest of us. Government was not the problem when we fought WWII or protected our elderly with Social Security and Medicare. Government was not a problem when we abolished child labor and sweatshops or when we cleaned up our air, rivers, lakes and harbors. Working for our government and being paid a decent and fair wage for doing so is a very honorable thing for an American to do. Why should we be freezing government wages simply because we can?
I recognize that some in this Chamber have already proposed deeper cuts, and I’m willing to eliminate whatever we can honestly afford to do without. But let’s make sure that we’re not doing it on the backs of our most vulnerable citizens. And let’s make sure what we’re cutting is really excess weight. Cutting the deficit by gutting our investments in innovation and education is like lightening an overloaded airplane by removing its engine. It may feel like you’re flying high at first, but it won’t take long before you’ll feel the impact.
Now, most of the cuts and savings I’ve proposed only address annual domestic spending, which represents a little more than 12% of our budget. To make further progress, we have to stop pretending that cutting this kind of spending alone will be enough. It won’t.
The bipartisan Fiscal Commission I created last year made this crystal clear. I don’t agree with all their proposals, but they made important progress. And their conclusion is that the only way to tackle our deficit is to cut excessive spending wherever we find it – in domestic spending, defense spending, health care spending, and spending through tax breaks and loopholes.
This means further reducing health care costs, including programs like Medicare and Medicaid, which are the single biggest contributor to our long-term deficit. Health insurance reform will slow these rising costs, which is part of why nonpartisan economists have said that repealing the health care law would add a quarter of a trillion dollars to our deficit. Still, I’m willing to look at other ideas to bring down costs, including one that Republicans suggested last year: medical malpractice reform to rein in frivolous lawsuits.
To put us on solid ground, we should also find a bipartisan solution to strengthen Social Security for future generations. And we must do it without putting at risk current retirees, the most vulnerable, or people with disabilities; without slashing benefits for future generations; and without subjecting Americans’ guaranteed retirement income to the whims of the stock market.
Fixing Social Security is a trivial problem to solve: we've worked on it since Reagan was president: raise or eliminate the upper cut-off on income so that everyone including rich folks pay the FICA tax on their entire income. (Now, only poor and middle class people pay their share.)
And if we truly care about our deficit, we simply cannot afford a permanent extension of the tax cuts for the wealthiest 2% of Americans. Before we take money away from our schools, or scholarships away from our students, we should ask millionaires to give up their tax break.
It’s not a matter of punishing their success. It’s about promoting America’s success.
Let's remember that when we do this we are not increasing their taxes but simply restoring them to the level that they were under Ronald Reagan. With those taxes the millionaires were happy to invest and grow very much richer under Clinton. They didn't need the extra tax breaks that Bush gave them, and we should restore things to they way they were.
In fact, the best thing we could do on taxes for all Americans is to simplify the individual tax code. This will be a tough job, but members of both parties have expressed interest in doing this, and I am prepared to join them.
A lot of this talk about the complicated tax code is humbug, although many people feel uncomfortable with filling out the IRS forms. Politicians try to pander by demonizing the IRS, even though most folks have a pretty straightforward filing. A lot of the tax code is written to promote fairness -- e.g. various deductions for medical, mortgage and childcare expenses. If you benefit from these deductions, you certainly can't complain about the time you spend claiming them. Similarly, businesses are allowed to take all sorts of deductions which save them money; they likewise can't complain. If you want a very simple tax form and simple laws, then you have to agree to forgo specialized breaks to which you are now entitled.
Preventing big business and the wealthy from getting unfair or undeserved tax breaks is not the same as "simplifying the tax code," and it is dangerous to confuse the two.
Of course it is outrageous that lobbyists for the investment industry have convinced lawmakers that some ways of making money are more "valuable" than others and need to be encouraged by tax breaks -- sort of "social engineering via tax policy". The example that is most egregious is the capital gains tax, which enables quite a few people to pay a low tax rate (15%) on some or all of their income simply because it is from investments. Firefighters, police, teachers, Warren Buffet's secretary, and even members of the military are apparently not as valuable as those who make money by having money. This arrogant claim is finally being aired publicly, and it is safe to say that most people -- even some investors -- are unhappy with this policy. Furthermore, as Warren Buffet has pointed out, it is unnecessary to encourage investment since people do it because they like to or are good at it -- after all, people don't become musicians or physicists because they get tax breaks.
.... (Some bombast eliminated)
Now, we have made great strides over the last two years in using technology and getting rid of waste. Veterans can now download their electronic medical records with a click of the mouse. We’re selling acres of federal office space that hasn’t been used in years, and we will cut through red tape to get rid of more. But we need to think bigger. In the coming months, my administration will develop a proposal to merge, consolidate, and reorganize the federal government in a way that best serves the goal of a more competitive America. I will submit that proposal to Congress for a vote – and we will push to get it passed.
.... (Some more bombast-trimming here.)
Look to Iraq, where nearly 100,000 of our brave men and women have left with their heads held high; where American combat patrols have ended; violence has come down; and a new government has been formed. This year, our civilians will forge a lasting partnership with the Iraqi people, while we finish the job of bringing our troops out of Iraq. America’s commitment has been kept; the Iraq War is coming to an end.
The timetable for leaving Iraq was, in fact, negotiated by then-president George Bush. It's nice that we are being congratulated for getting out of a war we never should have entered. Let's not forget that millions of people in the U.S. and millions more abroad, protested vigorously when it became clear that Bush intended to invade Iraq. It is even likely that a majority of Americans actually opposed our intervention. It was only after some American troops were killed that the usual jingoism of supporting our troops and high-held-heads took over and lead to the deaths of thousand more.
Of course, as we speak, al Qaeda and their affiliates continue to plan attacks against us. Thanks to our intelligence and law enforcement professionals, we are disrupting plots and securing our cities and skies. And as extremists try to inspire acts of violence within our borders, we are responding with the strength of our communities, with respect for the rule of law, and with the conviction that American Muslims are a part of our American family.
We have also taken the fight to al Qaeda and their allies abroad. In Afghanistan, our troops have taken Taliban strongholds and trained Afghan Security Forces. Our purpose is clear – by preventing the Taliban from reestablishing a stranglehold over the Afghan people, we will deny al Qaeda the safe-haven that served as a launching pad for 9/11.
Let's hope so, but it is unlikely.
(... more stuff deleted here)
In Pakistan, al Qaeda’s leadership is under more pressure than at any point since 2001. Their leaders and operatives are being removed from the battlefield. Their safe-havens are shrinking. And we have sent a message from the Afghan border to the Arabian Peninsula to all parts of the globe: we will not relent, we will not waver, and we will defeat you.
It is interesting the different ways Pakistan and Iran are referred to. Pakistan has nuclear weapons and has certainly been guilty of all sorts of coddling of both Al Qaeda and the Taliban. Yet this seems to produce nothing close to the bipartisan sabre-rattling that is directed against Iran (see below). Wouldn't it be wonderful if some intrepid reporter actually asked Obama and others why this is so -- and waited and followed up until there was an actual answer?
American leadership can also be seen in the effort to secure the worst weapons of war. Because Republicans and Democrats approved the New START Treaty, far fewer nuclear weapons and launchers will be deployed. Because we rallied the world, nuclear materials are being locked down on every continent so they never fall into the hands of terrorists.
Because of a diplomatic effort to insist that Iran meet its obligations, the Iranian government now faces tougher and tighter sanctions than ever before. And on the Korean peninsula, we stand with our ally South Korea, and insist that North Korea keeps its commitment to abandon nuclear weapons.
This is just a part of how we are shaping a world that favors peace and prosperity. With our European allies, we revitalized NATO, and increased our cooperation on everything from counter-terrorism to missile defense. We have reset our relationship with Russia, strengthened Asian alliances, and built new partnerships with nations like India. This March, I will travel to Brazil, Chile, and El Salvador to forge new alliances for progress in the Americas. Around the globe, we are standing with those who take responsibility – helping farmers grow more food; supporting doctors who care for the sick; and combating the corruption that can rot a society and rob people of opportunity.
Of course the Republican candidates in Florida are screaming about Cuba and Castro and Venezuela and Chavez; Obama chooses not to mention them here. His actual policy has been one of admirable restraint.
Recent events have shown us that what sets us apart must not just be our power – it must be the purpose behind it. In South Sudan – with our assistance – the people were finally able to vote for independence after years of war. Thousands lined up before dawn. People danced in the streets. One man who lost four of his brothers at war summed up the scene around him: “This was a battlefield for most of my life. Now we want to be free.”
We saw that same desire to be free in Tunisia, where the will of the people proved more powerful than the writ of a dictator. And tonight, let us be clear: the United States of America stands with the people of Tunisia, and supports the democratic aspirations of all people.
We must never forget that the things we’ve struggled for, and fought for, live in the hearts of people everywhere. And we must always remember that the Americans who have borne the greatest burden in this struggle are the men and women who serve our country.
The speech ends with the usual which you can read for yourself. As a State-of-the-Union address it wasn't bad. The economic news is largely mediocre so is largely omitted. In comparison with the idiocy of the Republican "debates" (which have largely not been debates about issues but about who is less like the fictional European-Socialist-who-hates-all-we-value-about-America and is also not white like the candidates) it is full of optimism, good will, and good sense. Roughly speaking, there is more of these qualities in Obama's little finger than in the entire B-Team of Republican contenders for his job.
Over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries. Those with accountants or lawyers to work the system can end up paying no taxes at all. But all the rest are hit with one of the highest corporate tax rates in the world. It makes no sense, and it has to change.
So tonight, I’m asking Democrats and Republicans to simplify the system. Get rid of the loopholes. Level the playing field. And use the savings to lower the corporate tax rate for the first time in 25 years – without adding to our deficit.
The thing about the corporate tax is that it is largely passed on to the consumer -- something to think about when arguing about whether to increase or decrease it. Certainly taking away grotesque loopholes is a good idea, as is ceasing to reward companies that transfer their operations overseas.
To help businesses sell more products abroad, we set a goal of doubling our exports by 2014 – because the more we export, the more jobs we create at home. Already, our exports are up. Recently, we signed agreements with India and China that will support more than 250,000 jobs in the United States. And last month, we finalized a trade agreement with South Korea that will support at least 70,000 American jobs. This agreement has unprecedented support from business and labor; Democrats and Republicans, and I ask this Congress to pass it as soon as possible.
The Republicans have been screaming about China, but history shows that negotiating with the Chinese is far more productive than threatening them. After all, they hold more of our debt than any other country, and are our second-largest trade partner (after Canada). China is also an important source of solar and wind energy products -- and inexpensive ones at that.
Before I took office, I made it clear that we would enforce our trade agreements, and that I would only sign deals that keep faith with American workers, and promote American jobs. That’s what we did with Korea, and that’s what I intend to do as we pursue agreements with Panama and Colombia, and continue our Asia Pacific and global trade talks.
To reduce barriers to growth and investment, I’ve ordered a review of government regulations. When we find rules that put an unnecessary burden on businesses, we will fix them. But I will not hesitate to create or enforce commonsense safeguards to protect the American people. That’s what we’ve done in this country for more than a century. It’s why our food is safe to eat, our water is safe to drink, and our air is safe to breathe. It’s why we have speed limits and child labor laws. It’s why last year, we put in place consumer protections against hidden fees and penalties by credit card companies, and new rules to prevent another financial crisis. And it’s why we passed reform that finally prevents the health insurance industry from exploiting patients.
Industries do not like to be regulated; many tend to throw financial support to the Republicans to oppose most regulations in a knee-jerk way, whether they protect miners or oil workers from on the job injuries, or all of us from severe environmental damage.
In fairness, however, we have to weigh the damage that a large hydroelectric project may do to an obscure creature like a snail darter against the good that such a project will do to thousands of other organisms -- such as ourselves -- by eliminating dangerous pollutants caused by burning fossil fuels.
Also, we have to realize that so-called "clean fuels" may not be as clean as is claimed. If the cost of making coal "clean" is taken into account (as well as the dangers of mining it), coal becomes a very expensive fuel indeed. Similarly, atomic energy still has the same problem it always has had: No one knows what to do with radioactive waste. I haven't heard Obama or the Republicans suggest which area in which state we're going to dump all that stuff.
Now, I’ve heard rumors that a few of you have some concerns about the new health care law. So let me be the first to say that anything can be improved. If you have ideas about how to improve this law by making care better or more affordable, I am eager to work with you. We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses.
What I’m not willing to do is go back to the days when insurance companies could deny someone coverage because of a pre-existing condition. I’m not willing to tell James Howard, a brain cancer patient from Texas, that his treatment might not be covered. I’m not willing to tell Jim Houser, a small business owner from Oregon, that he has to go back to paying $5,000 more to cover his employees. As we speak, this law is making prescription drugs cheaper for seniors and giving uninsured students a chance to stay on their parents’ coverage. So instead of re-fighting the battles of the last two years, let’s fix what needs fixing and move forward.
Yes: the correct strategy is to ask people exactly which part of healthcare reform they would like removed. Do they want to get rid of keeping their kids on their insurance? Do they want their healthcare rationed by income or the whims of big insurance companies? If they don't like the "individual mandate" but don't want to be bumped because of "pre-existing conditions," they ought to be ask how insurance companies can afford to insure only sick people. The Republicans ought to explain why they supported (even invented) the idea of an individual mandate, but now oppose it.
Now, the final step – a critical step – in winning the future is to make sure we aren’t buried under a mountain of debt.
We are living with a legacy of deficit-spending that began almost a decade ago. And in the wake of the financial crisis, some of that was necessary to keep credit flowing, save jobs, and put money in people’s pockets.
But now that the worst of the recession is over, we have to confront the fact that our government spends more than it takes in. That is not sustainable. Every day, families sacrifice to live within their means. They deserve a government that does the same.
This is not really correct. It's the size of the deficit that matters, not deficits themselves. We had fairly large deficits before Clinton took office, but we eliminated them by the time he left office. The problem is that now we are accumulating debt so fast that if it continues this way we will never be able to pay it off before we go bankrupt. But it doesn't have to be done tomorrow or even next year. There is nothing like a recovery to help with turning things around. More people working and more products being sold will generate more tax revenue and fewer unemployment benefits being paid. Taxing millionaires so that they share the same tax burden as the rest of us will help. These things won't solve the problem themselves, but they will help. Containing medical expenses is crucial, and continuing in anything like the way we were before "Obamacare" will be ruinous. In the long run, our only hope is a single-payer plan. We will eventually have it since there really is no alternative; whether we get to it soon enough to avoid disaster is the question. Nevertheless, all the other industrialized countries pay less for their healthcare and have healthier (and happier) citizens; we must learn from them, not sneer at them.
So tonight, I am proposing that starting this year, we freeze annual domestic spending for the next five years. This would reduce the deficit by more than $400 billion over the next decade, and will bring discretionary spending to the lowest share of our economy since Dwight Eisenhower was president.
This freeze will require painful cuts. Already, we have frozen the salaries of hardworking federal employees for the next two years. I’ve proposed cuts to things I care deeply about, like community action programs. The Secretary of Defense has also agreed to cut tens of billions of dollars in spending that he and his generals believe our military can do without.
Could we have some explanation of why cutting the incomes of federal employees is a fair idea? Sure we can do it, but that doesn't mean it's right to do it. As long as there's one highly profitable industry that gets a tax break, or one wealthy citizen who is not shouldering a fair tax burden, why should we cut the salary of a worker simply because that person is a federal employee? Doing this sends the message that somehow working for our -- our! -- government is not quite valuable. This is part of the Republican propaganda position that "government is the problem." Government is the problem mostly for people who want to cheat or endanger the rest of us. Government was not the problem when we fought WWII or protected our elderly with Social Security and Medicare. Government was not a problem when we abolished child labor and sweatshops or when we cleaned up our air, rivers, lakes and harbors. Working for our government and being paid a decent and fair wage for doing so is a very honorable thing for an American to do. Why should we be freezing government wages simply because we can?
I recognize that some in this Chamber have already proposed deeper cuts, and I’m willing to eliminate whatever we can honestly afford to do without. But let’s make sure that we’re not doing it on the backs of our most vulnerable citizens. And let’s make sure what we’re cutting is really excess weight. Cutting the deficit by gutting our investments in innovation and education is like lightening an overloaded airplane by removing its engine. It may feel like you’re flying high at first, but it won’t take long before you’ll feel the impact.
Now, most of the cuts and savings I’ve proposed only address annual domestic spending, which represents a little more than 12% of our budget. To make further progress, we have to stop pretending that cutting this kind of spending alone will be enough. It won’t.
The bipartisan Fiscal Commission I created last year made this crystal clear. I don’t agree with all their proposals, but they made important progress. And their conclusion is that the only way to tackle our deficit is to cut excessive spending wherever we find it – in domestic spending, defense spending, health care spending, and spending through tax breaks and loopholes.
This means further reducing health care costs, including programs like Medicare and Medicaid, which are the single biggest contributor to our long-term deficit. Health insurance reform will slow these rising costs, which is part of why nonpartisan economists have said that repealing the health care law would add a quarter of a trillion dollars to our deficit. Still, I’m willing to look at other ideas to bring down costs, including one that Republicans suggested last year: medical malpractice reform to rein in frivolous lawsuits.
To put us on solid ground, we should also find a bipartisan solution to strengthen Social Security for future generations. And we must do it without putting at risk current retirees, the most vulnerable, or people with disabilities; without slashing benefits for future generations; and without subjecting Americans’ guaranteed retirement income to the whims of the stock market.
Fixing Social Security is a trivial problem to solve: we've worked on it since Reagan was president: raise or eliminate the upper cut-off on income so that everyone including rich folks pay the FICA tax on their entire income. (Now, only poor and middle class people pay their share.)
And if we truly care about our deficit, we simply cannot afford a permanent extension of the tax cuts for the wealthiest 2% of Americans. Before we take money away from our schools, or scholarships away from our students, we should ask millionaires to give up their tax break.
It’s not a matter of punishing their success. It’s about promoting America’s success.
Let's remember that when we do this we are not increasing their taxes but simply restoring them to the level that they were under Ronald Reagan. With those taxes the millionaires were happy to invest and grow very much richer under Clinton. They didn't need the extra tax breaks that Bush gave them, and we should restore things to they way they were.
In fact, the best thing we could do on taxes for all Americans is to simplify the individual tax code. This will be a tough job, but members of both parties have expressed interest in doing this, and I am prepared to join them.
A lot of this talk about the complicated tax code is humbug, although many people feel uncomfortable with filling out the IRS forms. Politicians try to pander by demonizing the IRS, even though most folks have a pretty straightforward filing. A lot of the tax code is written to promote fairness -- e.g. various deductions for medical, mortgage and childcare expenses. If you benefit from these deductions, you certainly can't complain about the time you spend claiming them. Similarly, businesses are allowed to take all sorts of deductions which save them money; they likewise can't complain. If you want a very simple tax form and simple laws, then you have to agree to forgo specialized breaks to which you are now entitled.
Preventing big business and the wealthy from getting unfair or undeserved tax breaks is not the same as "simplifying the tax code," and it is dangerous to confuse the two.
Of course it is outrageous that lobbyists for the investment industry have convinced lawmakers that some ways of making money are more "valuable" than others and need to be encouraged by tax breaks -- sort of "social engineering via tax policy". The example that is most egregious is the capital gains tax, which enables quite a few people to pay a low tax rate (15%) on some or all of their income simply because it is from investments. Firefighters, police, teachers, Warren Buffet's secretary, and even members of the military are apparently not as valuable as those who make money by having money. This arrogant claim is finally being aired publicly, and it is safe to say that most people -- even some investors -- are unhappy with this policy. Furthermore, as Warren Buffet has pointed out, it is unnecessary to encourage investment since people do it because they like to or are good at it -- after all, people don't become musicians or physicists because they get tax breaks.
.... (Some bombast eliminated)
Now, we have made great strides over the last two years in using technology and getting rid of waste. Veterans can now download their electronic medical records with a click of the mouse. We’re selling acres of federal office space that hasn’t been used in years, and we will cut through red tape to get rid of more. But we need to think bigger. In the coming months, my administration will develop a proposal to merge, consolidate, and reorganize the federal government in a way that best serves the goal of a more competitive America. I will submit that proposal to Congress for a vote – and we will push to get it passed.
.... (Some more bombast-trimming here.)
Look to Iraq, where nearly 100,000 of our brave men and women have left with their heads held high; where American combat patrols have ended; violence has come down; and a new government has been formed. This year, our civilians will forge a lasting partnership with the Iraqi people, while we finish the job of bringing our troops out of Iraq. America’s commitment has been kept; the Iraq War is coming to an end.
The timetable for leaving Iraq was, in fact, negotiated by then-president George Bush. It's nice that we are being congratulated for getting out of a war we never should have entered. Let's not forget that millions of people in the U.S. and millions more abroad, protested vigorously when it became clear that Bush intended to invade Iraq. It is even likely that a majority of Americans actually opposed our intervention. It was only after some American troops were killed that the usual jingoism of supporting our troops and high-held-heads took over and lead to the deaths of thousand more.
Of course, as we speak, al Qaeda and their affiliates continue to plan attacks against us. Thanks to our intelligence and law enforcement professionals, we are disrupting plots and securing our cities and skies. And as extremists try to inspire acts of violence within our borders, we are responding with the strength of our communities, with respect for the rule of law, and with the conviction that American Muslims are a part of our American family.
We have also taken the fight to al Qaeda and their allies abroad. In Afghanistan, our troops have taken Taliban strongholds and trained Afghan Security Forces. Our purpose is clear – by preventing the Taliban from reestablishing a stranglehold over the Afghan people, we will deny al Qaeda the safe-haven that served as a launching pad for 9/11.
Let's hope so, but it is unlikely.
(... more stuff deleted here)
In Pakistan, al Qaeda’s leadership is under more pressure than at any point since 2001. Their leaders and operatives are being removed from the battlefield. Their safe-havens are shrinking. And we have sent a message from the Afghan border to the Arabian Peninsula to all parts of the globe: we will not relent, we will not waver, and we will defeat you.
It is interesting the different ways Pakistan and Iran are referred to. Pakistan has nuclear weapons and has certainly been guilty of all sorts of coddling of both Al Qaeda and the Taliban. Yet this seems to produce nothing close to the bipartisan sabre-rattling that is directed against Iran (see below). Wouldn't it be wonderful if some intrepid reporter actually asked Obama and others why this is so -- and waited and followed up until there was an actual answer?
American leadership can also be seen in the effort to secure the worst weapons of war. Because Republicans and Democrats approved the New START Treaty, far fewer nuclear weapons and launchers will be deployed. Because we rallied the world, nuclear materials are being locked down on every continent so they never fall into the hands of terrorists.
Because of a diplomatic effort to insist that Iran meet its obligations, the Iranian government now faces tougher and tighter sanctions than ever before. And on the Korean peninsula, we stand with our ally South Korea, and insist that North Korea keeps its commitment to abandon nuclear weapons.
This is just a part of how we are shaping a world that favors peace and prosperity. With our European allies, we revitalized NATO, and increased our cooperation on everything from counter-terrorism to missile defense. We have reset our relationship with Russia, strengthened Asian alliances, and built new partnerships with nations like India. This March, I will travel to Brazil, Chile, and El Salvador to forge new alliances for progress in the Americas. Around the globe, we are standing with those who take responsibility – helping farmers grow more food; supporting doctors who care for the sick; and combating the corruption that can rot a society and rob people of opportunity.
Of course the Republican candidates in Florida are screaming about Cuba and Castro and Venezuela and Chavez; Obama chooses not to mention them here. His actual policy has been one of admirable restraint.
Recent events have shown us that what sets us apart must not just be our power – it must be the purpose behind it. In South Sudan – with our assistance – the people were finally able to vote for independence after years of war. Thousands lined up before dawn. People danced in the streets. One man who lost four of his brothers at war summed up the scene around him: “This was a battlefield for most of my life. Now we want to be free.”
We saw that same desire to be free in Tunisia, where the will of the people proved more powerful than the writ of a dictator. And tonight, let us be clear: the United States of America stands with the people of Tunisia, and supports the democratic aspirations of all people.
We must never forget that the things we’ve struggled for, and fought for, live in the hearts of people everywhere. And we must always remember that the Americans who have borne the greatest burden in this struggle are the men and women who serve our country.
The speech ends with the usual which you can read for yourself. As a State-of-the-Union address it wasn't bad. The economic news is largely mediocre so is largely omitted. In comparison with the idiocy of the Republican "debates" (which have largely not been debates about issues but about who is less like the fictional European-Socialist-who-hates-all-we-value-about-America and is also not white like the candidates) it is full of optimism, good will, and good sense. Roughly speaking, there is more of these qualities in Obama's little finger than in the entire B-Team of Republican contenders for his job.
Thursday, January 26, 2012
Fidel evaluates the Republican Team B
He may be an old authoritarian figure, but he knows baseball and he knows a Team B when he sees one. Here's Fidel's take on the Republican candidates:
"The selection of a Republican candidate for the presidency of this globalized and expansive empire is – and I mean this seriously – the greatest competition of idiocy and ignorance that has ever been."
This may be slightly hyperbolic, since I doubt that either he or any of us know all the competitions of idiocy and ignorance that have "ever been", but it is substantially correct. The so-called "debates" have drawn out the incompetence, cruelty and logical fuzziness of these tenth-raters and their dim followers. It's all name-calling and tossing out rotten scraps of red meat to an audience of superficial morons.
That's why it's harder and harder to write blogs about them. It's Team B of a party that has no Team A.
(In case you think this is hyperbole, read or listen to what they had to say in the last Florida "debate" about the "Dream Act" or about making war on Iran . These guys are heartless and dangerous.)
"The selection of a Republican candidate for the presidency of this globalized and expansive empire is – and I mean this seriously – the greatest competition of idiocy and ignorance that has ever been."
This may be slightly hyperbolic, since I doubt that either he or any of us know all the competitions of idiocy and ignorance that have "ever been", but it is substantially correct. The so-called "debates" have drawn out the incompetence, cruelty and logical fuzziness of these tenth-raters and their dim followers. It's all name-calling and tossing out rotten scraps of red meat to an audience of superficial morons.
That's why it's harder and harder to write blogs about them. It's Team B of a party that has no Team A.
(In case you think this is hyperbole, read or listen to what they had to say in the last Florida "debate" about the "Dream Act" or about making war on Iran . These guys are heartless and dangerous.)
Wednesday, January 25, 2012
Annotated State of the Union Address: Part I
I have gone through the State of the Union Address (in italics below) delivered by President Obama and interspersed comments (in blue below). I have deleted some puffery and yadda-yadda-yadda where it seemed appropriate (e.g. how much we will miss Gabby Giffords); put "...." to indicate this. The full text can be found here.
....
At stake right now is not who wins the next election – after all, we just had an election.
Well, this is disingenuous since how we proceed will depend to a great deal on who "wins" the election. Surely if John McCain had won the last election things would be a lot different now in terms of health care and consumer financial protection to name just a few things. What we all should have learned by now is exactly the point that winning or losing election has consequences. Had Gore won in 2000 (or Kerry in 2004) we would have had a different Supreme Court and almost undoubtedly had a very different political campaign since the ridiculous "Citizens United" decision based on "corporations are people" would not have happened. We simply can't afford to have the right wing win elections: IT REALLY MATTERS.
We did that in December. Thanks to the tax cuts we passed, Americans’ paychecks are a little bigger today. Every business can write off the full cost of the new investments they make this year. These steps, taken by Democrats and Republicans, will grow the economy and add to the more than one million private sector jobs created last year.
But we have more work to do. The steps we’ve taken over the last two years may have broken the back of this recession – but to win the future, we’ll need to take on challenges that have been decades in the making.
It's difficult to say that the various investment tax credits and the cut in the FICA tax did much good. There is a huge amount of money that businesses and banks are sitting on, waiting for consumer demand to make investment worthwhile. I think there was a real danger in cutting the FICA tax, and it would have made more sense to accompany that with a raising of the income ceiling of this tax. However, Obama did what he could, so we'll just have to hope that recovery proceeds as quickly as possible. Only Republican ideologues think that taxes and regulations have anything to do with the anemic nature of the recovery: most business say that it's the lack of consumer demand, and most consumers say that job uncertainty and income stagnation leads to their lack of confidence.
Many people watching tonight can probably remember a time when finding a good job meant showing up at a nearby factory or a business downtown. You didn’t always need a degree, and your competition was pretty much limited to your neighbors. If you worked hard, chances are you’d have a job for life, with a decent paycheck, good benefits, and the occasional promotion. Maybe you’d even have the pride of seeing your kids work at the same company.
That world has changed. And for many, the change has been painful. I’ve seen it in the shuttered windows of once booming factories, and the vacant storefronts of once busy Main Streets. I’ve heard it in the frustrations of Americans who’ve seen their paychecks dwindle or their jobs disappear – proud men and women who feel like the rules have been changed in the middle of the game.
They’re right. The rules have changed. In a single generation, revolutions in technology have transformed the way we live, work and do business. Steel mills that once needed 1,000 workers can now do the same work with 100. Today, just about any company can set up shop, hire workers, and sell their products wherever there’s an internet connection.
Meanwhile, nations like China and India realized that with some changes of their own, they could compete in this new world. And so they started educating their children earlier and longer, with greater emphasis on math and science. They’re investing in research and new technologies. Just recently, China became home to the world’s largest private solar research facility, and the world’s fastest computer.
True, but not completely. In search of bigger profits, businesses abandoned American workers and moved a lot of their operations overseas where there were fewer regulations protecting workers and the environment. In many cases they were able to do this while paying lower taxes in other countries and without penalties from the IRS. There are still many unemployed American workers who are quite well-educated and able to perform the jobs that need to be done -- they just aren't cheap labor.
So yes, the world has changed. The competition for jobs is real. But this shouldn’t discourage us. It should challenge us. Remember – for all the hits we’ve taken these last few years, for all the naysayers predicting our decline, America still has the largest, most prosperous economy in the world. No workers are more productive than ours. No country has more successful companies, or grants more patents to inventors and entrepreneurs. We are home to the world’s best colleges and universities, where more students come to study than any other place on Earth.
While it is very true that we must make our education more rigorous, and students must work harder to master the more difficult subjects that are important in the modern, highly technical world, it is important to recognize as well that one of the reasons we have been so successful is that we have had for over a century an effective and relatively democratic education system. I say "relatively" because we had a very long period of segregation, and even now there remain great disparities; yet, in comparison with the class divisions of Europe that existed until fairly recently, our educational system provided a pretty good opportunity for people of talent to learn skills that enabled them to rise in society. Unfortunately, recent cutbacks in education have hit schools very hard, and the cost of college has risen far faster than middle-class incomes. Republican tax and social policies are making this worse -- cutting Pell grants, for example. A country's intellectual resources, in theory, are proportional to the size of its population -- provided there is equal access to education. Once vouchers that don't pay the costs of instruction and cuts in support for college and university education become the norm, our intellectual resources will be too largely concentrated in the hands of the wealthy and the legacies.
What’s more, we are the first nation to be founded for the sake of an idea – the idea that each of us deserves the chance to shape our own destiny. That is why centuries of pioneers and immigrants have risked everything to come here. It’s why our students don’t just memorize equations, but answer questions like “What do you think of that idea? What would you change about the world? What do you want to be when you grow up?”
........
The first step in winning the future is encouraging American innovation.
None of us can predict with certainty what the next big industry will be, or where the new jobs will come from. Thirty years ago, we couldn’t know that something called the Internet would lead to an economic revolution. What we can do – what America does better than anyone – is spark the creativity and imagination of our people. We are the nation that put cars in driveways and computers in offices; the nation of Edison and the Wright brothers; of Google and Facebook. In America, innovation doesn’t just change our lives. It’s how we make a living.
It is worth remembering that one of the major contributions of American industry was Henry Ford's realization that he couldn't sell cars unless people could afford to buy them. This meant not just making them cheaply, but also paying his workers a decent wage. Up until recently that was a vital part of the American way, but the incomes of working people hit a plateau decades ago and have remained stagnant, while other expenses (energy, education etc.) have gone up. The ratio of income between the wealthy, owning classes and the working classes has soared in recent years; it is higher than in any other major industrialized country.
Our free enterprise system is what drives innovation. But because it’s not always profitable for companies to invest in basic research, throughout history our government has provided cutting-edge scientists and inventors with the support that they need. That’s what planted the seeds for the Internet. That’s what helped make possible things like computer chips and GPS.
Just think of all the good jobs – from manufacturing to retail – that have come from those breakthroughs.
Not just techy stuff though. Don't forget that taxes pay for infrastructure without which making money would be impossible. This includes building and maintaining the highway system, paying police, firefighters and medical personel, and maintaining public elementary and secondary schools. (This is an important point made recently by Elizabeth Warren in cautioning us not to over-credit the wealthy for their success and their contributions.)
Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik¸ we had no idea how we’d beat them to the moon. The science wasn’t there yet. NASA didn’t even exist. But after investing in better research and education, we didn’t just surpass the Soviets; we unleashed a wave of innovation that created new industries and millions of new jobs.
This is our generation’s Sputnik moment. Two years ago, I said that we needed to reach a level of research and development we haven’t seen since the height of the Space Race. In a few weeks, I will be sending a budget to Congress that helps us meet that goal. We’ll invest in biomedical research, information technology, and especially clean energy technology – an investment that will strengthen our security, protect our planet, and create countless new jobs for our people.
And it's important to point out that this is a very good time to make these investments, when interest rates are historically low, and when the whole country will reap their benefits.
......
At the California Institute of Technology, they’re developing a way to turn sunlight and water into fuel for our cars. At Oak Ridge National Laboratory, they’re using supercomputers to get a lot more power out of our nuclear facilities. With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have 1 million electric vehicles on the road by 2015.
We need to get behind this innovation. And to help pay for it, I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. I don’t know if you’ve noticed, but they’re doing just fine on their own. So instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.
Now, clean energy breakthroughs will only translate into clean energy jobs if businesses know there will be a market for what they’re selling. So tonight, I challenge you to join me in setting a new goal: by 2035, 80% of America’s electricity will come from clean energy sources. Some folks want wind and solar. Others want nuclear, clean coal, and natural gas. To meet this goal, we will need them all – and I urge Democrats and Republicans to work together to make it happen.
At least two of these, nuclear and coal are highly problematic. No one knows what to do with nuclear waste: everyone knows it's unsafe and no one wants it in their "backyard." Clean coal is so difficult and expensive to create that it is virtually and contradiction in terms. In fact, if one includes the costs of safe and ecologically sound production, as well as the cleanup of residues and waste products on the earth, and in the water and air, wind and solar are quite competitive already with oil and perhaps with gas (the safety of "fracking" is not yet determined). Some environmentalists also have to lighten up on hydroelectric, which is clean and already more that competitive with fossil fuels; geothermal and tidal are already factors in some areas.
Maintaining our leadership in research and technology is crucial to America’s success. But if we want to win the future – if we want innovation to produce jobs in America and not overseas – then we also have to win the race to educate our kids.
Think about it. Over the next ten years, nearly half of all new jobs will require education that goes beyond a high school degree. And yet, as many as a quarter of our students aren’t even finishing high school. The quality of our math and science education lags behind many other nations. America has fallen to 9th in the proportion of young people with a college degree. And so the question is whether all of us – as citizens, and as parents – are willing to do what’s necessary to give every child a chance to succeed.
That responsibility begins not in our classrooms, but in our homes and communities. It’s family that first instills the love of learning in a child. Only parents can make sure the TV is turned off and homework gets done. We need to teach our kids that it’s not just the winner of the Super Bowl who deserves to be celebrated, but the winner of the science fair; that success is not a function of fame or PR, but of hard work and discipline.
... Stuff on Race to the Top omitted.
You see, we know what’s possible for our children when reform isn’t just a top-down mandate, but the work of local teachers and principals; school boards and communities.
.....
Let’s also remember that after parents, the biggest impact on a child’s success comes from the man or woman at the front of the classroom. In South Korea, teachers are known as “nation builders.” Here in America, it’s time we treated the people who educate our children with the same level of respect. We want to reward good teachers and stop making excuses for bad ones. And over the next ten years, with so many Baby Boomers retiring from our classrooms, we want to prepare 100,000 new teachers in the fields of science, technology, engineering, and math.
In fact, to every young person listening tonight who’s contemplating their career choice: If you want to make a difference in the life of our nation; if you want to make a difference in the life of a child – become a teacher. Your country needs you.
Exactly one party is blaming our problems on teachers, calling them overpaid and underqualified. This is mostly because most teachers are unionized, and only one party wants to smash unions and set back the labor movement a century. It's the same party whose presidential candidates mock child-labor laws and union wages and contracts. It's the same party that thinks that worker safety and its federal enforcer OSHA are legitimate subjects of ridicule.
Of course, the education race doesn’t end with a high school diploma. To compete, higher education must be within reach of every American. That’s why we’ve ended the unwarranted taxpayer subsidies that went to banks, and used the savings to make college affordable for millions of students. And this year, I ask Congress to go further, and make permanent our tuition tax credit – worth $10,000 for four years of college.
Because people need to be able to train for new jobs and careers in today’s fast-changing economy, we are also revitalizing America’s community colleges.
....
If we take these steps – if we raise expectations for every child, and give them the best possible chance at an education, from the day they’re born until the last job they take – we will reach the goal I set two years ago: by the end of the decade, America will once again have the highest proportion of college graduates in the world.
One last point about education. Today, there are hundreds of thousands of students excelling in our schools who are not American citizens. Some are the children of undocumented workers, who had nothing to do with the actions of their parents. They grew up as Americans and pledge allegiance to our flag, and yet live every day with the threat of deportation. Others come here from abroad to study in our colleges and universities. But as soon as they obtain advanced degrees, we send them back home to compete against us. It makes no sense.
Now, I strongly believe that we should take on, once and for all, the issue of illegal immigration. I am prepared to work with Republicans and Democrats to protect our borders, enforce our laws and address the millions of undocumented workers who are now living in the shadows. I know that debate will be difficult and take time. But tonight, let’s agree to make that effort. And let’s stop expelling talented, responsible young people who can staff our research labs, start new businesses, and further enrich this nation.
In the Republican "debates", several of the candidates -- Romney among them -- when asked to discuss the "Dream Act", kept yacking about people who came here to work illegally and how unfair it is when others came legally. The so-called moderators refused to point out that the proposal was all about little kids who were brought here illegally and who had no idea what was happening to them. It seems typical of what passes for (some) Christians these days to want to punish them for acts committed by parents or relatives. The questioners should have said: "What do you do to a person who was brought here as a little kid, grew up and was educated here, and is now in HS or college and is doing well? Throw him/her out -- perhaps back to a country they never really knew, and whose language they may not speak?" For this lack of compassion alone Mitt Romney shouldn't be elected dog catcher. For Gingrich's recent comments on Romney's position, see this article. Gingrich's history shows him to be, in general, a rather vile person, but in this particular case his position is more humane than Romney's -- though that's not saying much.
The third step in winning the future is rebuilding America. To attract new businesses to our shores, we need the fastest, most reliable ways to move people, goods, and information – from high-speed rail to high-speed internet.
Our infrastructure used to be the best – but our lead has slipped. South Korean homes now have greater internet access than we do. Countries in Europe and Russia invest more in their roads and railways than we do. China is building faster trains and newer airports. Meanwhile, when our own engineers graded our nation’s infrastructure, they gave us a “D.”
We have to do better. America is the nation that built the transcontinental railroad, brought electricity to rural communities, and constructed the interstate highway system. The jobs created by these projects didn’t just come from laying down tracks or pavement. They came from businesses that opened near a town’s new train station or the new off-ramp.
Over the last two years, we have begun rebuilding for the 21st century, a project that has meant thousands of good jobs for the hard-hit construction industry. Tonight, I’m proposing that we redouble these efforts.
We will put more Americans to work repairing crumbling roads and bridges. We will make sure this is fully paid for, attract private investment, and pick projects based on what’s best for the economy, not politicians.
Within 25 years, our goal is to give 80% of Americans access to high-speed rail, which could allow you go places in half the time it takes to travel by car. For some trips, it will be faster than flying – without the pat-down. As we speak, routes in California and the Midwest are already underway.
Within the next five years, we will make it possible for business to deploy the next generation of high-speed wireless coverage to 98% of all Americans. This isn’t just about a faster internet and fewer dropped calls. It’s about connecting every part of America to the digital age. It’s about a rural community in Iowa or Alabama where farmers and small business owners will be able to sell their products all over the world. It’s about a firefighter who can download the design of a burning building onto a handheld device; a student who can take classes with a digital textbook; or a patient who can have face-to-face video chats with her doctor.
All these investments – in innovation, education, and infrastructure – will make America a better place to do business and create jobs. But to help our companies compete, we also have to knock down barriers that stand in the way of their success.
See the article The Dangerous Notion that Dept Doesn't Matter for a businessman's take on the need for investing in infrastructure. (This was mentioned in a previous blog.)
More about the State of the Union Address later.
....
At stake right now is not who wins the next election – after all, we just had an election.
Well, this is disingenuous since how we proceed will depend to a great deal on who "wins" the election. Surely if John McCain had won the last election things would be a lot different now in terms of health care and consumer financial protection to name just a few things. What we all should have learned by now is exactly the point that winning or losing election has consequences. Had Gore won in 2000 (or Kerry in 2004) we would have had a different Supreme Court and almost undoubtedly had a very different political campaign since the ridiculous "Citizens United" decision based on "corporations are people" would not have happened. We simply can't afford to have the right wing win elections: IT REALLY MATTERS.
We did that in December. Thanks to the tax cuts we passed, Americans’ paychecks are a little bigger today. Every business can write off the full cost of the new investments they make this year. These steps, taken by Democrats and Republicans, will grow the economy and add to the more than one million private sector jobs created last year.
But we have more work to do. The steps we’ve taken over the last two years may have broken the back of this recession – but to win the future, we’ll need to take on challenges that have been decades in the making.
It's difficult to say that the various investment tax credits and the cut in the FICA tax did much good. There is a huge amount of money that businesses and banks are sitting on, waiting for consumer demand to make investment worthwhile. I think there was a real danger in cutting the FICA tax, and it would have made more sense to accompany that with a raising of the income ceiling of this tax. However, Obama did what he could, so we'll just have to hope that recovery proceeds as quickly as possible. Only Republican ideologues think that taxes and regulations have anything to do with the anemic nature of the recovery: most business say that it's the lack of consumer demand, and most consumers say that job uncertainty and income stagnation leads to their lack of confidence.
Many people watching tonight can probably remember a time when finding a good job meant showing up at a nearby factory or a business downtown. You didn’t always need a degree, and your competition was pretty much limited to your neighbors. If you worked hard, chances are you’d have a job for life, with a decent paycheck, good benefits, and the occasional promotion. Maybe you’d even have the pride of seeing your kids work at the same company.
That world has changed. And for many, the change has been painful. I’ve seen it in the shuttered windows of once booming factories, and the vacant storefronts of once busy Main Streets. I’ve heard it in the frustrations of Americans who’ve seen their paychecks dwindle or their jobs disappear – proud men and women who feel like the rules have been changed in the middle of the game.
They’re right. The rules have changed. In a single generation, revolutions in technology have transformed the way we live, work and do business. Steel mills that once needed 1,000 workers can now do the same work with 100. Today, just about any company can set up shop, hire workers, and sell their products wherever there’s an internet connection.
Meanwhile, nations like China and India realized that with some changes of their own, they could compete in this new world. And so they started educating their children earlier and longer, with greater emphasis on math and science. They’re investing in research and new technologies. Just recently, China became home to the world’s largest private solar research facility, and the world’s fastest computer.
True, but not completely. In search of bigger profits, businesses abandoned American workers and moved a lot of their operations overseas where there were fewer regulations protecting workers and the environment. In many cases they were able to do this while paying lower taxes in other countries and without penalties from the IRS. There are still many unemployed American workers who are quite well-educated and able to perform the jobs that need to be done -- they just aren't cheap labor.
So yes, the world has changed. The competition for jobs is real. But this shouldn’t discourage us. It should challenge us. Remember – for all the hits we’ve taken these last few years, for all the naysayers predicting our decline, America still has the largest, most prosperous economy in the world. No workers are more productive than ours. No country has more successful companies, or grants more patents to inventors and entrepreneurs. We are home to the world’s best colleges and universities, where more students come to study than any other place on Earth.
While it is very true that we must make our education more rigorous, and students must work harder to master the more difficult subjects that are important in the modern, highly technical world, it is important to recognize as well that one of the reasons we have been so successful is that we have had for over a century an effective and relatively democratic education system. I say "relatively" because we had a very long period of segregation, and even now there remain great disparities; yet, in comparison with the class divisions of Europe that existed until fairly recently, our educational system provided a pretty good opportunity for people of talent to learn skills that enabled them to rise in society. Unfortunately, recent cutbacks in education have hit schools very hard, and the cost of college has risen far faster than middle-class incomes. Republican tax and social policies are making this worse -- cutting Pell grants, for example. A country's intellectual resources, in theory, are proportional to the size of its population -- provided there is equal access to education. Once vouchers that don't pay the costs of instruction and cuts in support for college and university education become the norm, our intellectual resources will be too largely concentrated in the hands of the wealthy and the legacies.
What’s more, we are the first nation to be founded for the sake of an idea – the idea that each of us deserves the chance to shape our own destiny. That is why centuries of pioneers and immigrants have risked everything to come here. It’s why our students don’t just memorize equations, but answer questions like “What do you think of that idea? What would you change about the world? What do you want to be when you grow up?”
........
The first step in winning the future is encouraging American innovation.
None of us can predict with certainty what the next big industry will be, or where the new jobs will come from. Thirty years ago, we couldn’t know that something called the Internet would lead to an economic revolution. What we can do – what America does better than anyone – is spark the creativity and imagination of our people. We are the nation that put cars in driveways and computers in offices; the nation of Edison and the Wright brothers; of Google and Facebook. In America, innovation doesn’t just change our lives. It’s how we make a living.
It is worth remembering that one of the major contributions of American industry was Henry Ford's realization that he couldn't sell cars unless people could afford to buy them. This meant not just making them cheaply, but also paying his workers a decent wage. Up until recently that was a vital part of the American way, but the incomes of working people hit a plateau decades ago and have remained stagnant, while other expenses (energy, education etc.) have gone up. The ratio of income between the wealthy, owning classes and the working classes has soared in recent years; it is higher than in any other major industrialized country.
Our free enterprise system is what drives innovation. But because it’s not always profitable for companies to invest in basic research, throughout history our government has provided cutting-edge scientists and inventors with the support that they need. That’s what planted the seeds for the Internet. That’s what helped make possible things like computer chips and GPS.
Just think of all the good jobs – from manufacturing to retail – that have come from those breakthroughs.
Not just techy stuff though. Don't forget that taxes pay for infrastructure without which making money would be impossible. This includes building and maintaining the highway system, paying police, firefighters and medical personel, and maintaining public elementary and secondary schools. (This is an important point made recently by Elizabeth Warren in cautioning us not to over-credit the wealthy for their success and their contributions.)
Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik¸ we had no idea how we’d beat them to the moon. The science wasn’t there yet. NASA didn’t even exist. But after investing in better research and education, we didn’t just surpass the Soviets; we unleashed a wave of innovation that created new industries and millions of new jobs.
This is our generation’s Sputnik moment. Two years ago, I said that we needed to reach a level of research and development we haven’t seen since the height of the Space Race. In a few weeks, I will be sending a budget to Congress that helps us meet that goal. We’ll invest in biomedical research, information technology, and especially clean energy technology – an investment that will strengthen our security, protect our planet, and create countless new jobs for our people.
And it's important to point out that this is a very good time to make these investments, when interest rates are historically low, and when the whole country will reap their benefits.
......
At the California Institute of Technology, they’re developing a way to turn sunlight and water into fuel for our cars. At Oak Ridge National Laboratory, they’re using supercomputers to get a lot more power out of our nuclear facilities. With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have 1 million electric vehicles on the road by 2015.
We need to get behind this innovation. And to help pay for it, I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. I don’t know if you’ve noticed, but they’re doing just fine on their own. So instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.
Now, clean energy breakthroughs will only translate into clean energy jobs if businesses know there will be a market for what they’re selling. So tonight, I challenge you to join me in setting a new goal: by 2035, 80% of America’s electricity will come from clean energy sources. Some folks want wind and solar. Others want nuclear, clean coal, and natural gas. To meet this goal, we will need them all – and I urge Democrats and Republicans to work together to make it happen.
At least two of these, nuclear and coal are highly problematic. No one knows what to do with nuclear waste: everyone knows it's unsafe and no one wants it in their "backyard." Clean coal is so difficult and expensive to create that it is virtually and contradiction in terms. In fact, if one includes the costs of safe and ecologically sound production, as well as the cleanup of residues and waste products on the earth, and in the water and air, wind and solar are quite competitive already with oil and perhaps with gas (the safety of "fracking" is not yet determined). Some environmentalists also have to lighten up on hydroelectric, which is clean and already more that competitive with fossil fuels; geothermal and tidal are already factors in some areas.
Maintaining our leadership in research and technology is crucial to America’s success. But if we want to win the future – if we want innovation to produce jobs in America and not overseas – then we also have to win the race to educate our kids.
Think about it. Over the next ten years, nearly half of all new jobs will require education that goes beyond a high school degree. And yet, as many as a quarter of our students aren’t even finishing high school. The quality of our math and science education lags behind many other nations. America has fallen to 9th in the proportion of young people with a college degree. And so the question is whether all of us – as citizens, and as parents – are willing to do what’s necessary to give every child a chance to succeed.
That responsibility begins not in our classrooms, but in our homes and communities. It’s family that first instills the love of learning in a child. Only parents can make sure the TV is turned off and homework gets done. We need to teach our kids that it’s not just the winner of the Super Bowl who deserves to be celebrated, but the winner of the science fair; that success is not a function of fame or PR, but of hard work and discipline.
... Stuff on Race to the Top omitted.
You see, we know what’s possible for our children when reform isn’t just a top-down mandate, but the work of local teachers and principals; school boards and communities.
.....
Let’s also remember that after parents, the biggest impact on a child’s success comes from the man or woman at the front of the classroom. In South Korea, teachers are known as “nation builders.” Here in America, it’s time we treated the people who educate our children with the same level of respect. We want to reward good teachers and stop making excuses for bad ones. And over the next ten years, with so many Baby Boomers retiring from our classrooms, we want to prepare 100,000 new teachers in the fields of science, technology, engineering, and math.
In fact, to every young person listening tonight who’s contemplating their career choice: If you want to make a difference in the life of our nation; if you want to make a difference in the life of a child – become a teacher. Your country needs you.
Exactly one party is blaming our problems on teachers, calling them overpaid and underqualified. This is mostly because most teachers are unionized, and only one party wants to smash unions and set back the labor movement a century. It's the same party whose presidential candidates mock child-labor laws and union wages and contracts. It's the same party that thinks that worker safety and its federal enforcer OSHA are legitimate subjects of ridicule.
Of course, the education race doesn’t end with a high school diploma. To compete, higher education must be within reach of every American. That’s why we’ve ended the unwarranted taxpayer subsidies that went to banks, and used the savings to make college affordable for millions of students. And this year, I ask Congress to go further, and make permanent our tuition tax credit – worth $10,000 for four years of college.
Because people need to be able to train for new jobs and careers in today’s fast-changing economy, we are also revitalizing America’s community colleges.
....
If we take these steps – if we raise expectations for every child, and give them the best possible chance at an education, from the day they’re born until the last job they take – we will reach the goal I set two years ago: by the end of the decade, America will once again have the highest proportion of college graduates in the world.
One last point about education. Today, there are hundreds of thousands of students excelling in our schools who are not American citizens. Some are the children of undocumented workers, who had nothing to do with the actions of their parents. They grew up as Americans and pledge allegiance to our flag, and yet live every day with the threat of deportation. Others come here from abroad to study in our colleges and universities. But as soon as they obtain advanced degrees, we send them back home to compete against us. It makes no sense.
Now, I strongly believe that we should take on, once and for all, the issue of illegal immigration. I am prepared to work with Republicans and Democrats to protect our borders, enforce our laws and address the millions of undocumented workers who are now living in the shadows. I know that debate will be difficult and take time. But tonight, let’s agree to make that effort. And let’s stop expelling talented, responsible young people who can staff our research labs, start new businesses, and further enrich this nation.
In the Republican "debates", several of the candidates -- Romney among them -- when asked to discuss the "Dream Act", kept yacking about people who came here to work illegally and how unfair it is when others came legally. The so-called moderators refused to point out that the proposal was all about little kids who were brought here illegally and who had no idea what was happening to them. It seems typical of what passes for (some) Christians these days to want to punish them for acts committed by parents or relatives. The questioners should have said: "What do you do to a person who was brought here as a little kid, grew up and was educated here, and is now in HS or college and is doing well? Throw him/her out -- perhaps back to a country they never really knew, and whose language they may not speak?" For this lack of compassion alone Mitt Romney shouldn't be elected dog catcher. For Gingrich's recent comments on Romney's position, see this article. Gingrich's history shows him to be, in general, a rather vile person, but in this particular case his position is more humane than Romney's -- though that's not saying much.
The third step in winning the future is rebuilding America. To attract new businesses to our shores, we need the fastest, most reliable ways to move people, goods, and information – from high-speed rail to high-speed internet.
Our infrastructure used to be the best – but our lead has slipped. South Korean homes now have greater internet access than we do. Countries in Europe and Russia invest more in their roads and railways than we do. China is building faster trains and newer airports. Meanwhile, when our own engineers graded our nation’s infrastructure, they gave us a “D.”
We have to do better. America is the nation that built the transcontinental railroad, brought electricity to rural communities, and constructed the interstate highway system. The jobs created by these projects didn’t just come from laying down tracks or pavement. They came from businesses that opened near a town’s new train station or the new off-ramp.
Over the last two years, we have begun rebuilding for the 21st century, a project that has meant thousands of good jobs for the hard-hit construction industry. Tonight, I’m proposing that we redouble these efforts.
We will put more Americans to work repairing crumbling roads and bridges. We will make sure this is fully paid for, attract private investment, and pick projects based on what’s best for the economy, not politicians.
Within 25 years, our goal is to give 80% of Americans access to high-speed rail, which could allow you go places in half the time it takes to travel by car. For some trips, it will be faster than flying – without the pat-down. As we speak, routes in California and the Midwest are already underway.
Within the next five years, we will make it possible for business to deploy the next generation of high-speed wireless coverage to 98% of all Americans. This isn’t just about a faster internet and fewer dropped calls. It’s about connecting every part of America to the digital age. It’s about a rural community in Iowa or Alabama where farmers and small business owners will be able to sell their products all over the world. It’s about a firefighter who can download the design of a burning building onto a handheld device; a student who can take classes with a digital textbook; or a patient who can have face-to-face video chats with her doctor.
All these investments – in innovation, education, and infrastructure – will make America a better place to do business and create jobs. But to help our companies compete, we also have to knock down barriers that stand in the way of their success.
See the article The Dangerous Notion that Dept Doesn't Matter for a businessman's take on the need for investing in infrastructure. (This was mentioned in a previous blog.)
More about the State of the Union Address later.
Friday, January 20, 2012
Debt matters
Here's an interesting article by a Wall Street exec who's both a deficit hawk and an advocate of immediate investment of federal dollars in American infrastructure:
Thursday, January 19, 2012
Fine cartoon
Check out this from the The Salt Lake Tribune :
Sorry for the dearth of blogs. The political situation has been depressed and depressing. More soon (I hope...)
Goodbye Rick Perry. I hope that the media will stop saying that you've never been defeated in an election -- even though you quit this one after being defeated in every primary so far. You really were an icon for the Texas bluster and stupidity that the state so often exhibits.
Sorry for the dearth of blogs. The political situation has been depressed and depressing. More soon (I hope...)
Goodbye Rick Perry. I hope that the media will stop saying that you've never been defeated in an election -- even though you quit this one after being defeated in every primary so far. You really were an icon for the Texas bluster and stupidity that the state so often exhibits.
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