January 22, 2012

SSOTU: Supposed State of the Union

Oxymoronic SOTU
A quick preview of the president's State of the Union.would be remiss if it did not include the notion that the president is going to take the opportunity to use the opportunity as a campaign speech.  Indeed, many see it as the president's kick-off of his 2012 re-election effort (aside from the myriad of fundraisers that have been going on for months).  The president's speech in that spirit will do three things.  It will argue that the country is hurting and it will require more of his efforts to fight income inequality.  Secondly, in an oxymoron destined to go mostly unchecked, it will call for more spending and lower deficits.  Finally he will work in there somewhere, a narrative that he hopes will hold is that the country is spinning its wheels because of a Do Nothing Congress.

What is that going to look like?



Income Inequality - The president is going to call for more taxes on the wealthy. He's going to suggest that those who can afford more should be paying more.  He's going to ignore the fact that they already are paying a disproportionately large share of America's tax burden already.  He's going to go back to the playbook where he wants to spread the wealth around. 

The real issue with income inequality however is the very premise that income inequality is bad.  Real equality is not equality of outcome but equality of opportunity,  That's an education issue, not a socialism issue.  But let's be generous and assume the president means that his concern is not about complete wealth re-distribution but rather that the dispersion of income is too broad, too extreme.  That's not something I've expressly heard him state, but giving him the benefit of the doubt, his meaning seems to be that the rich are too rich and the poor are too poor.  The problem is that every attempt to flatten the outcome distribution curve, you are actually harming the equality of opportunity side of the equation.  By taxing the rich higher than the poor, you are in effect punishing success, which has the effect of hampering the amount of effort towards success.  If left unchecked, the natural tendency is towards a complete flattening of the outcome distribution and that has the negative effect of killing effort at innovation or self-improvement.  It's the reason Soviet communism failed.

Despite the friend of the poor mantra the Democrats constantly proclaim of themselves, their solutions are ultimately self-defeating.  Approaching the problem income inequality with the wealth re-distribution will only lead to the reduction of overall wealth in America.  Those proclamations by the president cannot be allowed to passed unchallenged. 

The Big Oxymoron

The president is going to tie a big mish-mash of ideas about infrastructure spending, and the need to start another round of expensive spending to help the American economy - it will dove tail with his request for another trillion dollar deficit. Isn't that nice? It's as if the previous stimulus actually did something (anything) to help the floundering economy.  At the same time, he's going to demand some sort of grand bargain on reducing the deficit.  This is what's known in the objective world as both hypocrisy and technically impossible.  

After the president has effectively gutted the national defense budget he's not really going to budge on Social Security, Medicare, Medicaid and Obamacare.  He just wants to look like he's willing to compromise, but he's not going to compromise. It's window dressing.  All he needs to do is sell the idea for six months and let it play into a Do Nothing Congress narrative.

Do Nothing Congress? Boehner pointed out on Fox News Sunday this morning that Congress had passed 20 jobs bills last year.  All were stalled in the Democrat-controlled Senate so that the president would not be forced with facing the option of signing or vetoing them.  He can't veto a jobs bill for fear of being seen as anti-jobs.  On the other hand he can't pass these types of bills for fear of not having a do-nothing Congress to run against.

There is an argument to be made that the 2010 election cycle was meant to put the brakes on a runaway big government. In that sense the Congress is not a do nothing Congress - it's doing what it was designed to to for now - slow down Obama.  In fact it has been pretty successful by that measure (imagine a metric of programs stopped, which would be similar to 'jobs saved'), but even that role was meant to be a temporary measure to carry through to 2012.  The fact is the Congress was not a Do Nothing Congress, it served as a check on unbridled liberal power. 

Expect to see a State of the Union address that does not reflect reality, and does not reflect the center-right views of the country, and watch for those three things.

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