I attended a local Organizing for America (OFA) State of the Union party last week. It was nice to be among fellow volunteers and like-thinkers. Our local OFA organizer suggested that I write a blog entry on my reactions to the speech for the state OFA blog and I’m using that post for my personal blog.
The last few years haven’t been very good for the US so rather than a speech on the current state of the Union, President Obama gave us a speech on the future state of the union. The theme is called “Winning the Future”. Frankly, I think the wordsmiths in the White House could have come up with a much better phrase than this which has the unfortunate acronym of WTF. Perhaps they should recruit the fellow who renamed the Estate tax, the Death Tax.
Tenor of the Evening
Given the recent political rancor and extreme partisanship, I expected that this address would be like prior addresses. Remember Joe Wilson’s “You Lie” outburst and Antonin Scalia’s “Not true” mouthed response to President Obama’s comments on the ruling in the Citizen’s United case.
President Obama was clearly thinking about this in his opening remarks. Both sides responded positively when he suggested that both parties have to work together–it was a great pre-emptive calming of the waters. We’ll see how long that lasts.
It’s the Economy, Stupid
Right now, the two biggest political issues are how to stimulate job growth and how to control the deficit without hurting the economy. The Stimulus act appears to have helped corporate profits in the last year but has failed to stimulate job growth. The jump in the US deficit was fueled in part by the Stimulus act. Much of this speech addresses these two issues with a different strategy of innovation through investment, educational improvements, and more efficient capital infrastructure: “We need to out-innovate, out-educate, and out-build the rest of the world”.
By and large, innovation in this area has come from universities and the national laboratories. But we still haven’t made the breakthroughs that will make clean energy price-competitive with dirty energy. (Perhaps, if we monetized the environmental costs of dirty energy, it wouldn’t be so cheap.) Private innovation comes from necessity and external incentive. How can we encourage private innovation?
No Child Left Behind (NCLB) has failed to improve our K-12 education. Emphasis upon improved teaching is the right approach. The Gates Foundation and Teach for America are trying to find out what distinguishes a good teacher from a bad teacher, and a good school from a bad school. How we can train our teachers to be good teachers?
Race to the Top awards good teachers and schools while NCLB penalizes bad teachers and schools. Incentives always work better than disincentives provide you don’t let people game the system.
The President calls for a redoubling of infrastructure investment. Public engineers tell us that our physical infrastructure is falling apart and a big goal of stimulus spending was to improve the infrastructure. It didn’t get very far because funds were sliced and diced into small short-term projects. These were chosen not for what they would do, but for whose constituency they are in. Replacing a bridge is a lot more difficult to do than re-paving a road and is not exactly shovel-ready. Will we get what we need from this redoubling of investment?
Simplifying the Tax Code
If you thought that the Personal Income Tax Code is complicated, take a look at the Corporate Tax Code. The President calls for simplification but the process of simplification is itself a political process subject to all the lobbying and introduction of loopholes that have come to complicate the tax code in the first place. It’s a noble idea but highly unlikely. I’d rather that Congress spend it’s time on investments in innovation, education, and infrastructure.
Competent and Efficient Government Regulation
Governing is really complicated because it is a political process. Some interest wins and some interest loses in most legislation. It has to be difficult to draft enforceable laws that can’t be gamed. Once a law is enacted, it is up to the Executive branch to implement the law and a whole new political process is overlaid on it involving internal interests with different external clients. Even if regulatory authority is completely transparent, who will be the overseers of regulation? As the President says, we have the information infrastructure now that promises greater transparency.
I’m any very curious what kind of reorganization of the Executive Branch will be proposed. Let’s hope that it is not so large and inclusive as the Department of Homeland Security.
President Obama clearly believes the government intervention is required to get the economy moving and that it is a long-term process to which we all have to commit. He has history on his side and I sincerely hope he is right.