It is terribly appropriate that President Obama gave his halting and graceless State of the Union address on Mardi Gras: He spent the evening shouting “Laissez les bons temps rouler!” at every liberal constituency in sight, promising new spending for public-sector unions (“Fix-It-First”), demanding (yet again) that banks renegotiate mortgages on politically driven terms, offering handouts to Al Gore–style enviropreneurs (reviving cap-and-trade, offering yet more subsidies to politically connected energy firms), and promising a $9-an-hour minimum wage.
In the real world, Fat Tuesday is followed by Ash Wednesday and a season of fasting and penance. For the free-spending Barack Obama, Fat Tuesday is followed by Fat Wednesday, Fat Thursday, Fat Friday, fat federal spending the whole way through. (Don’t tell the first lady.) Austerity is reserved for the taxpayer, the so-called rich on whom the president just secured tax increases before demanding, two minutes later, yet more tax increases. That includes new taxes on Medicare recipients (“ask more from the wealthiest seniors”).
Exhibiting the new liberal vogue for jingoism, the president blamed our economic straits on China three times in the first part of the speech, turned up his nose at imported cars, and abominated the always-popular scourge of “foreign oil.” (Blast you, Canada!) But a $9-an-hour minimum wage is a boon to a Chinese manufacturing sector still dependent upon cheap labor, and expensive emission controls make overseas industries relatively competitive, while one of the biggest threats to U.S.-made cars and U.S.-produced oil is the raft of new environmental regulations the president says he wishes to see enacted.
The high-income may sigh at the tax proposals, but the president’s proposals weigh particularly heavily upon the low-income young. They will have to pay his debt. They will also be the ones most affected by the proposal to raise the minimum wage: The result of artificial wages increases, as economists have documented over and over, is fewer jobs. The president proposes to cut the bottom rung off the economic ladder, which is of much more concern to those born at the bottom.
The president has a strange sense of language. The word “economy” used to be a synonym for “thrift.” Barack Obama has managed to turn that on its head. His speech gave every indication that he remains a hostage to the superstition that we can spend our way to national prosperity — or that we can pass laws that will force employers, pharmaceutical manufacturers, and other businesses to spend our way to prosperity for us. That has failed for four years because it is bad economics and wishful thinking.
In reality, the state of our union is this: The United States is today $6 trillion deeper in debt than it was before Barack Obama was first sworn in as president. That represents an increase of 57 percent in just four years. Put another way: Out of every dollar the country owes in government debt, 36 cents was acquired under the Obama administration.
The state of our union is this: Today there are more than 4 million fewer Americans working than there were when Barack Obama was first sworn in as president — not including those who have retired. The work-force-participation rate is at a historic low. Never before have so many Americans simply abandoned the hope of a job.
The state of our union is this: Economic growth is weaker than it has been during any recovery in recent memory; in fact, the economy shrank in the last quarter. Those figures may be revised, but in any case growth is so weak that the difference between what President Obama calls a recovery and what economists fear is the beginning of a new recession is within the margin of measurement error.