U.S. / On the Eve of the State of the Union Address

Wednesday, January 27, 2010

On this day of the president's annual State of the Union address, I think the title of Andrew Wilson's Spectator article this morning sets us up nicely for what we'll hear: Coming Tonight: The Mythic Tale of How Barack Obama Averted the Next Great Depression. Of course, this is the argument being used to secure a second term as chairman of the Federal Reserve for Ben Bernanke. At the end of the day this really amounts to saying, "It coulda been worse." It could always be worse, but not much worse. The other barb being levelled at those, like myself, who think Bernanke should not be given a second term, is that we are engaging populism, which is a peculiar form of demagoguery.

I like the counter-argument made yesterday by Senator Jeff Merkley of Oregon, who responded to the "it coulda been worse" argument by accepting it at face value: "After the house has burned down you don't need a fireman, you need a carpenter." Here's a fun game we can play during the speech, keep score as to how much new, deficit expanding, government spending is proposed and how many times he still blames President Bush for the mess we're in. Add the new spending to all the other expensive initiatives, like cash for Toyota and Honda and the $787 billion non-stimulating stimulus, which are wholly creations of the current administration and the Democratic-controlled Congress. The non-stimulating stimulus does not even meet Pres. Obama's benchmarks for success, like keeping unemployment at or below 8%, etc.

Pay no attention to yesterday's announced freeze on domestic discretionary spending, the savings to be realized by this freeze only amount to $100 billion more than the $150 billion jobs bill, which is in addition to the $787 billion non-stimulating stimulus, which the CBO is now saying will cost an additional $75 billion, thus making the savings in domestic discretionary spending only $25 billion. I agree with the editorial in today's Wall Street Journal: "stop spending more now: Drop the health-care bill, cancel the unspent stimulus spending from last year, kill the $150 billion new stimulus that has already passed the House, and bar all repaid bailout cash from being re-spent. Everything else is marketing."

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