I Heard The State Of The Union Address On The Radio
We were driving to a reason event on school choice. Gregg was driving us there, that is. He turned the radio off after I started yelling at it. The president was going on about how great American innovation has been. In recent years, it's produced Google and Facebook, for example.
Now, he's going to save us, he said, all by pumping buttloads of government money into business innovation.
Hello?
Google and Facebook weren't started by the government. Government is what gets in the way of business success! And so I was yelling at the radio.
(At this point, Gregg turned off the radio and changed the subject. But, it's true, what I said just above.)
Here's the particular SOTU address quote from the President:
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.
Guess what: None of that came from the government.
You want to subsidize innovation -- remove government regulations and stop bleeding businesses.
Meanwhile, writes Nile Gardiner in The Telegraph:
The Obama presidency has been trying this high spending approach for the past two years and has spectacularly failed to advance America's prosperity. Over $800 billion of stimulus spending has failed to create jobs, and has simply added to America's ballooning $14 trillion national debt, which the Congressional Budget Office predicts could rise to 87 percent of GDP by 2020, 109 percent by 2025, and 185 percent of GDP by 2035, a massive millstone around the neck of the world's only superpower.By adopting this reckless stance, Barack Obama is demonstrating once again how out of touch he is with the views of the American people. A New York Times/ CBS News poll published on Friday revealed that 56 percent of Americans think it is necessary to take immediate action to lower the federal budget deficit, with just 38 percent saying it is possible to wait for better economic times. In addition, 55 percent believe it is necessary to cut back on government programmes, as opposed to 39 who are against such cuts. By a margin of 62 percent to 29 percent, American voters support reducing spending rather than raising taxes.
Gardiner is right:
In his State of the Union address, President Obama has a major opportunity to outline pro-growth measures that will rein in the deficit, create jobs, and revitalise the economy. This can only be achieved by cutting spending, freeing businesses from red tape, lowering taxes, increasing foreign investment, and advancing free trade. Economic freedom, not more government intervention, is the key to prosperity in the United States.It is doubtful however that the president will seize this moment, and his chief advisers remain wedded to failed Big Government solutions that will only result in a weaker, more indebted nation that will increasingly struggle to compete internationally. By all accounts, his speech on Tuesday could be disastrous not only for America, but also for US leadership on the world stage.







"Guess what: None of that came from the government."
The internet did, a little bit...
And everyone wants to cut spending, but most when you ask them what specifically to cut will cite something that makes up an insignificant percentage of the budget.
clinky at January 26, 2011 12:29 AM
"We're from the government, and we're here to help."
"Run away!"
"Now, we see the violence inherent in the system!"
And, to 'clinky':
Cut 'EVERY MOTHERFUCKING THING'. Period, end of story. No less than 5% of every line item in the budget, no matter who squeals.
Cut entitlements (social security, etc. give 'em a cap based upon value and wealth, and so on ...).
Cut pensions for govt employees. They get what we get, defined contributions, not handouts from the state.
If they don't like it, they can get a job as a walmart greeter.
Bring govt salaries down to the median income in the lowest income states. A govt employee is the ultimate in fungible resources, the lowest bid should *always* apply.
If they don't like it, let them compete in an open market for a private sector position (they'll fail, of course).
Quit funding the governments' actions for consensual adult behaviour. It's not their business what adults do in their own spaces.
Transfer congress to Mars, and let them gasp for breath while they try to figure out why the oxygen is gone.
There are some who call me 'Tim?' at January 26, 2011 1:05 AM
In defense of Obama, he really doesn't get it.
moe at January 26, 2011 5:38 AM
(At this point, Gregg turned off the radio and changed the subject. But, it's true, what I said just above.)
Hysterical!! Maybe you should skip the next book and have your own reality show!
Kristen at January 26, 2011 5:42 AM
What Obama fails to understand is that innovation and economic growth are not dependent on a few highly-visible innovations, but on tens of thousands of smaller innovations and incremental improvements. Obama's top-down model of the economy and of society ignores this kind of market-driven innovation, focusing instead on "glamor" projects--which often turn out in retrospect to represent a misdirection of resources on a gigantic scale.
david foster at January 26, 2011 5:44 AM
"The world runs on individuals pursuing their self interests. The great achievements of civilization have not come from government bureaus. Einstein didn't construct his theory under order from a bureaucrat. Henry Ford didn't revolutionize the automobile industry that way."
- Milton Friedman
While the government, through its research arm ARPA, did fund the initial research that created the Internet (in 1967), it was nothing more than a researcher's toy for 25 years. It was business that made it successful. It was the desire of private business to find additional avenues to sell their products that made it available cheaply to almost every home that want's it. If it weren't for capitalism, the Internet might still be nothing more than a means for scientists to share their research. And given the nature of computers and networks, there's nothing to say that private industry wouldn't have created the Internet on its own ... out of need (need is the mother of all invention.)
AllenS at January 26, 2011 5:49 AM
AllenS...Indeed, had government in the early 1990s attempted to create a "national information infrastructure" via the kind of "targeted investments" favored by Mr Obama, we would have gotten something very different from today's Internet. Billions of dollars would have been forked over to large and politically-well-connected companies (most likely AT&T, IBM, and a contractor such as Lockheed Martin) and would have resulted, after a decade or so of delays, in a cumbersome closed system useable mainly to distributed the "content" of other large and well-connected companies.
David Foster at January 26, 2011 6:10 AM
"And given the nature of computers and networks, there's nothing to say that private industry wouldn't have created the Internet on its own ... "
Actually, it sort of did do that. IBM and DEC created their own networking systems in the '60s, and there were quite a few mainframes tied together with SNA and DECnet, not to mention the numerous dial-ups and point-to-point leased line networks that existed then (mostly connecting terminals with mainframes). The extremely ad hoc UUCP network was tying together small companies and hobbyists by the late '70s, and in the '80s we had all manner of bulletin board systems and things like PC Pursuit. Ethernet, the near-universal standard for local area networks, was created by Xerox without any government money. And the real growth of the early Internet occurred not in the ARPAnet itself, but in the many private extensions created by the companies and universities who had connections to it.
The main thing that the ARPAnet proper contributed was the internetworking protocols. And the important point to note here is that ARPA then was a blue-sky agency, with a charter to do "whatever it takes". Its main asset was not its relatively meager funding but its freedom to engage in wild-ass ideas and its ability to pull together ad hoc groups of researchers without worrying about which regulatory agency's toes were getting stepped on or which congressmen it needed to stroke. And even at that, it must be said that a lot of the work was done by a private company, Bolt Baranek & Neumann.
Cousin Dave at January 26, 2011 6:30 AM
moe, Barry does get it. He is doing what he is doing on purpose. It's like saying Stalin or Mao didn't understand what was happening. Of course they did, it was intentional. Barry may not be a stalinist, but he is a committed statist.
biff at January 26, 2011 6:39 AM
Obama is indeed a statist, but I don't believe he is a classical socialist. Nor of course is he a classical capitalist. His economic model is closer to corporatism or economic fascism: large, politically-well-connected companies will be allowed to allowed to make plenty of money as long as they do what they are told and genuflect to the ideologies du jour.
david foster at January 26, 2011 6:58 AM
We must make three choices, and can pick any two:
1) Do we want high taxes or low taxes?
2) Do we want lots of government services or limited government?
3) Do we want a balanced budget?
The one we have been opting out of for decades is #3. Nobody wants to pay high taxes, and now we have reached the point where half of the population pays no taxes.
Everyone wants lots of government bennies. Just listen to the chorus of people saying 'Don't touch my Social Security!' or those who want their underfunded pension liabilities bailed out by the taxpayers. People pay lip service to the idea of limited government, but when push comes to shove and it means you can't quit your job at a young age and have a lengthy retirement courtesy of the taxpayers, or have all your medical bills paid by the taxpayers, all bets are off.
The result? $14 trillion in debt with billions more added every day.
Pirate Jo at January 26, 2011 7:37 AM
What do you expect from a community activist/educator/politician? He doesn't have a clue about the private sector. He never worked there.
MarkD at January 26, 2011 8:04 AM
Obama's State of the Union address, like all such speeches before it, was pure political theater and changes little, if anything.
However, it is incorrect to think that the only government actions that encourage innovation are the removal of red tape and reduction of taxes.
The work of basic, early innovation that is done long before potential profits are twinkling in a CEO's eye, is frequently done by scientists, researchers and technicians working directly or indirectly for the government.
The space program drove innovation in computer technology. ARPANET, and the researchers who developed the packet-switching technology that powers the Internet was funded by DOD and connected military and university research agencies. NIH-funded scientists conduct the basic research that pharmaceutical and medical device companies then turn into life-saving treatments. Larry Page and Sergey Brin, Google's founders, were funded by NSF and were working at Stanford when they developed the original PageRank algorithm that enabled a much improved method of searching the web over previous human-powered and algorithmic search systems (anyone remember Altavista? How about Lycos?); Stanford shares in the ownership of Google's early patents. Most of the web gets served on Apache servers, an open source technology with its earliest roots in university computing.*
While it is clear that the government is not the organization best equipped to monetize early technological innovations; it is wrong to think that the government has no role there. Government investment in basic research that lacks and obvious connection – yet – to a profit motive has been an immense source of freely-shared information (since academics have to publish their methods and results to succeed) that entrepreneurs have used to develop immensely profitable and world changing-drugs, procedures and services.
*The immense value of open-source computing projects such as Linux, PHP, MySQL, Python and others, while not totally germane to this discussion, would make for an interesting digression in this discussion that not everything of value is developed by those with a profit motive.
Christopher at January 26, 2011 8:40 AM
Awesome, Amy! My husband and I watched and made up comments that could be running through people's heads as they did close-ups...
Hillary: I could be doing this SO MUCH BETTER THAN YOU.
Boehner: I still think I could have used one more trip to that spray tan joint.
Biden: Mahna Mahna. Do do do do do. Mahna Mahna.
Joint Chiefs of Staff: Yeah, well, you still can't make us listen to Lady Gaga.
What made me laugh was him yammering about investing in science and math education. Puh-leez. The Department of Education continually endorses and funds large scale programs for special needs kids while cutting programs for the gifted. I absolutely recognize that a mentally disabled kid needs help, but if we want to excel in science and math, how about throwing some money to the kids who can actually DO it?
UW Girl at January 26, 2011 9:03 AM
Christopher..."The work of basic, early innovation that is done long before potential profits are twinkling in a CEO's eye, is frequently done by scientists, researchers and technicians working directly or indirectly for the government"
This is true. However, it does not follow from this that you can increase economic growth by increasing the amount of $$ spent on basic research by more than a certain level. In any event, Obama's focus does *not* appear to be on basic research but rather on government-directed deployment of chosen technologies.
The history of the early semiconductor industry in Europe and the United States is a relevant story: see my post leaving a trillion on the table.
david foster at January 26, 2011 9:07 AM
I thought his blurb on high-speed rail was revealing:
"Within 25 years, our goal is to give 80% of Americans access to high-speed rail, which could allow you to go places in half the time it takes to travel by car"
Has this clown ever looked at a map of North America compared to, say, Japan? He could spend trillions without getting anywhere near 80% access.
"For some trips, it would be faster than flying - without the pat-down"
Until Al Qaeda tries to blow up a train. Note how blase he is about the idea that all passengers in American airports will still be waiting to have their genitals groped 25 years from now, and presumably for all eternity.
"As we speak, routes in California and the Midwest are already under way"
He just held up California's multi-billion dollar Train To Nowhere as a shining example!
http://www.advicegoddess.com/archives/2010/12/21/im_not_your_fri.html
All of this, and so much of the speech, would be pie-in-the-sky fantasy even if the US had a balanced budget and no debt. President Obama must be a truly passionate believer in American exceptionalism if he thinks his country is an exception to the laws of economics & physics.
Martin (Ontario) at January 26, 2011 9:35 AM
I had a choice to make last night between two kinds of fiction:
Political (re: SOTU address)
Science (the movie Inception)
I went with the movie (it was very good by the way) because I figured I'd go with the better acting and entertainment value. I also took into consideration that instead of listening to a pompous carpetbagger, that believes he's of superior intellect, I'd watch a movie where the director thought I'd be able to keep up with a mildly complex concept as opposed to insulting my power of reason…..
Ed at January 26, 2011 9:44 AM
Amy Alkon
http://www.advicegoddess.com/archives/2011/01/26/i_heard_the_sta.html#comment-1830487">comment from Martin (Ontario)I thought his blurb on high-speed rail was revealing: "Within 25 years, our goal is to give 80% of Americans access to high-speed rail, which could allow you to go places in half the time it takes to travel by car"
Grrr. In California, they'll spend billions to build a "high-speed" (it won't really be) railroad from Los Angeles to San Francisco. But, wait...you can get there in a fraction of the time it takes you to drive there -- for $59 each way on Southwest!
Amy Alkon
at January 26, 2011 10:40 AM
It was a poor speech. People say Obama is great at speeches, but I think he is only the equal of Reagan, and below LBJ and JFK.
I too worried about excessive federal initiative, as opposed to private.
And nobody seems to mention we spend double on defense what we spent only 10 years ago (inflation-adjusted) and we have no real enemies. Like all federal bureaucracies, the Defense Department is coprolitic and parasitic, draiing money out of the jobs- and wealth-creating private sector.
Did Obama even mention Afghanistan, a horrid waste of a trillion dollars or so?
"We are here from the federal government and we are here to help you"--how should Afghanies react to that sentiment?
Reason Foundation? They get a lot of Koch money--seems like they have become catamites and barking dogs for plutocrats.
BOTU at January 26, 2011 11:04 AM
Most inventions and discoveries are the products of what came before them. Otherwise we'd need to discover how to make fire all over again, instead of inventing charcoal briquettes that can't be lit with a flamethrower.
Top-down direction in research tends to ignore the way people are actually using things and adhere to specifications.
It also tends to ignore incremental improvements. With top-down applied research direction, you get the Trabant, a car so bad it was abandoned by its owners en masse when the Berlin Wall fell. The Trabant was "good enough" and cheap to produce, so was never really improved. Compare that to Western automobiles which are always being improved in performance, safety, efficiency, capacity, style, and comfort - without the government telling companies they have to make the improvements.
The government does a wonderful job funding basic research.
But it [mostly] fails miserably when it attempts to fund and direct applied research.
Because then the other precious little snowflakes will have their egos bruised.
And the teachers will be revealed to be dumber than the students. You can't teach advanced math without studying advanced math.
Even after two years, his inexperience is still killing him, both politically and managerially.
The initial research on the Internet was funded by the DoD trying to develop a nuclear-war-proof communications network.
First, the train will have to travel faster than a car does on the highway. As the current "high-speed" rail is being laid out, it won't.
Second, the train will have to go places people want to go. The route in California that is "already underway" will go from Los Angeles to Bakersfield and take longer than driving. Once you're in Bakersfield, you'll need to rent a car to get around (or a gun to shoot yourself when you realize you're in Bakersfield).
It won't reach San Francisco in our lifetimes.
If 80% of Americans wanted to travel by high-speed rail, they'd be doing so. Instead, the government had to rescue the passenger rail system in 1971 with a takeover (that was expected at the time to be shut down in 2 years).
The decline of passenger rails began in the 1920s was due in part to the fact that every inch of railroad was subject to local property taxes, the railroads were heavily regulated, its competitors (buses, airlines, and highways) were subsidized by the government, and rail could not easily be rerouted to meet changing demands the way buses, automobiles, and airline routes could.
Countries like France and Japan, which have extensive networks of high-speed rail, did not have available land on which to build airports near the city centers and so used high-speed rail, which uses less land and could be built on existing rail routes.
Rail can work here, but it's going to have to be built from scratch using the latest technology (e.g., mag-lev) to increase speed, be non-union, and the assumptions underlying its construction are going to have to be realistic. The current effort is using existing track (slow) and pie-in-the-sky assumptions about ridership and cost structures.
And, since it's a government project, it will be unionized, driving up costs (due to wage demands and work rules). For years after the switch to diesel/electric locomotives the unions kept the fireman on board and insisted on keeping the 100 mile limit for an engine crew's workday.
So, we'll be doing nothing to stop terrorists from riding our high speed rails?
Conan the Grammarian at January 26, 2011 11:14 AM
But but but... if you take away the govt, who's gonna pay my bills?!
Sabrina at January 26, 2011 11:20 AM
By all accounts, his speech on Tuesday could be disastrous not only for America, but also for US leadership on the world stage.
I really hate to agree with Rush, but it does seem this is what Barry wants.
biff at January 26, 2011 12:29 PM
High speed rail is a solution looking for a problem that does not exist in the US. All of the disadvantages of ground travel and air travel combined. I don't care how fast the trains are. They have to stop every mile or so or they lose their usefulness to commuters.
It is ironic now that I have EVEN less reason to go anywhere further than a few miles from my home, the solution to anything could be light rail. The internet and Amazon bring pretty much everything to my door, more quickly and cheaply than I was ever able to find it before.
I suspect that even in Japan, light rail can be pretty inconvenient. We had an exchange student from Japan stay with us for a year. He came from a suburb in Tokyo and every morning he rode his bike to the train station. It was a 20 minute trip. He then rode the train for over an hour to get to his school, and walked another 20 minutes from the train station, stayed all day and got home just in time to eat a late dinner and go straight to bed. There is a reason that there are all those cheap business hotels in Tokyo, the time spent commuting makes it just about worth not going home at all two or three nights a week. If Americans were forced to do this, I think the revolution would come sooner than people think.
Isabel1130 at January 26, 2011 3:41 PM
This post cracked me the hell up.
Feebie at January 26, 2011 4:19 PM
good to see butthads non stop anti military rants, he is consistantly a jerk, but he is consistant
ronc at January 26, 2011 4:47 PM
Trains? His biggest idea is trains? We are so screwed.
KateC at January 26, 2011 5:42 PM
How much money did Thomas Edison, A.G. Bell, and George Westinghouse, the Wright Brothers get from the government to create their inventions?
And why are the top 10 universities, technically, privately owned and endowed? The government locks them up in modern times by contracting the research out to them.
When was the last time the CDC came up with a new drug?
When did communications' technology really start to take off? Hint: there was an anti-trust suit against some telephone company.
When you have a leviathan that controls something -- it does not really lead to innovation.
Jim P. at January 26, 2011 8:12 PM
Amy Alkon
http://www.advicegoddess.com/archives/2011/01/26/i_heard_the_sta.html#comment-1830830">comment from FeebieThis post cracked me the hell up.
Thanks, Feebie! (It beats weeping!)
Amy Alkon
at January 26, 2011 8:25 PM
Isabel, in your post you seem to be conflating light rail and high-speed rail.
Light rail is used for traveling around urbanized areas. The trains travel both underground (subway) and above ground and make frequent stops at designated stations. San Francisco's Muni and BART, New York's IRT, Chicago's CTA, and Boston's MTA are examples of light rail.
High-speed rail is used for traveling over long distances. It's essentially a fast version of Amtrak (without the delays and deadly derailments). The train makes few stops between destinations (unless the politicians interfere and mandate stops at every little town) and can include sleeping accommodations for longer trips. France's TGV is an example of high-speed rail.
Conan the Grammarian at January 26, 2011 9:29 PM
Obama: “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.”
So this ass hat thinks government spending is the "engine" of our economy? We are so screwed.
Conan the Grammarian at January 26, 2011 9:56 PM
"We were driving to a reason event on school choice..."
It just occurred to me that there was not one word about school choice in this whole speech.
Martin (Ontario) at January 26, 2011 10:12 PM
It just occurred to me that there was not one word about school choice in this whole speech.
As noted by the CATO Institute (Amy's next blog entry) all his program did was to get the states to kowtow to the fed standards.
I listened to about 20 minutes then turned it off on my own. I just couldn't stand the bullS**t that B.O. was trying to feed.
Jim P. at January 26, 2011 11:09 PM
Amy Alkon
http://www.advicegoddess.com/archives/2011/01/26/i_heard_the_sta.html#comment-1830910">comment from Jim P.I actually went to an amazing reason magazine event on school choice, and saw the terrific film, "The Lottery," but i spent the entire day, into the evening, writing an op-ed, which I hope you'll be reading soon, so I'll have to blog about it in the next few days. Learned some shocking things -- and some promising ones.
Amy Alkon
at January 26, 2011 11:20 PM
Conan, actually I am not confusing high speed rail with light rail. Your high speed rail has to integrate with your other rail (heavy or light) or what you have is a two way airport between two destinations, and considerably less useful than a plane because it has no flexibility. In Japan high speed rail has been a dismal failure and put what was a profitable railway system into the red by the cost of construction. They then tried to jack up the fares to cover the cost and most went back to their cars because that was cheaper taking the high speed rail, driving the system further into the red. Most estimates have them 200 billion in the hole as the result of constructing the bullet trains.
From the Cato Institute
"Europe’s record with high-speed rail hasn’t been much better. Though nations in the European Union spend an estimated $100 billion per year subsidizing intercity rail, rail has slowly but steadily lost market share since Italy opened the continent’s first high-speed line in 1978. Today, less than 6 percent of passenger travel goes by rail.
We car-crazy Americans drive for 85 percent of our travel. Europeans drive for 79 percent. Spending several hundred billion dollars to get, at best, 5 or 6 percent of people out of their cars is not worthwhile. The real impact of high-speed rail is that it replaces private air service with heavily subsidized rail service."
I have been on Italy's high speed rail. Tickets were very expensive, Saved maybe half an hour to an hour. Trip between cities was 2 hours and 15 minutes rather than around three. No stops, but there were times when the train had to slow down a lot, as opposed to ten stops on the regular line. Rail went into the same terminal as the regular commuter lines and after you get off, if that is not your destination, you get on a regular run down commuter trail to get where you are going.
Isabel1130 at January 27, 2011 7:47 AM
Regarding the Education initiative that the President talked about, he started by describing this, "Race to the Top" program, right? Then he went on to talk about Bruce Randolph school in Denver.
This made it seem like Bruce Randolph school was a success story of the Race to the Top program, didn't it? Except that it wasn't part of that program, it had its own program, which started before Obama was elected.
Further, Colorado hasn't won any of the Race to the Top money yet, after two rounds, when they were convinced they would win some. Classic misdirection here
WayneB at January 27, 2011 10:28 AM
Good point.
Even San Francisco finally faced reality and allowed BART to take people to and from the airport to the city center.
If high-speed rail does not come into or near the city center, it's no better than an airport.
Conan the Grammarian at January 27, 2011 11:29 AM
He turned the radio off after I started yelling at it.
Reminds me of when then-President Nixon gave a TV speech on his wage and price controls program. I had to take a tranquilizer so I could watch it without throwing something through the screen.
These days I find it best for my health to avoid listening to any political speeches, including this one.
Rex Little at January 27, 2011 12:25 PM
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