Era of Big Government Not Over

The question of whether Barack Obama would tack to the political center in Tuesday’s State of the Union address was answered resoundingly. Over the course of sixty-two minutes President Obama clarified that he remains a Big Government man.

The mercantilist export, socialist education, corporatist industrial and Marxist taxation policies implicit in his remarks can be summed up as “statism”—that is, the state is the preferred means to achieve peace and prosperity.

Burdened by an unsustainable debt load and the failure of interventionist policies, the obvious prescription is for fiscal restraint and political statesmanship. What do the American people get instead?—promises for further spending and a game of “Whack-A-Mole”.

Congressional representatives forsook the traditional seating arrangement by pairing up with members of the opposition. This presented a visual alternative to the usual rising chorus of applause on one side of the chamber while those on the other would remain seated on their hands. On 80 occasions during this address the Democratic moles popped up to expose themselves to the metaphorical mallet.

As for dreams of fiscal restraint, President Obama called for a current budget level freeze (no cuts) and encouraged the nation to “invest” in the following:

  1. Research and development. Invoking Kennedy, Obama’s imperative was to “spark” innovation, dubbing the challenge a “Sputnik” moment.
  2. Education. Specifically, continued micromanagement of education. There was no suggestion that decentralization was an option. The history of escalating Federal expenditures coupled with declining competiveness internationally begs an alternative.
  3. Infrastructure. In Roosevelt fashion, big government initiatives such as rapid rail transport are the make-work projects of the day—that is, political initiatives rather than economic ones. Where will the capital be found for this “investment”?
  4. Clean energy. The objective is set by the President: breaking dependence on oil. Obama wants 80 percent of energy to be derived from so-called “clean” energy by 2035—where does this objective come from and whose capital is he risking?

The only bright spot in this speech was the proposal to reduce the rate of corporate taxation. Although vaguely stated—nothing as precisely clear as energy policy—the sentiment is proper. The United States has the second highest corporate tax rate in the world after Japan. It is small wonder that capital is flowing to more amenable jurisdictions. In Canada for example, the current government is proposing to reduce corporate taxation even further than it already has with the result that both investment and employment are on the rise.

President Obama left no doubt that he will continue to try and govern from the Left. Whether he succeeds will depend upon the degree to which Americans have accepted the ideology that the State is the solution to political-economic problems versus the initiative of their own goal-directed actions.

The verdict on the fate of Big Government was delivered last November. The American people are waiting for Congress and this administration to determine sentencing.

©Copyright 2011 Edward Podritske

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