Responding to Obama’s Economic Speech

President Obama recently began a string of speeches focused on economic policy at Knox College in Illinois. His first speech, riddled with collectivism, central planning, and misguided economics is worth rebutting as many of the talking points will likely be adopted by Democratic leaders.

Only a few paragraphs into his speech, Obama began making questionable statements that sounded oddly like excuses:

But over time, that engine began to stall. That bargain began to fray. Technology made some jobs obsolete. Global competition sent others overseas. It became harder for unions to fight for the middle class. Washington doled out bigger tax cuts to the rich and smaller minimum wage increases for the working poor.

Is technology an enemy to economic growth and increased prosperity? Absolutely not.

Obama also hinted at globalization being a culprit behind economic hardships, another invalid economic view. Free trade is a great benefit to all economies involved and thinking otherwise is being stuck in the ancient mindset of mercantilism. His mention of minimum wage increases suggests he refuses to accept the laws of supply and demand and the damaging effect of price controls. From the start of his speech, it is clear that the deliverer is no friend to logical, freedom oriented economics.

Obama then went on to list every statistic that could reflect positively on his highly interventionist policies. Not surprisingly, he failed to make any mention of Austrian Business Cycle Theory which explains that these positive statistics are the result of the trillions of dollars of newly created money that has laid the foundation for an inevitable future collapse.

He then took an opportunity to take jabs at republicans. Included in these was this curious statement: “With an endless parade of distractions, political posturing and phony scandals, Washington has taken its eye off the ball. And I am here to say this needs to stop.”

Phony scandals? Obama, who is supposed to be a defender of civil liberties, now believes that the IRS targeting conservative groups and the NSA massively spying on innocent citizens is really nothing to worry about.

After a few paragraphs of filler, he began the main talking points, or “cornerstones” of his plan.

The first cornerstone of a strong and growing middle class has to be an economy that generates more good jobs in durable, growing industries. Over the past four years, for the first time since the 1990s, the number of American manufacturing jobs hasn’t gone down; they’ve gone up. But we can do more. So I’ll push new initiatives to help more manufacturers bring more jobs back to America. We’ll continue to focus on strategies to create good jobs in wind, solar and natural gas that are lowering energy costs and dangerous carbon pollution. And I’ll push to open more manufacturing innovation institutes that turn regions left behind by global competition into global centers of cutting-edge jobs. Let’s tell the world that America is open for business – including an old site right here in Galesburg, over on Monmouth Boulevard.

How does Obama know that this is what the economy truly needs? Is his wisdom so unlimited that he knows the very direction the future of the economy should take? This is nothing more than veiled central planning. The economy should be left to operate naturally and have its future determined by the millions of individuals involved in it, not by the government:

Businesses depend on our transportation systems, our power grids, our communications networks – and rebuilding them creates good-paying jobs that can’t be outsourced. And yet, as a share of our economy, we invest less in our infrastructure than we did two decades ago. That’s inefficient at a time when it’s as cheap as it’s been since the 1950s. It’s inexcusable at a time when so many of the workers who do this for a living sit idle. The longer we put this off, the more expensive it will be, and the less competitive we will be.

Predictably, he clamors for infrastructure spending, the go to argument for all advocates of government spending. It’s just too insane to imagine that businesses would have a vested interest in establishing roads and transportation so individuals could access their stores. Walter Block provides a good introduction to how this could occur without government.

Obama then began discussing his second major point: education.

If you think education is expensive, wait until you see how much ignorance costs in the 21st century. If we don’t make this investment, we’ll put our kids, our workers and our country at a competitive disadvantage for decades.

Once again, it is just too insane for the statist to even imagine that education could be provided without government. Fortunately, an increasing number of alternatives to constantly degrading government education are naturally arising.

He then proceeded to discuss the rising cost of college. As expected, he made no mention that it is in fact government that is making education costs so high, and that his attempted solutions would actually only amplify the problem.

Next on his agenda was housing.

Now, if a good job and a good education have always been key stepping stones into the middle class, a home of your own has been the clearest expression of middle-class security. That changed during the crisis, when millions of middle-class families saw their home values plummet. Over the past four years, we’ve helped more responsible homeowners stay in their homes, and today, sales are up, prices are up and fewer Americans see their homes underwater. But we’re not done yet. The key now is to encourage homeownership that isn’t based on bubbles, but is instead based on a solid foundation, where buyers and lenders play by the same set of rules, rules that are clear, transparent and fair.

This isn’t surprising when considering how much money the Federal Reserve has been pumping into housing. It also won’t be a shock when the housing market begins to falter again once the unsustainable quantitative easing begins to taper off. The solid foundation he spoke of is certainly not what is being established currently.

His fourth major point: retirement.

Along with homeownership, the fourth cornerstone of what it means to be middle class in this country is a secure retirement. Unfortunately, over the past decade, too many families watched their retirement recede from their grasp. Today, a rising stock market has millions of retirement balances rising. But we still live with an upside-down system where those at the top get generous tax incentives to save, while tens of millions of hardworking Americans get none at all. As we work to reform our tax code, we should find new ways to make it easier for workers to put money away, and free middle-class families from the fear that they’ll never be able to retire. And if Congress is looking for a bipartisan place to get started, they don’t have to look far: economists show that immigration reform that makes undocumented workers pay their full share of taxes would actually shore up Social Security for years.

Here’s a suggestion: ending Social Security. Obama wishes to reform the tax code to allow people to keep more money for retirement, so a great place to start is to remove the regressive taxes taken for Social Security. This would promote personal responsibility and also help people have more money for retirement.

Fifth, I will keep focusing on health care, because middle-class families and small-business owners deserve the security of knowing that neither illness nor accident should threaten the dreams you’ve worked a lifetime to build.

While he seems completely confident in his Affordable Care Act, it’s interesting to note that his administration has already delayed crucial aspects of it.

After discussing healthcare, Obama had finished the major economic points of his speech. It is clear that his plan is nothing more than a continuation of failed economic central planning and government intervention into the economy.

Content published on the Young Americans for Liberty blog is only representative of the opinions and research of the individual authors. It does not necessarily reflect the views, goals, or membership of YAL.

Published in

Post a comment