Tag: SOTU

The More We Learn about ObamaCare, the Less the President Wants to Discuss It

Remember how the more we learned about ObamaCare, the more we would like it? Well, it seems the more we learn about this law, the less President Obama wants to talk about it. He relegated it to just a few paragraphs, tucked away near the end of his latest State of the Union political rally speech. And while he defended the law, he closed his health care remarks by begging Congress not to repeal it, and asking the American people to nag each other into buying his health plans.

My full response to the president’s health care remarks are over at my Forbes blog, Darwin’s Fool. Here’s an excerpt:

Note what the president did not say: he did not say that [Amanda] Shelley would not have gotten the care she needed. That was already guaranteed pre-ObamaCare. If ObamaCare saved Shelley from something, it was health care bills that she couldn’t pay. It’s impossible to know from this brief account just how much that might have been. But we can say this: making health care more affordable for Shelley should not have cost anyone else their job. It may be that ObamaCare doesn’t reduce bankruptcies at all, but merely shifts them from medical bankruptcies to other types of bankruptcies because more people cannot find work.

Read the whole thing.

Actually, I should amend that. Making health care more affordable will cost some people their jobs, and that’s okay. Progress on affordability comes when less-trained people (e.g., nurse practitioners) can provide services that could previously be provided only by highly trained people (e.g., doctors). When that happens, whether enabled by technology or removing regulatory barriers, prices fall – and high-cost providers could lose their jobs. The same thing has happened in agriculture, allowing food prices to drop and making it easier to reduce hunger. My point was that we should not be making health care more affordable for Ms. Shelley by taxing her neighbor out of a job.

New SOTU Education Promises Just Like the Old SOTU Education Promises

What should President Obama have said about education policy in this year’s State of the Union address? In a more perfect world, he would have announced his plan to eliminate the U.S. Department of Education in order to restore control of education policy to the state and local governments where it constitutionally belongs.

In that imaginary world, the President also would have called for an expansion of the Washington D.C. school choice program, where the federal government actually has legitimate constitutional authority, and used his bully pulpit to promote state-level educational choice programs across the country as a means of reducing inequality and expanding opportunity. And he would have announced that his administration would no longer seek to keep low-income black kids in failing government schools in Louisiana.

Alas, what President Obama proposed instead were mostly the same tired themes we’ve already heard in previous SOTU addresses. 

Once again, the president called for Congress to enact universal preschool (and threatened to go around them if they did not), claiming that “research shows that one of the best investments we can make in a child’s life is high-quality early education.” The research to which he alludes concerned a very small and high-quality program for disadvantaged children. (It’s notable that the president dramatically scaled down the audacity of his claims since last year’s SOTU.) There’s absolutely no evidence that the government could scale up the program for all children nationwide with the same level of quality.

Indeed, when the federal government has tried to do so, it has failed. The federal government’s own study of Head Start was so negative that the Obama administration released it on the Friday before Christmas, practically guaranteeing that almost no one would ever hear about it. Nearly fifty years and $200 billion later, Head Start produces no measurable, lasting benefits. To argue that “this time will be different” is magical thinking.

And once again, the president claimed that he “[wants] to work with Congress to see how we can help even more Americans who feel trapped by student loan debt.” If so, he should propose phasing out federal student loans and Pell Grants, which are spurring the rapid increases in tuition.

Fortunately, outside the administration’s push for Common Core, few of the administration’s SOTU-promoted education initiatives ever get off the ground.

Our Brave Leaders

The Washington Post reports: “Obama has decided not to endorse his deficit commission’s recommendation to raise the retirement age, and otherwise reduce Social Security benefits, in Tuesday’s State of the Union address.”

When I read this, I thought of a song from Monty Python and the Holy Grail:

Brave Sir Robin ran away
Bravely ran away, away
When danger reared its ugly head
He bravely turned his tail and fled
Yes, brave Sir Robin turned about
And gallantly he chickened out
Bravely taking to his feet
He beat a very brave retreat
Bravest of the brave, Sir Robin.

In the movie, Sir Robin and the other knights are galloping along on horseback, except when you look closely you see that their aides are banging coconuts together only simulating the sounds of brave mounted knights.

Isn’t that what’s going on in Washington? A giant fiscal disaster looms over the nation, and our leaders are only simulating leadership. Republican leaders can’t name a single program that they would cut, and President Obama runs away from a reform to the nation’s most costly program that should be a no-brainer.

Rather than chasing the Holy Grail of “investment” spending, the president needs to sit down with his congressional knights at a roundtable and get the kingdom’s finances under control with major spending cuts.

Time to Lose the Trade Enforcement Fig Leaf

During his SOTU address last week, the president declared it a national goal to double our exports over the next five years.  As my colleague Dan Griswold argues (a point that is echoed by others in this NYT article), such growth is probably unrealistic. But with incomes rising in China, India and throughout the developing world, and with huge amounts of savings accumulated in Asia, strong U.S. export growth in the years ahead should be a given—unless we screw it up with a provocative enforcement regime.

The president said:

If America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores. But realizing those benefits also means enforcing those agreements so our trading partners play by the rules.

Ah, the enforcement canard!

One of the more persistent myths about trade is that we don’t adequately enforce our trade agreements, which has given our trade partners license to cheat.  And that chronic cheating—dumping, subsidization, currency manipulation, opaque market barriers, and other underhanded practices—the argument goes, explains our trade deficit and anemic job growth.

But lack of enforcement is a myth that was concocted by congressional Democrats (Sander Levin chief among them) as a fig leaf behind which they could abide Big Labor’s wish to terminate the trade agenda.  As the Democrats prepared to assume control of Congress in January 2007, better enforcement—along with demands for actionable labor and environmental standards—was used to cast their opposition to trade as conditional, even vaguely appealing to moderate sensibilities.  But as is evident in Congress’s enduring refusal to consider the three completed bilateral agreements with Colombia, Panama, and South Korea (which all exceed Democratic demands with respect to labor and the environment), Democratic opposition to trade is not conditional, but systemic.

The president’s mention of enforcement at the SOTU (and his related comments to Republicans the following day that Americans need to see that trade is a two way street – starts at the 4:30 mark) indicates that Democrats believe the fig leaf still hangs.  It’s time to lose it.

According to what metric are we failing to enforce trade agreements?  The number of WTO complaints lodged? Well, the United States has been complainant in 93 out of the 403 official disputes registered with the WTO over its 15-year history, making it the biggest user of the dispute settlement system. (The European Communities comes in second with 81 cases as complainant.)  On top of that, the United States was a third party to a complaint on 73 occasions, which means that 42 percent of all WTO dispute settlement activity has been directed toward enforcement concerns of the United States, which is just one out of 153 members.

Maybe the enforcement metric should be the number of trade remedies measures imposed?  Well, over the years the United States has been the single largest user of the antidumping and countervailing duty laws.  More than any other country, the United States has restricted imports that were determined (according to a processes that can hardly be described as objective) to be “dumped” by foreign companies or subsidized by foreign governments. As of 2009, there are 325 active antidumping and countervailing duty measures in place in the United States, which trails only India’s 386 active measures.

Throughout 2009, a new antidumping or countervailing duty petition was filed in the United States on average once every 10 days.  That means that throughout 2010, as the authorities issue final determinations in those cases every few weeks, the world will be reminded of America’s fetish for imposing trade barriers, as the president (pursuing his “National Export Initiative”) goes on imploring other countries to open their markets to our goods.

Rather than go into the argument more deeply here, Scott Lincicome and I devoted a few pages to the enforcement myth in this overly-audaciously optimistic paper last year, some of which is cited along with some fresh analysis in this Lincicome post.

Sure, the USTR can bring even more cases to try to force greater compliance through the WTO or through our bilateral agreements.  But rest assured that the slam dunk cases have already been filed or simply resolved informally through diplomatic channels.  Any other potential cases need study from the lawyers at USTR because the presumed violations that our politicians frequently and carelessly imply are not necessarily violations when considered in the context of the actual rules.  Of course, there’s also the embarrassing hypocrisy of continuing to bring cases before the WTO dispute settlement system when the United States refuses to comply with the findings of that body on several different matters now.  And let’s not forget the history of U.S. intransigence toward the NAFTA dispute settlement system with Canada over lumber and Mexico over trucks.  Enforcement, like trade, is a two-way street.

And sure, more antidumping and countervailing duty petitions can be filed and cases initiated, but that is really the prerogative of industry, not the administration or Congress.  Industry brings cases when the evidence can support findings of “unfair trade” and domestic injury.  The process is on statutory auto-pilot and requires nothing further from the Congress or president. Thus, assertions by industry and members of Congress about a lack of enforcement in the trade remedies area are simply attempts to drum up support for making the laws even more restrictive.  It has nothing to do with a lack of enforcement of the current rules.  They simply want to change the rules.

In closing, I’m happy the president thinks export growth is a good idea.  But I would implore him to recognize that import growth is much more closely correlated with export growth than is heightened enforcement.  The nearby chart confirms the extremely tight, positive relationship between export and imports, both of which track similarly closely to economic growth.

U.S. producers (who happen also to be our exporters) account for more than half of all U.S. import value.  Without imports of raw materials, components, and other intermediate goods, the cost of production in the United States would be much higher, and export prices less competitive.  If the president wants to promote exports, he must welcome, and not hinder, imports.

Post-State of the Union Links

  • Time for the SOTU fact check:  Cato experts put some of President Obama’s core State of the Union claims to the test. Here’s what they found.
  • During this year’s SOTU, President Obama criticized the Supreme Court decision in the Citizens United case. Today’s podcast examines the Court’s ruling.

An Appalling Breach of Decorum

This morning, Politico Arena invites comments on Obama’s SOTU attack on the Supreme Court.

My response:

I join my Arena colleagues, Professors Bradley Smith and Randy Barnett, in condemning the president’s remarks last night singling out the Supreme Court for its Citizens United decision last week, which overturned law that the government itself admitted would even have banned books.  Not only was Obama’s behavior an appalling breach of decorum, but he didn’t even get his facts right.  As Brad, former FCC chairman, noted in his Arena post last night, and a bit more fully here, the decision did nothing to upset law that prohibits foreigners, including foreign corporations, from contributing anything of value to an American election.  Obama, the sometime constitutional law professor, should have known that.  At the least, his aides had plenty of time to research the question before he spoke.  This is just one more example of the gross incompetence or, worse, the indifference to plain fact that we’ve seen in this administration.

But it’s the breach of decorum that most appalls.  By constitutional design, the Supreme Court is the non-political branch of government.  Like members of the military, Supreme Court justices are invited to the State of the Union event, but they do not stand and applaud when the president makes political points that bring others to their feet.  For the president to have singled the justices out for criticism, while others around them stood and applauded as they sat there still, is simply demagoguery at its worst.  I would not be surprised if the justices declined next year’s invitation.  And Obama wanted to change the tone in Washington?  He sure has.