Topic: Government and Politics

President’s Auto Gaffe No Laughing Matter

In his address last night, president Obama implied that an American invented the automobile (“The nation that invented the automobile cannot turn away from it”). It doesn’t matter that the president was unaware this is false. Politicians can’t be expected to know everything. What matters is that neither he nor anyone in his inner circle apparently thought it was important to fact check his first major speech to the nation. What other parts of his speech and policy platform are based on mistaken assumptions, we might well wonder?

Alas, some very important ones. In his campaign fact sheet on “21st century threats”, then-candidate Obama declared that

 When Sputnik was launched in 1957, President Eisenhower used the event as a call to arms for Americans to help secure our country and to increase the number of students studying math and science via the National Defense Education Act.

“That’s the kind of leadership we must show today,” he later told a crowd in Dayton, OH.

The trouble is, the National Defense Education Act was an expensive failure. The average mathematics performance of 11th graders fell in the eight years following passage of the law, according to “national norm” studies conducted by the College Board. They still hadn’t returned to pre-NDEA levels a decade later.

In last night’s speech, the president called for increased federal “investment” in public schools, on the apparent assumption that this will improve educational outcomes and with them our economy. History does not support this rosy view.

To have any hope of achieving the lofty goals he has set out for himself, our 44th president would do well to get his future proposals – and speeches – thoroughly fact-checked. While this may starve late-night comics of material, it will save both the president and the American people a lot of heartburn.

A National Talk-Show Host with Nuclear Weapons

Over at the DC Examiner, I have a piece tied to President Obama’s address before Congress tonight. It’s called “The President Talks Too Much.” An excerpt:

In recent weeks, the president has been anywhere and everywhere, with a campaign-style blitz of media appearances and town hall meetings. But, hard as it is to imagine in this era of the omnipresent president, there was a time when presidents weren’t seen much and were heard even less. There might be a lesson there for Obama.

Our founding fathers didn’t want a president who’d perpetually pound the bully pulpit. They viewed presidential speechifying as a sign of demagoguery, and thought Congress should take the lead on most matters of national policy. They expected the nation’s chief executive to pipe down, mind his constitutional business, and keep his hands to himself.

The “permanent campaign” that dominates modern presidential politics would have appalled our forefathers. Accepting the 1844 Democratic nomination, James K. Polk described the custom of the time: “the office of president of the United States should neither be sought nor declined.”

When 19th-century candidates spoke publicly, they sometimes felt compelled to apologize, as 1872 Democratic contender Horace Greeley did, for breaking “the unwritten law of our country that a candidate for President may not make speeches.”

The modern ritual of the State of the Union–with members of Congress rising to clap for every outsized promise–has grown weirdly anti-republican. Congressmen and women are members of a coordinate branch, and they ought not to be clapping maniacally like so many members of the Supreme Soviet. (George W. Bush’s last SOTU was interrupted 72 times by applause).

It would be nice if Obama returned to the Jeffersonian tradition of writing out the State of the Union and sending it over by messenger, rather than delivering it in person before Congress assembled. Of course, that’s never going to happen. There is one thing he could do, however, that would endear him to millions of Americans in the viewing public: start the speech with the following words:

“Ladies and Gentlemen: Please hold your applause to the end.”

Dems Want D.C. Vouchers Dead. Hope Someone Else Pulls Plug.

Republican leaders in the House say that Democrats are using the 2009 omnibus spending bill to try to kill the D.C. voucher program. Democrats deny the charge. Who’s right?

Created in 2004, the D.C. Opportunity Scholarship Program was originally authorized for 5 years – a term that would have expired this June. While a typical reauthorization would have extended the program for another five years, Democrats have explicitly authorized funding only through the 2009-10 school year. If that truncated funding were not enough to worry participating families, Democrats have also called for the granting of a new veto power over the program for the DC City Council. If the bill passes as it is currently written, the voucher program can only be funded if it is reauthorized by both Congress and the City Council.

Clearly, this new language doesn’t kill the Opportunity Scholarship Program outright. Just as clearly, it puts the program on life support, and it suggests that Congress is hoping the DC Council will pull the plug for them, so that they can’t be directly blamed for kicking 1,900 children out of private schools that they have chosen and become attached to.

Critics of the program complain that, after its first two years, it had still not raised overall student academic achievement by a significant margin (though parents are happier with their voucher schools). What is less well known is that the program has proven to be dramatically more cost effective than the DC public schools. While voucher and non-voucher students are performing at about the same level, DC public schools spend more than four times as much per student. Total per pupil spending in DC was $24,600 in 2007-08, while voucher schools receive an average of less than $6,000.

If you could save 75 percent on a purchase, get the same quality of service, and know you’d be happier with the result, wouldn’t you do it? It seems Congressional Democrats would not.

New Podcast: ‘Most Banks Are Fine’

If it ain’t broke, don’t fix it, says Cato Senior Fellow Gerald P. O’Driscoll Jr. of the country’s banking system. Since more than 90 percent of U.S. banks are doing fine, why all the talk about nationalizing them?

In today’s Cato Daily Podcast, O’Driscoll explains:

If you think the bank is insolvent, certainly it should be resolved. But do we really want to see the government running very large financial institutions? In effect, we already have seen that movie, it’s Fannie Mae and Freddie Mac, and they’re not doing such a good job of it.

Prosperity for the Looter Class

While the rest of the country is losing jobs and suffering from recession, the Bush-Obama philosophy of bigger government and more intervention has been good news for the inside-the-beltway crowd. Business Week reports:

As the nation’s most populous metro area feels Wall Street’s pain, the fourth-largest—Washington—is barely sensing the recession. In fact, Moody’s Economy.com estimates that metro Washington’s economy will actually grow 2.5% from mid-2008 through mid-2010. New York’s economy is expected to shrink 4.2%. It wouldn’t be the first time that Washington benefited from a national crisis. Back in 1930 the District of Columbia was a quiet Southern town, scoffed at by New York sophisticates. But as the federal government ramped up to fight first the Great Depression and then World War II, its population grew 65% in two decades.. “Oversight alone will [mean] tons of new jobs,” enthuses Jill Landsman, a spokeswoman for the Northern Virginia Assn. of Realtors, who says the pace of home sales has picked up over the past year even as prices have continued to fall.

Toxic TARP: Mr. Geithner’s Takeover Targets

A front-page story in the February 23 Wall Street Journal describes a plan to let the government convert its preferred shares in Citigroup to common stock, taking 25-40% ownership.

It could be worse.  A brilliant February 19 Journal report by Peter Eavis warned that “Government capital injections sit like ill-disguised Trojan horses in the nation’s largest banks,” showing that under Treasury Secretary Geithner’s socialist scheming the government could seize 74% of Citigroup and 66% of Bank of America. Meanwhile, most other reporters kept claiming bank stocks collapsed simply because Geithner had left out a few details.  On the contrary, he said too much, not too little.

The newer Journal report says, “When federal officials began pumping capital into U.S. banks last October, few experts would have predicted that the government would soon be wrestling with the possibility of taking voting control of large financial institutions… . Citigroup’s low share price already reflects, at least in part, a fear among shareholders that their stakes might be further diluted. A government move to take a big stake could backfire, potentially spurring investors to flee other banks, even healthier ones [emphais added].”

Why is any of this a surprise?  Even before the scary “capital purchase program” was unveiled, I wrote in the October 20, 2008 issue of National Review that, “Conservative legislators who expressed fear about letting the Treasury buy mortgage-backed bonds were strangely enthusiastic about inviting the Treasury to acquire equity in companies.  Critics of derivatives became enthusiasts for warrants … which would give the Treasury secretary virtually unlimited power to confiscate the wealth of stockholders of any company foolhardy enough to play this game.” 

More recently, in a February 11 New York Post piece (subtly titled “A Plan to Kill Banks”) I explained that, “Once a bank or insurance company gets in bed with the government, the property rights of that company’s stockholders become uniquely insecure. When the government jumps into the cockpit, smart stockholders bail out.  And depressed stock prices deflate the banks’ capital cushion.”

If “few experts” predicted these consequences of Treasury purchases of bank preferred shares and warrants, then why are they called experts?