Here is what I heard last night….
“Socialism, socialism, socialism, socialism, socialism, veto republicans, socialism is what I want so that is bipartisan, socialism, socialism, socialism…etc etc etc…“
Sure he used fancy, political, and meaningless phrases like “middle class economics” that sound good to the brainwashed society they have created. They also made several efforts to over exaggerate and manipulate facts (see FactCheck.org). All that aside, I have no plans on going over his hour long speech in detail and nitpicking what he said. But, there are a few things that stuck out to me so here are…
My 5 takeaways from the State of the Union
One, he took credit for unemployment dropping.
And it has during his time in office, that much is true. Unfortunately for Obama, this had more to do with Congress than any of his economic plans. In 2010, unemployment his an annual high of 9.6% according to InfoPlease.com, all after his excessive economic recovery package. In 2010, the Republicans won and took over the House of Representatives in 2011, at which point they put an end or decrease to most of it. Since then there has been a slow and steady decrease in unemployment. To follow along with that point, the Democrats had full control of Congress in 2007 when when unemployment was at 4.6%. Since then the unemployment rate plummeted until the Republicans took over the House. None of this even tries to address the true unemployment rate and count those that have given up participating and no longer count against the rate which came to a long time high during this administration. This is not a support for the Republicans but more of a rebuke to the Democratic party’s economic policies and socialist agenda.
Two, taking credit for the drop in gas prices.
When George Bush left office, Gas prices where around $1.87/gallon, approximately. Obama comes in office and suddenly gas prices begin to spike. A few years ago Obama infamously said, “You know you can’t just drill your way to lower gas prices.”. Well guess what happened once drilling/production increased, the price per gallon dropped and down came the oil prices. And to be fair, Obama has on occasions supported producing more oil, I am just not aware of anything he has directly done to help any of this to occur.
Three, on the topic of trade and business.
Obama stated, “China wants to write the rules for the world’s fastest-growing region,” said Obama. “That would put our workers and businesses at a disadvantage. Why should we let that happen? We should write those rules. We should level the playing field.”
He continued, “I’m the first one to admit that past trade deals haven’t always lived up to the hype, and that’s why we’ve gone after countries that break the rules at our expense, But 95% of the world’s customers live outside our borders, and we can’t close ourselves off from those opportunities. More than half of manufacturing executives have said they’re actively looking at bringing jobs back from China. Let’s give them one more reason to get it done.”
Awesome, great, fabulous…and the government very well should protect American ideas and business interests around the world by using tarrifs, patent protections, and diplomacy. The problem is you can’t make them noncompetitive at home through regulations, taxes, social programs, etc. First you have the Corporate tax rate which is one of the highest rates in the world and around 15% higher than China’s rate according to TradingEconomics.com. Add in the added cost of regulations, the unfairly powered unions(by the government), and manipulation of the Minimum Wage, it makes thing far more challenging to compete. Regulations as a whole don’t necessarily provide a competitive disadvantage, but depending on what they are they can have a massive impact in several way: from forcing an increase in production costs to reach an excessive environmental standard, increased labor cost from Unions forcing an unjustified wage and benefits, to competition eliminating requirements that protect large corporation and prevent new ideas from entering the market. Obviously this is way to encompassing to cover outside of writing several volumes so I won’t attempt to do it here. I believe in a mutually beneficial economics theory of as long as full disclosure is done, let the people come to their own mutually beneficial agreements. That said, there is some room for environmental commerce laws to protect no participants from being harmed but other than that their is no constitutional authority for union protections and minimum wages.
Four, Free Community College and Education Credits…
Ok folks, in-case you don’t know it already, nothing the government provides is free. The money comes from the tax payers and taxes are the equivalent of legalized mugging (see what happens when you refuse to pay them). Again, the Constitution provides no authority to the government for any of this. That aside, if this should be implemented, what is going to happen quite frequently is that we are going to pay for educations that provide no economic value to society and/or people who will still avoid working. So in the end we are going to be paying twice as much for our welfare participants. Education is not a right, it is something you are free, and encouraged, to pursue at your own expense. Sending everyone to college actually hurts many people along with the economy by forcing massive debt on individual that will never be able to earn enough to pay for it and raising the cost of labor for jobs that really have no need for the education.
Five, the increase in minimum wage…
Here we go again… The minimum wage has never changed poverty level. What does happen is it increases the cost of everything else through increase production costs and operating expenses. What ends up happening, usually, is it begins or continues a decline in the median income (Compared MotherJones.com with the Minimum Wage increases). What ends up happening is prices increase to compensate and those with a higher minimum wage simply end up where they were to begin with except they have to do it with more paper and it makes businesses less competitive in the world.
And those are my 5 takeaways from the State of the Union address last night.
I am sure if I went back I could find many other issues to address. One positive I did take from Obama was his interest in decreasing our military tendency to engage in conflict and return to pursuing diplomacy. From his history this was obviously a slanted version on how he has handled this before but we do need to get out nose out of everything in the world. But that is also beyond the scope of this post.
Please share your thoughts and opinions in the comments below. I would really like to hear them.
And for those of you that missed it, here is the Presidents State of the Union address…