The text of Obama's major economic address, delivered live earlier today, has been posted. Read it and weep here.
The short version: We're gonna spend like there's no tomorrow. Because if the government doesn't spend enough right now, there ain't gonna be no tomorrow.
Highlights include generic shout-outs to massive spending and then a steaming pile of feel-good slogans such as these:
We will modernize more than 75% of federal buildings and improve the energy efficiency of two million American homes, saving consumers and taxpayers billions on our energy bills. In the process, we will put Americans to work in new jobs that pay well and can't be outsourced - jobs building solar panels and wind turbines; constructing fuel-efficient cars and buildings; and developing the new energy technologies that will lead to even more jobs, more savings, and a cleaner, safer planet in the bargain….
[W]e will make the immediate investments necessary to ensure that within five years, all of America's medical records are computerized….
We'll provide new computers, new technology, and new training for teachers so that students in Chicago and Boston can compete with kids in Beijing for the high-tech, high-wage jobs of the future….
We'll put people to work repairing crumbling roads, bridges, and schools by eliminating the backlog of well-planned, worthy and needed infrastructure projects. But we'll also do more to retrofit America for a global economy. That means updating the way we get our electricity by starting to build a new smart grid that will save us money, protect our power sources from blackout or attack, and deliver clean, alternative forms of energy to every corner of our nation. It means expanding broadband lines across America, so that a small business in a rural town can connect and compete with their counterparts anywhere in the world.
Wow, that's change everyone can believe in! We're going to put people to work computerizing medical records, changing lightbulbs, turning wind turbines, you name it. The whole thing, featuring various exhortations to not delay ("We could lose a generation of potential and promise") in passing even more spending bills, is here.
How did we get here? Obama calls out the following:
Too many Wall Street executives made imprudent and dangerous decisions, seeking profits with too little regard for risk, too little regulatory scrutiny, and too little accountability. Banks made loans without concern for whether borrowers could repay them, and some borrowers took advantage of cheap credit to take on debt they couldn't afford. Politicians spent taxpayer money without wisdom or discipline, and too often focused on scoring political points instead of the problems they were sent here to solve. The result has been a devastating loss of trust and confidence in our economy, our financial markets, and our government.
That's all true, though it's really important to underscore that by implicitly and explicitly guaranteeing market losses for homeowners and investors, the government radically alters the ways in which people behave. And sets up precisely the next big tumble. The losses surrounding Bernie Madoff involve mostly the fat-cat shitheads who invested with him; we're unlikely to socialize those bad choices.
On the point of "the devastating loss of trust and confidence," I direct Hit & Run readers' attention once again to a terrfying-if-true working paper titled "Regulation and Distrust," by Philippe Aghion, Yann Algan, Pierre Cahuc, and Andrei Shleifer. The authors argue:
"Distrust influences not just regulation itself, but the demand for regulation. Using the World Values Survey, we show both in a cross-section of countries, and in a sample of individuals from around the world, that distrust fuels support for government control over the economy. What is perhaps most interesting about this finding…is that distrust generates demand for regulation even when people realize that the government is corrupt and ineffective."
Read the whole thing here. And despair.