Advice to Barack Obama by Two People Who Didn't Vote for Him (or John McCain)

But just might if he ever got serious about governing.


The time for action is over; the time for talk is now.

The annual State of the Union address (SOTU), one of the lamest pseudo-spectacles in all of politics, is once again upon us. The one bright side: Even before the speech is over, it will already be forgotten.

SOTU is the equivalent of the old ABC Superstars competition from the 1970s, without the human drama of seeing whether Lou Ferrigno can finish an 800-yard run. It's a mixed-up, shook-up exercise in ring-kissing theatrics and gravity-defying promises that no one even pretends will be kept. Forget George W. Bush's Mission to Mars, or Bill Clinton's vow to "put Social Security on a sound footing for the next 75 years." Do you even remember the current president's prime-time joint session promise 11 months ago to "make hard choices to bring our deficit down"? 

This year, the SOTU can, should, and won't be remarkably brief, sparing us the Castro-length perorations of the Clinton years and the rhetorical mediocrity of the Bush era. The country is mired in a long-term recession whose causes are largely the result of rotten government policies (inflating the housing bubble, showering the economy with cheap money, etc.) and whose length has been increased by equally rotten government responses that have kept markets from finding their true bottom while scaring businessess away from getting on with random acts of recovery. Who in their right mind would start investing in the future when a trillion-dollar health care plan, a banking-regulation overhaul, and an enormous de facto carbon tax were all in the offing? Now is not the time either for Stimulus McTARP-HAMP Vol. 2, nor mickey-mouse schemes like cash-for-caulkers, the vice president's goofy plan to stimulate the economy by weatherizing vacant homes in Detroit. 

So here's some advice for President Barack Obama, who was elected on a platform of hope and change and has, after a year in office, helped dash hope by changing things mostly for the worse. We write not as Democratic Party hacks who are slow to wipe the sparkles from their eyes (we aren't asking you to recalibrate your "cool, detached temperament"), nor as Republican Party dead-enders (who turned against TARP only upon learning it would be administered by you rather than John McCain). 

Instead, we write as libertarian enthusiasts and political independents who think that the large majority of Americans that wants fewer government services and less government interference in our social and economic lives should, at long last, be taken seriously. That means no longer pretending that the people who oppose Obamanomics are all opportunistic Republicans or mis-informed voters bedazzled by nefarious special interests. 

Your policies are increasingly unpopular because they are no good. Take the $787 billion stimulus package. Fifty-six percent of Americans now oppose the stimulus, with only 42 percent supporting it. A year ago, those numbers were reversed. The American people have learned what economists such as Robert Barro and Valerie Ramey could have told you a long time ago: that a dollar increase in government spending results in no more (and almost certainly less) than a dollar increase in economic activity. Your estimates about how many jobs would be "created" by the stimulus package—a term of art later modified to "saved or created," then downgraded further to "funded"—have been slippery, unconvincing, and wildly off-base. The same goes for your estimates on the unemployment rate, still in double digits and not improving despite confident predictions that the stimulus would cap the bleeding at 9 percent. 

The stimulus is not unpopular because of evil lobbyists or hypocritical Republicans (many of whom voted for George W. Bush's forgotten and equally ineffective 2008 stimulus); it's unpopular because it transfers money from Main Street to Wall Street (despite your many protestations to the contrary), and it's unpopular because it doesn't work. It can't work, because government can only spend money by taking it from the current or future economy. Not only that, the artificial props of federal spending puts off the day of reckoning for the very sectors of the economy that melted down in the first place: Housing, mortgage finance, and banking. The best thing you can do for the economy right now is give it a break from some sort of real or imagined "transformational" program that requires continuously increasing debt ceilings. 

Your spending priorities are less than compelling. You campaigned on a promise to enact a "net spending cut" in federal outlays, a commendably (if unconvincingly) plain-spoken vow after the brazen irresponsibility of the Bush years. Yet the first big spending bill you signed last March helped set what in the most hopeful case will be the equivalent of Bob Beamon's Olympic long jump of 1968—a record for spending that won't be touched for decades. Despite your promise to cut earmarks, the bill was packed with more pork than the Oscar Meyer WeinerMobile, which is only one of the reasons why overall federal spending in fiscal year 2009 increased 32 percent over the previous year. 

Tack onto all this the slow-motion car wreck that was health care "reform" (your word, not ours). At some point, you talked about the need to contain costs and introduce choice and competition into a system chronically short on both. Yet in your big speech on the matter last fall, you ruled out the most basic reform of all: Breaking the link between employment and insurance, so that individuals can shop for and own their own policies regardless of work situation. And the plans pushed forward by your filibuster-proof majority in the Senate did little to address these concerns, either, no matter how minutely they gamed the scoring rules set forth by the Congressional Budget Office. You may have bought off Big Insurance with an individual mandate (thereby growing the number of people they could insure, or be subsidized to insure) and repeated the trick with Big Pharma through various plans to maintain or increase their market shares, but you couldn't fool most of the people any of the time that the end result would over the long haul magically reduce, rather than balloon, the deficit. 

We could add here a string of broken promises and dashed hopes on closing Guantanamo, reversing discrimination against gays, and paring back our overseas military commitments, but the headline story of your presidency is about one crucial thing: economic policy and results. With the grime of governance having replaced the gauze of campaigning, the country has now been able to focus on something that wasn't quite as clear in November 2008: That when it comes to basic economic orientation, the main "change" in this presidency is a reversion to the pre-Bill Clinton days of Keynesian faith in centralized planning by technocratic experts in the name of empathizing with the downtrodden. It didn't work then, and it isn't working now. 

You want to win back the faith that most voting Americans placed in you 14 months ago? Start by taking your own promises seriously, rather than treating them as short-term fixes for your long-term drop in popularity. Continue by taking the American people seriously, by acknowledging that their differences of opinion with you on economic policy spring from a genuine place. And finish by doing something no president since Bill Clinton has even tried: Scale back ambitions. Pay as you go. Limit the growth of government.

A thousand central planners before you have learned it the hard way: Prosperity isn't something the government creates, it's something the government, in the best case, can enable, mostly by establishing a set of simple rules and getting the hell out of the way.

Matt Welch is the editor in chief of Reason magazine. Nick Gillespie is the editor in chief of Reason.tv and Reason.com.