SOTU Preview: My Government Keeps Talking About "Competitiveness" And All I Got Was Debt Up the Ying-Yang
Stock up on those 5 Hour Energy drinks for tonight's State of the Union Address by President Barack Obama. By all early accounts, this speech will be a strong dose of been there, done that redux.
The Washington Post says Obama "will call for a broad 'competitiveness' initiative in Tuesday night's State of the Union address, proposing a series of steps the United States should take to retain its standing as the world's largest and most influential economy." Wait, there's more:
In a speech Friday at General Electric plant in Upstate New York, Obama said that the "new mission" of his administration's policies would be to "do everything we can to ensure that businesses can take root and folks can find good jobs and America is leading the global competition that will determine our success in the 21st century."
What form will that competitiveness mission take? Increased spending, of course, especially when it comes to education and infrastructure. As The New York Times puts it, here's the crux of it all:
When President Obama uses his State of the Union address on Tuesday to rally America to "outbuild" other nations, he will face an unusual challenge: getting Republicans to embrace public works projects again as the kind of worthy bacon they have traditionally fought to bring home, and not as wasteful pork that should be spurned.
Here's a note to Obama's tacticians: If you want the GOP to curl up around your feet, just tell 'em you're investing in defense spending and homeland security. All indications so far are that, with a few exceptions (cough, cough, Ron and Rand Paul, cough, cough), virtually all Republicans are still in thrall to the idea that the government can't deliver the mail worth a damn but can somehow efficiently prosecute region-building exercises everywhere west of California and east of Rhode Island.
More to the point: We have seen the "competitiveness" agenda and, like the future in the Soviet Union, it doesn't work.
So some words of advice to the president:
We have already "invested" tons of loot into K-12 education. The facts are clear on this: Since 1970, per pupil expenditures on K-12 education have more than doubled, and class sizes has shrunk. Yet, graduating high school seniors are performing at precisely the same levels as they were 40 years ago. The system doesn't work as is, and all the extra dough in the world ain't gonna change that.
It's ironic that you will be talking about the need for increased competitiveness and schooling during National School Choice Week, a non-partisan initiative to drum up interest in expanding educational options for kids. You want competitiveness in K-12 education, the sort of intervention that would individualize learning, alter power-dynamic, increase student and parental satisaction rates, and save money? Abolish the federal Department of Education, established not too long ago (1980), and spend its billions and billions of dollars on Rosetta Stone programs for grammar school kids.
Somewhat more seriously, Mr. President: Just say that the federal government will no longer give federal dollars to schools that are not schools of choice. You've never sent your kids to a school that gets students and tax dollars just because people are forced to send their kids there. Extend that choice to all parents and instead of joking around with B.S. programs like "The Race to the Top," which spent less ($4 billion) on generating innovation and reform than you immediately gave to educrats right after the winners of that contest were announced ($10 billion in pure pork just before the 2010-2011 school year started).
When it comes to higher education, you're getting props from all manner of rich broadcasters who love Pell Grants and low, low loans to college students (unless, of course, they go to for-profit, trade schools, which everyone with a B.A. from a four-year college knows, are pure evil). But the fact is, all that government money and subsidization for education creates a bubble just like it does in the housing market. In fact, the higher-ed bubble just keeps a-blowing. Those of us who spent 20 years or so getting degrees love us schooling but there comes a certain point, like turning Pell Grants into entitlements, where you just gotta say WTF and let markets price what college should cost.
Then there's that other black hole known as "infrastructure improvement." You know, Americans may pride themselves on being free from the shackles of history, but even the most ignorant among us remembers the Golden Age of Shovel-Ready Projects. We have yet to forget the triumph and drama of such urgently needed local improvements as the police facility solar panels of Lake Havasu, Arizona that would, the nation's buck-hungry mayors told us, would cost just $400,000 and generate 75 jobs; or the O'Malley Road Reconstruction in Anchorage, Alaska that we were told would create a whopping 300 jobs for just $30 milion in stimulus funds. And let's not forget the $71,000 that Manhattan, Kansas wanted to spend on a traffic light coordinator. According to your admin's own predictions regarding the unemployment rate and jobs created (later reduced to "saved," for at least as long stimulus dollars flowed) the stimulus didn't work. Don't double down on failure. You're already doing that in Afghanistan and there's no need to bring that war home.
There's at least two things to keep in mind about pouring more money—sorry, investment—down the rat hole of building bridges and super-trains that can go almost as fast as cars while costing 10 times as much. First, we're broke, at the state level, the local level, and the federal level. Check it out, why dontcha? Federal outlays in real terms are up 60 percent since Bill Clinton hit the bricks. If George W. Bush was the fuse, you, sir, are the explosion. In 2007, the fed's debt-to-GDP ratio was 37 percent. Now it's 63 percent and climbing faster than a dog-chased postman up a tree. You can't even pass a goddamned budget for this fiscal year and you're going to tell us we need to shell out more dough than ever?
Here's the kicker: To the extent that we need to maintain and increase infrastructure in the country, there's no need to spend public dollars. Take a page from the super-successful long-term lease of the Indiana Toll Road, where the Hoosier State dumped an epic money-losing white elephant on a private firm that a) paid almost $4 billion up front for a 75-year lease; b) pledged to do precisely the sort of improvements that the state couldn't afford, and c) will follow state guidelines or see its lease revoked. Spending on roads and the like (including absolutely useless money pits like high-speed rail) won't stimulate the economy or get people from point A to point B. They will saddle us with even more debt, which will either burden us with higher taxes or squeeze credit markets for the private sector. There's a ton of firms who are ready and willing to expand road capacity using their own money in exchange for the ability to make dollars off that increased capacity. You're sweating over China. Well, China is building most of its infrastructure with private funds. This may be one of the cases where it's worth following their lead.
The GOP got elected to a majority in the House of Representatives because your first two years have been a disaster for most of us. And note that the disaster isn't because you were stymied in your ambitions. It was because you got exactly what you asked for: Unpopular bailouts to banktards and car companies and deadbeat mortage holders, stimulus spending up the wazoo, vague yet "transformative" health care reforms, financial regulation overhaul that will only make it more difficult for low-income folks to get credit cards, you name it.
Now that they are in power, of course, Republicans are sputtering like a Chevy Monza when it comes to naming something/anything they'll cut other than maybe kinda sorta NPR funding. Be brave and tell them and America that you're ready to take on the entitlement spending that is outta control and is a bad deal especially for poorer and darker Americans who get stiffed on Social Security and Medicare. And tell us you're ready to free up all the dead capital and dead bodies and forsaken futures that are trapped in military budget that is more than six times what China shells out in absolute dollars and more than twice as much in terms of percentages of GDP. You want the U.S. to be "competitive," then maybe just maybe it's time to give more power to the people who pay the bills for the sorry situation we're in right now.
Sometimes freedom's just another word for nothing left to lose. And as residents of a variety of countries (including Canada, New Zealand, Sweden, and Lithuania) could tell you, sometimes austerity is just another word for economic expansion.