Gary North on current economic affairs and investment marketsGary North -- Specific Answers
HomeContact MeTell a FriendText SizeSearchMember Area
Gain immediate access to all of our current articles, the question-and-answer forums, dozens of free books, and article archives. Click here for details on how to join.

About This Site
Academic Gaps
Articles
Capitalism and the Bible
Clichés of Protectionism
College Finances
Debt Management
Ellen Brown: Critique
Federal Reserve Charts
Gary North's Free Books
Get Published Here!
Gold Price & My Report
Keynes Project
Price Index (U.S.A.)
Questions for Jim Wallis
Remnant Review
Social Security/Medicare
Sustained Revival
Tea Party Economist
U.S. Debt Clock
Yield Curve
Your YouTube Channel
Gary North's Miscellany
Advertising
Blogging
Budgeting for Wealth
Business Start-Up
Career Advancement
Digital Tools
Education That Works
Evernote: Free Notes
Federal Reserve Policy
Fireproof Your Job
Goal-Setting for Success
Great Default
Inheritance Strategies
Insurance
International Investing
Investment Basics
Job and Calling
Keynesian Economics
Leadership
Marketing Case Studies
Obamanomics
Precious Metals
Real Estate
Retirement
Safe Places
State of the Economy
Stocks and Bonds
Study Habits
Video Channel Profits
War With Iran
Members' Free Manuals
Our Products
Contact Me
Help
Tell a Friend
Text Size
Your Account
My 100% Guarantee
Privacy Policy
Terms of Use


This site powered by MemberGate
home | Tea Party Economist | Obama: A Keynesian, Not a Communist
 

Obama: A Keynesian, Not a Communist

Gary North - February 15, 2013
Printer-Friendly Format

Reality Check

"It is said that if you know your enemies and know yourself, you will not be imperiled in a hundred battles; if you do not know your enemies but do know yourself, you will win one and lose one; if you do not know your enemies nor yourself, you will be imperiled in every single battle." -- Sun Tzu

Step one: know your enemy.

The President's State of the Union address was long: 11 pages, single-spaced.

It was standard stuff: a laundry list of Keynesian programs, few of which will get by the House of Representatives. It was an exercise in futility. Fortunately.

He began his laundry list with economic inequality, as a good Progressive always does. "But we gather here knowing that there are millions of Americans whose hard work and dedication have not yet been rewarded. Our economy is adding jobs -- but too many people still can't find full-time employment. Corporate profits have skyrocketed to all-time highs -- but for more than a decade, wages and incomes have barely budged."

He appealed to the middle class, as every politician does. "It is our generation's task, then, to reignite the true engine of America's economic growth -- a rising, thriving middle class. (Applause.)" This is where the votes are. Then came bipartisan platitudes:

It is our unfinished task to restore the basic bargain that built this country -- the idea that if you work hard and meet your responsibilities, you can get ahead, no matter where you come from, no matter what you look like, or who you love. It is our unfinished task to make sure that this government works on behalf of the many, and not just the few; that it encourages free enterprise, rewards individual initiative, and opens the doors of opportunity to every child across this great nation. (Applause.)

Nothing Communist here. Why people say he is a Communist baffles me. He is a Keynesian. They all are.

The American people don't expect government to solve every problem. They don't expect those of us in this chamber to agree on every issue. But they do expect us to put the nation's interests before party. (Applause.) They do expect us to forge reasonable compromise where we can. For they know that America moves forward only when we do so together, and that the responsibility of improving this union remains the task of us all.

This is Sam Rayburn's politics: "Go along to get along."

He talked about the federal deficit. He lied. He said they have reduced the deficit. "Over the last few years, both parties have worked together to reduce the deficit by more than $2.5 trillion -- mostly through spending cuts, but also by raising tax rates on the wealthiest 1 percent of Americans." Reduce the deficit? It runs $1 trillion a year. Nobody has done anything to reduce it. As for spending cuts, both parties are trying to get out of the sequestration cuts that will hit in March.

"As a result, we are more than halfway towards the goal of $4 trillion in deficit reduction that economists say we need to stabilize our finances." At $1 trillion a year, the crisis is inevitable.

But he wants out of the 2011 deal.

In 2011, Congress passed a law saying that if both parties couldn't agree on a plan to reach our deficit goal, about a trillion dollars' worth of budget cuts would automatically go into effect this year. These sudden, harsh, arbitrary cuts would jeopardize our military readiness. They'd devastate priorities like education, and energy, and medical research. They would certainly slow our recovery, and cost us hundreds of thousands of jobs. That's why Democrats, Republicans, business leaders, and economists have already said that these cuts, known here in Washington as the sequester, are a really bad idea.

It's deficits today, deficits forever. It's kick the can.

He correctly identified the #1 problem: Medicare.

Yes, the biggest driver of our long-term debt is the rising cost of health care for an aging population. And those of us who care deeply about programs like Medicare must embrace the need for modest reforms -- otherwise, our retirement programs will crowd out the investments we need for our children, and jeopardize the promise of a secure retirement for future generations.

The solution? Tax the rich . . . the universal solution for Democrats.

But we can't ask senior citizens and working families to shoulder the entire burden of deficit reduction while asking nothing more from the wealthiest and the most powerful. (Applause.) We won't grow the middle class simply by shifting the cost of health care or college onto families that are already struggling, or by forcing communities to lay off more teachers and more cops and more firefighters. Most Americans -- Democrats, Republicans, and independents -- understand that we can't just cut our way to prosperity. They know that broad-based economic growth requires a balanced approach to deficit reduction, with spending cuts and revenue, and with everybody doing their fair share. And that's the approach I offer tonight.

He says he will go with Simspon-Bowles. Really? Why now? Why not when it was proposed in 2010? Why did he oppose it? Why did the Democrats in Congress oppose it?

On Medicare, I'm prepared to enact reforms that will achieve the same amount of health care savings by the beginning of the next decade as the reforms proposed by the bipartisan Simpson-Bowles commission. (Applause.)

Meanwhile, stick it to the rich!

Already, the Affordable Care Act is helping to slow the growth of health care costs. (Applause.) And the reforms I'm proposing go even further. We'll reduce taxpayer subsidies to prescription drug companies and ask more from the wealthiest seniors. (Applause.) We'll bring down costs by changing the way our government pays for Medicare, because our medical bills shouldn't be based on the number of tests ordered or days spent in the hospital; they should be based on the quality of care that our seniors receive. (Applause.) And I am open to additional reforms from both parties, so long as they don't violate the guarantee of a secure retirement. Our government shouldn't make promises we cannot keep -- but we must keep the promises we've already made. (Applause.)

And how will this be done? The system is a gigantic squid. Why now? What's new?

To hit the rest of our deficit reduction target, we should do what leaders in both parties have already suggested, and save hundreds of billions of dollars by getting rid of tax loopholes and deductions for the well-off and the well-connected. After all, why would we choose to make deeper cuts to education and Medicare just to protect special interest tax breaks? How is that fair? Why is it that deficit reduction is a big emergency justifying making cuts in Social Security benefits but not closing some loopholes? How does that promote growth? (Applause.)

In short, raise taxes.

The real deficit is $222 trillion. He never mentioned that. They never do.

Then he returned to that old favorite, a simplified tax code.

Now is our best chance for bipartisan, comprehensive tax reform that encourages job creation and helps bring down the deficit. (Applause.) We can get this done. The American people deserve a tax code that helps small businesses spend less time filling out complicated forms, and more time expanding and hiring -- a tax code that ensures billionaires with high-powered accountants can't work the system and pay a lower rate than their hardworking secretaries; a tax code that lowers incentives to move jobs overseas, and lowers tax rates for businesses and manufacturers that are creating jobs right here in the United States of America. That's what tax reform can deliver. That's what we can do together. (Applause.)

We have waited since 1913.

He called for bipartisanship. That means "do it my way."

I realize that tax reform and entitlement reform will not be easy. The politics will be hard for both sides. None of us will get 100 percent of what we want. But the alternative will cost us jobs, hurt our economy, visit hardship on millions of hardworking Americans. So let's set party interests aside and work to pass a budget that replaces reckless cuts with smart savings and wise investments in our future. And let's do it without the brinksmanship that stresses consumers and scares off investors. (Applause.) The greatest nation on Earth cannot keep conducting its business by drifting from one manufactured crisis to the next. (Applause.) We can't do it.

In short, no more debt ceiling battles. Capitulate! But the question is: How to avoid these battles? No one knows.

Let's agree right here, right now to keep the people's government open, and pay our bills on time, and always uphold the full faith and credit of the United States of America. (Applause.) The American people have worked too hard, for too long, rebuilding from one crisis to see their elected officials cause another. (Applause.)

Translation: "Let us kick the can!" We must create jobs. How? By government action. Government creates jobs.

But tonight, I'll lay out additional proposals that are fully paid for and fully consistent with the budget framework both parties agreed to just 18 months ago. Let me repeat -- nothing I'm proposing tonight should increase our deficit by a single dime.

And pigs can fly.

It is not a bigger government we need, but a smarter government that sets priorities and invests in broad-based growth. (Applause.) That's what we should be looking for.

The reason why we face a $222 trillion deficit is because of big government. It will get much bigger unless it defaults, which it will.

Our first priority is making America a magnet for new jobs and manufacturing. After shedding jobs for more than 10 years, our manufacturers have added about 500,000 jobs over the past three. Caterpillar is bringing jobs back from Japan. Ford is bringing jobs back from Mexico. And this year, Apple will start making Macs in America again. (Applause.)

This has been going on for 35 years. What will reverse it?

Boondoggles!

There are things we can do, right now, to accelerate this trend. Last year, we created our first manufacturing innovation institute in Youngstown, Ohio. A once-shuttered warehouse is now a state-of-the art lab where new workers are mastering the 3D printing that has the potential to revolutionize the way we make almost everything. There's no reason this can't happen in other towns. So tonight, I'm announcing the launch of three more of these manufacturing hubs, where businesses will partner with the Department of Defense and Energy to turn regions left behind by globalization into global centers of high-tech jobs. And I ask this Congress to help create a network of 15 of these hubs and guarantee that the next revolution in manufacturing is made right here in America. We can get that done. (Applause.)
We must bankroll science: the drug industry.

Now, if we want to make the best products, we also have to invest in the best ideas. Every dollar we invested to map the human genome returned $140 to our economy -- every dollar. Today, our scientists are mapping the human brain to unlock the answers to Alzheimer's. They're developing drugs to regenerate damaged organs; devising new material to make batteries 10 times more powerful. Now is not the time to gut these job-creating investments in science and innovation. Now is the time to reach a level of research and development not seen since the height of the Space Race. We need to make those investments. (Applause.)

Why won't the free market make these investments?

The man is a Keynesian.

More boondoggles! More Solyndras!

Today, no area holds more promise than our investments in American energy. After years of talking about it, we're finally poised to control our own energy future. We produce more oil at home than we have in 15 years. (Applause.)

We must reduce carbon emissions. We must fight what used to be called global warming, before we had a decade of stable temperatures.

But for the sake of our children and our future, we must do more to combat climate change. (Applause.) Now, it's true that no single event makes a trend. But the fact is the 12 hottest years on record have all come in the last 15. Heat waves, droughts, wildfires, floods -- all are now more frequent and more intense. We can choose to believe that Superstorm Sandy, and the most severe drought in decades, and the worst wildfires some states have ever seen were all just a freak coincidence. Or we can choose to believe in the overwhelming judgment of science -- and act before it's too late. (Applause.)

So, it's the same old story. He has not learned. The public has caught on. The scare is fake. But the intellectual class believes it's real.

The man is a standard liberal. He is not a Communist.

He reached out to other liberals:

Now, the good news is we can make meaningful progress on this issue while driving strong economic growth. I urge this Congress to get together, pursue a bipartisan, market-based solution to climate change, like the one John McCain and Joe Lieberman worked on together a few years ago. But if Congress won't act soon to protect future generations, I will. (Applause.)

And if Republicans resist, it's time for some executive tyranny.

I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.

Let's subsidize solar energy, he said. Solyndra forever!

Four years ago, other countries dominated the clean energy market and the jobs that came with it. And we've begun to change that. Last year, wind energy added nearly half of all new power capacity in America. So let's generate even more. Solar energy gets cheaper by the year -- let's drive down costs even further. As long as countries like China keep going all in on clean energy, so must we.

(In fact, China is going "all in" on nuclear power, with two dozen plants under construction.)

We need more government-funded research.

In fact, much of our new-found energy is drawn from lands and waters that we, the public, own together. So tonight, I propose we use some of our oil and gas revenues to fund an Energy Security Trust that will drive new research and technology to shift our cars and trucks off oil for good. If a nonpartisan coalition of CEOs and retired generals and admirals can get behind this idea, then so can we. Let's take their advice and free our families and businesses from the painful spikes in gas prices we've put up with for far too long.

We need federal energy consumption controls.

I'm also issuing a new goal for America: Let's cut in half the energy wasted by our homes and businesses over the next 20 years. (Applause.) We'll work with the states to do it. Those states with the best ideas to create jobs and lower energy bills by constructing more efficient buildings will receive federal support to help make that happen.
We need federal pothole controls.

America's energy sector is just one part of an aging infrastructure badly in need of repair. Ask any CEO where they'd rather locate and hire -- a country with deteriorating roads and bridges, or one with high-speed rail and Internet; high-tech schools, self-healing power grids.

Spend, spend, spend!

So tonight, I propose a "Fix-It-First" program to put people to work as soon as possible on our most urgent repairs, like the nearly 70,000 structurally deficient bridges across the country. (Applause.) And to make sure taxpayers don't shoulder the whole burden, I'm also proposing a Partnership to Rebuild America that attracts private capital to upgrade what our businesses need most: modern ports to move our goods, modern pipelines to withstand a storm, modern schools worthy of our children. (Applause.) Let's prove that there's no better place to do business than here in the United States of America, and let's start right away. We can get this done.

We need more household debt. Americans will borrow their way to prosperity.

Right now, there's a bill in this Congress that would give every responsible homeowner in America the chance to save $3,000 a year by refinancing at today's rates. Democrats and Republicans have supported it before, so what are we waiting for? Take a vote, and send me that bill. (Applause.) Why would we be against that? (Applause.) Why would that be a partisan issue, helping folks refinance? Right now, overlapping regulations keep responsible young families from buying their first home. What's holding us back? Let's streamline the process, and help our economy grow.

The market needs federal spending. "These initiatives in manufacturing, energy, infrastructure, housing -- all these things will help entrepreneurs and small business owners expand and create new jobs. But none of it will matter unless we also equip our citizens with the skills and training to fill those jobs. (Applause.)"

The man is a Keynesian.

We need federal day cares.

And that has to start at the earliest possible age. Study after study shows that the sooner a child begins learning, the better he or she does down the road. But today, fewer than 3 in 10 four year-olds are enrolled in a high-quality preschool program. Most middle-class parents can't afford a few hundred bucks a week for a private preschool. And for poor kids who need help the most, this lack of access to preschool education can shadow them for the rest of their lives. So tonight, I propose working with states to make high-quality preschool available to every single child in America. (Applause.) That's something we should be able to do.

What will this cost? He did not say. He never says.

He gave us statistics . . . but no evidence.

Every dollar we invest in high-quality early childhood education can save more than seven dollars later on -- by boosting graduation rates, reducing teen pregnancy, even reducing violent crime. In states that make it a priority to educate our youngest children, like Georgia or Oklahoma, studies show students grow up more likely to read and do math at grade level, graduate high school, hold a job, form more stable families of their own. We know this works. So let's do what works and make sure none of our children start the race of life already behind. Let's give our kids that chance. (Applause.)

But that's just the beginning.

Tonight, I'm announcing a new challenge to redesign America's high schools so they better equip graduates for the demands of a high-tech economy. And we'll reward schools that develop new partnerships with colleges and employers, and create classes that focus on science, technology, engineering and math -- the skills today's employers are looking for to fill the jobs that are there right now and will be there in the future.

The SAT test scores have fallen for 50 years. But this will change all that. Believe! Clap, and Tinker Bell will live!

We need Joe Biden's 20-year-old law to stop violence against women. He said: "Good job, Joe."

We need wage controls, too. "And I ask this Congress to declare that women should earn a living equal to their efforts, and finally pass the Paycheck Fairness Act this year. (Applause.)"

The man is a Keynesian.

We need a higher minimum wage. Government can do it. The free market can't.

We know our economy is stronger when we reward an honest day's work with honest wages. But today, a full-time worker making the minimum wage earns $14,500 a year. Even with the tax relief we put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That's wrong. That's why, since the last time this Congress raised the minimum wage, 19 states have chosen to bump theirs even higher. Tonight, let's declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour. (Applause.) We should be able to get that done. (Applause.)

The man is a Keynesian.

So here's an idea that Governor Romney and I actually agreed on last year -- let's tie the minimum wage to the cost of living, so that it finally becomes a wage you can live on. (Applause.)

Romney is a Keynesian, too.

We need bailouts for cities.

Let's offer incentives to companies that hire Americans who've got what it takes to fill that job opening, but have been out of work so long that no one will give them a chance anymore. Let's put people back to work rebuilding vacant homes in run-down neighborhoods. And this year, my administration will begin to partner with 20 of the hardest-hit towns in America to get these communities back on their feet. We'll work with local leaders to target resources at public safety, and education, and housing.

What is the key to social healing? The federal government.

Stronger families. Stronger communities. A stronger America. It is this kind of prosperity -- broad, shared, built on a thriving middle class -- that has always been the source of our progress at home. It's also the foundation of our power and influence throughout the world.

At this point, we are only halfway through the address. The rest was devoted to foreign policy. It was a defense of the American empire.

The man is a Keynesian. He is a front man for the Council on Foreign Relations. Nothing new here.

There never is.


Printer-Friendly Format

 Tip of the Week
Sign up for my free
Tip of the Week
Verification Characters:    Type     M  7  R  7  Y     here   


Tip of the week archives
On what this icon
means, and how it
can help you,
click here
 Q & A Forums
General Q&A Forum
Advertising and Resumés
Affiliates
American History Topics
Backyard Food Gardening
Banking and Politics
Blog Sites and Web Sites
Books Worth Reading
Bumper Sticker Slogans
Business Forum
Buying Smart
Christian Service Forum
College -- The Cheap Way
Copywriting
Education Alternatives
Food Storage
For Women Only
Fukushima
GNC Benefits
GNC Testimonials
Gold and Silver
Great Default Forum
Health and Diet
Health Insurance
Homeschooling
Investments Forum
Iran War
Job, Calling, and Career
Leadership Development
Legacy Building
Less Dependent Living
Local Political Action
Non-Retirement Forum
One Good Idea
Police State
Privacy
Public Speaking
Real Estate Forum
Remnant Review Forum
Safe Places Forum
Taxation Policy
Typographical Errors
Video Production Basics

 Archives
Reality Check
 Discussion Forum
Search Discussion


Recent Forum Posts
• Financial Management Sites
• Don't Touch Principle Follow Up
• FOREX (I use OANDA.com) - trading ideas -
• Funding Retirement vs. Paying Off Mortgage
• Timing Canadian dollar purchase
• Investing in specific stocks
• Investing in Christian Businesses
• Asset seizure risk
• 403B Sidelines
• Ammo hoarding
• Abandon Ship?
• The "Ultimate" Simple Portfolio?
• Where and how to go from IRA?
• Shorting Bonds
• The Whole Life of An Economic Ignoramus
• First debt free rental done
• Plaster wall repair and paint
• No-recourse loan in an IRA
• Buying duplex for my 72 yo sis to run from afar
• Depreciation versus maintenance expenses
• lease to own
• Real Estate Wholesaling - Direct Marketing
• Selling a house without a real estate agent
• Inspection before listing house
• Berkshire Hathaway, Inc.
• Giving Tree Realty, LLC
• Equity in home vs. "Liquid" equity
• Advice for Substantial Drop in Price/Negotation
• West coast FL prop management company
• Software reco anyone?
• Will you die getting to your bug out location?
• teaching English overseas - some questions
• The state with the most Liberty
• Switzerland and Firearms
• On "Zip Code Searching On The Web"
• Crash Course in becoming an Expat
• Anyone tried Puerto Rico?
• Chattanooga, Tennessee
• Middle Class squeezed out of Chicago
• An Article on Chile
• 5 Amazing, Cheap Places to Live as an Expat
• Oil Field Job Security
• Moving to TriCities Area
• PJ ORourke on the Baby Boom
• Is Vegas DOOMED?
• advice on how do I interact with my older parents?
• Do You Sincerely Want to Be Rich? Why?
• Req. For No 401(k)/Other Pensions via Relocatio
• Cashing out 401K to pay student debt?
• SS @ 62 and still working
• Desolation or Prosperity?
• I take it Retirement Armageddon is not available
• Post Retirement Career
• Social Security - when to start collecting
• 401K Risk
• Detroit Retirees Fight 83% Health Care Cut
• Lump Sum Early DROP
• Underfunded pensions
• 401k strategy
• Can I Avoid Medicare Entirely?
• Question about paradise corridor
• North, Kline, Wilson, et al.
• Speech by Stanley Fisher Vice Chairman of the Fed
• In lieu of flowers . . .
• Militarism and the Military - Anecdote
• Another question from the Buy Lifestyle article
• “Latitudes of Acceptance” and persuasion
• Lifestyle
• Wordpress.com
• The Cobra Effect
• Babysitting Economics in Canada
• A world with out Fiat Money ? Back to the future ?
• How Far $100 Gets You In Your State
• Apprenticeships and females
• Fantasy Football 2014
• Retail vs Online - a personal experience
• freeman workbook on entrepreneurism
• Selling ad space in my newsletter
• Angel's Game
• aweber list and marketing
• Paid counseling web site
• Wife's small business - Spanish Immersion 4 chldr
• Alternative to Quicken 2014 needed
• wds2014 in Portland, Oregon
• Max cash flow ideas with a spare $100k
• Getting Your First Client
• Starting Nature Trail business
• Book or Resource on Writing Business Plan
• start-up biz for kids...
• Fiji experts?