All Commentary
Friday, January 29, 2010

The State of Obama’s Union

U.S. Government! U.S. Government!


“[T]he nation that leads the clean energy economy will be the nation that leads the global economy. And America must be that nation.”

That line from Wednesday night’s state of the union address was one of several in which the current White House occupant, Barack Obama, displayed a rather ominous nationalist—even chauvinist—streak.

He also said, Germany and China “are not standing still. These nations aren’t playing for second place. They’re putting more emphasis on math and science. They’re rebuilding their infrastructure. They’re making serious investments in clean energy because they want those jobs. Well, I do not accept second place for the United States of America.”

And: “There’s no reason Europe or China should have the fastest trains, or the new factories that manufacture clean energy products.”

Now some people will think, “What’s wrong with that? All he’s doing is rallying the American people, who are mired in recession and pessimism.”

But of course, that is not all he did. “[W]e made the largest investment in basic research funding in history,” Obama boasted in his speech.

And: “[T]o create more of these clean energy jobs, we need more production, more efficiency, more incentives. And that means building a new generation of safe, clean nuclear power plants in this country. It means making tough decisions about opening new offshore areas for oil and gas development. It means continued investment in advanced biofuels and clean coal technologies.”

And: “[W]e need to export more of our goods. Because the more products we make and sell to other countries, the more jobs we support right here in America. So tonight, we set a new goal: We will double our exports over the next five years, an increase that will support two million jobs in America. To help meet this goal, we’re launching a National Export Initiative that will help farmers and small businesses increase their exports, and reform export controls consistent with national security.”

(He neglected to point out that buying imports gives foreigners the money with which to buy American exports.)

And: “We have to seek new markets aggressively, just as our competitors are.” (Flashbacks to nineteenth century imperialism.)

And: “If America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores.”

He also called for further manipulation of the tax code (tax credits) to induce small businesses to hire workers and raise wages, to shift the economy from carbon to renewable green energy sources, to make it easier to go to college (pointless and even damaging for most people), and more.

The upshot? In Obama’s mind, the way to make America (the entity) — us — No. 1 is to have the central government coordinate economic activity, to set goals, and to construct incentives to carry out its objectives. We will do this. Hey, you! Back in line and keep quiet.

Behind the “U.S.A! U.S.A!” is an economy guided by a coterie of politicians, bureaucrats, and their colleagues in what is quaintly still called the “private sector.” Call it what you will, it is not a free market.

This is the truth behind economic nationalism, including “energy independence.” Setting goals for “America” means setting goals for individuals — which means using a variety of measures to direct their economic activities.

This would not be new, of course, just much more of the same. Such intervention to one degree or another has been a feature of the United States for generations. But let’s be clear that this is what Obama heartily embraces.

No Marxist He

If we don’t get the analysis right, we won’t get the response right. Despite what some popular right-wing talk-show hosts claim, Obama is not pushing Marxism, revolutionary or otherwise. The threat is not from socialism in the sense of State ownership of the means of production, much less a proletarian uprising. Rather, he’s pushing good old American progressive-corporate elitism, or corporatism. (Some would simply call it capitalism.) It is anti-free market, but not anti-business.

By that I mean business people, especially those who run big well-connected incumbent firms, love this sort of thing. Why take chances and risk market share in the unpredictable free market when I can get government to keep things orderly? (Translation: tame the competitive process.) Laissez faire is so unrefined. Would the bankers want it? Better yet, let’s have government buy — or require/encourage others to buy — my products. Remember that in Atlas Shrugged Ayn Rand warned of the approaching corporate-state alliance.

A few more observations from Obama’s speech:

“[T]he longer it [health care] was debated, the more skeptical people became.”

Now what does that tell us? His impatience with debate reminds me of what Hayek had to say in The Road to Serfdom about government planning’s being incompatible with democracy.

“I take my share of the blame for not explaining it more clearly to the American people.”

Is he trying to fool us or himself? The problem was not an inadequate explanation of the health care monstrosity. People got the point all too well.

“But each time a CEO rewards himself for failure, or a banker puts the rest of us at risk for his own selfish gain, people’s doubts grow. Each time lobbyists game the system or politicians tear each other down instead of lifting this country up, we lose faith…. No wonder there’s so much cynicism out there. No wonder there’s so much disappointment.” (Emphasis added.)

That’s the worst offense he could think of for politicians? He just wasn’t not trying.

Here’s to continued doubt, lack of faith, and cynicism about statism.


  • Sheldon Richman is the former editor of The Freeman and a contributor to The Concise Encyclopedia of Economics. He is the author of Separating School and State: How to Liberate America's Families and thousands of articles.