Caught between Scylla and Charybdis

(Oops! I changed the time but forgot to change it to PM, and I didn't change the date either. Writing about the SOTU at 2 p.m. on Tuesday? Call me psychic.)

Transcript: President Bush's 2006 State of the Union Address

Transcript: Gov. Tom Kaine delivering the Democratic response

President Bush said some good things tonight in his State of the Union speech, but some bad things too. And as I fully expected, the Democratic response, instead of challenging President Bush on the actual Constitutional limits on the federal government, relied on partisan politics and new myths like "energy independence" and that the federal government should "serve us."

As I'm writing this up from my quickly typed notes, Fox News showed a clip that I didn't notice before. John Kerry turned to his left and said something to Dianne Feinstein. The side of his face was toward the camera, but Feinstein was facing it, and it wasn't hard to read her lips. She replied, "I know." Maybe he said something like, "That should be I up there!"

The President began well with a good indirect jab at the Democrats, criticizing the partisanship in Washington. The Democrats' behavior throughout Justice Alito's confirmation hearings was so disgusting that even Robert Byrd said, "The people of West Viriginia in no uncertain terms were, frankly, appalled by the Alito hearings." Byrd could have been stronger and said he was pointing fingers at unnamed members, but what would you expect from a partisan Democrat? Byrd could have a very tough campaign this time, so he needs to sound less extreme and more centrist. He's probably taking lessons from Hillary.

"We will choose to build our prosperity by leading the world economy or shut ourselves off from trade and opportunity. In a complex and challenging time, the road of isolationism and protectionism may seem broad and inviting, yet it ends in danger and decline." Take that, John Kerry. Wide and straight is the road of protectionist economics, and it leads only to impoverished economies.

"There is no peace in retreat, and there is no honor in retreat.... But our enemies and our friends can be certain: The United States will not retreat from the world, and we will never surrender to evil." As one who supported invading Iraq to topple Saddam and turn the most willing Iraqi people into friends, I'm naturally biased, but I rather liked that. Contrast Bush's refusal to surrender with the anti-war left who want to cut and run, come what may to Iraqis, and not because they have a sincere desire, but because it's to take the opposite position.

I was watching the speech on Fox News, which then cut to Charlie Rangel. He looked like he didn't particularly give a damn. Cut to John Kerry, whose countenance screamed, "Damn it, I should have been giving the speech tonight!"

"In less than three years, the nation has gone from dictatorship, to liberation, to sovereignty, to a constitution, to national elections." As I wrote last March, even the United States, after declaring independence in 1776 and formally gaining it in 1783, had much civil unrest (to the extent that George Washington thought a civil war was imminent) and an ineffective federal government until 1788. With our help, Iraqis have accomplished so much and so fast that it borders on miraculous.

"Fellow citizens, we are in this fight to win, and we are winning. The road of victory is the road that will take our troops home. As we make progress on the ground and Iraqi forces increasingly take the lead, we should be able to further decrease our troop levels. But those decisions will be made by our military commanders, not by politicians in Washington, D.C." Very good: peace through victory.

"...there is a difference between responsible criticism that aims for success and defeatism that refuses to acknowledge anything but failure. Hindsight alone is not wisdom. And second-guessing is not a strategy." Another good jab at the anti-war Democrats. God knows we've made tactical errors in Iraq, but that is the nature of war. My father reminded me more than once how we bombed our own troops in Italy during World War II. It's one thing to examine mistakes and try to improve our military -- it's another to say that because we made mistakes and will inevitably make mistakes, we should never go to war and simply surrender.

"...the leaders of Hamas must recognize Israel, disarm, reject terrorism and work for lasting peace." I fear that's just a pipe dream. Hamas is all about working toward the destruction of Israel, using terrorism against innocent civilians.

"Liberty is the right and hope of all humanity." A bit of a platitude, but good to inject.

"...Iran, a nation now held hostage by a small clerical elite that is isolating and repressing its people. The regime in that country sponsors terrorists in the Palestinian territories and in Lebanon, and that must come to an end." With all the focus on Iran's attempt to develop nuclear weapons, I'm glad Bush reminded us that Iran's very government has long since been a major sponsor of global terrorism.

"I urge members of Congress to serve the interests of America by showing the compassion of America." I sighed here, because this compassion is the false notion of government charity, which of course is paid for by other people.

"So to prevent another attack -- based on authority given to me by the Constitution and by statute -- I have authorized a terrorist surveillance program to aggressively pursue the international communications of suspected Al Qaida operatives and affiliates to and from America." I more than sighed here, because not only does the Constitution of the United States not give such powers to the executive branch, the Fourth Amendment requires warrants. In these days of instant digital communications, obtaining a warrant within minutes should not be difficult.

Gathering intelligence on terrorists is certainly essential. I and other libertarians (currently derided by many conservatives as "civil liberties Chicken Littles") do not oppose the intelligence gathering, but the methods. As someone recently asked me rhetorically, why won't the administration submit requests to FISA? Are there so many terrorist-connected calls coming out of America that it would overwhelm the system? Is the administration is trying to save taxpayer dollars by cutting down on paper usage? Or are they not wiretapping who they say they are, so no court (even FISA) would actually grant such warrants? I'll also add, in all fairness, the possibility of an overzealous and misguided attempt to protect Americans.

The camera cut to Hillary Clinton, the queen of state-worshippers, who was smiling insincerely and slightly shaking her head.

"Our own generation is in a long war against a determined enemy, a war that will be fought by presidents of both parties who will need steady bipartisan support from the Congress. And tonight I ask for yours. Together, let us protect our country, support the men and women who defend us, and lead this world toward freedom." The camera cut to Hillary again, who was no longer smiling and clapping just halfheartedly.

"In the last two-and-a-half years, America has created 4.6 million new jobs -- more than Japan and the European Union combined." That was a sobering statistic illustrating Japan's travails (and not from a lack of effort) and the EU's stagnation (which is from a lack of real effort in reforming their tax policies and welfare states).

"In a dynamic world economy, we are seeing new competitors like China and India. And this creates uncertainty, which makes it easier to feed people's fears. So we're seeing some old temptations return. Protectionists want to escape competition, pretending that we can keep our high standard of living while walling off our economy." I very much liked this. Bush can talk like a real free-trader when he wants, but he's disappointed me a few times with things like steel tariffs.

"We hear claims that immigrants are somehow bad for the economy, even though this economy could not function without them." Though our welfare state attracts many immigrants who want a free ride, that is all too true. Many illegal immigrants really do do the jobs that Americans won't, and they're people who simply want to come to this country peacefully and work hard.

"All these are forms of economic retreat, and they lead in the same direction: toward a stagnant and second-rate economy." The road goes in only two directions, and the other way is toward prosperity.

Bush touted his tax cuts, as he should have. "In the last five years, the tax relief you passed has left $880 billion in the hands of American workers, investors, small businesses and families. And they have used it to help produce more than four years of uninterrupted economic growth." That's $880 billion spent by people on what they judged was necessary and efficient, not politicians' latest projects.

I still maintain that the timing of Bush's tax cuts was a stroke of luck, otherwise our very mild recession (unemployment not even at 7%, when "normal" unemployment in a stagnant but "happy" economy like France's is 10%!) would have been much worse. Bush added, "I urge the Congress to act responsibly and make the tax cuts permanent."

I would like to add that I urge Congress and the President "to act responsibly" and cut federal spending -- by a lot. When Bush spoke of "another $14 billion next year," I could only laugh bitterly and say, "Big deal!" That drop in the bucket will make no difference in the deficit, let alone halving it by 2009.

Once Bush mentioned the word "earmarks," McCain vigorously applauded. Bush then called upon Congress to give him the line-item veto, which Clinton briefly had. I fear that, even with a Republican Congress, President Bush expressed the same hopeless desire that his father did.

Bush then turned to massive growth in "entitlements" (how I hate that term, because it implies obligation on government's part). By 2030, nearly 60% of the federal budget will be on Social Security, Medicare and Medicaid. To put it in perspective, our current entitlement spending is about $1 trillion out of a $2.5 trillion federal budget, and at 60% it would be an even more staggering $1.5 trillion. If you follow that link, one error I'd like to note in the newspaper article is that the $2.2 trillion figure is budgeted federal spending, but actual federal spending in 2005 was $2.47 trillion.

"Congress did not act last year on my proposal to save Social Security, yet the rising cost of entitlements is a problem that is not going away. And with every year we fail to act, the situation gets worse." Good, very good. Emphasize that the longer we delay, the more wealth we lose and the more painful we make reform.

Then Bush said, "So tonight I ask you to join me in creating a commission to examine the full impact of baby boom retirements on Social Security, Medicare and Medicaid." Oh, for the love of heaven, we already know the full impact! Numerous thinktanks of all political persuasions have all done projections and arrived at more or less the same figures about how many elderly will be retiring and how many workers will be supporting them. Where they differ is how to deal with it.

"One out of every five factory jobs in America is related to global trade, and we want people everywhere to buy American." It's a good statistic to show the regular American how free trade may send some of our jobs overseas, but we create new jobs to make things for our new trading partners.

But it really scares me Bush talks about "a level playing field." Is that a sly reference to China's alleged currency manipulation, which GM and Ford have recently used as an excuse for their failures?

Bush then got to the meat of his "compassionate conservatism": "Keeping America competitive requires affordable health care," and "Government has the responsibility to provide health care for the poor and the elderly." I again was reminded that he might sound Reagan-like in promoting tax cuts, but Bush is still a big government conservative.

"We will make wider use of health information technology to help control costs and reduce dangerous medical errors." If private companies could already use the technology to control costs, though, they already would have. Companies would jump at the chance because they could continue to charge the same prices, increasing their profits...at least until one company charged less to get more customers, and others followed suit.

He promoted "health savings accounts" as he did during the 2004 campaign, and that they should be "portable." But such accounts wouldn't be necessary if we didn't tax savings -- if we had a more sensible tax system that didn't discourage savings (which fuel investment), people could simply save that money without the need for more government regulations.

Medical liability reform is a must, but I have no confidence in this being passed anytime soon. It's been proposed for years, and nobody does anything significant.

What is significant is Bush's attempt to brag that, "Since 2001, we have spent nearly $10 billion to develop cleaner, cheaper and more reliable alternative energy sources." In other words, we've spent $10 billion so that we can use more expensive forms of energy, like wind, solar and water. If these were more efficient and cheaper than fossil fuels, then we'd already have been using them. The President sadly does not understand this aspect of the free market, because he continued in proposing his "Advanced Energy Initiative -- a 22 percent increase in clean-energy research at the Department of Energy to push for breakthroughs in two vital areas."

How much more of our money can the federal government spend so that we can use more expensive, less efficient ethanol? How much must we spend so we can use hybrid, electic and hydrogen-fueled automobiles, which, as our friend TKC pointed out, don't really save money overall?

Federal subsidies for ethanol are something I've criticized several times. When President Bush proposed federal funding for "additional research in cutting-edge methods of producing ethanol, not just from corn but from wood chips and stalks or switch grass," to "make this new kind of ethanol practical and competitive within six years," I wanted to tear my hair out.

What he said next sounds like a good idea, "to replace more than 75 percent of our oil imports from the Middle East by 2025," but as I pointed out here, it's not a bad thing to import something for cheaper than you can make it yourself. We could ban all imports of Middle East oil, but at what price? "By applying the talent and technology of America, this country can dramatically improve our environment, move beyond a petroleum-based economy and make our dependence on Middle Eastern oil a thing of the past." Again, at what price? When we've made oil so expensive with bad supply-limiting policies that we stifle our economy?

Next, the proposal of the "American Competitiveness Initiative," i.e. another big government program to skew the labor markets. "I propose to double the federal commitment to the most critical basic research programs in the physical sciences over the next 10 years." In other words, double the spending, but what exactly are the "most critical" programs? Who will determine them, business investors who carefully weigh what they're pouring their money into, or government bureaucrats who dole out other people's money while under the influence of industry lobbyists?

The "research and development tax credit" is a good start toward real tax reform, because it sounds general enough. Specific tax incentives are bad policy, simply because they skew markets by favoring one industry (or company) over another. What I want to see is a full repeal of all taxes on businesses, because they do not pay taxes. I explained toward the end of this entry that businesses merely pass taxes onto consumers, which requires overhead, so it's actually better to have individuals bear the full tax burden.

"We made a good start in the early grades with the No Child Left Behind Act, which is raising standards and lifting test scores across our country." Even conservatives like Michelle Malkin are more than dismayed at the huge mess and boondoggle of NCLB. With all those billions wasted, and schools in fact rarely left better off, how can we trust the federal government, as Bush called for tonight, "to train 70,000 high school teachers to lead advanced placement courses in math and science, bring 30,000 math and science professionals to teach in classrooms, and give early help to students who struggle with math so they have a better chance at good, high-wage jobs"? As I discussed here, schools cannot attract professionals who can make much more in the private sector, and many school districts are like NYC's, unable to pay those salaries because they're too busy paying so many bad teachers.

"I ask Congress to reform and reauthorize the Ryan White Act and provide new funding to states so we end the waiting lists for AIDS medicines in America." This is fundamentally redistribution of wealth, and it is self-defeating. Giving more money to states will encourage greater supply of the medicines, it is true, but it will divert pharmaceutical companies' efforts from other ventures that they'd have undertaken. They will make less medicine for influenza, less insulin, etc., so this is another example of government skewing the free market's determination of what is most important to people.

"Each of us has made a pledge to be worthy of public responsibility, and that is a pledge we must never forget, never dismiss and never betray." Actually, I thought he and Congress made pledges "to preserve and protect the Constitution of the United States."

And now for the Democratic response:

I was immediately suspicious when Tom Kaine began by mentioning his missionary experience. It's just like liberals to blur the important distinction between individual charity and government powers. Indeed, he wasted no time: "Our faith and values teach us that there's no higher calling than serving others. Our federal government should serve the American people."

Could there be any bigger poppycock in the world than liberals' belief in the nanny state?

"As Americans, we do great things when we work together." Perhaps he should ask, oh, Ted Kennedy, Chuck Schumer and most of the Democrats on the Senate Judiciary Committe, who disgraced themselves at Justice Alito's confirmation hearings.

"When there is a natural disaster, you expect a well managed response." A nice generality, but the federal government has no Constitutional authority to do what it has for Louisiana and Missippippi in Katrina's aftermath.

"...you have a right to expect government to be fiscally responsible, pay the bills and live within its means. Tonight we heard the president again call to make his tax policies permanent, despite his administration's failure to manage our staggering national debt...huge surpluses to huge deficits..." Again I ask, where was the Democrats' "fiscal austerity" were in the 1980s when they were refusing to go along with Reagan and cut non-military spending, when Democrats controlled Congress and produced several budget deficits higher than today (as a percentage of the economy)? Moreover, not only were Clinton's two "surplus" years achieved in teamwork with a Republican Congress, the surpluses were not that large as a percentage of the budget or the economy.

In fact, federal debt has increased but is not as bad many think. Forget the absolute numbers and look at Steve Conover's January calculations. U.S. federal debt as a percentage of GDP is quite favorable compared to other nations, especially those in our range but whose economies are performing dismally. I'll post more on this another time, but federal debt is actually quite manageable right now. How many people do you know have a high debt ratio, but also get consistent pay raises of nearly 4% a year, pay between just 4% and 5% interest on their loans, and can borrow all the money they want because there are so many who are offering to lend money?

Kaine's nonsense about the United States' "credit rating" reflects either his ignorance or his partisanship: a country's credit rating is reflected in the interest rates it pays on its government bonds. The still-low interest rates on Treasury bonds are why paying interest on the national debt no longer consumes a quarter of the federal budget, unlike in the early 1990s. Foreigners have become so eager to save their money by buying our bonds, and they earned the dollars by selling goods and services to us.

"Congressional Democrats have a plan to educate 100,000 new engineers, scientists and mathematicians in the next four years." Ah, Bush proposed 30,000, so the Dems will more than triple that to prove that they're still the premier party of big government!

"The White House has made efforts to cut Medicaid funds for our most vulnerable citizens. Our seniors were promised that the new federal Medicare drug plan would make it easier and cheaper to obtain their medication." The Medicare prescription drug plan was bad, but Democrats don't see why it really is. To them, it's bad because they were beaten to it by a Republican President and Republican-controlled Congress. In reality, it's bad because the drug plan, and in fact Medicare/Medicaid, are not part of the federal government's constitutional powers.

"In Virginia, we've worked to provide health insurance coverage for nearly 140,000 children who weren't covered four years ago." But the age-old question: at what cost? Who's paying for it, and what are the taxed people not buying (meaning jobs are destroyed all over, little by little) because they are paying for others' health care?

"...Republicans and Democrats alike have come together to fight the administration's efforts to slash Medicaid and push more costs onto the states." And that is why both parties can be so wrong. The federal government under the real U.S. Constitution, not Robert Byrd's revised edition that allows spending on whatever they damn well please, is one of specific, limited powers. The Tenth Amendment clearly states that everything else is reserved to the states or to the people.

Kaine drudged up the old "inaccurate information" accusation, a nicer way than some Democrats' claim that the President deliberately misled the American people, when Democrats (among whom were Bill Clinton, Al Gore, John Kerry and Ted Kennedy) since the late 1990s warned that Saddam was still pursuing WMD programs and couldn't be trusted. I look at the War on Terror this way: the Taliban are gone, a regime that harbored al Qaeda. Saddam has been toppled, a dictator who permitted al Qaeda and other terrorists to operate training camps in Iraq. Saddam also harbored Abu Nidal and gave money to Palestinian suicide bombers' families. Instead of two countries whose governments call for our destruction, Afghanistan and Iraq's governments are now friendly to the U.S., with about 50 million people now able to determine their own destiny. That sounds like pretty good success to me within four years.

What will be curious in the next while is the verifying of an Iraqi general's claims that Saddam sent chemical weapons to Syria on stripped-down civilian planes.

"Working together, we have to give our troops the tools they need to win the war on terror." Is that why John Kerry voted for the $87 billion before he voted against it?

"Last summer, I joined Democrats in Washington and in other states and called on oil companies to share in our sacrifice and return some of their record-breaking excess profits." The Democrats ignore the fact that if oil prices hadn't gone so high, oil companies and oil-producing nations wouldn't be working so furiously to develop new oil fields so that we don't run out of oil. For more on the Democrats' myth of energy independence, click here. For the reason that Hillary and other Dems' desire to tax oil companies to hell will backfire by causing even higher prices for consumers, click here.

Beware: the Democrats' plan for energy independence will only make everything more expensive for us all by reducing our access to less expensive fossil fuels, by increasing our use of expensive alternative fuels.

"But at the same time, we have to ensure that our homeland defense efforts begin with consistent federal action to protect our borders." After how many years, Democrats are starting to talk like Republicans on immigration.

"The administration is falling behind in other critical areas: preserving the environment, keeping our workplaces safe, protecting family farms, keeping jobs in America." The environment is doing quite well. Because of technological advancement that allows us to do more with less land, as well as conservation spurred by the free market, we don't need to cut down as many trees, and we thus have more forest today than at any time since the 1940s. How are workplaces not safe, other than post offices that seem to produce a lot of lunatics? "Family farms" tend to be old-fashioned and inefficient, and they should be allowed to go under or be bought out. And "keeping jobs in America" is the tired old Kerry line from the debates, which is ignorant economics.

When Kaine talked about "rights endowed by our creator," is he talking about what liberals claim as rights? The right to health care, i.e. getting medical care at others' coerced expense? The right to work, i.e. the right to force a business to continue your employment no matter how unfit you are? What liberals' "rights" come down to is using the government to help yourself to others' pockets.

If Kaine and other Democrats really do want to "replace the division that's been gripping our nation's capital," then absolutely "we need a change." But in no way, after watching their shameless antics since President Bush nominated Miguel Estrada, are "Democrats are leading that reform effort" like Kaine claimed. If Democrats are serious about eliminating the partisanship, then their leadership can start by obtaining Congressional resignations from, in no special order, Harry Reid, Nancy Pelosi, Hillary Clinton, Ted Kennedy, John Kerry, Barbara Boxer, Dianne Feinstein, Dick Durbin and Byron Dorgan (I include Dorgan for his belief in taxing oil company profits above $40 a barrel).

"...working to restore honesty and openness to our government, working to replace a culture of partisanship and cronyism with an ethic of service and results."

Before telling others to take the specks out of their eyes, Democrats would do well to remember names like Henry Cisneros, Ron Brown, Susan McDougal and Marc Rich.