Insights

State of the Union 2010: Jobs! Finally!

Well something funny happened on the way to the office in Washington D.C., the politicians figured out that health care is not what we think is most important right now, but jobs.  Jobs, jobs and more jobs.  Hopefully the impetus behind this newly found, and more correct focus, is not the looming 2010 elections, but the fact that 1 in 10 working age Americans is out of work.

After the opening few minutes of rah-rah lines, President Obama stated that he bailed out the banks and hated doing it.  He reiterated this three time for effect to interrupting applause.  I rewound my DVR to check and make sure he didn’t say “I hate banks”, and he didn’t.

Next up during the State of Union address, President Obama’s first, he got onto the jobs issue.  The first thing to note was that when the politicians in attendance gave a standing ovation to this point, all those sitting to Obama’s left, ironically, stayed rooted to their seats.  These people, of course, were the Republicans and we refer to them as ‘The Right.’  Maybe someone screwed up the seating chart, I don’t know.  When the demand for a new jobs bill was announced by Obama, ALL of the vote loving politicians stood up.

This was amazing as it might be the first bi-partisan movement in Washington D.C. since January 2009 – standing up together.  As we all learned to stand up and sit down together in kindergarten and the first grade, there is still hope for the constipation of the nation in our capitol.  First we get these popularity contest winners to stand up and sit down together and you never know what is possible then… maybe some sensible economics programs and laws?

Obama then went on to state a few ideas of his to help get more Americans back to work;

1) $30 Billion from the TARP program to help community banks give small business loans.

2) A small business tax cut to those that hire new workers or raise wages.

3) Eliminate small business capital gains taxes.

4) Tax incentives for all businesses, large and small, to invest in new plants and equipment.

Items 1,2 and 4 sound great to me.  Item 3 is a bit misleading as a large number of small businesses do not pay capital gains taxes at all as the profits from these businesses are taken as income by the owners.  Maybe it will help some, so let’s roll with the guy – he seems to be trying now.

One of the most entertaining parts of The Address was when Obama got onto green energy.  When Obama mentioned the “overwhelming scientific evidence on climate change”, most the people in attendance started laughing.  They didn’t just chuckle either, they laughed, and this seems to indicate that maybe not everyone is convinced about all this evidence, especially the politicians.  Biden started laughing, Pelosi cracked a smile and even Obama, as he was trying to continue his speech, let a sly smile crack.  BUT…

“But even if you doubt the evidence, providing incentives for energy efficiency and clean energy are the right thing to do for our future – because the nation that leads the clean energy economy will be the nation that leads the global economy. And America must be that nation.”

…Obama went on to say.  I am a ‘man-made global warming’ doubter, and I think the science has been steered for political gain and personal profit.  BUT, Obama is right on this point.  The green energy sector will continue to grow and generate jobs, profits and scientific breakthroughs and America should lead that charge, if for no other reason than to break our addiction to oil from the Middle East.  Now the crucial thing to do is not to kill the old energy infrastructure right off, but to stimulate the green sector and this means ‘cap and trade’ is still a bad idea.  Only time will tell how they roll with this one.

A bit later in his speech came health insurance reform.  We certainly have not spent enough time on this one over the past year, so Obama figured he would air the issue out again.  Obama mentioned that the Congressional Budget Office is the independent organization that both parties have cited as the official scorekeeper (more on this later). Obama then asked everyone to take a new and closer look at his health care plan.  This threw me for a loop as there are two plans out there, the Senate’s and the House’s, and the Massachusetts election let the politicians know where the voter stood on those plans.  Hopefully it does not get rammed down our throats again.

At this point we got to the place in the speech that everyone was waiting for – a rumored “spending freeze.”  STARTING IN 2011…  You see it coming don’t you?  This basically says “after we spend a LOT of money that adds to our debt in 2010 and I get all my expensive programs through” we will get responsible.

My suspicions were confirmed after the next segment of Obama’s speech;

“I know that some in my own party will argue that we cannot address the deficit or freeze government spending when so many are still hurting. I agree, which is why this freeze will not take effect until next year, when the economy is stronger.  That’s how budgeting works.”

At this point all the politicians in the audience started laughing, out loud.  These were full belly roll laughs and were even louder than when they laughed about the ’scientific evidence.’  It was sad to hear the laughing at their own admission of their propensity to spend OUR money.  That joke is going to cost us a lot of money.  Nancy Pelosi started laughing and clapping upon seeing her partners in crime laughing.  While entertaining, this was the most disheartening part of the speech.

After all this ‘entertainment,’ Obama moved on to lobbyist reform.  While he hit the right notes and called for the right moves, I would like it if he included all the visits he gets from the powerful union leaders in here somewhere.  A step in the right direction was next in line as Obama called for a single website where ALL earmark spending will be posted before being voted upon.  I gave that one a standing ovation!  Hopefully it gets done.

Throughout the speech there were comments about partisanship and the Democrats vs. Republicans issue.  At this point in his speech, Obama hit directly on this issue and called for more unity.  He said to the Republicans that if they insist 60 votes is needed to pass any laws, then they needed to share in getting things done as well.  Hopefully this means a new renewed push to become more open to compromise between parties.  Stranger things have happened.

Obama then moved on to Al Queda, Afghanistan, Iraq and the war on terror.  The President mentioned a new commitment to the VA system and about taking care of our soldiers when they come home.  Obama promised to have all of our ‘combats troops out of Iraq by the end of this office.’  This new promise is; 1) a bit longer than the one year that has already passed (a previous promise), and 2) gives Obama three more years.

At this point I need to go back to jobs.  Jobs, jobs jobs!

Sure there are a lot of problems abroad and we have a great number of soldiers to be grateful to and respect.  Right here, right now at home we need to get this economic engine firing on all cylinders again so excuse me if I stay with jobs.  Jobs, jobs, jobs!

How much is this new jobs spending bill going to cost us?  Obama spent $787 billion last year, which the Congressional Budget Office evaluated and stated that 12.6% was going to generate jobs, meaning that the remaining 87.4% was not.  That means that $688 billion of OUR MONEY was spent that did not generate jobs.  Remember that both the Republicans and Democrats agree that the Congressional Budget Office is the official scorekeeper?

What happened to the $688 billion?  Maybe if that $688 billion was spent more appropriately we wouldn’t need to spend more of OUR money to generate the jobs we need.  Well, I guess Congress gets a ‘do over’ on that one.  Now they plan on going back to the well again and taking more of our water.  No worries mate – the cost on that one was only $688 billion.

The State of the Union speech is an annual chance for the President to rally the country and present his updated plan to the people.  This speech seemed to have elements calling for more bipartisanship, a new focus on job creation, to freeze spending and get the budget and debt mess under control.  Hopefully Obama takes this chance to tack back towards the middle and work with both parties to solve our problems.

More of what we got over the past year we certainly do not need.