State of the Union comes out as big flop

By CHARLES KRAUTHAMMER   Friday, Jan. 27, 2012
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— Once upon a time, small ball was not Barack Obama’s game. Tuesday, it was the essence of his State of the Union address. The visionary of 2008—purveyor of hope and change, healer of the Earth, tamer of the rising seas—offered an hour of little things: tax-code tweaks to encourage this or that kind of behavior (manufacturing being the flavor of the day), little watchdog agencies to round up Wall Street miscreants and Chinese DVD pirates, even a presidential demand “that all students stay in high school until they graduate or turn 18.”

Under penalty of what? Jail? The self-proclaimed transformer of America is now playing truant officer? It sounded like the Clinton years with their presidentially proclaimed initiatives on midnight basketball and school uniforms.

These are the marks of a shrunken presidency, thoroughly flummoxed by high unemployment, economic stagnation, crushing debt—and a glaring absence of ideas. Of course, this being Obama, there was a reach for grandeur. Hope and change are long gone. It’s now equality and fairness.

That certainly is a large idea. Lenin and Mao went pretty far with it. As did Clement Attlee and his social-democratic counterparts in postwar Europe.

Where does Obama take it? Back to the decade-old Democratic obsession with the Bush tax cuts, the crusade for a tax hike of all of 4.6 points for 2 percent of households—10 years of which wouldn’t cover the cost of Obama’s 2009 stimulus alone. Which is why Obama introduced a shiny new twist—the Buffett Rule, a minimum 30 percent rate for millionaires.

Sounds novel. But it’s a tired replay of the alternative minimum tax, originally created in 1969 to bring to heel all of 155 underpaying fat cats. Following the fate of other such do-goodism, the AMT then metastasized into a $40 billion monster that today entraps millions of middle-class taxpayers.

There isn’t even a pretense that the Buffett Rule will do anything for economic growth or job creation (other than provide lucrative work for the sharp tax lawyers who will be gaming the new system for the very same rich). Which should not surprise. Back in 2008, Obama was asked if he would still support raising the capital-gains tax rate (the intended effect of the Buffett Rule) if this would decrease government revenues. Obama said yes. In the name of fairness.

This is redistribution for its own sake—the cost be damned. It took Indiana Gov. Mitch Daniels about 30 seconds of his State of the Union rebuttal to demolish that idea. To get the rich to contribute more, explained Daniels, you don’t raise tax rates. This ultimately retards economic growth for all.

You (a) eliminate loopholes from which the rich benefit disproportionately (tax reform) and (b) means-test entitlements so the benefits go to those most in need.

Tax reform and entitlement reform are the really big ideas. The first produces social equity plus economic efficiency; the second produces social equity plus debt reduction. And yet these are precisely what Obama has for three years steadfastly refused to address.

He prefers the easy demagoguery of “tax the rich.” After all, what’s he got? Can’t run on his record. Barely even mentioned Obamacare or the stimulus, his major legislative achievements, on Tuesday night. Too unpopular.

His platform is fairness, wrapped around a plethora of little things, one mini-industrial policy after another—the conceit nicely encapsulated by his proclamation that “I will not cede the wind or solar or battery industry to China or to Germany.” As if he can command these industries into existence. As if Washington funding 1,000 Solyndras will make solar economically viable.

Soviet central planners mandated quotas for steel production, regardless of demand. Obama’s industrial policy is a bit more subtle. Tax breaks for manufacturing—but double tax breaks for high-tech manufacturing, which for some reason is considered more virtuous, despite the fact that high tech is less likely to create blue-collar jobs. Its main job creation will be for legions of lawyers and linguists testifying before some new adjudicating bureaucracy that the Acme Umbrella Factory meets their exquisitely drawn criteria for “high tech.”

What Obama offered the nation Tuesday night was a pudding without a theme: a jumble of disconnected initiatives, a gaggle of intrusive new agencies and a whole new generation of loopholes to further corrupt a tax code that screams out for reform.

If the Republicans can’t beat that in November, they should try another line of work.

Charles Krauthammer is a columnist for the Washington Post. His email address is letters@charleskrauthammer.com.

reader COMMENTS
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(45)
No_fascist
Feb 1, 2012 at 12:18 p.m.
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Why does the Gazette constantly print the unintelligent rantings of a fascist supporter like Charles Krauthammer? Do they support his ideology of crony capitalism?

MBHammer
Feb 1, 2012 at 12:05 p.m.
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Debt Clock, on this day in 2004: 7 trillion, on this day in 2008: 9.3 trillion, Bush 2.3 trillion increase. On this day, today 15.3 trillion, Obum 6 trillion increase. A huge increase during Obum's watch. Source Debt Clock. n00b, I corrected your math.

n00b
Jan 30, 2012 at 10:39 a.m.
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You know I keep seeing this game of pass the buck for whose fault it is that we are no longer an economic superpower and I did a little research into the last 20 years of spending and I was really surprised to see the numbers add up the way they did.
So over the last 20 years Republicans were in control of the Congress for 12 of those years and the Democrats for 8 of them. If I look at spending levels I am truly surprised to see who spent what.

1981 National Debt $998 BILLION dollars
Ronald Reagan is elected and supply side economics are enacted for 12 years of Reagan and Bush1
1993 National Debt $4.411 TRILLION dollars an increase of $3.414 TRILLION dollars
1993 Bill Clinton takes over the White House and pays over $2.2 Trillion over his term in office as INTEREST on Reagan/ Bush1 debt handed to him.
2001 National Debt now stands at $5.807 Trillion dollars
George W Bush is elected and comes into office with $5.807 Trillion Dollar Debt
George W Bush Increases the Debt by $6.102 Trillion dollars.
To be fair let take out the 36 Billion for the Obama stimulus package because he spent that.
On Sept 30 2009 the total debt stands at $11.609 Trillion dollars
From Sept 30,2009 to Sept 30 2010 Interest on Reagan Bush debt is 357 Billion dollars
Total Debt increase in 12 years of Republican control totals

$12,049 TRILLION DOLLARS

This is not a right/left, Republican/Democrat rant just some simple math I did on the debt we currently owe and trying to figure out how we got here. EVERYONE is guilty equally and everyone needs to help find a solution but the business of blaming everyone has outlived it lifetime and needs to stop so we can get back to fixing things.
We have been doing supply side economics for 20 years and it simply is not working as advertised, if it were why are we arguing over extending these tax cuts for the job creators? Where are the jobs that were created by the current tax cuts that have been and are currently in effect?
Take off the political blinders installed by both sides and see the real facts for what they are.

SuperDave
Jan 30, 2012 at 8:39 a.m.
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Wow. 91%! I am not buying it - besides the problem of skewed sample (supporters are more likely to watch), the poll must have been rigged in other more subtle ways. There is simply no way that 91% of any group can support Mr. Obama on anything. His failed presidency is self-evident. He is in over his head, and after three years he can no longer blame his predecessor with any credibility. For those of you on the fence about the November election, please vote for anybody other than this guy, a vote for Obama is a wasted vote. If he were to win this election, the country might not survive the next four years.

onedayatatime
Jan 29, 2012 at 5:24 p.m.
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SuperDave
Jan 29, 2012 at 3:32 p.m.
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91% approval rate? Where do you see that?

NVgrf
Jan 29, 2012 at 3:24 p.m.
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The Kraut's "big flop" had a 91% approval rate by Americans. How blind is this guy again to the facts? VERY!!

garyprimer
Jan 28, 2012 at 12:43 p.m.
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I don't often call anyone stupid,
but today I must make an exception.

Olderandornerier
Jan 28, 2012 at 8:01 a.m.
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Too bad Obama's a Kenyan and there are millions of illlegals, or we would all be Americans under one flag.

schoonyg
Jan 28, 2012 at 6:49 a.m.
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you asked what does obamam got in your article wellllll welllll lettttt meeee seeeeee oh ya he got BIN LADEN yet i hear he didnt kill him seal team six did an those persons who performed this heroic act i pray for you and may the lord bless your souls yet they had enough respect for the office an the person who sits in the oval office and i suggest you do the same we are all one class of people under the stars an stripes tha class of AMERICANS

donnaw
Jan 28, 2012 at 6:32 a.m.
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mopsy.. So it's a good idea for the school to insist that a kid, who at 16 decides he doesn't want to be in school anymore, to stay another 2 years? Good luck with that kid! And to the kids who have to be in school with him and his teachers!

dkush21
Jan 28, 2012 at 12:29 a.m.
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kaysbrew: said
"so stop spending away my kids future and take only 15% from my wages, same as capital gains.
Don't raise more taxes, stop spending and lower mine!!
it's the clear difference between liberals and conservatives."

There is no difference between liberals and conservatives. They just have different ways to tax us to death.

westorbust
Jan 27, 2012 at 9:27 p.m.
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The worst thing people can do is take anything Krauthammer says seriously.

mopsy
Jan 27, 2012 at 8:57 p.m.
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Perhaps, Mr. Krauthammer, you are not aware that, in most states, schooling is only compulsory through age 16, not through age 18 or graduation. Obama wants school districts to finish what they started. Sounds reasonable to me.

Bowlgal
Jan 27, 2012 at 4:45 p.m.
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Too bad this speech was the same tired divisive language we've become used to with this President.

dustyd
Jan 27, 2012 at 4 p.m.
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Krautmammer is so disingenuous. After actively promoting the President's failure and encouraging unprecedented Republican obstructionism, he now acuses Obama of not getting enough done. He hates the President and government generally, and is constantly seeking to validate his disdain for collective action, community mindedness and participative democracy. In Krauthammer's oligarchy, it's every man for himself...I've got mine, so screw you. Social Darwinism at its finest. Maybe, unlike the bizarre nut-jobs seeking the Republican nomination, Obama is trying not to make promises he can't keep. BTW Mitt: you won't be able to "repeal Obamacare." Only Congress can do that.

smallBIZowner
Jan 27, 2012 at 3:57 p.m.
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The so called Bush era taxcuts became the 'Obama era taxcuts' when he extended them.

support_local_racing
Jan 27, 2012 at 3:40 p.m.
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bebe53, I fail to see how Obama has control over that.
.
On a related note... if it's broke, Republicans think the POTUS broke it. If it's fixed, the POTUS and his fellow Democrats claim he fixed it.
.
We sure like to give a lot of credit (good and bad) to the POTUS, don't we?

dal
Jan 27, 2012 at 3:27 p.m.
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Do you actually pay Mr. Krauthammer for this drivel?

youkillme
Jan 27, 2012 at 3:04 p.m.
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I'm suggesting a single-pronged approach only for raising revenue. I'm not suggesting that raising revenue is the only solution to balancing our budgets.

bebe53
Jan 27, 2012 at 2:56 p.m.
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Gee-look at this-
279,000 federal employees owe the federal government $3.4 BILLION in back taxes as of Sept 30,2010
This includes 36 people working in the President's executive office staff who owe $833,970 in back taxes.
Before Obama goes spouting off about "fairness" he should take care of business in his own back yard-what an absolute joke!!

support_local_racing
Jan 27, 2012 at 1:53 p.m.
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Oh, lookee there... you see what I just did? Compromise! 'Course, that word is banned in congress these days.

support_local_racing
Jan 27, 2012 at 1:49 p.m.
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donnaw, drop the friggin' jealousy crap. I'm do damned tired of that rhetoric. I don't need a boat or plane to make me happy. I just think we should be taxed at least equally.
.
And, youkillme, I agree with closing loopholes. But you're suggesting a single-pronged approach. I think we need to attack from all angles: Reduce spending, close loopholes, fairness in tax rates.

youkillme
Jan 27, 2012 at 1:34 p.m.
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Let's not make up different definitions of income with different tax rates. Close loopholes and take care of that first.

donnaw
Jan 27, 2012 at 12:35 p.m.
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support...those people who buy yachts and jets, high ticket items, support a lot of jobs in those industries. In turn those paychecks help support lots of communities. Class jealousy. The average effective tax of federal tax payers is 11%. Some pay more, some pay no tax. So if we raise taxes we should be sure everybody pays something in support of our wonderful federal govt bureacracies.

youkillme
Jan 27, 2012 at 12:33 p.m.
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Kaysbrew, do you realize Republicans instituted the Bush tax cuts primarily to lessen projected surpluses? Many wanted even larger tax cuts. And, secondarily to spur economic growth? They got rid of the projected surpluses alright but where is the booming economy? We are going to pay for current spending and all of that accumulated debt with more tax cuts?

If Democrats can’t beat that in November, they should try another line of work.

kaysbrew
Jan 27, 2012 at 12:29 p.m.
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LOL, cool!

tthompson
Jan 27, 2012 at 12:21 p.m.
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Ha. Thanks Kay. I'm a switch hitter:) I hit from whatever side of the plate has the most logic...from my perspective:)

kaysbrew
Jan 27, 2012 at 12:17 p.m.
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I love you T! Even though you swing left.

RoCoChick
Jan 27, 2012 at 12:16 p.m.
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I guess Wisconsin is no longer 'the state of the unions' - it's been returned to the citizens.

tthompson
Jan 27, 2012 at 12:10 p.m.
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It never ceases to amaze me how two rational adults can watch and hear the exact same thing and come away with completely opposite thought processes. Perspectives...

Sigma40
Jan 27, 2012 at 12:03 p.m.
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Do you people really think the president has anything to do with what happens in this country?

youkillme
Jan 27, 2012 at 12:02 p.m.
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Every dollar collected as capital gains and taxed at 15% is a dollar confiscated from the paycheck of those who generated the profits to pay the gains - the workers who are taxed at 30+%. As far as I'm concerned, labor/wage earned income should be taxed at a lower rate than income collected by investments, stock options or interest.

MBHammer
Jan 27, 2012 at 12:01 p.m.
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FACTS: On this day in 2004 debt 7.0 trillion, 2008 9.3 trillion, today 2012 15.2 trillion. Obum has set a record beating the republicans increasing the debt on his watch.

kaysbrew
Jan 27, 2012 at 11:56 a.m.
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You just said it. Bush tax cuts aren't going to work, and didn't without cuts to the spending.
Bush spent too, liberals don't have to be Democrats.
the Obama spending is on a run away train.

support_local_racing
Jan 27, 2012 at 11:47 a.m.
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"it's the clear difference between liberals and conservatives."
.
I'm not so sure the difference is that clear. Unfunded wars... Bush tax cuts. How were those cutting down spending again?
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I'm not disagreeing that spending is certainly a problem and has ballooned under Obama. But it's not the only problem.

mteg
Jan 27, 2012 at 11:42 a.m.
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Title of the Year

support_local_racing
Jan 27, 2012 at 11:42 a.m.
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Here's a thought. If you want to means-test entitlements, let's do the same with capital gains. Business who use the capital to create jobs get taxed at the current rate. Individuals (multi-millionaires) who stash the cash or buy luxury jets and yachts, you get taxed at 30%.

kaysbrew
Jan 27, 2012 at 11:39 a.m.
Suggest removal

so stop spending away my kids future and take only 15% from my wages, same as capital gains.

Don't raise more taxes, stop spending and lower mine!!
it's the clear difference between liberals and conservatives.

support_local_racing
Jan 27, 2012 at 11:28 a.m.
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I agree with tax reform. I agree with means-testing for entitlements. But why do my wages get taxed at a higher rate than capital gains? Yes, investments are very important to keep the country running. Guess what... so are the middle class wage-earners.

donnaw
Jan 27, 2012 at 11:05 a.m.
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Then they will just print more money.

kaysbrew
Jan 27, 2012 at 10:57 a.m.
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Tax the rich! the 1% could give every last nickel to the Government and it would be enough to run it for 18 days.
Then what liberals???

http://www.wnd.com/2011/04/286217/

NVgrf
Jan 27, 2012 at 10:32 a.m.
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Krauthammer, Gingrich and Sheldon Adelson....America's three biggest fabricators! Slimeballs of a feather flock together.

SuperDave
Jan 27, 2012 at 9:51 a.m.
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The solution to all problems is always more government, more programs, more beauracracies, more tax code complications...always more of the same. If it's broke, break it a little more.

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