The guy's name is Jack Ryan, the same name as the hero in many of the Clancy novels. He has a reputation for knowing the nuts and bolts of the budget more than anyone else. I was reading that he has a budget plan that consists of some severe cuts and that it's going to be so unpopular even republicans are steering clear of it. His speech was intended for three audiences. He opened with some religious talk and prayer for the fallen in Arizona (religious conservatives). He talked about the role of government, which was targeted at tea party and conservatives. And the rest was for the rest of us. There is some benefit to the wooden delivery, as he came across as being smart and knowledgeable but not as a slick politician used to making this sort of speech. The opposition response type speeches don't get the notoriety that the SOTU ones do, and are delivered with no real live audience to speak of. The really big line he delivered was about how the last congress didn't pass a budget (they didn't) and allowed the blank check and unchecked spending continue. He was an effective attack dog without seeming hateful, IMO. "The stuff they promised was expensive and failed miserably." The guy is considered a rising star in the republican party (so say the talking heads). The real test will be what comes out of his budget committee. Did you notice Obama's airplane joke fell flat? GW may have fumbled his words a lot, but he was genuinely a funny man in his speeches. Or at least he could deliver a joke. I'm not a rabid anti-Obama guy. I've been critical of policies I could see were doomed to failure and were even harmful to the country. In general, I thought he wasn't specific enough, though he did spell out some priorities (slash, but don't forget to invest), and he was quite conciliatory and rather gracious towards the guys that kicked his party's ass in the recent elections. The willingness to offer compromise on the tort reform issue is a clear signal he's studying Clinton's playbook - it's called triangulation. Congress should immediately pass a bill limiting tort damages and get Obama to sign it, IMO. Republicans can get something they want and believe is good for all of us, and at the same time they can do the "put up or shut up" routine. The tax cut Obama was talking about absolutely came from the White House and is great and will help the private sector. Shortly before the lame duck congress returned to session, he proposed a cut in social security deductions for a year and that was tacked onto the extension of the Bush tax cuts. I know my first paycheck this year was bigger, enough to make a dent in a car payment or to have a little extra disposable income to spend in the local stores. I have a pie chart to show you from the wikipedia article on the federal budget. The deficit is $1.4T (revenues were $2.105T). Do the math and you'll see how fucked we are. Eliminate Defense entirely, TARP, and other Discretionary. That's 782 + 151 + 437 = 1370. Almost enough to balance the budget, but still a deficit. That leaves nothing but the left wing holy grails, and we'd have no military at all and no education grants or welfare or any of pick_your_favorite_program. We obviously need a military of some size, and we aren't likely to cut the FDA and DEA and CDC and FBI and the courts (and the rest of the 3 letter agencies) to $0. To come up with tax hikes to pay for that 1370 difference, it'd take more than a 50% tax hike on EVERYONE, not just the rich. Something has to give, it's the harsh reality both sides have to face. ObamaCare is supposed to slash that Medicare and Medicaid in half, but it also spends that savings to insure 30M+ uninsured - a wash at best, and an obvious spending (other mandatory) trap we're going to be on the hook for with continued high deficits. Obama made a list of things he said were hurting the budget, but left Social Security out. He later said that we need to save it. He's stated his priorities, but again I didn't hear any specifics. FWIW.
Denny, it's PAUL Ryan. I love this guy and think he would make a terrific VP. Right now, he doesn't have enough foreign policy or military experience. He may know the Federal budget better than anyone else in our government. I really thought the best response to a SOTU I've ever seen was Bob McDonnell's last year. He gave it in the Virginia Legislature to fellow Republicans. It wasn't the speech that was good, but the venue. From a speech perspective, you just can't compare the two speeches when they're given in such dramatically different venues.
My biggest issue I'm having with the SOTU is reconciling the line about how we can't know what the next big industry will be or where the next jobs will come from followed by a laundry list of industries in which we have to make investments. Left or right, can we all agree that crony capitalism is something to be avoided?
Here's the text of Michelle Bachmann's reply. Her delivery and staging was unwatchable, but the speech is actually not bad. http://latimesblogs.latimes.com/was...e-bachmann-tea-party-express-speech-text.html
Americans don't want specifics. The speech you guys wanted from Obama would have caused millions of people to hit the "change channel" button quicker than a Blazer gets injured. Average Americans want to get smoke blown up their ass, and Obama's fans will eat it up, and Obama's detractors will scoff and complain... just as every SOTU address has been received.... ever. If this address was just meant for the people in that room, then yes, he should have busted out the Ross Perot Pie Charts and gone over the numbers and specifics.... but he wasn't. He was talking to the cameras. Everyone else in that room was a photo-op backdrop, for both sides. SOTU speeches are meant to inspire, encourage, and propose broad measures, leaving the "nuts and bolts" to be hammered out later.
there was not much inspiring about it. "this is our sputnik moment"? some flim-flam schools program we've never heard of which sounded kind of BS? This speech could have been written 2 years ago.
Actually, (without hearing the address, I missed it) - this does not strike me as that big of a deal. You are not sure what investment strategy will be best - so you make some educated guesses and diversify your portfolio. Same should be done about industries that the country should invest in. Of course, the details might make a difference - which I can not refer to - but as a general idea - I do not see anything wrong with it.
Or you could not tax and borrow to invest other people's money on your chosen projects. How about letting people keep their money and make their own bets? The winner settles itself without the distortion of subsidies. Those funds have the added benefit of not having a dead weight loss attached to them.
Serendipity. After replying to your post, I went to read the WSJ and found this editorial which better explains the concept to which I referred in my earlier post: http://online.wsj.com/article/SB100...6104172158318768.html?mod=WSJ_Opinion_LEADTop
I haven't heard anything about the next generation of air travel (aside from the NASA CGI images). Do you have a link? I'm a big fan of HSR because I've experienced it in Japan and China. It's so much more convenient and cheaper than flying (from my experiences). I don't think the government should make a big push to fund it though. The government should help make a climate that is favorable to entrepreneurs that want to develop rail. One thing congress could do is regulate how local governments are allowed to tax railroad rights-of-way.
Sorry, but this has no real world chance of hell to work - same can be said about anything from defense to roads to... Why should we invest in defense? Why should we invest in roads? Why should we invest in the judicial system? Just let it all hang and let the chips fall as they may, wild west style. the reality is that a US (or any modern country) with no government regulation/investment/financial guidance has left this world around the 30s of the last century. The other reality is that this country's past success has limited what it can compete in - we no longer accept an industrial climate where child labor exists, where people are going to accept the kind of return for manual labor that you see in developing countries. To succeed in this world, given our high labor costs - we need to compete in high-tech industries that require lots of infrastructure investment, which leads us to the next point - The reality is that letting markets dictate how to proceed is great within reason - but the nature of the publicly funded private sector (via the stock market) with an emphasis on quarterly results has basically made any large-scale infrastructure investments in this country impractical. The rhetoric and "Utopian" ideas of "keep the government out" are fine on paper - but the reality is that all the success and crazy wealth created in this country came from smart investment spurred by the government in the past, some of it deemed crazy at the time - be it the infrastructure investments in the highway system ($25 billion in the 50s, only passed it because it was hidden under the defense umbrella), the space race (again, spurred by the missile arms race and the only reason it happened) and the high-tech industry it spurred, the DARPA developed network system and technology that brought us a lot of the tech industry success of the last 20 years. We have seen that the Chinese were a no-factor in the world until they started to invest heavily in infrastructure, the same was true for Korea - India is just starting to do the same. Infrastructure investment by governments is a necessary evil for financial success in the modern world. Thinking it can be done without is just as naive as thinking you can spend without regard and not keep your budget in check. The two things are not independent. Spending without thought is idiotic and not spending at all is idiotic as well. Until there is a way for the private sector to fund the infrastructure costs - there is no other way than to accept that the government is a necessary evil. What we can not do, however, is leave things to be as they always were. Reducing government spending is great, as long as it is done along with spending on infrastructure that will move this country along - the two things have to happen together. The reality is that big industry in this country is too comfortable to make the necessary investment in new technologies. The railroad barons of the 19th century did not want to see changes to their cash cows - but breaking their monopolies was important for the country to move forward, likewise, our energy use policies can not continue as is - the oil industry is too comfortable to make the changes needed for this country to move forward, the financial industry was too comfortable with the way money lending was done and this lead us to the housing bubble and the recession. Letting people keep their money and make their own bets lead to the housing bubble as well... allow me to remind you... What we can not do - is invest money - and when proven that it does not work after giving it enough time - continue to do so because it is comfortable (see Corn subsidies, a lot of the agricultural subsidies). Investment by the government is a good thing, not putting all the eggs in one basket is a good thing - but like anything else - it can not continue forever and needs to have time-lines on it.
I have no problem with high speed rail. However, it's silly to try to push it for 80% of the population as Obama wants it. Between Boston and DC? Sure. That kind of population density gives the rail line a chance to make money. However, no where else in this country has that kind of settlement pattern. For example, a high speed line between Seattle and Portland would cost billions, but would serve so few people and be so expensive as to be uncompetitive. Now, imagine a line between Denver and Chicago. It's a joke. China and Japan are different animals altogether. Japan is the size of California, but has four times the population. A lack of physical space (which is not our problem) and density make it viable. China's relative poverty of its population, as well as its density make it possible, as most can't afford cars. As for future aircraft, NASA just supported a study on the future of aircraft. Here's one link: http://www.ausbt.com.au/nasa-s-airliners-of-the-future-could-these-be-your-long-haul-ride-in-2025 There are many more.
Your post shows that you have no idea what causes economic bubbles. And when bubbles are purely private (railroads, cable, broadband, etc.) it is actually a benefit to the economy as a whole. Individuals go bankrupt, individuals lose money, but the country as a whole benefits from infrastructure at pennies on the dollar. In the case of the real estate bubble, it was created almost entirely by public policy and the GSEs. Without them, money would have been much more difficult to borrow and the bubble would have been much smaller. Again, subsidies distort the market. The best ideas don't need them. Our President brought up the Wright Brothers and Edison; did they receive subsidies? Hell, Edison's greatest invention--the incandescent light bulb--is being outlawed. We'll find the next generation of energy if the government just gets out of the way. It's trying to force the outcome before the game is played. Coal and oil clearly bother you; however, we have ample supplies of both. I say we use them and then let the market figure out what's next. There will be a point where supplies are so dear that they'll become unaffordable. Then other technologies will come to the forefront. And there will be trillions of dollars chasing that next energy source.
Megan McArdle strikes again: http://www.theatlantic.com/business/archive/2011/01/the-president-as-micromanager/70255/
We are going in circles - so this is my last post on this subject. Ideas mean absolutely nothing if there is no infrastructure where they can thrive. My opinion is that the modern world is too big and complicated for a lot of these ideas to really make a difference without this infrastructure support - as shown by the majority of innovation happening in countries with proper infrastructure throughout history. There is a reason you have not seen the innovation in China and Korea for many years until this infrastructure was created, there is a reason you see pockets of innovation in small countries where government created the infrastructure for innovation to happen (Ireland, Israel, South Korea) - and yet you do not see them in much bigger countries where this does not happen. It is also clear to me that this country thrived throughout the recent century was because there was a nice balance of government funding and infrastructure building with enough free-market initiatives. You need both - and I do not believe this country will have the continued success if they keep the world same as it ever was. You see it in a smaller scale within the free-market as well. Microsoft went from being a Juggernaut because it did not have the leadership to push it out of it's comfort zone with the arrival of network computing. It happened to IBM before with their inability to bust out of the big-iron mode and it will happen to this country if someone does not continue to do it moving forward. It might mean some wrong turns, but it is a good thing in my opinion.
Apple was created in a garage. Microsoft was created in a warehouse in Albuquerque (and they're still a juggernaut). Google was created in a grad school lab at Stanford and Facebook in a dorm room at Harvard. Innovation doesn't take infrastucture. And innovation certainly isn't created by a bureaucrat picking winners and losers. Perhaps, GE should be incentivized to spend their money on R&D and not lobbying. Now, they're addicted to money from the government teet instead of being able to make their own way. If you look at the great innovations of the past century, the vast majority of them came from the private sector. In fact, I'm struggling to think of a market the government created that is a cornerstone of our economy. As for your contention that the world is too complex, I arrive at the opposite conclusion. Technology has leveled the playing field that the best ideas now get the broadest possible audience. It used to be that IBM, Xerox, ITT or Westinghouse set the standard. Now people working at home can compete toe to toe with them if they have a better idea. This should be the golden age of entrepreneurship, yet the government is killing innovation by ham-handedly trying to decide in which direction our economy should move.
TARP's been paid back (aside from 25B of the 700B, and projected to actually make a profit). I'd be trumpeting that.
You seem to be hung up about the 1930s and the massive intrusion into the private sector by FDR and all those agencies he started that won't go away. The railroads were built in the 1800s with govt. basically giving away land to the railroad barons. Those guys put up a lot of real capital to build the railroads and the trains and establish commerce through them. The nation benefited from all the towns that sprung up along those railroads and the ability to transport goods from west coast to east coast. No regulations involved, just govt. giving away an asset the private sector could leverage MUCH better. Ever heard of 40 acres and a mule? The Homestead Act of 1862? If you think infrastructure wouldn't get built if not for govt. intrusion, I think not. And wow, maxiep. The internet was a DARPA (defense dept.) project that took off when the govt. privatized it. All of the basic technology was there before it was privatized. Most universities were wired up for broadband before it was privatized as well, and there was a lot of consumer type software developed by college students in dorms. That infrastructure made Google and Facebook and Amazon (and many others) even possible. The federal highway system makes UPS and FedEx possible. There are numerous commercial spin offs of technology developed by NASA that benefit us all in numerous sectors. Of all the things govt. does, infrastructure is a rare thing I favor. The constitution is basically full of detailed infrastructure projects - from post office to printing the money. Actual infrastructure is color blind, doesn't care about sexual orientation, race, religion, etc. It is by definition for the common good and GENERAL WELFARE of the people. andalusian, the thing is, just about all the great infrastructure projects are really cheap in the govt. sized scope of things. No "Manhattan Project" sized efforts. And it's pretty clear to me that Obama and progressives see a lot of things (like health care or social security) as infrastructure - they're not, they're social/welfare programs.
Denny, you bring up the internet, but I'm wondering how people get connected? Could it be through phone, cable and broadband lines? How many miles of those did the government lay? As for UPS and FedEx, the last I checked, they transported their cargo primarily by air. I wasn't aware they primarily used the Interstate system. We had a perfectly functioning state highway system, BTW. As you know, the Interstate system was built as a military transportation program, with a side benefit of making auto travel easier.
The govt. bought thousands of miles of dedicated circuits by the time the Internet was privatized. There were a number of companies founded just to build the internet, almost exclusively for the government. These companies would be UUNet, BBN Planet, and others. All government (defense dept.) contractors. In 1985, I worked at 3Com, one of the major networking companies, and we had a Vax running Unix that was connected to Usenet via POTS. Meanwhile, our interns who went to Stanford had accounts on the school network. Via Usenet, an email from Mountain View, CA to Virginia took 2-3 days to reach the destination. Those guys who sent mail from Stanford accounts got their emails delivered within seconds. The WAN that connected the universities and research facilities was hugely expensive and very fast for its day. A T1 circuit in those early days cost maybe $10,000 for a short distance, and the university backbone was all T3 circuits (45x faster, more expensive). The circuit pricing was based on miles; the longer the circuit, the bigger the cost. Not only did the govt. purchases of circuits become a cash cow for the telcos, all the equipment needed to connect it up built up a number of high tech companies and drove the development of bigger and faster communication technologies, primarily fiber optics. Companies like Cisco came into existence primarily to make routers for the Internet. The privatization of the Internet further fueled private sector growth, obviously. But early on, Southern Pacific Railroad started a telecom company, SP Telecom, that laid fiber optic cable nationwide. They built a special railroad car with a spool of fiber on it that trenched next to the railways as the train went down the track, and laid the fiber at the same time. The private sector was doing its own thing at the same time as DARPA. There were services like CompuServe and AOL, and Microsoft was trying to compete with those with their MSN (Microsoft Network). All of those offerings were closed networks and proprietary technologies. Basically glorified BBS systems. The world would be a vastly different place if not for Reagan's defense spending (investment in DARPA) and the eventual privatization of it. We probably wouldn't have Cable or DSL speed access (still dial up modems), and the whole experience would be like being connected to just S2 if you were an AOL user or just some other one site if you were an MSN user, etc. They likely would not have even exchanged mail. TCP/IP is the low level protocol used to transmit data from one end point to another on the network. It was designed to be self healing, especially so if a city like Chicago were nuked by some enemy, the network would route the data around it and your emails would get through. You act like the government spending huge sums of money (relative to what the biggest corporations make and spend) and contracting private companies is the same thing as the private sector doing all that with no help. It's just not right to disconnect government demand driving the private sector business decisions. We wouldn't be sitting around today with smart phones and laptops and video game machines and personal computing devices of any kind if it weren't for government demand for the microprocessor. There were real military and scientific uses for microprocessors long before there were video games (one of the earliest commercial mass consumer of them). The military designs and builds planes. The requirement for those planes includes flying fast and having computers to control weapons systems, navigation, and the like. Computers without microprocessors were huge and heavy, having lots of vacuum tubes and the like. At some point, they couldn't have gotten big and fast enough to control advanced weapons systems. They couldn't make (fighter) planes small and have enough horsepower to lift the goddamned things. In fact, our military superiority over the Soviet Union and their MIG type aircraft was demonstrated periodically when one of their pilots would land at guantanimo seeking asylum and we reverse engineered the planes to find they had those vacuum tube type computers. Similarly, the Space Program created demand for microprocessors. The cost of every ounce of anything they launch is so expensive it was worth their while to seek lighter and lighter computers. The same for ICBMs and so on. Heck, look at the early manufacturers and designers of microprocessors and you'll see a who's who of defense contractors. Companies like Texas Instruments (built lots of stuff for WW II), Fairchild, Rockwell, etc. Carry on.
