Aug 31 2012
The really remarkable thing about President Obama’s rhetoric about the economy in this election season is just how little it has changed since 2010. Those who expected new ideas from this administration for getting the economy back on track must have been sorely disappointed, as the widely-anticipated “reset” on economic issues has really just been a “repeat.” Once again, he’s trotting out the same old strawmen and warmed over policies he has pounded relentlessly for the last three and a half years: he inherited the worst economy since the Great Depression, Republicans have stymied the recovery by refusing all compromise, and the only way we will remain competitive in the world economy is by “investing” in things like education, renewable “green” energy, and infrastructure development.
This “investment” angle has become so repetitive it’s easy just to ignore.
But what does it really mean?
When the president says he wants to invest in education, what, exactly does he want to invest in it?
It can’t simply be better education results, because 40 years of soaring costs for public education have already failed to do that. Since 1970, the per-pupil cost of a K – 12 education has exploded from about $55,000 to about $150,000 in real, inflation-adjusted terms. Yet math and reading scores have stagnated, and science scores have actually declined.
Surely, President Obama cannot believe that “investing more in education and training” and “recruiting an army of new teachers” in math and science constitutes new and innovative education policy. We’ve been trying it for decades, and despite hiring 3 million more teachers and spending $210 billion more per year on public education, taxpayers have nothing to show for it.
If taxpayers and students have not benefited from all this public largesse, who has? Teachers unions, of course, who are – not coincidentally – one of the Democratic Party’s most powerful constituencies and the single biggest obstacle to education reform in America today, continually sacrificing the interests of public school students to permanent job security and pay hikes for teachers.
When the president talks about investing in “education,” what he means is giving more money to the teachers unions in order to solidify their political efforts on his behalf.
The same goes for the other abstract nouns in which the president constantly demands more “investment.”
“Clean energy?” We’ve been “investing” in that for years. And what is the return on that investment? Solyndra, a company whose failure cost taxpayers $528 million in Department of Energy loan guarantees. A123 Systems, a recipient of $279 million in energy grants, filed for bankruptcy earlier this year. First Solar, having procured $1.46 billion in loan guarantees, announced layoffs of over 2000 employees over the last several months. Dozens more “clean” energy companies are filing for bankruptcy or laying off thousands of workers after receiving federal funds. Is this “investment” producing better energy resources, or economic growth?
But, as with the teachers unions, subsidized green energy executives do produce lots of campaign contributions.
Time and again, when the president says “investment,” he doesn’t simply mean spending – he means a redistribution of wealth from successful individuals and businesses to those who support his liberal agenda.
The president compares his “investment” vision to the successes of Thomas Edison or the Wright brothers. But none of them needed a government handout to invent the light bulb or the airplane. Government “investments” invariably go not to the people with the most promising innovations, but those with the best political connections. Politicians – of both parties – use the “investment” rhetoric to paper over payoffs to their friends and benefactors. It’s both immoral and inefficient.
But for Obama, this spending is a matter of faith. “I don’t believe,” he asserted, “that a tax cut is more likely to create jobs than providing loans to new entrepreneurs or tax credits to small business owners who hire veterans. I don’t believe it’s more likely to spur economic growth than investments in clean energy technology and medical research, or in new roads and bridges and runways.”
If we are to take his rhetoric seriously, the president clearly believes that the way to get our floundering economy moving again is not to let employers keep more of the money they themselves created, but to tax them and spread the wealth around to special interests like teachers unions, labor bosses, and well-connected firms like Solyndra that embody the correct leftist policies.
Call it a boondoggle. Call it crony capitalism. Call it corporate welfare. But let’s stop calling this “investment.”
Mike Lee is a U.S. Senator from Utah and a member of the Joint Economic Committee