THE PRESIDENT: Now, let me say this. It’s fashionable among some pundits -- and this happens every time America hits a rough patch -- it’s fashionable to be saying, well, this time it’s different, this time we really are in the soup; it’s going to be hard to solve our problems. Let me tell you something. What’s missing is not big ideas. What’s missing is not that we’ve got an absence of technical solutions to deal with issues like education or energy or our deficit. The problem we’ve got right now is we’ve just got a stalemate in Washington.
The reason for the stalemate of course was the election of 2010, when Republican overtook the House. Who voted in that election? The American people.
Let's see what is next:
THE PRESIDENT: No, no, look -- I mean, we’re having a good, healthy, democratic debate. That’s how this works. And on their side, they’ve got a basic theory about how you grow the economy. And the theory is very simple: They think that the economy grows from the top down. So their basic theory is, if wealthy investors are doing well then everybody does well. So if we spend trillions of dollars on more tax cuts mostly for the wealthy, that that’s somehow going to create jobs, even if we have to pay for it by gutting education and gutting job-training programs and gutting transportation projects, and maybe even seeing middle-class folks have a higher tax burden.
For the breakdown of this section, see this post. Ultimately, if you don't have time for that, it's a basic straw man that no one actually believes to be true.
Let's see if this will get any better:
THE PRESIDENT: I love you back. (Applause.) But I just want to point out that we tried their theory [on top down economics and rolling back regulations] for almost 10 years, and here’s what it got us: We got the slowest job growth in decades. We got deficits as far as the eye can see. Your incomes and your wages didn’t go up. And it culminated in a crisis because there weren’t enough regulations on Wall Street and they could make reckless bets with other people’s money that resulted in this financial crisis, and you had to foot the bill. So that’s where their theory turned out.
There is almost too much in this paragraph even to decipher. Overall, this is interesting coming from a president who's added another 15 trillion in debt and who famously said that saddling future generations with more debt is "unpatriotic." By the way, the whole theory that an unregulated Wall Street caused the housing collapse in 2008 is bogus. The collapse was caused primarily by government failure, not market failure. Read this post by Ed Morrisey to find out how President Bush in 2003 and Sen. John McCain in 2005 attempted to fix Fannie Mae and Freddie Mac -- the two government mortgage lenders -- and were met with silence and stonewalling by Democrats.
Let's move on:
And I understand why they wouldn’t want to pay more in taxes. Nobody likes to pay more in taxes. Here's the problem: If you continue their tax breaks, that costs a trillion dollars. And since we're trying to bring down our deficit and our debt, if we spend a trillion dollars on tax cuts for them, we're going to have to find that trillion dollars someplace else. That means we're going to have to maybe make student loans more expensive for students. Or we might have to cut back on the services we're providing our brave veterans when they come home.
To say that tax breaks -- or allowing people to keep more of their money -- would "cost" a trillion dollars is remarkable to say the least. This is predicated on the idea that the money people earn is not primarily the property of the earner but is provided by the government. Secondly, the underlying assumption that tax increases necessarily lead to higher tax revenue is, no matter how many time it is repeated, just absolutely false.
Well, this is not looking so good. Next:
So I believe in American manufacturing. I believe in making stuff here in America. (Applause.)
Well American manufacturing sure isn't looking too good right now. The rest of the paragraph which I did not quote is an almost incomprehensible dirge about how Mitt Romney supposedly loves to outsource jobs overseas, which I guess makes him richer and probably more evil too.
Now to the best part:
There are a lot of wealthy, successful Americans who agree with me -- because they want to give something back. They know they didn’t -- look, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own. I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. It must be because I worked harder than everybody else. Let me tell you something -- there are a whole bunch of hardworking people out there. (Applause.)
If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business -- you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.
This is truly outrageous and strikes at the heart not only of the concept of property but at the natural rights foundation of America. Equality rightly understood -- that we are equal to each other in our natural rights -- sets the proper foundation for the use of our naturally unequal talents and skills. Paradoxically, inequality understood in this way then is the natural outcome of a regime that is built upon this self-evident truth of equality. Government is created for the purpose of the protecting the natural rights of the governed. But the People and the compact they made with each other comes prior to the creation of any government.
The idea implicit in these statements is that government and the People made a compact with each other, with the vast residuum of power presiding with the government; the rights we have being mere exceptions to the general power held by the government. But this scheme was precisely the reason why we declared independence in 1776 (and it was the reason why initially, James Madison among other Founders was wary of adding a Bill of Rights to the Constitution). It is a straw man to argue as the president does that the services provided by the government, e.i., schools, hospitals, transportation, etc., means that we owe a debt to government; that without the presence of government -- funded ultimately through tax payer dollars -- we would be a blank slate; that we as human persons would be somehow incomplete without some kind of bond formed with the State.
Let's just hope this speech is used over and over again in the coming weeks to show Obama's true face.
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