Thursday, January 27, 2011
Obama's State of the Soviet Union
When the applause had died down and the softly glowing screen of the teleprompter faded to black, the echoes of the Leninist cadences of Obama's State of the Union address, "We must out-educate, out-compete, and out-innovate the rest of the world", "We have broken the back of the recession" and "We can't win the future with a government of the past" suggest that we are now living in a land without history. How else could Obama get up and deliver an address whose rhetoric represents a 180 degree turn, while the substance continues down the same track. The meat of the address was stolen from Clinton's 1992 campaign stump speeches on the economy. There is the same invocation of personal stories of unemployment combined with promises of replacing the old bad manufacturing jobs with free educations for everyone. But Clinton was better at pretending to be one of the boys, a working class man who only got out thanks to a good education. Obama's people must have known that dog wouldn't hunt.
As usual, the slogan du jour comes from the dictionary of the left. "Winning the future" was a common slogan on the left. While it was belatedly used by Newt Gingrich, it was most commonly employed in the 20th century by Communists and the far left. Two time Lenin prize winner, Danilo Dolci used it as the theme of one of his addresses. Jesse Jackson made use of it during his presidential campaign. Max Lerner gave a number of talks on "Winning the Future". Mandella threw it in there. Most notably it was used by Lenin, "Our hopes must be placed on the young. We must win the youth if we are to win the future."
The thrust of Obama's agenda follows Lenin's. The old jobs are gone. We must prepare for the future by educating our youth. The sturm und drang of the "We Musts" quickly becomes an argument for pandering to the teacher's unions. Only by empowering the teacher's union will we be able to compete with China. But China isn't strong because of its teachers, but because it has no independent unions, no minimum wage, no pollution laws and nothing to get in the way of the terrible machine of its industry. The People's Republic of China is not beating us in science or math, but in manufacturing cheap products with an undervalued national currency.
Handing out free educations to beat China is like going to college to fight a bear. Not only will it not improve your bear fighting skills, it actually gives the bear the upper hand. American math and science degrees are used to do research whose practical applications take the form of products manufactured in China. Even if all 300 million Americans all go to work as researchers, we are not going to "out-compete" and "out-innovate" by "out-educating" Americans. Russia has the highest percentage of college degrees by population in the world. China has the lowest. These figures have little to do with their economic success.
America already has a college degree program percentage rate on par with Sweden and Finland, countries that almost wholly subsidize higher educations. Greece subsidizes 99.7 percent of higher education, and yet has a lower degree rate than America and is in a state of complete economic meltdown. America has higher rates of graduates than many of the European countries which heavily subsidize their education systems. The takeaway is that state subsidized education does not ensure more graduates. And more graduates does not mean more jobs.
One of the more surreal moments in the address came when Obama mentioned Kathy Proctor, a 55 year old woman who after losing a job in the future industry is now a second year student at a community college working toward a biotechnology degree. Her plan is to become a biofuels analyst.
I can't imagine a worse model for American workers than a 55 year old woman amassing unknown amounts of student debt for a job in an industry that doesn't exist except as a government subsidized program. Even if Obama succeeds in obtaining more ethanol subsidies and some biofuels company decides to hire Kathy to be their biofuels analyst, her job will only exist because of the billions poured into subsidizing the educations and industry that make it possible. A job and an industry that would not exist without those subsidies. This is not how a genuinely productive country is run. It's not how we're going to beat China.
What's worse is that the odds are very good that Kathy Proctor will join the ranks of other struggling Americans whom Obama singled out as examples, only for them to lose their jobs and homes. Jennifer Cline was one of those success stories, using unemployment benefits to go to college. Then she had to sell Obama's "Things will get better" card to make ends meet. It's true, "Things will get better", as long as you have a letter from the big man himself and there's still a market for Obama's autographs.
If you're following Obama's curve ball so far, the plan is to fund education for entirely new industries. The same clean energy industries he wants to subsidize. All in the name of innovation. But this isn't innovation, it's central planning. The Obama administration has decided which industries to promote. It will use taxpayer money to subsidize those industries. It's a great plan aside from one small hitch, what if those industries don't succeed? That's the fallacy of central planning. It all looks good on paper. But paper isn't life.
Obama acted as if he were delivering Lenin's 10th congress speech on the New Economic Plan, but he has nothing revolutionary to say. He wants to cut spending, and all he does is talk about more spending. He wants to see more innovation, but what he's actually proposing is economic central planning, the opposite of innovation. Lenin's "Commanding Heights" approach allowed for socialism to be promoted through market economics, as long as the Communist party controlled the commanding heights of key industries. That seems to be Obama's approach as well. Nationalize and subsidize the country's remaining industries in order to shape the trajectory of the economy, while letting small businesses enjoy their freedom until the time arrives to shut them down. Even Obama's talk of innovation seemed to echo Lenin's "We are a party of innovators".
The internet, GPS and the space program were mentioned as examples of government subsidized innovation. And he has a point. But the internet, GPS and the space program were all spinoffs of ARPA/DARPA, the Defense Advanced Research Projects Agency. They were outgrowths of the Cold War. Elements of a plan to checkmate the Soviet Union by protecting the homefront and denying them space supremacy. They are proof that subsidized government programs can create amazing and revolutionary technologies. But to do that there has to be a plan.
Obama's speech is devoid of plans. We're going to build rail, because China is building rail. China is also building factories, but we're not going to do that. China is leveraging its exports in order to move manufacturing into the country, but we're not doing that either. Chinese companies are moving into Africa, but we're not doing that. So why are we building high speed rail?
China's high speed rail program is impressive, but also a Communist party project that loses money every year. It's more about control, than it is about economic necessity. If we had expanding urban infrastructure and a booming manufacturing sector, the way China does, then at least we would be building high speed rail in context. But we don't. We're building high speed rail, because the administration likes the idea. Not because American business is in desperate need of it. Like Kathy's biofuels degree, it's another program without context.
Had such a project been contemplated under the Eisenhower administration, it's possible that it might have been revolutionary and feasible. But it's just so much noise now. Connecting 80 percent of the country with high speed rail is doable, but we aren't going to do it. And no one seriously thinks that we are. The money isn't there and neither is the commitment. The only part of the government that can actually carry out grand projects is the military. No other part of the Federal government can successfully complete major infrastructure projects anymore, except for the new buildings they need to house their own bureaucracy. The Chinese are building high speed rail on the backs of a booming economy. We are not. And our own bureaucracy is not performance oriented. Instead of completing projects, we hand out subsidies for projects that never get built or if they do, never get utilized. And we borrow the money to pay for all that from China.
In the Soviet Union, Khrushchev did the same thing when he tried to integrate innovations he picked up on his trip to the United States, into Soviet industry and agriculture with no context. The results were disastrous. Khrushchev tried to imitate America's corn industry, by growing corn in the USSR. But Soviet farmers didn't want the corn and didn't understand how to plant it and where. Food production fell and usable land was ruined. Attempts to imitate American construction resulted in equally disastrous Khruschobas. That is what happens when techniques and approaches developed through innovation are filtered through a system of central planning.
This is our Sputnik moment, Obama says. But what is our Sputnik? Is it Chinese rail. What happens if the Chinese outrail us? Is it investing in clean energy, as he suggests the Chinese are doing. But China doesn't care about clean energy. Try taking a brisk walk through Bejing if you think pollution is a major concern there. Liberals have cynically pushed the meme that we're losing to China in the clean energy race. We're not. We're losing to China in every race.
China is building coal and nuclear plants, and manufacturing solar panels and wind turbines. It's a diverse strategy, not an environmental one. The ChiCom leadership does not care whether energy is clean or not, but how much it costs and how much it frees them from concern over energy supplies. Obama mentioned that China has the world's largest solar plant, but he failed to mention that the vast majority of their solar panels are manufactured for export to environmentally obsessed Western countries.
China's clean energy industry is heavily subsidized by the government. Obama wants us to follow suit. But China's export market for wind turbines and solar panels is us. What is our export market? Mostly Western countries which will also begin subsidizing their own clean energy industries. If every country subsidizes its own clean energy manufacturing, then there is no export market. Only a giant scam. Another closed loop of central planning as governments mandate the use of solar panels and wind turbines, and then subsidize solar panel and wind turbine manufacturing. Again this is not innovation. It's money being moved around at the expense of jobs and innovation.
Clinton promised all Americans an affordable college education and a home. What millions ended up with were piles of debt. That debt mushroomed and imploded on itself. Obama is still promising the college education and green jobs. Take out a loan, get a biotech degree and sign up to be a biofuels analyst. All to be paid for by more debt, with no actual economic prosperity in sight. The future is here, except it's more like the past.
"In the State of the Union, President Obama laid out a vision for the future," Obama's Organizing for America site proclaims in leaden Leninist tones. "We must out-educate, out-compete, and out-innovate the rest of the world... That work begins right now, with each of us committing to the work necessary to bring it about. The future is ours to win, but to get there, we can't just stand still. Join the fight to make the President's vision a reality." The message concludes by encouraging the prospective young Komsomol member to sign a letter saying, "I stand with President Obama and his vision for winning the future."
But what future has Obama actually laid out? There is the Khrushchevian "We will overtake you" directed at China. Calls for a Stakhanovitesque commitment by the masses. And a promise to win the future. But what future is that? We haven't been told. It's an unknown future with high speed rail, green jobs, college educations for everyone, but no flying cars unless they're electric or solar flying cars. This isn't a future. It's more mouthwash. Soviet mouthwash.
There's a 5 year plan to give broadband access to the masses. How did Khrushchev never think of that. More subsidies for solar and wind, at the expense of oil. Because 4 dollar a barrel oil isn't expensive enough. A 25 year plan to give 80 percent of Americans access to high speed rail. Except there's no actual plan either. It's all mouthwash. Soviet leaders rinsed their mouths with talk like this to assure their citizens that the future was moving forward on schedule. Now Obama is spitting their mouthwash out all over the country.
But don't worry, comrades. We're winning the future. History is on our side.. This is not a State of the Union address. It's a State of the Soviet Union address.