First Meeting:
January 26:
What: Middle East Update
Who: Maj. Elliot Chodoff, IDF Ret.
Where: AA Synagogue - 9 Lee Blvd
When: 7:30PM
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Second Meeting:
SKIDAWAY ISLAND REPUBLICAN CLUB
Bernie Marcus has become a well-known businessman and philanthropist in the Atlanta community since cofounding the Home Depot in 1979. He is a frequent guest on Fox News due to his year-long efforts to unseat President Obama on behalf of small business and our economy.
Banquet Chairmen - Gary Bocard and Tom Osborn$125/person Individual Seats Available Freedom Tables Only
For Reservations, Contact: Tom Sharp (5422) or Gary Bocard (1038)
Mail to Tom Sharp, 6 Sedgewater Retreat, Savannah, GA 31411
Third Meeting:
When: Tuesday, March 13 at 5PM
Who: Meg Heap candidate for District Attorney Chatham County
Where: Plantation Club Ball Room - The Landings, Skidaway Island
I hear a lot of grousing and complaining about the fact that good candidates for public office are seldom willing to run.
Well Meg Heap is running for District Attorney and I am hosting a meeting for her on Tuesday, March 13 at 5PM at The Plantation Club at The Landings in the Main Ball Room.
Mark your calendars and come hear Meg explain why she is the best suited attorney to help fight crime and other problems in Savannah and the surrounding County.
If you care about what happens to Savannah citizens, as a result of crime, and other legal issues facing our city/county then show up damn it!!!!!
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I did not listen to SOTU last night because I was engaged in conversations with Meg's senior staff person as well as talking with Kate Sommers of AIPAC in preparation for Elliot Chodoff's 7:30PM, appearance Thursday at AA Synagogue, 9 Lee Blvd., among other matters.
I read some pre-address reviews and several thoughts came to mind. Like Sen. Kerry, in a previous campaign, who said: 'he voted against the bill before voting for it,' President Solyndra voted against the Canadian Pipeline but will now support it after the election because he will have more time to study its impact. Voting out of both sides of one's mouth seems to be a serious problem for Democrats running for the presidency. Hypocrisy knows no boundaries when it comes to President Solyndra's pandering.
Have you noticed President Solyndra, now wears expensive $2,000 to $5,000 suits delivering his various 'fairness' pitches.
Here is the text of his entire speech for those who missed hearing it. After reading it one must admit he touched all the bases. Why then does he continue to strike out as a leader? Probably because so much of what he says is hot air crafted to appeal to those who want to believe by him saying it, ipso facto, it becomes reality. (See 1 below.)
The words sound reasonable and soothing, even believeable but the meaning behind them is dangerous. For some commentary see: ( 1a by John Stossel, 1b from a very bright and long standing friend and 1c from a dear family member and my response.)
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Porter Stansberry believes the Euro will be rescued but the consequences will be inflationary, as I do. He continues to urge gold as one way to protect yourself from the inevitable inflation printing money creates.
When you read Stansberry's comments think about its connection and implications with SOTU! Grow government, print money to pay for the cost, inflate your way out and destroy that which you profess you want to save and improve by talk of fairness .
I challenge you to define fairness that fairly applies to everyone. It only applies when you have reduced everyone to a number and destroyed their freedom and individuality. This is what President Solyndra is about as those dictator like presidents who went before him , ie. Wilson and Roosevelt. Their misguided ideas helped create the problems America now faces.
The message and strategy remains the siren song of the powerful who seek control over your life. This president has turned the sound of empty words into a ringing art form that suggests a world of hope that can neither can be nor sustain itself.
Re-elect him at our peril. (See edited 2 and 2a below.)
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Jordan's King not happy Netanyahu is failing to make more concessions to the Palestinians. (See 3 below.)
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According to Walter Russell Mead, Liberalism is on life support. If he is correct then so is our Republic which has been strangled by progressive ideas that have failed. (See 4 below.)
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Dick
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1)Full Text: State of the Union
Below is the full text of tonight's State of the Union address released by the White House:
Mr. Speaker, Mr. Vice President, members of Congress, distinguished guests, and fellow Americans:
Last month, I went to Andrews Air Force Base and welcomed home some of our last troops to serve in Iraq. Together, we offered a final, proud salute to the colors under which more than a million of our fellow citizens fought – and several thousand gave their lives.
We gather tonight knowing that this generation of heroes has made the United States safer and more respected around the world. For the first time in nine years, there are no Americans fighting in Iraq. For the first time in two decades, Osama bin Laden is not a threat to this country. Most of al Qaeda’s top lieutenants have been defeated. The Taliban’s momentum has been broken, and some troops in Afghanistan have begun to come home.
These achievements are a testament to the courage, selflessness, and teamwork of America’s Armed Forces. At a time when too many of our institutions have let us down, they exceed all expectations. They’re not consumed with personal ambition. They don’t obsess over their differences. They focus on the mission at hand. They work together.
Imagine what we could accomplish if we followed their example. Think about the America within our reach: A country that leads the world in educating its people. An America that attracts a new generation of high-tech manufacturing and high-paying jobs. A future where we’re in control of our own energy, and our security and prosperity aren’t so tied to unstable parts of the world. An economy built to last, where hard work pays off, and responsibility is rewarded.
We can do this. I know we can, because we’ve done it before. At the end of World War II, when another generation of heroes returned home from combat, they built the strongest economy and middle class the world has ever known. My grandfather, a veteran of Patton’s Army, got the chance to go to college on the GI Bill. My grandmother, who worked on a bomber assembly line, was part of a workforce that turned out the best products on Earth.
The two of them shared the optimism of a Nation that had triumphed over a depression and fascism. They understood they were part of something larger; that they were contributing to a story of success that every American had a chance to share – the basic American promise that if you worked hard, you could do well enough to raise a family, own a home, send your kids to college, and put a little away for retirement.
The defining issue of our time is how to keep that promise alive. No challenge is more urgent. No debate is more important. We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules. What’s at stake are not Democratic values or Republican values, but American values. We have to reclaim them.
Let’s remember how we got here. Long before the recession, jobs and manufacturing began leaving our shores. Technology made businesses more efficient, but also made some jobs obsolete. Folks at the top saw their incomes rise like never before, but most hardworking Americans struggled with costs that were growing, paychecks that weren’t, and personal debt that kept piling up.
In 2008, the house of cards collapsed. We learned that mortgages had been sold to people who couldn’t afford or understand them. Banks had made huge bets and bonuses with other people’s money. Regulators had looked the other way, or didn’t have the authority to stop the bad behavior.
It was wrong. It was irresponsible. And it plunged our economy into a crisis that put millions out of work, saddled us with more debt, and left innocent, hard-working Americans holding the bag. In the six months before I took office, we lost nearly four million jobs. And we lost another four million before our policies were in full effect.
Those are the facts. But so are these. In the last 22 months, businesses have created more than three million jobs. Last year, they created the most jobs since 2005. American manufacturers are hiring again, creating jobs for the first time since the late 1990s. Together, we’ve agreed to cut the deficit by more than $2 trillion. And we’ve put in place new rules to hold Wall Street accountable, so a crisis like that never happens again.
The state of our Union is getting stronger. And we’ve come too far to turn back now. As long as I’m President, I will work with anyone in this chamber to build on this momentum. But I intend to fight obstruction with action, and I will oppose any effort to return to the very same policies that brought on this economic crisis in the first place.
No, we will not go back to an economy weakened by outsourcing, bad debt, and phony financial profits. Tonight, I want to speak about how we move forward, and lay out a blueprint for an economy that’s built to last – an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values.
This blueprint begins with American manufacturing.
On the day I took office, our auto industry was on the verge of collapse. Some even said we should let it die. With a million jobs at stake, I refused to let that happen. In exchange for help, we demanded responsibility. We got workers and automakers to settle their differences. We got the industry to retool and restructure. Today, General Motors is back on top as the world’s number one automaker. Chrysler has grown faster in the U.S. than any major car company. Ford is investing billions in U.S. plants and factories. And together, the entire industry added nearly 160,000 jobs.
We bet on American workers. We bet on American ingenuity. And tonight, the American auto industry is back.
What’s happening in Detroit can happen in other industries. It can happen in Cleveland and Pittsburgh and Raleigh. We can’t bring back every job that’s left our shores. But right now, it’s getting more expensive to do business in places like China. Meanwhile, America is more productive. A few weeks ago, the CEO of Master Lock told me that it now makes business sense for him to bring jobs back home. Today, for the first time in fifteen years, Master Lock’s unionized plant in Milwaukee is running at full capacity.
So we have a huge opportunity, at this moment, to bring manufacturing back. But we have to seize it. Tonight, my message to business leaders is simple: Ask yourselves what you can do to bring jobs back to your country, and your country will do everything we can to help you succeed.
We should start with our tax code. Right now, companies get tax breaks for moving jobs and profits overseas. Meanwhile, companies that choose to stay in America get hit with one of the highest tax rates in the world. It makes no sense, and everyone knows it.
So let’s change it. First, if you’re a business that wants to outsource jobs, you shouldn’t get a tax deduction for doing it. That money should be used to cover moving expenses for companies like Master Lock that decide to bring jobs home.
Second, no American company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas. From now on, every multinational company should have to pay a basic minimum tax. And every penny should go towards lowering taxes for companies that choose to stay here and hire here.
Third, if you’re an American manufacturer, you should get a bigger tax cut. If you’re a high-tech manufacturer, we should double the tax deduction you get for making products here. And if you want to relocate in a community that was hit hard when a factory left town, you should get help financing a new plant, equipment, or training for new workers.
My message is simple. It’s time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America. Send me these tax reforms, and I’ll sign them right away.
We’re also making it easier for American businesses to sell products all over the world. Two years ago, I set a goal of doubling U.S. exports over five years. With the bipartisan trade agreements I signed into law, we are on track to meet that goal – ahead of schedule. Soon, there will be millions of new customers for American goods in Panama, Colombia, and South Korea. Soon, there will be new cars on the streets of Seoul imported from Detroit, and Toledo, and Chicago.
I will go anywhere in the world to open new markets for American products. And I will not stand by when our competitors don’t play by the rules. We’ve brought trade cases against China at nearly twice the rate as the last administration – and it’s made a difference. Over a thousand Americans are working today because we stopped a surge in Chinese tires. But we need to do more. It’s not right when another country lets our movies, music, and software be pirated. It’s not fair when foreign manufacturers have a leg up on ours only because they’re heavily subsidized.
Tonight, I’m announcing the creation of a Trade Enforcement Unit that will be charged with investigating unfair trade practices in countries like China. There will be more inspections to prevent counterfeit or unsafe goods from crossing our borders. And this Congress should make sure that no foreign company has an advantage over American manufacturing when it comes to accessing finance or new markets like Russia. Our workers are the most productive on Earth, and if the playing field is level, I promise you – America will always win.
I also hear from many business leaders who want to hire in the United States but can’t find workers with the right skills. Growing industries in science and technology have twice as many openings as we have workers who can do the job. Think about that – openings at a time when millions of Americans are looking for work.
That’s inexcusable. And we know how to fix it.
Jackie Bray is a single mom from North Carolina who was laid off from her job as a mechanic. Then Siemens opened a gas turbine factory in Charlotte, and formed a partnership with Central Piedmont Community College. The company helped the college design courses in laser and robotics training. It paid Jackie’s tuition, then hired her to help operate their plant.
I want every American looking for work to have the same opportunity as Jackie did. Join me in a national commitment to train two million Americans with skills that will lead directly to a job. My Administration has already lined up more companies that want to help. Model partnerships between businesses like Siemens and community colleges in places like Charlotte, Orlando, and Louisville are up and running. Now you need to give more community colleges the resources they need to become community career centers – places that teach people skills that local businesses are looking for right now, from data management to high-tech manufacturing.
And I want to cut through the maze of confusing training programs, so that from now on, people like Jackie have one program, one website, and one place to go for all the information and help they need. It’s time to turn our unemployment system into a reemployment system that puts people to work.
These reforms will help people get jobs that are open today. But to prepare for the jobs of tomorrow, our commitment to skills and education has to start earlier.
For less than one percent of what our Nation spends on education each year, we’ve convinced nearly every State in the country to raise their standards for teaching and learning – the first time that’s happened in a generation.
But challenges remain. And we know how to solve them.
At a time when other countries are doubling down on education, tight budgets have forced States to lay off thousands of teachers. We know a good teacher can increase the lifetime income of a classroom by over $250,000. A great teacher can offer an escape from poverty to the child who dreams beyond his circumstance. Every person in this chamber can point to a teacher who changed the trajectory of their lives. Most teachers work tirelessly, with modest pay, sometimes digging into their own pocket for school supplies – just to make a difference.
Teachers matter. So instead of bashing them, or defending the status quo, let’s offer schools a deal. Give them the resources to keep good teachers on the job, and reward the best ones. In return, grant schools flexibility: To teach with creativity and passion; to stop teaching to the test; and to replace teachers who just aren’t helping kids learn.
We also know that when students aren’t allowed to walk away from their education, more of them walk the stage to get their diploma. So tonight, I call on every State to require that all students stay in high school until they graduate or turn eighteen.
When kids do graduate, the most daunting challenge can be the cost of college. At a time when Americans owe more in tuition debt than credit card debt, this Congress needs to stop the interest rates on student loans from doubling in July. Extend the tuition tax credit we started that saves middle-class families thousands of dollars. And give more young people the chance to earn their way through college by doubling the number of work-study jobs in the next five years.
Of course, it’s not enough for us to increase student aid. We can’t just keep subsidizing skyrocketing tuition; we’ll run out of money. States also need to do their part, by making higher education a higher priority in their budgets. And colleges and universities have to do their part by working to keep costs down. Recently, I spoke with a group of college presidents who’ve done just that. Some schools re-design courses to help students finish more quickly. Some use better technology. The point is, it’s possible. So let me put colleges and universities on notice: If you can’t stop tuition from going up, the funding you get from taxpayers will go down. Higher education can’t be a luxury – it’s an economic imperative that every family in America should be able to afford.
Let’s also remember that hundreds of thousands of talented, hardworking students in this country face another challenge: The fact that they aren’t yet American citizens. Many were brought here as small children, are American through and through, yet they live every day with the threat of deportation. Others came more recently, to study business and science and engineering, but as soon as they get their degree, we send them home to invent new products and create new jobs somewhere else.
That doesn’t make sense.
I believe as strongly as ever that we should take on illegal immigration. That’s why my Administration has put more boots on the border than ever before. That’s why there are fewer illegal crossings than when I took office.
The opponents of action are out of excuses. We should be working on comprehensive immigration reform right now. But if election-year politics keeps Congress from acting on a comprehensive plan, let’s at least agree to stop expelling responsible young people who want to staff our labs, start new businesses, and defend this country. Send me a law that gives them the chance to earn their citizenship. I will sign it right away.
You see, an economy built to last is one where we encourage the talent and ingenuity of every person in this country. That means women should earn equal pay for equal work. It means we should support everyone who’s willing to work; and every risk-taker and entrepreneur who aspires to become the next Steve Jobs.
After all, innovation is what America has always been about. Most new jobs are created in start-ups and small businesses. So let’s pass an agenda that helps them succeed. Tear down regulations that prevent aspiring entrepreneurs from getting the financing to grow. Expand tax relief to small businesses that are raising wages and creating good jobs. Both parties agree on these ideas. So put them in a bill, and get it on my desk this year.
Innovation also demands basic research. Today, the discoveries taking place in our federally-financed labs and universities could lead to new treatments that kill cancer cells but leave healthy ones untouched. New lightweight vests for cops and soldiers that can stop any bullet. Don’t gut these investments in our budget. Don’t let other countries win the race for the future. Support the same kind of research and innovation that led to the computer chip and the Internet; to new American jobs and new American industries.
Nowhere is the promise of innovation greater than in American-made energy. Over the last three years, we’ve opened millions of new acres for oil and gas exploration, and tonight, I’m directing my Administration to open more than 75 percent of our potential offshore oil and gas resources. Right now, American oil production is the highest that it’s been in eight years. That’s right – eight years. Not only that – last year, we relied less on foreign oil than in any of the past sixteen years.
But with only 2 percent of the world’s oil reserves, oil isn’t enough. This country needs an all-out, all-of-the-above strategy that develops every available source of American energy – a strategy that’s cleaner, cheaper, and full of new jobs.
We have a supply of natural gas that can last America nearly one hundred years, and my Administration will take every possible action to safely develop this energy. Experts believe this will support more than 600,000 jobs by the end of the decade. And I’m requiring all companies that drill for gas on public lands to disclose the chemicals they use. America will develop this resource without putting the health and safety of our citizens at risk.
The development of natural gas will create jobs and power trucks and factories that are cleaner and cheaper, proving that we don’t have to choose between our environment and our economy. And by the way, it was public research dollars, over the course of thirty years, that helped develop the technologies to extract all this natural gas out of shale rock – reminding us that Government support is critical in helping businesses get new energy ideas off the ground.
What’s true for natural gas is true for clean energy. In three years, our partnership with the private sector has already positioned America to be the world’s leading manufacturer of high-tech batteries. Because of federal investments, renewable energy use has nearly doubled. And thousands of Americans have jobs because of it.
When Bryan Ritterby was laid off from his job making furniture, he said he worried that at 55, no one would give him a second chance. But he found work at Energetx, a wind turbine manufacturer in Michigan. Before the recession, the factory only made luxury yachts. Today, it’s hiring workers like Bryan, who said, “I’m proud to be working in the industry of the future.”
Our experience with shale gas shows us that the payoffs on these public investments don’t always come right away. Some technologies don’t pan out; some companies fail. But I will not walk away from the promise of clean energy. I will not walk away from workers like Bryan. I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here. We have subsidized oil companies for a century. That’s long enough. It’s time to end the taxpayer giveaways to an industry that’s rarely been more profitable, and double-down on a clean energy industry that’s never been more promising. Pass clean energy tax credits and create these jobs.
We can also spur energy innovation with new incentives. The differences in this chamber may be too deep right now to pass a comprehensive plan to fight climate change. But there’s no reason why Congress shouldn’t at least set a clean energy standard that creates a market for innovation. So far, you haven’t acted. Well tonight, I will. I’m directing my Administration to allow the development of clean energy on enough public land to power three million homes. And I’m proud to announce that the Department of Defense, the world’s largest consumer of energy, will make one of the largest commitments to clean energy in history – with the Navy purchasing enough capacity to power a quarter of a million homes a year.
Of course, the easiest way to save money is to waste less energy. So here’s another proposal: Help manufacturers eliminate energy waste in their factories and give businesses incentives to upgrade their buildings. Their energy bills will be $100 billion lower over the next decade, and America will have less pollution, more manufacturing, and more jobs for construction workers who need them. Send me a bill that creates these jobs.
Building this new energy future should be just one part of a broader agenda to repair America’s infrastructure. So much of America needs to be rebuilt. We’ve got crumbling roads and bridges. A power grid that wastes too much energy. An incomplete high-speed broadband network that prevents a small business owner in rural America from selling her products all over the world.
During the Great Depression, America built the Hoover Dam and the Golden Gate Bridge. After World War II, we connected our States with a system of highways. Democratic and Republican administrations invested in great projects that benefited everybody, from the workers who built them to the businesses that still use them today.
In the next few weeks, I will sign an Executive Order clearing away the red tape that slows down too many construction projects. But you need to fund these projects. Take the money we’re no longer spending at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home.
There’s never been a better time to build, especially since the construction industry was one of the hardest-hit when the housing bubble burst. Of course, construction workers weren’t the only ones hurt. So were millions of innocent Americans who’ve seen their home values decline. And while Government can’t fix the problem on its own, responsible homeowners shouldn’t have to sit and wait for the housing market to hit bottom to get some relief.
That’s why I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low interest rates. No more red tape. No more runaround from the banks. A small fee on the largest financial institutions will ensure that it won’t add to the deficit, and will give banks that were rescued by taxpayers a chance to repay a deficit of trust.
Let’s never forget: Millions of Americans who work hard and play by the rules every day deserve a Government and a financial system that do the same. It’s time to apply the same rules from top to bottom: No bailouts, no handouts, and no copouts. An America built to last insists on responsibility from everybody.
We’ve all paid the price for lenders who sold mortgages to people who couldn’t afford them, and buyers who knew they couldn’t afford them. That’s why we need smart regulations to prevent irresponsible behavior. Rules to prevent financial fraud, or toxic dumping, or faulty medical devices, don’t destroy the free market. They make the free market work better.
There is no question that some regulations are outdated, unnecessary, or too costly. In fact, I’ve approved fewer regulations in the first three years of my presidency than my Republican predecessor did in his. I’ve ordered every federal agency to eliminate rules that don’t make sense. We’ve already announced over 500 reforms, and just a fraction of them will save business and citizens more than $10 billion over the next five years. We got rid of one rule from 40 years ago that could have forced some dairy farmers to spend $10,000 a year proving that they could contain a spill – because milk was somehow classified as an oil. With a rule like that, I guess it was worth crying over spilled milk.
I’m confident a farmer can contain a milk spill without a federal agency looking over his shoulder. But I will not back down from making sure an oil company can contain the kind of oil spill we saw in the Gulf two years ago. I will not back down from protecting our kids from mercury pollution, or making sure that our food is safe and our water is clean. I will not go back to the days when health insurance companies had unchecked power to cancel your policy, deny you coverage, or charge women differently from men.
And I will not go back to the days when Wall Street was allowed to play by its own set of rules. The new rules we passed restore what should be any financial system’s core purpose: Getting funding to entrepreneurs with the best ideas, and getting loans to responsible families who want to buy a home, start a business, or send a kid to college.
So if you’re a big bank or financial institution, you are no longer allowed to make risky bets with your customers’ deposits. You’re required to write out a “living will” that details exactly how you’ll pay the bills if you fail – because the rest of us aren’t bailing you out ever again. And if you’re a mortgage lender or a payday lender or a credit card company, the days of signing people up for products they can’t afford with confusing forms and deceptive practices are over. Today, American consumers finally have a watchdog in Richard Cordray with one job: To look out for them.
We will also establish a Financial Crimes Unit of highly trained investigators to crack down on large-scale fraud and protect people’s investments. Some financial firms violate major anti-fraud laws because there’s no real penalty for being a repeat offender. That’s bad for consumers, and it’s bad for the vast majority of bankers and financial service professionals who do the right thing. So pass legislation that makes the penalties for fraud count.
And tonight, I am asking my Attorney General to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis. This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.
A return to the American values of fair play and shared responsibility will help us protect our people and our economy. But it should also guide us as we look to pay down our debt and invest in our future.
Right now, our most immediate priority is stopping a tax hike on 160 million working Americans while the recovery is still fragile. People cannot afford losing $40 out of each paycheck this year. There are plenty of ways to get this done. So let’s agree right here, right now: No side issues. No drama. Pass the payroll tax cut without delay.
When it comes to the deficit, we’ve already agreed to more than $2 trillion in cuts and savings. But we need to do more, and that means making choices. Right now, we’re poised to spend nearly $1 trillion more on what was supposed to be a temporary tax break for the wealthiest 2 percent of Americans. Right now, because of loopholes and shelters in the tax code, a quarter of all millionaires pay lower tax rates than millions of middle-class households. Right now, Warren Buffett pays a lower tax rate than his secretary.
Do we want to keep these tax cuts for the wealthiest Americans? Or do we want to keep our investments in everything else – like education and medical research; a strong military and care for our veterans? Because if we’re serious about paying down our debt, we can’t do both.
The American people know what the right choice is. So do I. As I told the Speaker this summer, I’m prepared to make more reforms that rein in the long term costs of Medicare and Medicaid, and strengthen Social Security, so long as those programs remain a guarantee of security for seniors.
But in return, we need to change our tax code so that people like me, and an awful lot of Members of Congress, pay our fair share of taxes. Tax reform should follow the Buffett rule: If you make more than $1 million a year, you should not pay less than 30 percent in taxes. And my Republican friend Tom Coburn is right: Washington should stop subsidizing millionaires. In fact, if you’re earning a million dollars a year, you shouldn’t get special tax subsidies or deductions. On the other hand, if you make under $250,000 a year, like 98 percent of American families, your taxes shouldn’t go up. You’re the ones struggling with rising costs and stagnant wages. You’re the ones who need relief.
Now, you can call this class warfare all you want. But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.
We don’t begrudge financial success in this country. We admire it. When Americans talk about folks like me paying my fair share of taxes, it’s not because they envy the rich. It’s because they understand that when I get tax breaks I don’t need and the country can’t afford, it either adds to the deficit, or somebody else has to make up the difference – like a senior on a fixed income; or a student trying to get through school; or a family trying to make ends meet. That’s not right. Americans know it’s not right. They know that this generation’s success is only possible because past generations felt a responsibility to each other, and to their country’s future, and they know our way of life will only endure if we feel that same sense of shared responsibility. That’s how we’ll reduce our deficit. That’s an America built to last.
I recognize that people watching tonight have differing views about taxes and debt; energy and health care. But no matter what party they belong to, I bet most Americans are thinking the same thing right now: Nothing will get done this year, or next year, or maybe even the year after that, because Washington is broken.
Can you blame them for feeling a little cynical?
The greatest blow to confidence in our economy last year didn’t come from events beyond our control. It came from a debate in Washington over whether the United States would pay its bills or not. Who benefited from that fiasco?
I’ve talked tonight about the deficit of trust between Main Street and Wall Street. But the divide between this city and the rest of the country is at least as bad – and it seems to get worse every year.
Some of this has to do with the corrosive influence of money in politics. So together, let’s take some steps to fix that. Send me a bill that bans insider trading by Members of Congress, and I will sign it tomorrow. Let’s limit any elected official from owning stocks in industries they impact. Let’s make sure people who bundle campaign contributions for Congress can’t lobby Congress, and vice versa – an idea that has bipartisan support, at least outside of Washington.
Some of what’s broken has to do with the way Congress does its business these days. A simple majority is no longer enough to get anything – even routine business – passed through the Senate. Neither party has been blameless in these tactics. Now both parties should put an end to it. For starters, I ask the Senate to pass a rule that all judicial and public service nominations receive a simple up or down vote within 90 days.
The executive branch also needs to change. Too often, it’s inefficient, outdated and remote. That’s why I’ve asked this Congress to grant me the authority to consolidate the federal bureaucracy so that our Government is leaner, quicker, and more responsive to the needs of the American people.
Finally, none of these reforms can happen unless we also lower the temperature in this town. We need to end the notion that the two parties must be locked in a perpetual campaign of mutual destruction; that politics is about clinging to rigid ideologies instead of building consensus around common sense ideas.
I’m a Democrat. But I believe what Republican Abraham Lincoln believed: That Government should do for people only what they cannot do better by themselves, and no more. That’s why my education reform offers more competition, and more control for schools and States. That’s why we’re getting rid of regulations that don’t work. That’s why our health care law relies on a reformed private market, not a Government program.
On the other hand, even my Republican friends who complain the most about Government spending have supported federally-financed roads, and clean energy projects, and federal offices for the folks back home.
The point is, we should all want a smarter, more effective Government. And while we may not be able to bridge our biggest philosophical differences this year, we can make real progress. With or without this Congress, I will keep taking actions that help the economy grow. But I can do a whole lot more with your help. Because when we act together, there is nothing the United States of America can’t achieve.
That is the lesson we’ve learned from our actions abroad over the last few years.
Ending the Iraq war has allowed us to strike decisive blows against our enemies. From Pakistan to Yemen, the al Qaeda operatives who remain are scrambling, knowing that they can’t escape the reach of the United States of America.
From this position of strength, we’ve begun to wind down the war in Afghanistan. Ten thousand of our troops have come home. Twenty-three thousand more will leave by the end of this summer. This transition to Afghan lead will continue, and we will build an enduring partnership with Afghanistan, so that it is never again a source of attacks against America.
As the tide of war recedes, a wave of change has washed across the Middle East and North Africa, from Tunis to Cairo; from Sana’a to Tripoli. A year ago, Qadhafi was one of the world’s longest-serving dictators – a murderer with American blood on his hands. Today, he is gone. And in Syria, I have no doubt that the Assad regime will soon discover that the forces of change can’t be reversed, and that human dignity can’t be denied.
How this incredible transformation will end remains uncertain. But we have a huge stake in the outcome. And while it is ultimately up to the people of the region to decide their fate, we will advocate for those values that have served our own country so well. We will stand against violence and intimidation. We will stand for the rights and dignity of all human beings – men and women; Christians, Muslims, and Jews. We will support policies that lead to strong and stable democracies and open markets, because tyranny is no match for liberty.
And we will safeguard America’s own security against those who threaten our citizens, our friends, and our interests. Look at Iran. Through the power of our diplomacy, a world that was once divided about how to deal with Iran’s nuclear program now stands as one. The regime is more isolated than ever before; its leaders are faced with crippling sanctions, and as long as they shirk their responsibilities, this pressure will not relent. Let there be no doubt: America is determined to prevent Iran from getting a nuclear weapon, and I will take no options off the table to achieve that goal. But a peaceful resolution of this issue is still possible, and far better, and if Iran changes course and meets its obligations, it can rejoin the community of nations.
The renewal of American leadership can be felt across the globe. Our oldest alliances in Europe and Asia are stronger than ever. Our ties to the Americas are deeper. Our iron-clad commitment to Israel’s security has meant the closest military cooperation between our two countries in history. We’ve made it clear that America is a Pacific power, and a new beginning in Burma has lit a new hope. From the coalitions we’ve built to secure nuclear materials, to the missions we’ve led against hunger and disease; from the blows we’ve dealt to our enemies; to the enduring power of our moral example, America is back.
Anyone who tells you otherwise, anyone who tells you that America is in decline or that our influence has waned, doesn’t know what they’re talking about. That’s not the message we get from leaders around the world, all of whom are eager to work with us. That’s not how people feel from Tokyo to Berlin; from Cape Town to Rio; where opinions of America are higher than they’ve been in years. Yes, the world is changing; no, we can’t control every event. But America remains the one indispensable nation in world affairs – and as long as I’m President, I intend to keep it that way.
That’s why, working with our military leaders, I have proposed a new defense strategy that ensures we maintain the finest military in the world, while saving nearly half a trillion dollars in our budget. To stay one step ahead of our adversaries, I have already sent this Congress legislation that will secure our country from the growing danger of cyber-threats.
Above all, our freedom endures because of the men and women in uniform who defend it. As they come home, we must serve them as well as they served us. That includes giving them the care and benefits they have earned – which is why we’ve increased annual VA spending every year I’ve been President. And it means enlisting our veterans in the work of rebuilding our Nation.
With the bipartisan support of this Congress, we are providing new tax credits to companies that hire vets. Michelle and Jill Biden have worked with American businesses to secure a pledge of 135,000 jobs for veterans and their families. And tonight, I’m proposing a Veterans Job Corps that will help our communities hire veterans as cops and firefighters, so that America is as strong as those who defend her.
Which brings me back to where I began. Those of us who’ve been sent here to serve can learn from the service of our troops. When you put on that uniform, it doesn’t matter if you’re black or white; Asian or Latino; conservative or liberal; rich or poor; gay or straight. When you’re marching into battle, you look out for the person next to you, or the mission fails. When you’re in the thick of the fight, you rise or fall as one unit, serving one Nation, leaving no one behind.
One of my proudest possessions is the flag that the SEAL Team took with them on the mission to get bin Laden. On it are each of their names. Some may be Democrats. Some may be Republicans. But that doesn’t matter. Just like it didn’t matter that day in the Situation Room, when I sat next to Bob Gates – a man who was George Bush’s defense secretary; and Hillary Clinton, a woman who ran against me for president.
All that mattered that day was the mission. No one thought about politics. No one thought about themselves. One of the young men involved in the raid later told me that he didn’t deserve credit for the mission. It only succeeded, he said, because every single member of that unit did their job – the pilot who landed the helicopter that spun out of control; the translator who kept others from entering the compound; the troops who separated the women and children from the fight; the SEALs who charged up the stairs. More than that, the mission only succeeded because every member of that unit trusted each other – because you can’t charge up those stairs, into darkness and danger, unless you know that there’s someone behind you, watching your back.
So it is with America. Each time I look at that flag, I’m reminded that our destiny is stitched together like those fifty stars and those thirteen stripes. No one built this country on their own. This Nation is great because we built it together. This Nation is great because we worked as a team. This Nation is great because we get each other’s backs. And if we hold fast to that truth, in this moment of trial, there is no challenge too great; no mission too hard. As long as we’re joined in common purpose, as long as we maintain our common resolve, our journey moves forward, our future is hopeful, and the state of our Union will always be strong.
Thank you, God bless you, and may God bless the United States of America.
1a)The Real State of the Union
By John Stossel
Has Barack Obama learned nothing in three years? Last night, during his State of the Union address, he promised "a blueprint for an economy." But economies are crushed by blueprints. An economy is really nothing more than people participating in an unfathomably complex spontaneous network of exchanges aimed at improving their material circumstances. It can't even be diagrammed, much less planned. And any attempt at it will come to grief.
Politicians like Obama believe they are the best judges of how we should conduct our lives. Of course a word like "blueprint" would occur to the president. He, like most who want his job, aspires to be the architect of a new society.
But we who love our lives and our freedom say: No, thanks. We need no social architect. We need liberty under law. That's it.
Obama -- and most Republicans are no different -- doesn't understand the real liberal revolution that transformed civilization. The crux of that revolution is that law should define general visible rules of just conduct, applicable to all, with no eye to particular outcomes. In other words, as Nobel laureate F.A. Hayek taught, the only "purpose" of law is to enable us all to pursue our individual purposes in peace.
If Obama really wanted, as he says, a society in which "everybody gets a fair shot," he would work to shrink government so that the sphere of freedom could expand. Instead, he expands government and raises taxes on wealthier people, as though giving politicians more money were a way to make society better. Instead, the interventionist state rigs the game on behalf of special interests.
What should Obama have said in his speech? Here's what I wish he'd said:
Our debt has passed $15 trillion. It will reach Greek levels in just 10 years.
But if we make reasonable cuts to what government spends, our economy can grow us out of our debt. Cutting doesn't just make economic sense, it is also the moral thing to do. Government is best which governs least.
We'll start by closing the Department of Education, which saves $100 billion a year. It's insane to take money from states only to launder it through Washington and then return it to states.
Next, we'll close the Department of Housing and Urban Development. That saves $41 billion. We had plenty of housing in America before a department was created.
Then we eliminate the Commerce Department: $9 billion. A government that can't count votes accurately should not try to negotiate trade. We will eliminate all corporate welfare and all subsidies. That means agriculture subsidies, green energy subsidies, ethanol subsidies and so on. None of it is needed.
I propose selling Amtrak. Why is government in the transportation business? Let private companies compete to run the trains.
And we must finally stop one of the biggest assaults on freedom and our pocketbook: the war on drugs. I used drugs. It's immoral to imprison people who do what I did and now laugh about.
Still, all these cuts combined will only dent our deficit. We must cut Medicare, Social Security and the military.
I know. Medicare and Social Security are popular. But they are unsustainable. The only way to cut costs and still have medical innovation is to free the market. So I propose that we repeal Obamacare immediately. My proposal was a mistake. We should repeal all government interference in the medical and insurance industries, including licensing. It all impedes competition.
We must shrink the military's mission to true national defense. That means pulling our troops out of Germany, Japan, Italy and dozens of other countries. America cannot and should not try to police the world.
Those cuts will put America on the road to solvency. But that's not enough. We also need economic growth.
Our growth has stalled because millions of pages of regulations make businesses too fearful to invest. Entrepreneurs don't know what the rules -- or taxes -- will be tomorrow.
All destructive laws must go. I endorse the Stossel Rule: For every new law passed, we must repeal two old ones.
OK, Obama will never say that.
But I can dream, can't I?
1b)Obama's speech is disgusting. I am sorry, but midway through it, I was so disgusted I had to turn it off.
As just a minor example, Obama called on Congress to pass the payroll tax extension without delay. He called on everyone in the room to agree to that extension, without side deals or gimmicks. Excuse me, but wasn't that what the House Republicans called for before Christmas when the Senate refused to pass a payroll tax extension for longer than two months, passed a bill and left town? The only issue was that the Republicans wanted to have the payroll tax extension extend for the entire year, and the President and the Democrat Senators called on a two month extension only. WHY would they limit a tax bill to two months? Right before Christmas? I have my answer: So Obama could grandstand tonight and call for an extension for a full year.
Does he think we don"t remember what happened four weeks ago? Or does he think we are stupid? More important than what he thinks about the American people (I know that he HOPES that we are this stupid), does he think the press is so compliant that it will give him a pass on that stupid comment? Apparently so.
Then Obama called for everyone earning more than $1 million to pay taxes at a rate of 30%. Excuse me, but the last time I looked, the tax rate on income above $1 million was already 36%. Oh, maybe he thinks millionaires should not get deductions for charitable giving, business deductions, etc. Unfortunately, that law is already on the books as well -- it's called the alternative minimum tax (AMT), and it ensures that those deductions are phased out for upper income Americans (starting at about $250,000) so that they will not get deductions that would reduce their effective rate of tax below 28%. Does he want to raise AMT to 30%? If so, that change won't make much difference, and the talk in DC is to minimize the effect of the AMT. Why? Because if the middle class start to feel the bite of AMT, they will start to understand why they should never support the Democrat Party.
So what is he talking about? Just a 30% tax based on gross income? Does he know how stupid that makes him sound? Does the press? Do the people?
Then he invokes the Oracle of Omaha to support his thesis. What is the purpose of not explaining why men like Warren Buffett and Mitt Romney -- who have paid their taxes, and invested the after-tax funds into capital, should not pay again at ordinary income rates on the returns generated by that capital? Why does he want to obfuscate the difference between INCOME TAX and CAPITAL GAINS TAX? Again, because he thinks the compliant media will support him.
Remember who the media are -- their mommies told them they were special and they were going to change the world. But they couldn't stand the sight of blood, so they didn't go into health care. And they couldn't do math, so they didn't become businessmen. And they really didn't want to work so hard, so a lot of other professions -- law, IT, etc. -- fell by the wayside. And they couldn't get elected to office, so they joined the media.
All this complex math and accounting stuff is for lesser beings that the media to figure out. May as well write a flattering article about how much Obama cares for the little guy and have another Scotch.
I am reminded of a story that Carol Platt Liebau told about Obama. I may get some details wrong, but she has told this story on the radio and it made a deep impression. Carol was the editor of the Harvard Law Review the year after Barry Obama was the President. And she faced an interesting problem -- the members of the Law Review didn't want to work. They would not show up for assigned cite checking duties, proofreading duties, etc. That was beneath them. So Carol decided that if they did not fulfill their assigned duties, they would be kicked off the Harvard Law Review. That was too much for the members of the Law Review who remembered the days of Barry Obama, so they brought Barry back to have a word with her. Barry explained that there were some members of the Law Review who wanted to work, and they should do whatever it took to get out the next edition. For those who did not want to work, well, Barry felt that Carol should just leave them alone.
Barry has done Marx one better: "From each according to whatever you can sucker him into doing, to each according to his wants." That's Obama's principle of fairness.
Governor William Bradford faced the same decision in Plymouth Colony when the original colonists tried a communal type of living until they started to starve. Then Governor Bradford, after consulting with the "chiefest among them," decided to impose a principle of making each man responsible for growing his own corn. In the first year, "much more corn was planted than otherwise would have been by any means the Governor or any other could use." (Of Plymouth Plantation). Bradford went on to observe how he had proved Plato wrong:
"The experience that was had in this common course and condition, tried sundry years and that amongst godly and sober men, may well evince the vanity of that conceit of Plato’s and other ancients applauded by some of later times; and that the taking away of property and bringing in community into a commonwealth would make them happy and flourishing; as if they were wiser than God. For this community (so far as it was) was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort."
We are now back with the "vanity of that conceit of Plato's" that the commonweal can take care of all whether we produce or not. Let there be no doubt -- Obama's state of the union speech tonight was to create a state of disunion -- a war of the takers against the producers, a war of communalism (if not communism) against the free market, a war of the poor against the rich. Let's just hope that there are some in the media -- or at least enough people with common sense in the public at large -- who can see this charade for what it is.
All the best,
Bob
1c) "Obama's speech last night proves that he will be a powerful and formidable candidate. Whether you agree with him or not, he projects a vision. The Republican candidates just seem to be not Obama. They have done nothing but criticize each other and have barely put forth their vision of America. Many of the articles you are sending seem to suggest that Republicans are already making excuses for why they will lose the election (ie. blame the liberal media, the best candidates were afraid to run etc). I hope this primary season doesn't irreparably harm the Republican candidate, whoever he may be). Also, the decline of morals of supporters of Gingrich is simply shocking. I guess if you say God forgives you; your past is meaningless."
My response: "Looks bleak but there will be a dawn once the infighting subsides and a candidate emerges. Obama can be beat with his failed record, the subtle and cloaked meaning of his words if Americans remain smart enough to comprehend snake oil and can be awakened to this fact." Me
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Whatever you want to call it, simply know this: There will not be a deflationary collapse in Europe. The euro will not collapse in the near term. Why? Because the European Central Bank (ECB) "loaned" roughly 500 billion euro to Europe's major banks at 1% interest. This capital will allow all the big banks to report adequate capital ratios when they file their annual reports… which is code for "getting a huge bailout." Consequently, Europe will see a gigantic increase in its money supply. When asked by the Financial Times if there was any substantive difference between what the ECB was doing (printing money and "loaning" it at 1%) and what the Federal Reserve has been doing since 2009 (printing money and buying mortgages and Treasury bonds), ECB President Mario Draghi replied, "Each jurisdiction has not only its own rules, but also its own vocabulary. We call them 'non-standard measures.' They are certainly unprecedented. But the reliance on the banking channel falls squarely in our mandate." Let me translate Mario's political blather: "There is little difference. We are printing money to bail out deadbeat borrowers and big banks." I have been writing, consistently, for almost four years, that the world's gigantic debt bubble will end in a massive inflation. I have long believed sovereign borrowers from around the world would choose to inflate their debts away, rather than suffer the consequences of actual defaults and restructurings. The reluctance of some members of the European Union (Germany, in particular) to do so caused a delay in the realization of my thesis… But it will not change the inevitable result. Soon, you will see a massive financial-led economic rebound as the credit market re-opens, thanks to government-manipulated, ultra-low interest rates. In the short term, millions of people will cheer these moves, as the risk of any economic pain will have apparently been removed. But this resolution is a mirage… Instead of wiping out the bankers, brokers, and politicians who approved these bad debts (and were enriched by them), these bad debts will now be paid for by the millions and millions of people who rely on the two major global currencies – the euro and the dollar. The trillions of dollars in bad loans will be paid for through inflation. It's an invisible, secret tax that not one in a hundred regular people even understand. Over time, the result of these actions will be a vastly lower standard of living, thanks to declines in purchasing power and increasing commodity prices. Real wages will be much lower, as employers will not readily increase wages to keep up with inflation. Volatile paper currencies will make it harder for entrepreneurs to invest and source products and services across borders. The so-called "wealth gap" will increase dramatically, as inflation will increase the purchasing power of the rich (whose assets will increase in value), while the poor – who have no ready means to protect themselves from inflation – are further impoverished. And… in a surprise to the politicians who think easy money and bigger annual deficits are the path to greater centralized power… the coming inflation will cause massive social unrest. Occupy Wall Street is merely a sign of what is to come. Soon, the protesters won't merely march past the homes of the wealthy and the powerful… they will firebomb them. The stability of our currency – of any nation's currency – is ultimately a reflection of the stability and reliability of our culture. It was the "Corruption of America" that led to the paper money system we use today. Many people forget that until 1971, gold-backed money – sound money – was a privilege every American enjoyed. Not anymore… Today, under a purely paper system, the entire monetary system is controlled by the political class, which has the power to allocate capital or to deny it. Thus, the world's capital markets, rather than acting as capital allocators, have become merely speculative marionettes, whose strings are controlled by the well-connected and the influential. Consider the recent case of Philipp Hildebrand, president of Switzerland's central bank, the Swiss National Bank (SNB). The Swiss central bank has long been famed as the world's best strong-currency advocate. It has a long tradition of backing its paper money with gold. In August, the bank made an extraordinary and uncharacteristic decision. Hildebrand decided to cap the value of the Swiss franc by deliberately devaluing the currency against the euro and announcing that the value of the Swiss franc would never be allowed to rise above a certain point. This immediately eliminated the Swiss franc as one of the world's few remaining "lifeboat" currencies. Its value plummeted against the dollar. Just two days before that stunning change in Swiss policy, Hildebrand placed a $512,000 trade into U.S. dollars from Swiss francs. Hildebrand resigned his post this month after the outcry over his transaction. This kind of petty graft seems remarkably stupid for such a sophisticated political figure. But perhaps it simply speaks to the arrogance of his class. (He claims his wife placed the trade without his knowledge.) What was not as widely reported about the scandal was, to me, far more interesting. Hildebrand and his wife met at Moore Capital, one of the world's largest hedge funds. Its specialty is foreign exchange trading. How much would you like to bet that Moore Capital was also long dollars – billions of them – prior to the change in Swiss policy? This is how the game will be played. While the weak currency policies of the major nation states will impoverish their citizens, they will never be allowed to impoverish the elite… who will only grow richer and far more powerful. The only question is, how long will the game continue before the side effects (higher prices, lower wages, more social unrest) turn over the entire apple cart? We cannot know. God does not whisper in our ear. But… I can tell you how to avoid becoming the patsy of Western governments and their paper scheme: Instead of storing your wealth in soon-to-be-debased paper currencies like the dollar and the euro, store your wealth in gold and silver. Although these "anti-paper money" metals have climbed substantially in the past decade, schemes like the one I've just described ensure they will rise much higher in the coming years. Good investing, Porter Stansberry 2a)The State of His Policies Obama has done nearly everything he wanted. That's the problem.President Obama delivered a State of the Union address Tuesday night that by the account of his own advisers is more campaign document than a plan for governing. He's running against Republicans in Congress, Reaganomics, wealthy bankers and inequality. Normally a President at the start of his fourth year would be running on his record, accentuating the legislation he's passed. Mr. Obama can't do that with any specificity because the economic recovery has been so weak and the legislation he has passed is so unpopular. So last night he took credit for the shale gas revolution he had nothing to do with and proposed new policies to "spread the wealth around," as he famously told Joe the Plumber in 2008 before he took the words back. We thought he meant it then, and now he's admitting it. Perhaps this will work if Republicans nominate a standard-bearer who is damaged, or too cautious or guilty to challenge this politics of envy. Mr. Obama clearly has Mitt Romney and his 14% effective tax rate in his sights (see the editorial nearby). The President will try to portray Mr. Romney as Mr. 1%, and if the Republican settles for defending the current tax code, he will lose. He needs a tax reform proposal of his own, as well as the self-confidence to argue for it in the same moral terms that Mr. Obama will attack him. European Pressphoto Agency Meantime, as Mr. Obama begins his fourth year in power it's a good moment to recount the economic record that he'd rather not talk about. The President inherited a deep recession, but in political terms that should have been a blessing. History shows that the deeper the recession, the sharper the recovery, and Mr. Obama was poised to take credit for the economy's natural recuperative powers. Instead, we've had the weakest recovery since the Great Depression and stubbornly high joblessness. The nearby chart compares rates of quarterly growth during the Reagan and Obama economic recoveries. The comparison is apt because both recoveries followed deep recessions in which the jobless rate reached more than 10%. Once the Reagan recovery got cooking, in 1983, growth stayed above 5% for 18 months and never fell below 3.3% for 13 consecutive quarters. In the Obama recovery, growth has never exceeded 4% in any quarter and fell off markedly in mid-2010 through the third quarter of 2011. For the first nine months of 2011, growth averaged less than 1.2%. The economy finally picked up again in the fourth quarter, but still at a rate that is subpar for a recovery that long ago should have become robust and durable. As he runs for re-election, Mr. Obama is trying to campaign as an incumbent who is striving to help the economy but has been stymied at every turn by Congress. Not even MSNBC can believe this. For two years he had the largest Democratic majorities in Congress since the 1970s and achieved nearly everything he wanted. The New Yorker magazine this week has posted on its website a 57-page memo that economic adviser Larry Summers wrote to Mr. Obama in December 2008. It lays out nearly his entire agenda for the "stimulus," reviving housing, the auto bailout and saving the financial industry. If anything, the memo overstates what would be needed to stabilize the financial panic, but nearly all of the stimulus spending priorities that the memo deemed "feasible" made it into law. They simply didn't work as promised. The Pelosi Congress also passed ObamaCare, Dodd-Frank, cash for clunkers, the housing tax credit, and much more. The only Obama priority it didn't pass was cap-and-trade, which was killed by Senate Democrats. Mr. Obama's regulators also currently have some 149 major rules underway, which are those that cost more than $100 million. The 112th Congress hasn't been able to kill a single major rule. The most it has been able to do is extend the Bush tax rates—which helped the economy by avoiding a tax shock—and slow the rate of increase in federal spending. This President has been "obstructed" less than anyone since LBJ. Mr. Obama clearly has a spring in his step these days, figuring that the public hates Congress and thinks Republicans run it, that the GOP will field a weak presidential candidate, and that he can fool the public into believing only Mitt Romney's taxes will rise if Mr. Obama wins a second term. He has only one big obstacle: his record. 3)'Jordan mulling sanctions against Israel' Arab media say King Abdullah frustrated with Amman talks; is considering various diplomatic moves against Israel if negotiation with Palestinians continue to stall By Roi Kais, Elior Levy Jordan's King Abdullah alluded to a possible deterioration in Amman's relationship with Jerusalem if unless Israel will "demonstrate it is willing to make considerable moves" to reignite the stalled Israeli-Palestinian peace process, the Al-Quds al-Arabi newspaper reported Wednesday. According to the London-based Arab publication, Abdullah expected Prime Minister Benjamin Netanyahu's government to "make significant concessions which will allow the Palestinian leadership to justify their return to the negotiating table." The papers sources said that the king has "three aces up his sleeves," which he may choose to use of Israel proves "suborn," including the possible reduction or suspension of the diplomatic ties between Israel and Jordan, while possibly bolstering ties with both the Jordanian Opposition and even Iran. Thursday is the date at which both parties are supposed to present their updated positions on security and the issue of borders according to The Quartet's instructions to Israel and the Palestinian Authority . Chief Israeli and Palestinian negotiators Yitzhak Molcho and Saeb Erekat will meet later Wednesday, in what Palestinian sources said is likely to be the last round of Amman talks. According to the report, Abdullah has been able to convince Palestinian President Mahmoud Abbas that Jordan should be give a chance to broker the Israeli-Palestinian talks. According to the Maan news agency, Abbas "Refuses and will continue to refuse to prolong the talks… He sees today's meeting as the last chance to broker an agreement that will allow the preliminary talks to continue and eventually mature into full-fledge negotiations." Abbas, the sources added, is poised to declare that the Amman talks have failed. Palestinian sources told Ynet that "the ball is in Israel's court." The PA criticized Israel for "failing to meet the Quartet's basic demands," adding that it does not expect Israel to meet the Palestinian demand for a construction freeze in the West Bank. The Palestinian Authority will convene its executive committee in Ramallah in the next few days to decide on the PA's next move. The Arab League's Middle East Committee will convene in mid February to review possible diplomatic moves in the matter, the report said. -------------------------------------------------------------------------------------------------------- 4)2The Once and Future Liberalism We need to get beyond the dysfunctional and outdated ideas of 20th-century liberalism. WALTER RUSSELL MEAD Writing about the onset of the Great Depression, John Kenneth Galbraith famously said that the end had come but was not yet in sight. The past was crumbling under their feet, but people could not imagine how the future would play out. Their social imagination had hit a wall. The same thing is happening today: The core institutions, ideas and expectations that shaped American life for the sixty years after the New Deal don’t work anymore. The gaps between the social system we inhabit and the one we now need are becoming so wide that we can no longer paper over them. But even as the failures of the old system become more inescapable and more damaging, our national discourse remains stuck in a bygone age. The end is here, but we can’t quite take it in. In the old system, most blue-collar and white-collar workers held stable, lifetime jobs with defined benefit pensions, and a career civil service administered a growing state as living standards for all social classes steadily rose. Gaps between the classes remained fairly consistent in an industrial economy characterized by strong unions in stable, government-brokered arrangements with large corporations—what Galbraith and others referred to as the Iron Triangle. High school graduates were pretty much guaranteed lifetime employment in a job that provided a comfortable lower middle-class lifestyle; college graduates could expect a better paid and equally secure future. An increasing “social dividend”, meanwhile, accrued in various forms: longer vacations, more and cheaper state-supported education, earlier retirement, shorter work weeks, more social and literal mobility, and more diverse forms of affordable entertainment. Call all this, taken together, the blue model. In the heyday of the blue model, economists and social scientists assumed that from generation to generation Americans would live a life of incremental improvements. The details of life would keep getting better even as the broad outlines of society stayed the same. The advanced industrial democracies, of which the United States was the largest, wealthiest and strongest, had reached the apex of social achievement. It had, in other words, defined and was in the process of perfecting political and social “best practice.” America was what “developed” human society looked like and no more radical changes were in the offing. Amid the hubris that such conceptions encouraged, Professor (later Ambassador) Galbraith was moved to state, in 1952, that “most of the cheap and simple inventions have been made.”1 If only the United States and its allies could best the Soviet Union and its counter-model, then indeed—as a later writer would put it—History would end in the philosophical sense that only one set of universally acknowledged best practices would be left standing. Life isn’t this simple anymore. The blue social model is in the process of breaking down, and the chief question in American politics today is what should come next. One large group, mainly “blue state” self-labeled liberals who think the blue model is the only possible, or at least the best feasible, way to organize a modern society, wants to shore it up and defend it. This group sees the gradual breakup of the blue social model as an avoidable historical tragedy caused by specific and reversible policy errors. Supporters of the model point to the rising inequality and financial instability in contemporary American life as signs that we need to defend the blue system and enlarge it. Others, generally called conservatives and often hailing from the “red states”, think the model, whatever its past benefits or general desirability, is no longer sustainable and must give way to an earlier, more austere but also more economically efficient pre-“big government” model. Often, backers of this view see the New Deal state as a great wrong turn. Their goal is to repair the errors of the 1930s and return to the more restrictive constitutional limits on Federal power from an earlier time. But even as the red-blue division grows more entrenched and bitter, it is becoming less relevant. The blue model is breaking down so fast and so far that not even its supporters can ignore the disintegration and disaster it now presages. Liberal Democrats in states like Rhode Island and cities like Chicago are cutting pensions and benefits and laying off workers out of financial necessity rather than ideological zeal. The blue model can no longer pay its bills, and not even its friends can keep it alive. Our real choice, however, is not between blue or pre-blue. We can’t get back to the 1890s or 1920s any more than we can go back to the 1950s and 1960s. We may not yet be able to imagine what a post-blue future looks like, but that is what we will have to build. Until we remove the scales from our eyes and launch our discourse toward the future, our politics will remain sterile, and our economy will fail to provide the growth and higher living standards Americans continue to seek. That neither we nor the world can afford. The blue social model rested on a novel post-World War II industrial and economic system. The “commanding heights” of American business were controlled by a small number of sometimes monopolistic, usually oligopolistic firms. AT&T, for example, was the only serious telephone company in the country, and both the services it offered and the prices it charged were tightly regulated by the government. The Big Three automakers had a lock on the car market; in the halcyon days of the blue model there was virtually no foreign competition. A handful of airlines divided up the routes and the market; airlines could not compete by offering lower prices or by opening new routes without government permission. Banks, utilities, insurance companies and trucking companies had their rates and, essentially, their profit levels set by Federal regulators. This stable economic structure allowed a consistent division of the pie. Unionized workers, then a far larger percentage of laborers than is the case today, got steady raises in steady jobs. The government got a steady flow of tax revenues. Shareholders got reasonably steady dividends. There were problems with the blue model. It abided systematic discrimination against women and minorities, and a case can be made that it depended on that discrimination to some degree. Consumers had little leverage: If you didn’t like the way the phone company treated you, you were free to do without phone service, and if you didn’t like poorly made Detroit gas guzzlers that fell apart in a few years, you could get a horse. The system slowed innovation, too; AT&T discouraged investments in new telecommunications technologies. Rival companies and upstart firms were barred from controlled markets by explicit laws and regulations intended to stabilize the position of leading companies. By some accounts, too, the quarter century after World War II was a period of stultifying cultural conformity. In this prologue to the end of History, some “last men”, from the Beatniks to Lennie Bruce to Andy Warhol to Lou Reed, were already bored, resenting the pressure to conform that the mass consumption, Fordist era entailed. The blue model began to decay in the 1970s. Foreign manufacturers recovered from the devastation of World War II and in many cases had more efficient and advanced factories than lazy, sclerotic American firms. German and Japanese goods challenged American automobile and electronic companies. The growth of offshore financial markets forced the U.S. financial services industry to become more flexible as both borrowers and lenders were increasingly able to work around the regulations and the oligopolies of the domestic market. Demand for new communications services created an appetite for competition against Ma Bell. The consumer movement attacked regulations designed to protect big companies. As a sign of the times, Ted Kennedy, of all people, cosponsored a bill to deregulate the airlines. Anti-corporate liberals rebelled at the way government power and regulation allowed corporations to give consumers the shaft. The new environmental movement pointed to the problem of privately caused but publicly paid-for externalities like air and water pollution. As the old system dissolved, companies had to become more flexible. As industry became more competitive, private-sector managers had to shed bureaucratic habits of thought. Lifetime employment had to go. Especially productive workers had to be lured with high pay. The costs of unionization grew; in the old days, government regulators simply allowed unionized firms to charge higher prices to compensate for their higher wage costs, but that no longer worked in the face of greater competition. High wages in the United States drove manufacturers toward greater automation even as low wage labor in Asia and elsewhere began to make inroads in manufacturing. And with the advent of the pro-deregulation Reagan Administration, government enthusiasm for maintaining the Iron Triangle waned dramatically, coincidentally dividing the Republican Party into pro- and anti-big business wings as never before since the first Gilded Age. Some companies (like the automakers) were large and rich enough to cling to the blue model long after its sell-by date. The result was a long, slow and grueling decline whose late stages are still unfolding today. The Big Three lost (and are still losing) market share to more nimble rivals. Their unionized workforce became old, inflexible and expensive, and they were supporting ever larger numbers of retirees on the basis of smaller market shares and shrinking profitability. These days, most private-sector blue companies can only survive with government support. Government protection from foreign competition (economically wasteful and illegal under our international trade agreements) is one option; direct subsidies and cash transfers (bailouts and tax breaks) is another. Neither works very well or for very long. Both are unsustainably expensive given current levels of national debt. Demographic change is accelerating the crisis of the blue social model, as retirement and other social benefits come under increasing pressure. Social Security and Medicare are covering a steadily growing percentage of the population. Younger workers no longer believe these systems will be in place for their old age. They are at least partly right. Without major change, the current Medicare system cannot last. Beyond that, a general crisis of the pension system threatens to reduce the income of older people even as government is less able to take up the slack. Defined benefit retirement programs have largely disappeared in the private sector; state and municipal pensions threaten to bankrupt some cities and states, and they are forcing officials in others to choose between drastic service cuts and breaking pension commitments to retirees. With some significant variation, the welfare-state economies of Western Europe have also been true blue, and they have consequently encountered the same limits and entered the same systemic crisis as the U.S. system. In a sense, the European situation is worse. It is structurally bluer than America, as measured by public share of GDP and the extent of “cradle-to-grave” services proffered. Demography is a graver problem in the European welfare states than in the United States, and the poor design of the European monetary union has further exacerbated the crisis in many countries. There are a lot of reasons to be nostalgic for the old days (especially for the white males who were, far and away, the biggest beneficiaries of the old system), but there are also good reasons to bid the blue model good riddance. It wasn’t a particularly inspiring system. There was actually a lot that was unjust and cramped about the blue social model, and the friends of progress and the average person should be chomping at the bit to put something better in its place. Even in the early days of the blue social model, after all, social critics pointed to mass assembly line production as a dehumanizing innovation that condemned millions to a wage slavery of repetitive, meaningless, soul-killing work to produce endless streams of mediocre consumer products. Fordism was once a term of abuse hurled at the factory system by Marxist critics who, rightly, deplored the alienation and anomie that mass production for mass consumption entailed. Has the Fordist factory system and the big box consumerism that goes with it now become our ideal, the highest form of social life our minds can conceive? Social critics also denounced our school system, justifiably, as a mediocre, conformity inducing, alienating, time wasting system that trained kids to sit still, follow directions and move with the herd. The blue model built big-box schools where the children of factory workers could get the standardized social and intellectual training necessary to enable most of them to graduate into the big-box Ford plant and shop in the big-box store. Maybe that was a huge social advance at one time, but is that something to aspire to or be proud of today? Don’t we want to teach our children to do something smarter than move in large groups by the clock and the bell, follow directions and always color between the lines? Finally, in this regard, the blue model has impoverished our lives and blighted our society in more subtle ways. Many Americans became (and remain) stuff-rich and meaning-poor. Many people classified as “poor” in American society have an historically unprecedented abundance of consumer goods—anything, essentially, that a Fordist factory here or abroad can turn out. But far too many Americans still have lives that are poor in meaning, in part because the blue social model separates production and consumption in ways that are ultimately dehumanizing and demeaning. A rich and rewarding human life neither comes from nor depends on consumption, even lots of consumption; it comes from producing goods and services of value through the integration of technique with a vision of social and personal meaning. Being fully human is about doing good work that means something. Is a blue society with our level of drug and alcohol abuse, and in which the average American watches 151 hours of television a month, really the happiest conceivable human living arrangement? In any event, there is no going back to blue, and using public resources to try to prop up the old system is a waste of those resources and a hurtful diversion from the need to figure out what we need to do next. Europe’s challenges are complicated mightily by an unfinished and perhaps impossible federal project (too large a subject to analyze here in depth). American society, for its part, must move beyond the increasingly dysfunctional and outdated ideas of 20th-century liberalism. If we don’t, economic decline and social stagnation will undercut our prosperity, endanger our liberty and undermine our international power and domestic security. That is a future no true liberal could love. The real crisis today in the United States is the accelerating collapse of blue government, not blue private industry, which is a phenomenon largely behind us. We are witnessing a multi-dimensional meltdown that affects our lives and politics in many ways. Three elements of the blue government meltdown in particular are worth mentioning. The first is the government’s role in providing the benefits associated with the blue system. When we talk about “runaway entitlement programs”, we are talking about commitments by the government to provide retirement and other social benefits that originated as part of the blue system social contract. Workers could retire as early as 62 with a combination of Social Security and private pensions. These costs are now exploding according to the immutable logic of demographic and actuarial facts, and it is clear that the government can’t pay them into the future. The second crisis is that the government is now the last “true blue” employer in the country. Federal, state and local governments are often staffed by lifetime civil servants whose jobs are protected by law and by some of the last truly powerful unions in the country. All the Reagan Administration and like-minded state governments ever managed to do was to slow the growth of government, not reduce it; government at all levels today accounts for a larger share of U.S. gross national product than it did in 1981 (and that was when government did a lot more in regulating the economy). It has become incredibly expensive for governments to do anything at all, and they are poorly equipped to respond nimbly to the fast-changing conditions of America today. Quasi-governmental sectors of the economy (like the health and university industries) are also mainly blue: characterized by high wages, stable employment, cumbersome procedures, and powerful non-industrial (or “trade”) unions that “produce” only paper and process, imposing high transactional costs to the economy. The result is a governmental sector too unproductive, too unresponsive and too expensive to do what needs to be done at a reasonable cost. Government also retains the anti-consumer mentality of the old blue monopolies: If you don’t like the lousy services government provides, you can...move. This is why public schools are increasingly expensive and yet do not provide improved services. Education, health care, the legal system and government are four crucial economic sectors in which costs have been rising faster than inflation for much of the last generation. Finally, culturally and intellectually, bureaucrats and politicians often remain blue. Despite the ebbing of the blue private sector, they think instinctively in the old ways, come up with blue solutions to non-blue problems (think the Obama Administration’s approach to health care costs), and often fail to grasp either the constraints or the opportunities of the new era. As long as the Federal government can print money and find lenders to buy its bonds, it can bleed slowly. It can watch its fiscal position erode gradually, and only gradually become less effective and popular. But state and local governments increasingly need vast transfers of cash from the Federal government to keep their blue noses above the rising tide. The stock market declines after September 2008 wiped out huge chunks of the wealth that state pension systems needed to have even a hope of paying the pensions promised to government retirees under terms more generous than virtually any private employers now provide. California and New York are headed over the cliff without Federal bailouts, and others are following close behind. That is why a substantial share of the Obama Administration “stimulus” spending was targeted less at New Deal-era infrastructure projects than at simply keeping unsustainable state bureaucracies and systems afloat for a few months or years longer. There are several ugly truths that the country (and especially those states whose governments are bigger and bluer than the rest) must soon face. One concerns taxes. The debate today at the elite level is about whether the rich should pay more. Given the historic lows of marginal and capital gains tax rates, this is a debate of consequence for reasons having to do with fairness. But it distracts attention from a more fundamental political reality: Voters simply will not be taxed to cover the costs of blue government, and in most cases they will vote out of office anyone who suggests otherwise.2 That, at base, is what the Tea Party movement is all about. Voters with insecure job tenure and, at best, defined-contribution rather than defined-benefit pensions simply refuse to pay higher taxes so that bureaucrats can enjoy lifetime tenure and secure pensions. Second, voters will not accept the shoddy services that blue government provides. Government must respond to growing consumer demand for more user-friendly, customer-oriented approaches. The arrogant lifetime bureaucrat at the Department of Motor Vehicles is going to have to turn into the Starbucks barista offering service, and options, with a smile. Third, government must reconcile itself to its declining ability to manage a post-blue economy with regulatory models and instincts rooted in the past. We need to be thinking about structural changes based on properly aligned incentive architecture, not regulatory systems based on command protocols. The collapse of a social model is a complicated, drawn out and often painful affair. The blue model has been declining for thirty years, and the final bell has not yet tolled. But toll it will, and as the remaining supports of the system erode, slow decline and decay is increasingly likely to give way to headlong crash. That may be happening now; the financial mess that came upon us in the fall of 2008 may be both symptom and accelerant (not cause) of the basic problem. One of the main reasons Americans have been so slow to recognize the collapse of the blue model is that the language we use to discuss and think about politics tends to disorganize our stock of understanding about our own society. Millions of Americans are conservatives and even reactionaries but think of themselves as “liberals”; at the same time, millions of genuine liberals and even radicals call themselves conservative. It’s an unholy mess that calls desperately for a language intervention. Let us begin with an historic meditation on the “L” word. “Liberal” and “progressive” are two of the noblest and most important words in the English dictionary. They describe essential qualities of the American mind and essential values in American politics in a country born in reaction against oligarchy and concentrated autocracy. They sum up in a nutshell what this country is all about. A liberal is someone who seeks ordered liberty through politics—namely, the reconciliation of humanity’s need for governance with its drive for freedom in such a way as to give us all the order we need (but no more) with as much liberty as possible. In this sense, liberty isn’t divided or divisible into freedoms of speech, religion, economic activity or personal conduct: Genuine liberals care about all of the above and seek a society in which individuals enjoy increasing liberty in each of these dimensions while continuing to cultivate the virtues and the institutions that give us the order without which there can be no freedom. But today the words liberal and progressive have been hijacked and turned into their opposites: A “liberal” today is somebody who defends the 20th-century blue social model; a “progressive” is now somebody who thinks history has gone wrong and that we must restore the Iron Triangle of yesteryear to make things better. Most of what passes for liberal and progressive politics these days is a conservative reaction against economic and social changes the Left doesn’t like. The people who call themselves liberal in the United States today are fighting rearguard actions to save old policies and established institutions that once served noble purposes but that now need fundamental reform (and in some cases abolition), lest they thwart the very purposes for which they were created. This is not the first time such a reversal around the word liberal has taken place. To the contrary, there is a long history of specific political agendas that incorporate a forward-looking program and bear the name liberal precisely because they look ahead in the name of the nation as a whole. As time goes by they make their contributions and society goes on to face new issues. The old “liberal” becomes the new “conservative” and fresher, more useful ideas emerge to capture the label. Old liberalisms are born to perish as new, more vital liberalisms take up the struggle; in the process the liberal spirit itself lives on. We can see this process at work in modern Anglo-American history, during which liberalism has gone through at least four distinct incarnations. Liberalism 1.0 was the political expression of the original Enlightenment philosophy that developed in Britain and shaped the Glorious Revolution of 1688. That Revolution remains the seminal political event in the history of the English-speaking world. The American Founding Fathers set out consciously to imitate the spirit of 1688. Both the Declaration of Independence and the Bill of Rights flow from the ideas of a revolution that once and for all made Parliament supreme over the Crown in British history. But the Revolution of 1688 had its limits, and by 1776 liberalism 1.0 was no longer enough. In Britain, the corruption of the House of Commons allowed George III to reassert royal control; Americans realized that the constitutional monarchy of liberalism 1.0 was no longer ideal. The 2.0 liberalism of our Founding Fathers replaced constitutional monarchy with a republic expressly founded on natural rights and the sovereignty of the people. The 1.0 Revolution of 1688 had replaced an intolerant established Church with one constitutionally more tolerant; the 2.0 American Revolution of 1776 separated the church from the state to the benefit of both. Liberalism 2.0, as developed in the late 18th and early 19th centuries, was rooted in the thought of 1.0 liberals like John Locke. But Adam Smith, Thomas Jefferson, Benjamin Franklin and George Washington developed and put into practice a set of ideas about how individual liberty could be reconciled with economic development and good governance. Note how the names changed. In 1688, if you supported the Glorious Revolution you were a Whig and a liberal. In 1776, if you supported those same principles against the Declaration of Independence you were a Tory conservative. Yet while liberalism 2.0 was more advanced and more fully and consistently liberal than the 1.0 model, 2.0 liberals remained tied to many ideas later liberals considered anathema. The American Founders, for example, thought that limiting the vote to rich white men was just fine; women and the “lower orders” had no legitimate place in public life. While 2.0 liberals understood that slavery was an evil (much more so than the 1.0 liberals), they believed that it could be tolerated until it died a natural death. The 19th century saw the development of liberalism 3.0. Sometimes called Manchester liberalism, this was, compared to the earlier systems, a philosophy of radical individualism and equality. The 3.0 liberals had much more confidence in the common-sense reasoning power of ordinary people than earlier generations. Their programs included once unthinkable ideas like universal suffrage, the abolition of slavery, an end to state-enforced monopoly corporations, limited government, free markets at home and free trade abroad. 3.0 liberals tended to support strong, personal and emotional religious belief; they were much more likely to be evangelical than either 1.0 or 2.0 liberals. Like earlier liberals, 3.0 liberals believed that capitalism, individual rights and a culture of virtue supported by a tolerant, non-fanatical Protestant Christianity could provide ordered liberty. (They also, by and large, believed in the superiority of the white race, thought that “too much” Jewish influence was bad and believed that Catholic countries could never become effective modern democracies.) In the 20th century, liberals continued to seek new ways of advancing the core liberal synthesis of individual freedom with social order. Before the Depression and World War II, liberalism 4.0 reflected the progressive ideas of men like Theodore Roosevelt and Woodrow Wilson. As a result of the New Deal and World War II, turn-of-the-century progressivism was revamped and retweaked into liberalism 4.1, the big government, Iron Triangle system that most Americans think of when they hear the word “liberal” today. Today liberalism 4.1, blue liberalism, is increasingly outdated and backward-looking, but in its time it was a genuinely positive attempt to realize old values in new circumstances, and many of its achievements still demand our respect. The driving force shaping the agenda of 4.0 and 4.1 liberals before and after the New Deal were a series of powerful and profound historical developments that changed the world under their feet. The earlier versions of liberal politics had been built in societies that, while beginning to urbanize and industrialize, were still predominantly agricultural. Both Jeffersonian and Jacksonian liberals saw independent small farmers as the basis of American freedom and democracy. All that began to change after the Civil War. The Industrial Revolution and associated phenomena (urbanization, mass immigration from non-English speaking, non-Protestant societies and the economic decline of small farmers and rural communities) presented liberals with new problems: urbanization, class conflict (and the competition with socialism for the support of urban industrial workers), assimilation and the regulation of a modern industrial economy. These extremely complex problems posed challenging questions about the basic premises of liberal thought. Classically, liberals considered an unholy alliance of church and state as the prime enemy of freedom. In the late 19th century, however, the rise of huge industrial corporations seized pride of place as a threat to individual liberty; 20th-century, 4.0 liberals began to think about the state as a possible ally to defend individuals from unaccountable private power. The liberalism of Theodore Roosevelt and men like William Allen White was defined by their response to these challenges. Democratic government needed to ensure a level playing field, to fight for basic equality of opportunity. There were other problems, too, and they grew after World War I. Agrarian America had been a relatively egalitarian society when it came to incomes; the Industrial Revolution and mass immigration threatened to divide society into paupers and millionaires. Agrarian America had also been relatively homogeneous in culture: Protestant and British, or from relatively similar cultures in northern Europe, like those of Germany and the Netherlands. A society including millions of impoverished urban workers from radically different cultural backgrounds could not be run as in the past; the situation grew even more complex as millions of African Americans left Dixie for big Northern and Midwestern cities. The progressives and liberals who created 20th-century liberalism did their best to address these and similar problems in ways that would preserve as much as possible of the old liberal heritage in a new world. The development of a professional, bureaucratic civil service and the regulatory state were intended to preserve individual autonomy and dignity in a world dominated by large and predatory corporate interests. At the same time the challenges of modernization and urbanization (public health, food safety, and provision of newly necessary services like electricity and gas) could best be met through public services and, in some cases, regulated private monopolies. The emerging professional and managerial classes were not just middle classes in the sense of standing between the rich and the poor in income and status; they were mediating classes who sought through the state, the universities and the learned professions to erect a balance between the interests of the wealthy and those of the workers. On religion, 4.1 or blue liberals were better than their predecessors at understanding the ways in which growing numbers of American Catholics and Jews could support rather than undermine the culture of faith and virtue on which American civil liberty ultimately depends. Partly to create a neutral public space in which Catholics and Jews could join Protestants on equal terms in debate, blue liberals tended to favor the secularization of public life. Despite some missteps and excesses along the way, when it came to both gender and (perhaps their greatest accomplishment) race, blue liberals did yeoman service to the cause of human freedom by opening the doors of full participation more widely than ever before. Their great effort to open the gates of American opportunity to non-whites, with special attention to African Americans, was one of the greatest triumphs ever of the American liberal spirit. Although socialists and social democrats sometimes made common cause with 4.1 liberals, at bottom, blue liberalism was built as an alternative to socialism rather than an on-ramp for it. With the onset of the Great Depression in particular, most American liberals came to believe that providing benefits like Social Security and unemployment insurance would inoculate American workers against more virulent forms of socialist ideology and attract new immigrants and their children toward the American liberal tradition. It worked. The strong socialist movements, mostly based among recent immigrants from countries with strong socialist and social-democratic traditions, gradually faded away. The descendants of the European immigrant waves between 1880 and 1920 turned their backs on socialism, and the overwhelming bulk of the American labor movement was strongly anti-communist throughout the Cold War. The second phase in the construction of what became the blue liberalism of the past two generations owed much to the emergency mentality of both the Great Depression and World War II. Programs like the Civilian Conservation Corps and later the GI Bill, along with the experience of mobilization and rationing during the war, convinced many liberals that government could and should do more than ensure a level playing field, that it could plan, regulate and control well enough to at least bracket a rough equality of economic and social outcomes, not just opportunities. The historically high rates of taxation during World War II were largely maintained during both the Truman and Eisenhower Administrations in order to finance what became the regulatory state of the Iron Triangle. In time, with the advent of the Great Society programs of “the best and the brightest”, liberalism 4.1 became more explicitly redistributionist, and more deeply convinced of the superiority of the technocratic ethos. Thus President John F. Kennedy at Yale University in June 1962: The central domestic issues of our time . . . relate not to basic clashes of philosophy or ideology but to ways and means of reaching common goals—to research for sophisticated solutions to complex and obstinate issues. . . . What is at stake in our economic decisions today is not some grand warfare of rival ideologies which will sweep the country with passion, but the practical management of a modern economy. What we need is not labels and cliches but more basic discussion of the sophisticated and technical questions involved in keeping a great economic machinery moving ahead. Uniting all the versions of liberalism since 1688 has been a drive to find a creative compromise between the individual’s drive for self-expression and freedom and the need for a stable society. Liberalism insists that an open, dynamic society will lead to a better life for all, and that promoting ordered liberty is the morally obligatory as well as the pragmatically desirable thing to do. All four versions have something else in common: None can serve as the political program for the heirs of the two great revolutions today. We don’t want the constitutional monarchy and Anglican establishment of William III; we don’t want the aristocratic, limited-franchise republic of George Washington; we don’t want the Manchester liberalism of the 1860s; and we don’t want the managerial state that liberals and progressives built in the first two-thirds of the 20th century. That doesn’t mean we should not admire, learn from and build on each of these liberal traditions, but our job today is to synthesize enduring liberal values in a 21st-century liberalism 5.0. As with earlier versions, liberalism 5.0 must build on the best of what has gone before while making adjustments—radical when necessary, though never gratuitously so—to existing beliefs and institutions. 5.0 liberals must challenge the right of blue liberals to own the L-word, seeking both to convince 4.1 liberals to come back to the future and denouncing those who won’t as the blinkered reactionaries and speed bumps they are. These conversions are not as rare as one might think. Benjamin Franklin was one of the most prominent American 1.0 liberals during much of his life. During his long residence in London he hoped that a Transatlantic British Empire under the royal House of Hanover would be a beacon of enlightenment to all the world. But as times changed, so did Franklin; he became a 2.0 liberal and one of the most courageous and effective leaders of the American Revolution. Some of the most important and creative people who will lead the movement toward a 5.0 America will have grown up steeped in the values of 4.1 thought. Developing a politically successful liberalism 5.0 must start with an understanding of what the people want. Americans may be conflicted, but we are not particularly complicated. In a big-picture sort of way, the American people have a Maslovian hierarchy of needs, and we want our political leaders to meet them all. By and large, American voters want five things. First, above and before all else, they want physical safety for themselves, their loved ones and their property. Americans generally expect American politicians to pass a credibility test on this issue before hearing them out on other issues. That is unlikely to change. Second, Americans want and expect rising standards of living. Times when the economy fails to deliver the growth Americans expect tend to be politically tough: like the depressed years of the 1880s and early 1890s and, of course, the Great Depression. And now. Third, Americans want honor. We don’t want to be dissed by foreigners and we want to be free, equal and in charge of our own lives at home. We don’t like plutocrats, snooty social hierarchies, privileged hereditary ruling elites, or intellectual and moral poobahs telling us how to live. We despise being at the mercy of large, unfeeling corporations. We don’t like having our privacy violated by public or private snoops. We hate standing at the DMV line like humble peasants as officious bureaucrats abuse their authority. We also believe, deeply and viscerally, that the commonsense reasoning of the average person is enough to resolve political and moral questions, and we don’t like experts who try to impose counterintuitive policy ideas (that deficits are good for you, for example). Fourth, Americans want to feel that the United States of America is on track to fulfill its global mission, whatever that is (and our thinking here lately tends toward the fuzzy). But Americans generally feel that this exceptional country has some kind of unique world role, and they want their political leaders to keep the country on the right course. Finally, Americans want to believe that all four goals work together: that defending their security, promoting their prosperity, preserving their freedom and equality and fulfilling their global mission are all part of an integrated package and worldview—and that the commonsense reasoning of the average American can understand the way the pieces fit together. They are, in other words, looking for more than a set of unrelated policies that accomplish certain discrete goals: They want those policies to proceed from an integrated and accessible vision that meshes with their understanding of traditional American values and concerns. A generation ago, blue liberalism was pretty good at giving most of the people what they wanted, and between 1932 and 1968 blue liberals dominated American politics. From FDR to JFK (and LBJ until the Vietnam War went wrong and inflation got out of hand), liberal Democrats impressed most Americans with their ability to manage national security, build prosperity, honor the dignity of the common man and lead the world on the basis of a reasonably consistent and coherent worldview. The one Republican who managed to get elected President during the only period of stable Democratic power since the Civil War was Dwight Eisenhower, a man who could have won the Democratic nomination in 1952 if he had wanted it, and who accepted the basic New Deal policies of the Roosevelt years and the national security policy of the Truman era. Since that time, the American political terrain has shifted several times, but it never came to as firm an equipoise as during the quarter century following World War II. From 1968 through 2010 we seem to have been in another era, one in which blue liberal candidates lost more elections than they won. During these years, however, Republican gains have not been consolidated like Democratic gains were during and after the Depression. And the basic reason is that the blue social model of rising living standards based on stable manufacturing jobs for blue collar workers doesn’t work anymore. Automation and outsourcing mean that manufacturing sheds jobs in good times and bad. Rapid technological change and tough international competition force companies to innovate aggressively, and to stay lean. In such circumstances, no party can keep the American people happy for long. At the same time, the appearance of intellectual elitism widely attributed to blue liberalism has also offended Americans’ sense of dignity and honor. Many people seem to feel that there are too many well-credentialed blue liberals telling Americans things they don’t want to hear and don’t believe—and offering solutions (like much higher energy taxes to solve global warming) that appear to take the interests and concerns of average people lightly. Many blue liberals often argue that the real enemies of average Americans aren’t bureaucrats and Harvard-trained technocrats; they are the financial wizards, evil corporations and plutocratic tycoons. Maybe so, but at this point the argument doesn’t convince many people. Besides, why can’t both be enemies? After all, many elite liberal Democrats, in office and out, have been exceedingly Wall Street-friendly. What does this argument look like when translated into historical terms? Many believe that the real ideological contest in America today is between “red” liberalism 3.0 (the more individualistic, laissez-faire, often evangelical kind of liberalism of the 19th century) and the more state-oriented, collectively minded post-World War II 4.1 blue liberalism. Red liberals denounce blue liberals as betrayers of the liberal legacy, as ideology thieves who have taken a philosophy grounded in individual freedom and limited government and turned it into a charter for “big” government. Blue liberals respond that red liberals don’t understand how the complexities of modern life make the outmoded pieties of liberalism 3.0 inadequate to today’s problems. But common to both these positions is the belief that the American debate today is between two versions of the past: the (presumed) free market utopia of the 19th century versus the (presumed) social utopia of the New Deal/Great Society of more recent times. If that were true, this would be a nation of conservatives fighting reactionaries—the status quo of 1970 fighting the status quo of 1880. But it’s not true. Neither aged version of liberalism can adequately address what Americans most want. In particular, neither can provide a new era of rising mass prosperity for the overwhelming majority of the American people. Nobody has a real answer for the restructuring of manufacturing and the loss of jobs to automation and outsourcing. As long as we are stuck with the current structures, nobody can provide the growing levels of medical and educational services we want without bankrupting the country. Neither “liberals” nor “conservatives” can end the generation-long stagnation in the wage level of ordinary American families. Neither can stop the accelerating erosion of the fiscal strength of our governments at all levels without disastrous reductions in the benefits and services on which many Americans depend. We cannot realistically solve our problems by trying to return to the 3.0 liberalism of the 19th century because the American economy of that era depended on conditions we cannot reproduce today. Though some may think it desirable, we cannot return to a largely agrarian economy. Nor can we replicate the industrial system of the 19th century, with its extremely high tariffs against foreign goods and a completely laissez-faire national attitude toward immigration. Trying to recreate the American economy of a century ago would lead to massive dislocations, depressions and quite likely wars around the world, not to mention thoroughly wrecking the American economy and bankrupting many of our banks and biggest corporations. But if red liberal fundamentalism can’t work, blue fundamentalism can’t help us either. There’s no going back even half a century ago, because the great achievements of blue liberalism were also rooted in conditions we cannot replicate today. Between 1914 and the 1970s, when the blue social model took shape and rose to power and success, the world economy was in an unusual state. International financial and trade flows were much lower than before 1914 and after 1970, due to the disruptions of two world wars and the Great Depression. And the United States was so far ahead of the rest of the world in manufacturing that few American companies (or workers) had anything to fear from foreign competition. Capital was dramatically less mobile; it was much easier to tax high earners without driving savings and investment out of the country. At the same time, Americans in the first two thirds of the last century were more willing to engage in group politics than is the case today. Industrial workers fought to build unions and generally voted the way their leaders advised them. Ethnic groups stuck together and voted as blocs. Twentieth-century liberal politics generally involved negotiated agreements among party bosses and other leaders who commanded loyal followings. Few politicians today can count on this kind of unquestioning support in an era when party structures and patronage networks are both weaker and less reliable than they used to be. Now, instead of party structures funding candidates, candidates are expected to fund party structures. We must come to terms with the fact that the debate we have been having over these issues for past several decades has been unproductive. We’re not in a “tastes great” versus “less filling” situation; we need an entirely new brew. But this is nothing to mourn, because both liberalism 3.0 and 4.0 died of success, just as versions 1.0 and 2.0 did before them. As for 3.0, rising agricultural productivity ultimately drove millions of farmers off the land; high tariffs helped attract tens of millions of immigrants; ideas and institutions developed in a homogeneous, egalitarian and predominantly agricultural country no longer worked very well in an industrial, urban country threatened by class conflict. The same with 4.0. Our successful manufacturing economy led us to push for free trade; that stimulated other countries to export to U.S. markets and generated the kind of financial flows that undermined the nation-based Keynesian economic models of the 4.0 econ wizards. The rising affluence of Americans facilitated their mass migration into the suburbs where the old party organizations and ethnic loyalties broke down. More affluent and better educated voters became more individualistic and saw the system of party bosses as an obstacle to democracy rather than a way of making it work. Each version of liberalism in turn created a social system and an economy so dynamic and so inventive that it ultimately outgrew the institutions and ideas that had given it birth. Textbook cases of the cultural contradictions of capitalism at work they were. Now it has happened again. The success of our institutions and ideas has so changed the world that they don’t work any more. We cannot turn back the clock, nor should we try. America’s job is to boldly go where none have gone before, not to consume our energies in vain attempts to recreate the glories of an unattainable past. We need to do for our times and circumstances what other Americans have done before us: Recast classic Anglo-American liberal thought, still the cultural and moral foundation of American life and the source of the commonsense reasoning that guides most Americans as they evaluate policy ideas and party programs, in ways that address the challenges before us. For those blue Democrats clinging to liberalism 4.1, this is a time of doom and gloom. For those red Republicans longing for a return to liberalism 3.0, it is a time of angry nostalgia: Ron Paul making a stump speech. This should be a time of adventure, innovation and creativity in the building of liberalism 5.0. America is ready for an upgrade to a new and higher level; indeed, we are overdue for a project that can capture the best energies of our rising generations, those who will lead the United States and the world to new and richer ways of living that will make the “advanced” societies of the 20th century look primitive, backward and unfulfilled. We’ve wasted too many years arguing over how to retrieve the irretrievable; can we please now get on with the actual business of this great, liberal, unapologetically forward-looking nation? 1According to Candace A. Allen, “The Entrepreneur As Hero”, Economic Insights, Federal Reserve Bank of Dallas, 2:1, p. 3, n.d. 2Evidence for this resides in recent Gallup polls, which show that only 21 percent of Americans consider themselves liberals; 40 percent consider themselves “conservative”, and 35 percent call themselves “moderate.’’ Another Gallup poll reports that 49 percent say that the Democrats are “too liberal” while only 38 percent think they are just right; 10 percent think Democrats aren’t liberal enough. After two years in which Democrats controlled the White House and both houses of Congress, using their majorities to pass the most sweeping health and financial legislation in seventy years, only 17 percent said they are happy with the way the country is going. |
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