Obama's Congressional Speech

Few people can argue with the eloquence and power that is delivered by President Obama during a speech. I for one could hardly be misconstrued as an Obama supporter, but even I can’t deny his gift of oral communication. The power behind such lines as “We will rebuild, we will recover, and the United States of America will emerge stronger than before” was enough to send a rattle into the homes of the millions of Americans watching. In his speech, he attempted to send a message of hope and reassurance to the American citizens. However with that said, a few things in Obama’s speech were quite questionable to say the least.

Now I realize he may have simply been trying to emphasize the point that America has done great things, but it was purely entertaining to hear him say “I believe the nation that invented the automobile cannot walk away from it.” He was referring to the United States and us as Americans not allowing the auto industry to fail by turning our backs on them. His statement was blatantly misleading. Those who are even slightly knowledgeable on the history of the automobile will know that Karl Benz of Germany, not Henry Ford, is credited for creating the first automobile. But we’ll just call this a small faux pas by some speech writer.

But now we need to move on to some of the meatier and even more controversial elements of the Obama speech. Recently, a considerable amount of political rhetoric has been centered on the trillion dollar stimulus bill and the plethora of pork projects sneaking into the small crevices of that massive bill. For this reason, one line in the speech that was particularly salient to me was:

I'm proud that we passed the recovery plan free of earmarks, and I want to pass
a budget next year that ensures that each dollar we spend reflects only our most
important national priorities.

An earmark is a measure placed in a bill that sets aside money for a very particular project. For those of you who may not know, an earmark is the same thing as a pork project. You know, those “little tiny, yes, porky amendments” that Americans are supposedly indifferent to. It simply astounds me to hear Obama discuss anything free of earmarks while Congress is preparing to send him a spending bill with roughly 9,000 earmarks. For some reason, spending $190,000 on the “Digitization of New York Historical Society Collection” just doesn’t appear to be one of our “important national priorities.”

Another particularly disturbing excerpt from the speech comes as Obama is discussing future generations. Ensuring we do not leave a financial burden to future generations was a somewhat major component of Obama’s rhetoric while running for president. This campaign strategy was clearly in response to the enormous deficits accumulated during the Bush years. So in his speech, Obama lays out the hard truth on the table:

There is, of course, another responsibility we have to our children. And that is
the responsibility to ensure that we do not pass on to them a debt they cannot
pay. With the deficit we inherited, the cost of the crisis we face, and the
long-term challenges we must meet, it has never been more important to ensure
that as our economy recovers, we do what it takes to bring this deficit down.

This comes after he worked so diligently to pass the largest spending package this nation has ever seen. This comes after he has warned that we could possibly be spending hundreds of billions more to bailout citizens who have failed to pay their mortgages. How can he possibly keep a straight face while talking about not leaving a colossal debt for future generations to pay off while he himself has already signed and plans to sign even more monumental bills? When is this fiscal responsibility going to kick in and put an end to these irresponsible financial measures?

Another auto bailout?

In December, which was only two months ago, the government decided to bailout the auto industry, providing billions of dollars to both GM and Chrysler. Since then, the auto industry has been unsuccessful in doing an about face with their business practices. They have been unsuccessful in negotiating with the stubborn and powerful United Auto Workers (UAW). This means that instead of cutting the hourly cost per employee, the automakers will be forced to cut tens of thousands of jobs. Latest projections show GM ready to cut 47,000 jobs.

The current stock price of GM is hovering around two dollars per share. That translates to a market value of around 7 billion dollars. The company has already received more than this amount from the government and is now requesting an additional 9.1 billion minimum. Do politicians not realize they are investing more money into this company than it is even worth? Seriously, you can put as many band-aids on a corpse as you want, but it isn't coming back to life. We must let them fail. We must allow the laissez-faire system to work. When an individual citizen becomes engulfed in bills and can no longer handle what they believed they could financially, they file for bankruptcy. If you and I can be forced to go through the pain and burden of bankruptcy then so to should these top companies. In 2002, Kmart filed for chapter 11 and they were able to turn themselves around and are still in existence in 2009.

We have to stop allowing politicians and lobbyists to scare us with words such as meltdown and financial doom. Large companies such as Kmart have filed for bankruptcy before and have lived to sell again. The UAW continues to use scare tactics in order to push for another bailout and thus keep from having to negotiate too extensively with the automakers. They are relying on the idea that President Obama will not allow these companies to fail and will instead continue to pour massive amounts of cash into them. As long as they anticipate an unrelenting flow of money from the treasury, they will continue their demand for ungodly hourly earnings.

In order to rectify this situation, Obama and our congressional leaders will need to bite the bullet and allow for these companies to fail. They will need to take the hard stand against the unions and teach them the lesson that working for less is better than no job or income at all. Unfortunately, Obama and many democratic leaders favor unions and will not allow these companies to fall. The threat of a another major corporate failure may be a terrifying thought for those in charge of the well being of the United States, but by continuing to bailout these corporations, they are only weakening our capitalist system. The same system that made our country and economy so powerful.

Out of Touch Politicians

While I realize this issue may not be a new argument, it’s completely mind numbing at times to hear statements revealing how out of touch politicians can become over time. Perhaps some newbie politicians can be given the benefit of the doubt, but those who have held numerous offices, or the same office for any length of time tend to become so inept when it comes to understanding what it is their constituents want and think about issues. In the past week, Senator Chuck Schumer, a democrat from New York made the following statement:

And let me say this, to all of the chattering class, that so much focuses on
those little, tiny — yes, porky — amendments: The American people really don’t
care.

This asinine statement was made on the senate floor while discussing the pork ridden stimulus package. At 58 years old, Schumer has been in politics since the age of 23. He disconnected himself from mainstream America by moving directly from Harvard Law School into the political sphere. Serving the public is considered by some to be an honorable career path. I however, believe far too many “public servants” either enter into or stay in this line of work for economic gains or because they enjoy the power trip.

Statements such as this are made by both parties and should be enough evidence to call for term limits. Senators should not be serving well into their 70’s as some have done in the past. I’m not trying to say the elderly are incompetent, I’m purely imagining some of the people I know personally who are in their 70’s and thinking about how out of touch they are with current issues. People such as Schumer, who have known nothing other than politics are in many cases, simply out of touch with those they represent. It’s baffling to see incumbents elected every two years when public outcry against many of these incumbents is generally so high.

Executive Limits

The problem with the government bailing out the failing banks and other massive corporations can be seen in a single statement by President Obama: “air out of golden parachutes.” This is what the president is now pledging to do on behalf of the American tax payers. He is going to limit the salaries of government aided executives to $500,000 a year. This, we have been told, will “strengthen the public trust.”

At first glance, I thought this was a great idea. Like many people, I find it preposterous to see some of these executives redecorating their offices (with $1,400 wastebaskets), taking bonuses, and treating themselves to posh resorts to get away from the stress of Wall Street life. Ordinarily, these activities would only be the concern of stockholders and disgruntled employees. However, due to this massive bailout situation, we as taxpayers have begun to concern ourselves (and rightfully so) with the day-to-day activities of these companies and their executives.

When I sit back and reevaluate the situation, I realize how dangerous these bailouts have become. The government is now interfering and controlling how private companies conduct their business. As if the government was not merely a stock holder or federal business regulator, but was actually controlling the board of directors for these companies. Did we say goodbye to the free enterprise system when we bailed out these companies? Did we sign the death certificate to capitalism? I certainly hope not.

Where do we go from here? Have we gone too far? Only time can tell now. I believe what we have done to ourselves is not irreversible, but will take some time. For one, we need to put an end to bailing out companies. Two, we need to incur penalties on the companies that are not repaying the funds in due time. Obviously penalties in the form of fines would be redundant, but penalties such as even stricter pay for top level executives could possibly work. By due time, I am talking about a time frame of no longer than five years. Efforts should be made within the first two years.

Relating to the aftermath, once these companies have completely paid back taxpayer money, any and all restrictions should be removed. Banking regulations are partially to blame for why banks failed in the first place. If they fall into the same predicament again, than we need to be ready to accept the outcome and just tell them to go screw themselves. The government cannot afford to be in the business of buying private companies and we cannot afford for the government to have any more control over our lives than they have already commandeered.