Obama Budget Speech
- Posted by Jeff Carter
- on April 13th, 2011
A lot is being made of the speech the President Obama is going to give this afternoon at 1:30ET today on the budget. I don’t understand all the hyperventilation.
First, Obama has been on television every day since his inauguration giving a speech on one thing or another. I have never seen television channels interrupt normal coverage to flash to any President giving a speech as much as they have gone to Obama. 99% of his speeches are “bloviating”. They are incoherent, boring with little substance. All I can say is it’s a good thing he hasn’t adopted Ross Perot’s Powerpoint technique or the ACLU would have a good case for torture. I think “Death by Powerpoint” might be worse than water boarding.
The Republicans have been all over television this morning talking about how they want to see “details and numbers”. Given what happened last week, they have lost all their credibility with regard to details and numbers. Obama had very little credibility to begin with, and what little he had was burned in the stimulus and health care debate. Numbers are elusive in Washington. Maybe they ought to require that lawyers take calculus and economics-then maybe they would insert some true business math into budget numbers and not accounting numbers.
Both parties are still being disingenuous with the American people. Shame on them. That’s not what we voted for in November.
The path of spending that we are on is unsustainable. There are several places that we can truly cut budgets, but true cuts are politically unpalatable. Both parties are scared of the aftermath if they really and truly went after all the things in the government that need to be hacked. We don’t need a scalpel, we need a flamethrower. If either party enacted real cuts-pension reform, entitlement reform, we would see people marching in the streets. If you think I am off base on that remark you weren’t watching in Wisconsin. Entitlement programs and government pensions are going to break us. The net present value tables don’t lie.
Economic incentives are misaligned in virtually all of Washington DC policy. It’s amazing that the US is as productive as it is. How about trying something interesting, a swap? End all government subsidies, duties and tariffs for farming and agriculture-including agricultural corporate welfare and tax breaks. In return, end all restrictions on how farmers can use private land, and sell all the government land back to private holders. Then, let’s see what happens to food prices, agriculture production and imports/exports. I bet they go down, and the amount of raw commodity material increases. I also bet that agriculture becomes even more efficient than it is already.
This is why a flat tax with no write offs makes a lot of economic sense. The markets will organize itself and businesses will react accordingly. GE won’t be able to lobby for this or that, and businesses will have to compete rather than take a bureaucrat or Congressperson to lunch.
Don’t look for a lot of details in Obama’s speech. Look for a campaign speech. There will be a lot of platitudes that various groups can hang their hat on and feel good about. If Obama was being honest and straight with the American people, he’d give a lot different speech.
In twitterspeak, I’d say we have #leadershipfail.
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Jeffrey Carter is an angel investor and independent trader. He specializes in turning concepts into profits. He co-founded Hyde Park Angels one of the most active angel groups in the United States in April of 2007. He previously served on the Chicago Mercantile Exchange Board of Directors. He has done market commentary for (More...)