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November 21st, 2017

Insight

Government Created the Housing and Financial Crises --- and Might Be Doing it Again

Michael Barone

By Michael Barone

Published Jan. 23, 2015

 	Government Created the Housing and Financial Crises --- and Might Be Doing it Again

It's not in the printed text, but the most revealing words in President Obama's seventh State of the Union address came near the end. After the scripted line, "I have no more campaigns to run," elicited Republican applause, Obama ad libbed, "I know, because I won both of them."

Thus the last quarter of Obama's presidency resembles the first quarter, when he shut off discussion with House Republicans by saying, "I won." But his second winning percentage was lower than his first — the only American president of which that can be said — and the House now has a record and the Senate a near-record Republican majority.

The first half of Obama's speech was a deft attempt to, as he said, "turn the page." The year 2014, he said, was "a breakthrough year for America," the economy was finally growing at a respectable rate and U.S. troop deployments in war zones are nearly down to zero.

He was playing on the uptick — a "small" but real uptick, as FiveThirtyEight put it — in his polling numbers and in positive assessments of the economy. To give it voice, he quoted, twice, a woman (a former Democratic staffer, it seems) in the gallery.

In contrast to previous Obama speeches, he took some care to cite accurate statistics. No mention of the discredited claim that one in five college women will be raped or the misleading claim that women's earnings are only 77 percent of men's.

He cheered America for being number one in oil and gas production — something his administration has tried to prevent. He boasted that wages are rising — though not by much. His brief allusions to Obamacare sparked applause from Democrats — but the law remains highly unpopular.

Obama's policy proposals were small stuff. More tax cuts for child care — but discrimination against stay-at-home moms and taxes on 529 college savings accounts. Paid sick leave. Equal pay for women — on the books already for 52 years. A minimum wage increase. He's all for infrastructure but, in deference to rich donors, will veto the Keystone XL pipeline.

Free community college — even though it's already free to those in lower-income households, and despite the evidence from student loan programs that colleges and universities sop up all the federal dollars with little gain to students.

Democrats, after applauding loudly in the first half of the speech, stayed mostly mum during much of the rest. There was silence when he called for trade promotion authority and free trade agreements. There was little noise when he called for tax reform — not surprisingly, given that he has ignored plans Republicans have put forward.

There was silence as well when he turned to foreign policy. Obama received better ratings on foreign than domestic policy in his first term; it's the other way around now.

America, he said, is "stopping [the Islamic State's] advance," is "opposing Russian aggression," is ending a Cuba policy "long past its expiration date," and "our diplomacy is at work with respect to Iran." It is leading "not with bluster, but with persistent, steady resolve." But not, as most in the chamber and watching on TV know, with much in the way of results.

Obama seems finally to have realized that his divisive rhetoric has meant he hasn't delivered on the red-white-and-blue America vision of his 2004 Democratic National Convention speech. He devoted the last 24 paragraphs of his prepared text to addressing that criticism.

But not very convincingly. A president calling for big tax increases this Congress will never pass is not effectively seeking bipartisan accords. A president still blaming his predecessor — "bluster" — for foreign problems is not seeking unified support. A president who says "we stand united" with the marchers in Paris but didn't go there himself isn't forging united action against the jihadists whose cause he refuses to name.

It looks like Obama is trying to set a left-wing agenda for his increasingly leftish party and to box in Hillary Clinton. But he hasn't come up with policy proposals that can withstand serious scrutiny. Just with sloganeering he can blame Republicans for opposing.

The bigger problem for Obama and the Democrats is that the perceived failures of the stimulus package and Obamacare have undermined the case for big government as much as the perceived success of the Reagan economic policies strengthened the case for cutting it back. "Because I won" is a look back to the past, not a formula for the future.

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JWR contributor Michael Barone is senior political analyst for The Washington Examiner.

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