State of the Union Analysis

President Obama’s 2011 State of the Union address was one of the most future-oriented addresses to Congress in recent memory, despite proposing relatively few new ideas. Although the speech consisted mostly of the same policy recommendations that could have been given by any Democratic politician of the last two decades, the things the president chose to emphasize offer some hints to the direction the United States is heading.

I felt that the first half of the speech dealing with domestic policy was far stronger than the foreign policy section. President Obama hit most of the key policy ideas that will dominate American politics in the coming decades, referring several times to “investing in the future.” As America’s infrastructure crumbles and its education system falls behind that of other nations, viewing this type of spending as an investment rather than an expense is absolutely essential for our future wellbeing. President Obama mentioned his National Broadband Plan for the second year in a row. Although it is a welcome step in the right direction, it is woefully inadequate at meeting the needs of a 21^st century economy. If the goals are met, broadband coverage in the United States in 2020 will be about the same as South Korea has today. Additionally, President Obama failed to take a firm stand on net neutrality or wireless carrier oligopolies, which have made the United States one of the least efficient countries in the developed world in telecommunications.

The President touched on our need for a new energy policy, referring to it as our “Sputnik moment” which is absolutely essential for the long-term success of the United States. I was pleased to hear him voice support for nuclear power, and continued subsidies of solar and wind power. The biggest flub from this section was his continued advocacy of biofuels, which have largely been discredited as an economical, environmentally-friendly form of energy. Biofuels sound to me more like an excuse for agricultural subsidies than a serious energy proposal.

President Obama hit a positive note on education, where he signaled a willingness to break with the teachers' unions, which have begun to fall out of favor with many Democrats. He touted the success of his Race to the Top Initiative, which has been the most progressive piece of education legislation in decades, and urged Congress to replace No Child Left Behind with an initiative that encouraged educational innovation. There were a couple areas of education policy that I would have liked to hear the president mention: online schools and charter schools. Although both are in their infancy and have problems which will need to be solved, mentioning them would have fit quite nicely with his theme of investing in the future, which will certainly not be dominated by traditional brick-and-mortar schools giving students standardized curricula.

President Obama’s calls for bipartisan deficit reduction were a bit difficult to take seriously, since neither political party has shown any real interest in the subject. The US structural deficit is only a problem inasmuch as it is larger than our rate of economic growth. President Obama proposed an ill-advised five-year discretionary spending freeze (which doesn’t square very well with his “investing in the future” theme, or the fact that we still have extremely high unemployment) but did not offer any substantial cuts to entitlements. He called for modest income tax increases after 2012, which will certainly be opposed by Republican members of Congress. President Obama’s deficit reduction commission offered a series of centrist proposals and compromises to reduce the size of the deficit, but the president mentioned almost none of them. I think that Obama's deficit reduction pledge was one of those promises that presidents make during State of the Union addresses that are forgotten a few weeks later...and perhaps that is for the best.

The foreign policy section of the speech was mostly boilerplate rhetoric, and provided a very odd contrast to the high-flying futuristic vision of the domestic policy section. The president could have continued the theme of investing in the future (for example, by offering more humanitarian assistance to African and South Asian nations) but instead chose to focus primarily on the same trouble spots that have dominated US foreign policy for a decade: Afghanistan, Pakistan, Iraq, Iran, and North Korea. Although he offered nothing substantively different from his previous policies, he did have the foresight to point out that the real danger of terrorist groups comes not from a repeat of 9/11 or isolated bombings, but from weapons of mass destruction. Nuclear proliferation poses the greatest short-term threat from terrorists, by far.

It was disappointing to hear the president utter not a single word about the chronic crisis in Israel and Palestine, indicating that he has given up on Israeli Prime Minister Benjamin Netanyahu as a potential peacemaker. To make matters worse, Palestinian President Mahmoud Abbas has no legitimacy in the eyes of his people, and lacks the political ability to agree to a compromise. It is time for some creative thinking on the subject. Efforts are afoot at the United Nations to establish a unilateral peace agreement which could be imposed on all parties in the conflict. Although this certainly would not bring about peace in the Middle East immediately, it would change the dialog from prodding both nations to compromise (which they have been unable to do for nearly 50 years), to instead urging them to adhere to the UN-imposed peace plan. Unfortunately, such an effort has no chance of success without at least the tacit approval of the United States. If the next 50 years in the Middle East are to be brighter than the past 50 years, President Obama will need to think outside the box about how to help the region establish peace.

Perhaps the most outside-the-box foreign policy idea the president mentioned was his statement that the United States “supports the democratic aspirations of all people,” in reference to the Jasmine Revolution in Tunisia. Although this notion has been well-established for some time in theory, it has not always been the case in practice, and under the circumstances I was surprised to hear it in the State of the Union address. But supporting democracy in an inconsequential global backwater is one thing. As the Tunisian unrest spreads to key US-aligned countries like Egypt and Yemen, it remains to be seen if the president will support the democrats, although the early signs are encouraging.

Overall, the policy prescriptions in the State of the Union were mostly good ideas that can potentially garner the bipartisan support they will need to become law. The speech itself, while very progressive and futuristic, was somewhat uninspiring. The biggest disappointments came not in what Obama said, but in what he didn’t say. Perhaps the State of the Union address is not the ideal forum for floating trial balloons of creative new ideas, but if Obama is serious about investing in the future at home and abroad, he will need to develop more innovative solutions of his own than what he offered on Tuesday night.

Political Issues on the Horizon, Part 3

In my last two posts, we explored four political issues that are likely to be important in the next decade. To wrap up this political trilogy, I’m going to talk about two issues that are often discussed as vitally important for our future…which I nevertheless think will soon fade from the political landscape.

Cap and Trade. For the past decade, the climate change debate in the United States has focused on the wrong issues. One side of this debate has tended to overhype the worst-case climate change scenario, arguing for immediate, draconian carbon cuts which would harm the economy while doing almost nothing to avert climate change. The other side has flatly denied climate change even exists, despite a huge amount of scientific evidence indicating otherwise.

Yet technological advancement, not political decrees, will determine the fate of our climate. As it becomes clear that none of the common prescriptions for climate change are politically feasible and scientifically plausible, we can and must stop focusing on policies like cap-and-trade and instead turn to the real solution: technology.

Fossil fuel combustion is responsible for 96.5% of all man-made carbon dioxide emissions. Addressing the need for fossil fuel combustion is of paramount importance to stop clogging our atmosphere with carbon dioxide. Fortunately, solar power will soon supplant fossil fuels as our primary source of energy. Any political policies to fix climate change must instead focus on making this happen as soon as possible, through subsidies and tax credits for solar energy pioneers.

Furthermore, research into geoengineering must be heavily funded to determine if there are any plausible ways to counteract the harmful effects of carbon dioxide, without unleashing even worse environmental damage in the process. Some of the more promising ideas include stationing powerful underwater turbines in the ocean to spray water high into the atmosphere, injecting chemicals underneath large glaciers to prevent them from sliding into the ocean, seeding the ocean with iron flakes to encourage carbon-eating plankton to grow, and spraying sulfur dioxide into the stratosphere to mimic the cooling effects of volcanoes. Any of these solutions would cool the earth, but they carry environmental risks of their own that may make them unpalatable. In many ways, we would be picking our poison: do the risks of geoengineering outweigh the risks of climate change, or vice versa? Governments should commit to researching these geoengineering techniques in depth to determine the answer.

Ultimately, political debates over cap-and-trade or possible successors to the Kyoto Protocol are a dead-end. They are unproductive and unlikely to succeed. I expect them to disappear from the political landscape in the very near future, as more voters realize that a more practical approach is necessary to truly combat climate change.

National Debt. In 2006, the Democratic Party gained control of Congress, in part, by campaigning on deficit reduction. In 2010, the Republican Party did the same. Yet there is no evidence that either party in the United States has any actual interest in reducing the debt. Both parties value their other priorities – cutting taxes in the case of Republicans, and increasing spending in the case of Democrats – much more highly than deficit reduction.

And that is not entirely a bad thing. For all the hype that surrounds our debt, it is still not at dangerous levels. Even after the worst recession in recent history, our debt stands at about 94%. This is high by American standards, but still much lower than many other developed nations which are at no risk of defaulting. The interest rate on treasury bonds is at an all-time low, meaning that the idea of the US government defaulting on its debt is barely even in the minds of investors.

To be sure, we cannot continue running large deficits forever. We need a medium-term plan to get our deficits under control, but even so, we don’t need to balance the budget entirely. Running a small annual deficit is fine. Between 1940 and 1980, the United States cut its debt-to-GDP ratio from 120% to 35%, despite running an annual deficit for most of the intervening years. There is no reason we cannot do this again in the next few decades. As long as our economy grows faster than our debt, our debt-to-GDP ratio will fall, eventually returning to more typical levels.

Although the national debt will probably continue to be a complaint of the out-party, I am skeptical that it will be more than a political tactic anytime soon. Neither party has shown any interest in seriously addressing the debt, and as long as we can get our deficits down to a more reasonable level once the economy picks up, neither party will need to.