Obama & the Dems: Still in Retreat

The president’s State of the Union speech is unlikely to change anything. Indeed, the political dynamics that existed before he spoke remain intact; Obama did nothing to alter or arrest them. And this is true both domestically and internationally.

Domestically, Obama and the Left are in retreat because the public has let it be known in three decisive elections — in Virginia, New Jersey, and Massachusetts – that it wants no more massive government spending on banks and boondoggle projects.

The American people also fear a massive new government entitlement program — Obama’s cherished healthcare “reform” — which promises to balloon the deficit and the national debt, raise their taxes, and seriously undermine their health insurance coverage.

His hand forced by a political reality called Republican Senator Scott Brown and the Massachusetts Miracle, Obama backed away from healthcare — for now at least. He wants “temperatures [to] cool” and for “everyone to take another look at the plan” he’s proposed.

But par for the course, Obama plays fast and loose with the truth. Thus, he says, with a straight face:

Now, even as healthcare reform would reduce our deficit, it’s not enough to dig us out of a massive fiscal hole in which we find ourselves.

Please, Mr. President, don’t insult our intelligence. There’s not one serious analyst or economist who honestly thinks that healthcare “reform” — and certainly not the healthcare “reform” that you’ve proposed — will reduce the deficit. In fact, quite the contrary: Your healthcare “reform” plan, most serious-minded observers agree, will add at least a trillion dollars or more to the deficit.

For these reasons, Obama’s fate is in the hands of the economic gods and what happens to the economy.

Economic Prospects: Gloomy

No one knows how the economy will turn; however, it’s a good bet that the economy will rebound somewhat in time for the 2010 congressional elections and then dip again in time for the 2012 presidential election. An upswing in 2010 seems inevitable given the natural swings of the business cycle, and given the incredible pump priming of the Federal Reserve and Congress.

However, a downturn in 2012 is likely given that the current and impending economic upswing is a mirage built on temporary and unsustainable government largess — and given that Obama is doing nothing really to promote long-term (private-sector) economic growth. That, at least, is the view of noted supply side economist Arthur Laffer, he of the famed “Laffer Curve.”

Don’t be fooled into thinking the economy is actually coming out of one of the worst recessions of the post-war era, because this year will be a false recovery, Laffer [says]. The downturn will begin again when ‘2011 will enter center stage, followed quickly by an economic catastrophe.

All the factors that will make 2010 (and have already made the last half of 2009) look so good will reverse direction, and 2011 will be a train wreck,’ he said in his forecast.

The bottom line: This next year, and probably the next three years, will involve a lot of political posturing; but don’t expect a lot to get done. The politicians will bicker and position themselves to cast blame for the likely impending economic disaster.

Foreign Policy

Foreign policy, I predict, likely will surprise the unknowing but always confident Washington cognoscenti. Iraq and Afghanistan likely will stabilize, thanks to the heroic and unheralded efforts of the United States Army and Marine Corps. Indeed, our Soldiers and Marines likely will make Obama look like a winning commander-in-chief — in spite of himself.

Iran, however, is the wild card. In his State of the Union Address, Obama completely missed the historical moment by failing to vigorously champion the surprisingly strong and resilient Iranian Green Revolution. Instead, he issued some soulless, routine, and pro forma remarks about how

the international community is more united, and the Islamic Republic of Iran [sic] is more isolated. And as Iran’s leaders continue to ignore their obligations, there should be no doubt: They, too, will face growing consequences…

We support the human rights of the women marching through the streets of Iran… For America must always stand on the side of freedom and human dignity.

But as to exactly how, when and where America will, in fact, “stand on the side of freedom and human dignity” in Iran, the president had nothing to say.

Obama’s unwillingness to actively and vigorously champion freedom for the Iranian people is a serious abdication of American political and moral leadership. People the world over — in Iran and elsewhere — look to the United States for hope and inspiration; and when we fail to lead, we betray them and ourselves.  We betray our ideals.

Moreover, from a purely realist perspective, a peaceful regime change in Iran may be the world’s best hope for stopping Iranian nuclear mischief and Iranian blackmail. Yet, Obama was strangely silent and nonchalant about the looming Iranian Islamist threat. Indeed, he failed to exercise the bully pulpit in any meaningful, memorable and effective way during his State of the Union address.

The bottom line: Obama is a passenger, and not the conductor, on the train ride of history.