President Barack Obama delivers his State of the Union address on Capitol Hill in Washington, Tuesday, Jan. 24, 2012. (AP Photo/Saul Loeb, Pool)
When President Obama promised "no more bailouts, no more handouts" in his State of the Union address, and declared "it's time to apply the same rules from top to bottom," he was either prescribing a total reversal of his current industrial policy, or he was once again using words to mean something they've never meant before.
The rest of Obama's speech suggests the latter: He plans to continue his pattern of subsidizing, regulating, mandating and picking winners and losers, all the while calling it "fairness" and "a level playing-field."
When liberals speak of "fairness," conservatives tend to hear "redistribution" and "welfare," but Obama's fairness talk is not just code for liberal class warfare. He's also trying to tap into a broad sense that right now, the game is rigged -- that the insiders get special treatment and regular folks get short shrift. This is a real problem, and it's prudent to tap into this dissatisfaction. It's too bad all his policies just rig the game even more.
Obama opened his discussion on industrial policy Tuesday night by bragging about how the taxpayer bailouts of Detroit had helped put General Motors "back on top as the world's number one automaker." In other words, if the government stacks the deck sufficiently in favor of one huge, politically connected corporation, that corporation can beat other, huge, less politically connected corporations.
Then Obama promised, "What's happening in Detroit can happen in other industries." The meaning was clear: With enough handouts, enough bailouts, enough mandates, government can prop up all sorts of manufacturing corporations.
Although Obama did not explicitly lay out new subsidy programs, he painted a picture of the sort of government backing he wants to preserve and expand. He touted his Export Initiative, the centerpiece of which is a subsidy agency called the Export-Import Bank. Last year Ex-Im issued more than $15 million in new taxpayer-backed loan guarantees, with two-thirds of that money subsidizing Boeing sales.
In Obamaland, putting taxpayer money at risk in order to benefit the world's largest jetmaker somehow doesn't count as a "handout."
Obama also promised he would "not cede the wind or solar or battery industry to China or Germany."
China and Germany, of course, subsidize their renewable energy companies even more than we do. To compete for more solar and wind business, we will need more Solyndra-type loan guarantees, and we'll need to extend and probably expand current tax credits and grants for "green energy."
But again, the president doesn't consider these "handouts." The policies Obama does call "taxpayer giveaways" are often nothing of the sort. He railed against oil subsidies and called on Congress to end them. But Democratic legislation purportedly ending oil subsidies mostly targeted broad-based production subsidies, and rather than ending these, Democrats propose to merely exclude the five biggest oil companies.
Obama hasn't shown any willingness, for instance, to repeal the law that results in the single largest oil subsidy -- the domestic production tax credit. In fact, that credit is a key part of his campaign to subsidize manufacturing. He only wants to freeze a few oil companies out of it.
Giving a subsidy to coal mining and some oil drilling but denying it to oil drilling by big companies is pretty Orwellian definition of "apply[ing] the same rules from top to bottom."
The same is true for his "Buffett tax," named after billionaire Obama fundraiser Warren Buffett who laments that his taxes are too low. "If you make more than $1 million a year," Obama decreed, "you should not pay less than 30 percent in taxes." This would have to take the form of another alternative minimum tax. In other words, he wants to deny tax deductions and change the treatment of investment income only for those who earn too much. This isn't graduated tax rates Obama's talking about -- this is two different tax codes.
To believe Obama wants "fairness" you have to pack that word with all the subjective judgments Obama makes about who deserves what. To believe Obama wants to end "handouts" and "bailouts," you must redefine the words to exclude Obama's favorite subsidies and to include some profits made through free enterprise.
When Obama says "it's time to apply the same rules from top to bottom," however, he means it. But these are the rules: Do what Obama likes, get favors. Do what Obama doesn't like, get punished.
Timothy P.Carney, The Examiner's senior political columnist, can be contacted at tcarney@washingtonexaminer.com. His column appears Monday and Thursday, and his stories and blog posts appear on washingtonexaminer.com.
http://campaign2012.washingtonexaminer.com/article/obama-attacks-handouts-and-then-adds-handouts/338751
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