Guest Post: President Obama's State of the Union: Ten Skirted Issues

Tyler Durden's picture

Submitted by Nomi Prins

President Obama's State of the Union: Ten Skirted Issues

I confess; I expected to be bored out of my mind listening to President Obama’s campaign - I mean, State of the Union - I mean campaign, speech. I kept hoping some truly earth shattering story would sneak in there beforehand, like say some discovery that Mitt Romney had been having an affair with Newt Gingrich’s ex-wife while he was creating jobs at Bain capital, and we could all focus on that instead.

It turned out that my pre-determination proved accurate. I wonder if the members of Congress felt the same sense of same déjà vu that I did, as they were bopping up and down and applauding. 

Obama's speech was a compilation of highlights from his past ones. One part optimism, two parts repetition equals one total uninspiring. Maybe it’s so boring, because it matters so little at this point. Taking away popularity polls, our national threshold for belief in hope or change has been trampled, not just because of Obama or Romney, but of the whole political apparatus that thrives on deflection of reality and posturing. We don’t have the same energy to expend listening to politicians, the endless spin that renders fact obsolete, responsibility absent, and true accomplishment, unnecessary.

We saw Optimistic Obama in his first address to Congress in 2009: “While our economy may be weakened and our confidence shaken; though we are living through difficult and uncertain times, tonight I want every American to know this: We will rebuild, we will recover, and the United States of America will emerge stronger than before.”

We got Presumptuous Obama in 2010: “As we stabilized the financial system, we also took steps to get our economy growing again, save as many jobs as possible, and help Americans who had become unemployed.”

We watched Philosophical Obama in 2011: “We are the first nation to be founded for the sake of an idea -– the idea that each of us deserves the chance to shape our own destiny.  That’s why centuries of pioneers and immigrants have risked everything to come here… The future is ours to win.”

Now, we had Campaigning on Fairness Obama. He returned to the roots of his pre-Presidential words, having accomplished little to attain the goal that his words implied. Here are ten things that President Obama skirted: 

1) The cost of healthcare insurance. Obama tried to play both sides, slapping a populace spin on an insurance industry gift. “That’s why our health care law relies on a reformed private market, not a Government program.” He claimed he won’t “go back” on things like health insurance companies being able to cancel policies. He didn’t say that insurance premiums have already risen 22% in the past two years. Republicans hate Obama’s ‘signature’ healthcare reform bill because it unconstitutionally forces people to purchase insurance. Democrats support the bill because Obama passed it. The reality is – by the time it takes effect in 2014, premium costs may have doubled. Frame it however you want, that means health insurance could cost twice as much when this bill takes effect as it did before it was passed. Meanwhile, there are more people without insurance (because they can’t afford it) even though insurance companies can’t cancel policies or deny insurance for pre-existing conditions. This bill merely offers insurance companies a wider pool of customers, with a few restrictions on how much they can pillage them.

2) Student Loan Defaults. Obama claimed he wants to cap interest rates on student loans - which would be great, but can only work in this particularly low rate environment. He urged  colleges to keep costs down – again, something that’s worked out really well when he’s mentioned it before. This year, student loan debt surpassed credit card debt, breaching the $1 trillion mark, at an average of more than $25,000 per student (and up 47% over a decade ago, not all under Obama, but a bi-administration problem is still a problem). Not surprisingly, student loan defaults rates have risen alongside this debt increase. Nearly 9% of loans defaulted in 2010, of those that began repayment in 2009, vs. 7% that began in 2008.) Obama didn’t mention this growing problem. 

3) Youth unemployment. Obama took credit for the creation of 3 million jobs (I’m not going to debate that here). Regardless, youth unemployment is at its highest rate since 1948. The unemployment rate for those under age 25 is 18.1%, (31% for blacks) havin risen sharply since 2008. Do the math. High student loan debt + diminishing  job prospects =  bad ending. Work-study programs have to be intense to really alter that.

4) Big banks. The largest firms continue to grow their asset bases and fee extrapolation strategies from their captive customer base (If you’re say, a JPM Chase customer, it costs you $5 to extract your own money from a Bank of America ATM – both banks get a cut). It was Obama that re-confirmed Fed Chairman Ben Bernanke for another fourteen years (and yes, a bi-partisan Congress agreed), and who still keeps Treasury Secretary, Tim Geithner around. Both men were gung-ho about the merger mania that dotted Wall Street in the fall of 2008 and making the ‘too-big-to-fail” banks bigger, as they now are.

5) Small banks. President Obama didn’t address the smaller bank closings occurring because the big banks got disproportionate subsides;, 389 smaller banks (with $297 billion in assets) failed from 2009 to 2011. Like during the early years of the Great Depression, this means less choice for individuals, less loans for local businesses, and consolidation of influence and market share for the big banks – which comprise Obama’s largest bundling base.

6) Borrowers. Despite a few tepid programs to help homeowners, the sheer number of foreclosures is higher today than it was in 2008. There were a record number of foreclosure filings:  2.9 million in 2010 and 2.7 million in 2011.  These are predicted to rise in 2012 amidst default surges and more lender notices than in 2011. 

Why? Because Obama’s program (that was supposed to help 5 million borrowers, and helped half a million) had to be approved by the banks. Banks don’t like citizen aid programs, even if they screwed them to begin with by fueling a $14 trillion toxic asset pyramid repackaging risky (for people), high interest-bearing (for them). Obama said, “The banks will repay a deficit of trust”? What?! When?! Where?!

7) Recent regulator incompetence. Regulators looked the other way, Obama said, pre-crisis. But he mentioned nothing about the regulators giving a pass since; the SEC bestows banks settlements for fraudulent mortgage asset products, without extracting any admission of wrongdoing. He missed saying anything about the lack of related DOJ criminal indictments. The top five banks agreed to pay $1.149 billion to the SEC to settle subprime-mortgage related fraud charges, with no admission of guilt or criminal indictments. (The SEC settlement of $285 million with Citigroup was rejected by Judge Rakoff in November, 2011 and is being re-negotiated.) And Obama wants to create a Financial Crimes Unit? What’s the SEC supposed to be doing? or the DOJ? or the FBI?

8) MF Global and customer money. On the same topic – the deficit of trust thing: Obama avoided any talk about his buddy, Jon Corzine or MF Global, the nation’s eight largest bankruptcy. He didn’t point out how diabolical it was to use and ‘lose’ customer funds that were supposed to have been kept separate from bad bets. He didn’t suggest having a solid separation between customer money and financial firm money - as in - don't have it at the same firm. He claimed to ‘we will not bailout you out again” and yet, we still are.

9) Banks hoarding. Obama neglected to mention the $1.6 trillion that banks are stashing at the Fed in the form of excess (and interest-bearing) reserves, which do nothing for the Main Street economy. Meanwhile, small business loans are at a 12-year low, having shrunk continuously since 2008.

10) Obama conveyed that we dodged a bullet with getting the banking system under control. He didn’t note the rising risk in the banking system: the largest four US banks (JPM Chase, Citibank, Bank of America and Goldman Sachs) control nearly 95% of the US derivatives market, which has grown by 20% since just last year, to  $235 trillion JPM Chase holds 11% of the world’s derivative exposure, Citibank, Bank of America, and Goldman comprise about 7% each. Goldman has 537 times as many (from 440 times last year) derivatives as assets and it’s still considered a bank holding company (as per Bernanke) that gets federal backing.

In all, the President's speech was reminiscent of George Clooney’s in Ides of March. We’ve heard it all before, maybe with slightly different words: America lost 4 million jobs before I got here, and another 4 million before our policies went into effect, but in the last 12 months, we added 3 million job. We must reduce tax loopholes, and provide tax incentives to businesses that hire in America. We must reform taxes for the wealthy (though he signed an extension of Bush’s tax cuts.) We must train people for an apparent abundance of expert jobs. We need more clean energy initiatives.  We created regulations (big sigh of relief he didn’t use the word ‘sweeping’) to avoid fraudulent financial practices. We will help homeowners. Wall Street must ‘make up a trust deficit.”   Like Jamie Dimon cares. 

In other words, Obama gave Wall Street a pass, while waxing populace. Don’t get me wrong. I expected nothing different. I will continue to expect nothing different, when he gets a second term, given the lame field of contenders all around.

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memyselfiu's picture

Yes, it was Newt that slashed military spending in the 90's........

we should throw that out and see if it sticks?

Everybodys All American's picture

Regan never was a president. Ronald Reagan was though and you have shown your analysis is misplaced. Obama has spent more than any president from Washington up to and including Reagan together. That is of more import today.

Woodyg's picture

Federal debt from geo washington to Jimmy Carter - less than 1 trillion.......

8 years of Reagan - federal debt 3 trillion......

Nice work beating 200 years of presidents in a single administration.....

GeezerGeek's picture

By that standard, given another 4 years Obama will out-Reagan Reagan. Wow, that makes a warm tingly feeling go down my leg!

memyselfiu's picture

by that standard Obama has another 5 years to triple the debt like Reagan did!

Do you think he can hit 27 trillion by 2016?

DosZap's picture

GeezerGeeek,

By that standard, given another 4 years Obama will out-Reagan Reagan. Wow, that makes a warm tingly feeling go down my leg

Obama is a single celled protozoa compared to Reagan,he could not carry the mans hat.

DosZap's picture

ACjourneyman

Regan was no great president of the 20th century.

Maybe not, but before he came into office, most folks were barely getting by, and inflation was thru the roof,and I was making 25% of what I was after his fost 2yrs in office.And, at least he was an American.

What has this dude done for ya?

ACjourneyman's picture

Don't get me wrong, I am 100% conservative and dislike the present gov vehemently, I just would like to see us live within our means.

GeezerGeek's picture

"The national debt was under control somewhat" is like being a little bit pregnant. The condition just gets more and more obvious as time goes on.

The nation's economy was floundering when Reagan took office, with astronomical interest rates and inflation rates. As others have pointed out, Reagan inherited a broken economy and had to deal with a Democrat-controlled House.. Same for Obama, and he had a veto-proof majority in both houses of Congress. Under Reagan the economy improved once the tax cuts were fully implemented, surpassing the starting point. I haven't seen anything like that yet.  Although not a Keynesian, I suspect that Federal deficit spending in the 1980s had a positive multiplier effect. Now it appears to be negative, and that's a big difference.

flattrader's picture

Yeah.  He just blew the doors of regulation so the predator class had a freer hand.

His own budget director while still employed in his admin called his trickle-down theory voodoo economics.

Regan wasn't a clown.  He was a witchdoctor.

WonderDawg's picture

Jesus Christ on a pogo stick. His name is spelled REAGAN.

Woodyg's picture

Actually Reagan was brain addled....... Just as Americans like their presidents..... Then bush 1 could do whatever the heck he wanted behind the scenes -

Remind you of another repub admin? Shrub bush and Cheney of course!

DaveyJones's picture

Funny how people miss that. That silly Bush family's been messin around for a long time.

buckethead's picture

Ive taken the Reagan was great stance... 

 

It took a bit of ignorance on my part. He might have gone into office as a "Goldwater Conservative", but he came out bathed in debt, deficits, huge government, CIA subversion, and MIC blood money.

 

He was still a swell guy.

 

Didn't GHWB run some government freedom watch agency for a while?

 

You cant hide from the see eye ayyyy.

ElvisDog's picture

I think one of the things people look back on fondly with Reagan was that he actually believed the things that he said. In other words, whether you agreed with him or not he was at least genuine. With Obama (and Bush and Clinton before him) virtually everything out of his mouth is bullshit. You don't know what he really thinks or believes because everything is focus-group-driven spin.

DaveyJones's picture

It's not so much the character of the men than the state of the country. The lies will continue to grow until (1) some revolt, (2) the complete collapse, or (3) both

fuu's picture

Trickle down voodoo, Bueller Bueller.

psychobilly's picture

The American people have elected a clown as President for well over 100 years.

You'll just confuse and anger the herd, who are busy being corralled by their televisions and radios into voting against their own interests and compromising all of their supposed principles (that they never really possessed in the first place).  Anyone but BushObama.

BLOTTO's picture

Also, thanks to the help of the Illuminati controlled mass media for the huge influence and conditioning...

But the truth of the matter is - when both candiadates are FULLY on board to be a willing LAP DOG to - lick and suck off the masters genitals in the name of greed, power, lies, etc - than when did votes really ever matter?

Exactly - they never did.

'They' own both sides - they always have... they have to - its the only way to control the outcome of course.

 

Woodyg's picture

It's a club - and YOU ain't in it! Geo carlin

tarsubil's picture

I wish. If we had literally elected clowns, we'd be better off.

DaveyJones's picture

They're better at juggling, like to run around in circles, can work with monkeys and  I always prefer a red nose to  brown.

stant's picture

boiled down. the anal probing will continue until moral improves

Al Capowned's picture

Oboma is just a lviing breathing Oxy -moron....

HD's picture

Obama is in full spin mode now - he has to be. Problem with Obama isn't what he promises - it what he actually delivers.

GeneMarchbanks's picture

'I will continue to expect nothing different, when he gets a second term, given the lame field of contenders all around.'

Nomi of all people should understand that when Alessio Rastani announced "Goldman Sachs rules the world" he wasn't being provocative but reflective of todays affairs. As a former Goldmanite, she at least should point out that the abysmal state of affairs doesn't at all take shape according to who's in the White House.

So there you have it, gents, America is completely leaderless. Good thing corporations are people.

redytogo's picture

I will be very surprised if we are not under martial law in many cities before November.  That will provide a second term to Obama, since we will also be at war with Iran by then, and those in "camps" will not be allowed to vote.  God help us all

Al Capowned's picture

I wish this was Hyperbole but it just isnt anymore!

HungrySeagull's picture

I don't know about Martial law in MANY cities.

Maybe a few rebellious ones. It wont be the first time.

dukeystick's picture

They have started by detaining Rand Paul just this week.

DosZap's picture

redytogo

Good possibility, as Joint nighttime military exercises/choppers/rope drops,etc are being held all over LA, and in diverse parts of the USA NOW.

The EXCUSE is so they can be prepared for Urban conflicts if called out,Duh, did we not just have 7yrs of Urban conflict in Iraq?.

Make NO mistake these exercises are for you and I. If not for USE, for INTIMIDATION tactics.

lynnybee's picture

.... luv Nomi Prins, super young lady to be admired.

HungrySeagull's picture

Usually what is NOT said is much more important.

I feel that this Consitutionally Mandatory State of the Union should go through each of our 50 states one by one and examine each of the Federal budget items.

It will take a day to get it done instead of a evening applause fest.

achmachat's picture

I like birds!  (and Nomi, of course)

Capitalist10's picture

11.  Entitlement reform in the face of impending bankruptcy.

MFL8240's picture

Wont happen until you get a Republican Congress, Senant and president.

Dr. Engali's picture

I believe we had that and we got a new war in Iraq and another entitlement.

LawsofPhysics's picture

Thanks for pointing that out to this idiot who obviously still believes in the "two-party" lie.

WallStreetClassAction.com's picture

Obama, Nobama. You Americans are lost. The only reason you held together was because the times were good and no one really cared. Now that the money is gone, and debts are piling up, your individualism will get the best of you. You whine and beyach about Obama, but look at the alternatives - a bunch of Obama clowns, even worse than Obama perhaps. You are ruled by a handful of monopoly overlords, who are banked and incorporated offshore. In essense, you are back to square one - you are ruled from overseas, while you are kept divided over skin color, social classes, party dogma, religion, sexual preferences, etc. You are fucked people, at least have balls to admit it.

MFL8240's picture

Any Republican running is better than this clown.  Anyone of them!

blueridgeviews's picture

You are so right MFL8240. What people don't understand it's not just the President we are replacing but his entire staff! FUnny how no one mentions the Constitution in these forums. Have they all been asleep the last 3 years
?

LawsofPhysics's picture

Still believe the two party lie huh.  What a good sheep you are.  The last republican president began with a republican house and senate and he added over 4 trillion in debt (starting from a surplus) and got us stuck in two useless wars that continue to cost the taxpayer money today.

The banks (who fund Obama, Romney, Santorum, and the Newt) love idiots like you.  Wake the fuck up, we have ONE party, period.

DaveyJones's picture

Guess that's because the previous administration did so much good for the constitution. What a joke. Keep using exclamation points MFL and it will be true

WonderDawg's picture

I fail to see any difference, with the exception of Ron Paul.

MeBizarro's picture

Honestly this is the truth.  He is the only candidate who has presented a substantial alternative from the status quo.  Disagree with some of his positions but it is amazing to hear his answers in contrast to the other GOP candidates during the endless stream of mindless debates. 

francis_sawyer's picture

Ok we admit it... Now what's YOUR problem?

WallStreetClassAction.com's picture

admitting the problem is half of solution! have an upvote.

dukeystick's picture

...it sounds like you had some bad mushrooms on the cold greasy pizza you ate for breakfast this morning.

(I read that Freud and Jung determined that overuse of "bold" typeface is inversely correlated to penis size.)

GeneMarchbanks's picture

Somebody wants some votes.

Individualism, often touted as an American character trait, is pure mythology. What you have is an incredibly vain conformity and general anomie. Look, what was often referred to as 'revolutionary' times a few short decades ago, has now entered the books for what it was: America's decline into decadence, solipsism and market nihilism. No reason to brutalize the poor bastards though.