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Reflections


State of the Union, Revised

by Ralph R. Reiland,
Professor of Free Enterprise at Robert Morris University
 

President Obama's State of the Union speech began with the applause lines: "Tonight, after a breakthrough year for America, our economy is growing and creating jobs at the fastest pace since 1999. Our unemployment rate is now lower than it was before the financial crisis. More of our kids are graduating than ever before; more of our people are insured than ever before; we are as free from the grip of foreign oil as we've been in almost 30 years. Tonight, for the first time since 9/11, our combat mission in Afghanistan is over."

What's not over in Afghanistan, after 2,213 American military deaths in the conflict, is the consequent and ongoing suffering of our wounded soldiers while Afghanistan's opium production and government corruption gallops along in more vigorous condition than the country's fragile democracy and tenuous state of human rights, especially for girls and women.

On the same day as President Obama's State of the Union speech, "Shiite insurgents stormed Yemen's presidential palace and besieged the leader's residence in a show of force that threatened to topple a government that has been a key American ally in the fight against al-Qaeda," reported the Washington Post.

The attack, "believed to be backed by Iran," reported the Post, was unmentioned in the State of the Union address.

A collapse of the government in Yemen "could send the country into full-scale civil war, threatening a Syria-like disintegration that many fear could be exploited by radical groups such as al-Qaeda," reported the Post. "Yemen is home to the terrorist group's most powerful branch, al-Qaeda in the Arabian Peninsula."

Regarding the economy, President Obama stated, "At this moment — with a growing economy, shrinking deficits, bustling industry, and booming energy production — we have risen from recession freer to write our own future than any other nation on Earth."

Further, "Today, America is number one in oil and gas," and "thanks to lower gas prices and higher fuel standards, the typical family this year should save $750 at the pump."

Approximately half of the $2 drop per gallon in fuel prices is due to innovations and investments in horizontal drilling and hydraulic fracturing. In contrast, President Obama, regularly portraying the oil, gas and coal industries as archaic, outdated, and lethal threats to our planetary existence, imposed a virtual drilling moratorium on federal lands.

Regarding unemployment, the federal government's official jobless rate of 5.6 percent in December 2014, or 8.7 million unemployed workers, didn't count the 6.8 million officially classified "involuntary" part-time workers in December who were seeking full-time jobs, or the 2.3 million jobless workers who hadn't actively searched for work in the previous four weeks, or the approximately six million Americans who have dropped out of the workforce and aren't categorized as unemployed.

Overall, the labor-force participation rate in December declined to 62.7 percent, with the participation rate declining in every age group except those older than 60 years of age.

Additionally in December, average hourly earnings for private-sector workers decreased by five cents, continuing the stagnation or decline in wages.

Finally, while simultaneously warning that we shouldn't accept what's "dividing us and whipping up anger," President Obama, pushing for higher taxes on the rich and putting a target on the incomes of top earners, asked if we should "accept an economy where only a few of us do spectacularly well."

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Ralph R. Reiland is an associate professor of economics and the B. Kenneth Simon professor of free enterprise at Robert Morris University in Pittsburgh.


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