Uncle Sam in the driver's seat

By George F. Will
The Washington Post
http://www.washingtonpost.com
Sunday, January 30, 2011


Disregard Barack Obama's rhetorical cotton candy about aspiring to be transformative. He is just another practitioner of reactionary liberalism and champion of a government unchastened by its multiplying failures.

The word "entitlements" was absent from his nearly 7,000-word State of the Union address - a $183 million speech that meandered for 61 minutes as the nation's debt grew $3 million a minute. He exhorted listeners to "win the future" by remembering the past.

On May 10, 1869, at Promontory Summit, in the Utah Territory, a golden spike was driven to celebrate the joining of the Union Pacific and Central Pacific railroads. In the 1960s, the United States sent men to the moon. Obama said: Today's government should take more control of the nation's resources so it can do innovative things akin to building the transcontinental railroad and exploring space.

The nation heard: You should trust the government whose recent innovations include the ethanol debacle that, four days before the State of the Union, the government expanded. And you should surrender more resources to the government whose recent innovations include the wild proliferation of subprime mortgages.

Obama spoke to a nation limping into a sixth year of declining housing prices (housing accounts for about one-quarter of households' assets), with an additional 10 to 20 percent decline likely. With 5 million households at least two months' delinquent on their mortgage payments and 5.5 million households with mortgages at least 20 percent larger than the value of their houses, more housing foreclosures will probably take place this year than the 1 million in 2010, when sales of new homes hit a 47-year low. It is indeed amazing what innovative government can accomplish.

The day after Obama told the nation that the key to prosperity is creativity defined by this government and propelled by more government spending ("investment"), the Congressional Budget Office said that this year's budget gap is widening to $1.5 trillion, making the national debt 70 percent of gross domestic product, up from 40 percent in 2008.

But Michigan's Levin brothers remain faithful to Obamanomics, which holds that prosperity is just around the corner - if government spends more on innovations it imagines. Sen. Carl Levin and Rep. Sander Levin have a combined 60 years of Capitol Hill tenure, and an innovation. Like most liberals' new ideas, theirs is to make an old idea more expensive. The day of the CBO's dark forecast, the Levins said that the government should double the scope of its program to bribe people to buy a kind of car the government likes much more than do buyers of cars.

The government already offers $7,500 tax incentives for people who buy electric cars such as the $32,780 Nissan Leaf and, more to the point, General Motors' $41,000 Chevrolet Volt. As The Post's Peter Whoriskey reported, these prices are "well above" those of "comparably sized cars with gasoline engines that can cost about $20,000."

Obama's goal of getting 1 million such cars on America's roads by 2015 cannot be met unless innovative government rigs the market. Introduced in 2008, the $7,500 bribe was limited to the first 250,000 cars. Under Obama's stimulus, it was expanded to 200,000 per manufacturer. The Levins, uttering liberalism's timeless rallying cry ("More!") want it to cover 500,000 per manufacturer.

The Levins' applied liberalism is regressive because it conscripts all taxpayers into subsidizing a fortunate few: As Whoriskey reported, the subsidy would flow to "early adopters" of a new kind of car, and they "generally tend to be affluent." But this is "all about economic and national security," says Robbie Diamond, president of the Electrification Coalition.

It represents, among others, people who sell electricity and related products and those who want to sell electric cars. The coalition's leaders include Carlos Ghosn, Nissan's chief executive, and Jeff Immelt, GE's chief executive and (simultaneously) chairman of Obama's Council on Jobs and Competitiveness.

Diamond says that electric cars will help prevent America from being "hostage to one fuel source produced in the world's unstable and often-hostile regions." America's two largest sources of imported oil are Canada and Mexico. Both Levins oppose tapping the large oil reserves in Alaska's Arctic National Wildlife Refuge.

The Levins' innovation could cost $19 billion over 10 years, but if it does, says Sander, "it means that the program worked." So, a program "works" if it pays people enough to get them to do something they otherwise would consider irrational - to buy something so overpriced it would fail in an unrigged market. If it "works," the cry will be: "More!"

georgewill@washpost.com