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Government not passive provider, market appeaser

BY DI EDITORIAL BOARD | FEBRUARY 14, 2013 5:00 AM

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President Obama used his annual State of the Union address on Tuesday evening to outline an ambitious second-term agenda built, in large part, on campaign promises to boost economic growth and put unemployed Americans back to work. The president’s message also included several calls to Congress to act to avoid the upcoming mandatory budget cuts known as the sequester, pass bipartisan immigration reform, develop a market-based solution to reduce carbon emissions, and establish stricter limitations on access to guns.

The clearest articulation of the guiding principle of Obama’s new agenda came as the president introduced his plan to jump-start economic growth.

“It is not a bigger government we need,” Obama said in his address, “but a smarter government that sets priorities and invests in broad-based growth.”

We support the philosophy that Obama advocated on Tuesday. The government should be neither a passive provider of services nor a stripped-down appeaser of market forces; the government should be an instrument that promotes public investment and economic fairness.

To support America’s workers, Obama proposed raising the national minimum wage to $9 an hour (up from $7.25, currently) and allowing the minimum wage to rise with inflation. The economics of raising the minimum wage is controversial, of course, but there is little reason to believe that raising the minimum wage would lead to fewer jobs for low-skilled workers.

A 2008 meta-analysis of economic literature on the minimum wage by Hristos Doucouliagos and T.D. Stanley at Australia’s Deakin University found that “little or no evidence of a negative association between minimum wages and employment” exists.

The president closed his speech with an impassioned call for Congress to put new gun-control measures up for a vote; many victims of gun violence, including former Rep. Gabrielle Giffords, who was shot in the head at an event in her Arizona district in 2011, were invited to the State of the Union.

The broad vision for the country outlined by Obama contrasted starkly with that offered by Florida’s Marco Rubio, who was tapped by the Republicans to deliver the opposition’s response to the president’s message.

Rubio — the 41-year-old Cuban-American senator who is widely considered to be the cream of a crop of young Republicans — presented a familiar and entirely incongruous vision of the government’s role in American society.

“More government isn’t going to help you get ahead,” Rubio said in response to the president’s economic plan. “It’s going to hold you back. More government isn’t going to create more opportunities. It’s going to limit them.”

But while he was quick to discredit the government’s ability to solve problems, Rubio was quicker to sing the praises of Social Security and Medicare — the latter he credited with providing much needed care to his late father and his mother alike. Rubio also credited a government program with helping him get ahead.

“I believe in federal financial aid,” he said. “I couldn’t have gone to college without it.”

Obama, on the other hand, has presented an agenda built on the admirable idea that the government should allocate its resources more intelligently to spur economic growth and solve the country’s most pressing problems like climate change and rampant gun violence.

We understand that a vast majority of Obama’s proposals will never see the light of day in Congress — there are simply too many to conceivably cram them all through a divided Congress — but we encourage Washington to set aside its recent tendency to lurch from crisis to crisis and its fixation on the federal budget and begin working to make the country a better place.


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