Thoughts on the President's visit

Posted by George Hostetter on February 10, 2014 

I would say to Barack Obama on Friday: “Welcome to Fresno and the central San Joaquin Valley, Mr. President. We are pleased and honored to have you as our guest. But, really, why are you here?”

I know the conventional wisdom. The President and local leaders will, as The Bee reported, “discuss the drought.” As a Valley native, I understand the importance of water policy — storage, transport, conservation. But, drought or not, these are perpetual worries here.

We need rain. If we get enough, no drought. If we don’t, drought. The presidency has many powers. Sadly, making it rain on command isn’t one of them.

Anything President Obama has to say about the drought could just as easily be said from Washington, D.C. or by his Secretary of the Interior.

President Obama isn’t coming to town to discuss the state of water in the Valley. He’s coming to discuss the state of work in the nation. The drought is merely his vehicle.

What is the state of work in our area — Fresno, Tulare, Madera and Kings counties?

* We are the key part of the world’s richest agricultural region. We also are probably the nation’s poorest region. That’s no coincidence. There are many reasons for this. It’s sufficient now to simply note that we have considerable demands for low-cost seasonal manual labor in an industry that is increasingly mechanized and in a nation that finds intolerable the existence of a perpetually nomadic low-skill labor force.

* With so many people unemployed or under-employed in a region that spends billions every year on public education, we have become the center of the Entitlement State. I give two statistics among many. First, nearly a quarter of residents in Fresno and Tulare counties are on food stamps. Second, Fresno County’s 13 public assistance programs produce about 570,000 clients per month. This doesn’t mean 570,000 of the county’s 950,000 people are on public assistance. Many people participate in more than one program. But it does mean the need for help is immense.

* The Entitlement State will only grow. This will happen because of need. This will happen because of political pressure for equitable outcome, not merely equitable opportunity. The Jan. 20-26, 2014 issue of “Bloomberg Businessweek” has an article about a Swiss effort to guarantee each person in that country an annual income that is the equivalent of $33,000 U.S. dollars. “The vote on a minimum income for every Swiss citizen may still be some time away, but it has already generated headlines around the world,” the article says. “Philosophically, the idea has a long history, drawing support from the likes of the English-American revolutionary Thomas Paine and the economist Milton Friedman.”

* The Congressional Budget Office last week issued a report about the Affordable Care Act (ObamaCare). The report predicted, in the words of a “Wall Street Journal” story, that “by 2024 the equivalent of 2.5 million Americans who were otherwise willing and able to work before ObamaCare will work less or not at all as a result of ObamaCare.”

The CBO’s logic: If it’s more profitable to receive government entitlements than work for a paycheck, people will stop working.

The WSJ story is an interview between the paper’s Joseph Rago and University of Chicago economist Casey Mulligan. They review Mulligan’s research on ObamaCare and the President’s economic stimulus. The piece gets into marginal income-tax rates for 2007-2016.

Mulligan states: “The thing I argue with is the denial that there is a trade-off. I argue with the denial that if you pay unemployed people you’re going to get more unemployed people. That doesn’t mean the consequences aren’t worth paying. But you can’t deny the consequences for the labor market.”

* The CBO’s report has caused a national uproar on both Left and Right. President Obama will land in Fresno fully aware of the national debate about the future of work in a high-tech nation being transformed by design into a European-style Entitlement State.

* President Obama on Friday will land in a region that needs long-term solutions to water challenges if it hopes to perpetuate and expand an agricultural economy that, by its nature, creates the very policy friction (empathy vs. incentive) that so intrigues the Congressional Budget Office, Professor Mulligan and Americans of every political stripe.

All of this and much more will be front and center when President Obama comes to town. I hope he addresses what Professor Mulligan calls “the consequences” in a public forum.

We could see history in the making, right here in our beloved central San Joaquin Valley.

Again, Mr. President, welcome.

 

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