Nicole Neily

Last night’s State of the Union was a soaring oratory, and one that was widely lauded. CBS News found that 91% of the public approved of the speech, findings that were closely echoed by CNN. It’s unsurprising, seeing how the speech’s major themes – competitiveness, innovation, growth, job creation, and deficit reduction – have been top priorities across the political spectrum for a long time.

Unfortunately, when it comes to implementing these broad goals, the President’s plans are doomed to fail, because of a fundamental disconnect between his vision for America and the realities of governance. Although some may wish it so, the government cannot be all things to all people. When it tries to do too much, it fails at doing well those few things that it is supposed to do.

In his speech last night, President Obama asserted, “None of us can predict with certainty what the next big industry will be, or where the new jobs will come from.” He is correct. But alas, in the next breath, he offered a litany of ways the government will try to do just that – through increased federal spending to support select industries and create jobs.

It is time to acknowledge that the government cannot create new jobs – it can only reallocate them by shuffling resources. And this shuffling comes with a real cost. No man, or group of men, can direct the economy perfectly. Unlike markets, which through a natural process absorb information that comes from millions of sources, those in government get only partial information and therefore make less than fully informed decisions. By inefficiently allocating resources, these efforts make us worse off. There is simply no reason to think that government will do a better job determining what technologies are promising, and what isn’t feasible, than the markets. It's a mistake for this Administration to try.

To truly create economic growth, the private sector must be given uniform rules that are applied equally. Regulatory carve-outs must end. Rather than doling out subsidies and tax credits to well-connected corporations, all businesses – and all industries – should be treated the same, and allowed to compete on an objectively level playing field. On both sides of the aisle, politicians agree on the need for “simplification” of the tax code, and a need to “broaden the base” – but it’s how we get there that will matter.


Nicole Neily

Nicole Neily is a Senior Fellow at the Independent Women’s Forum.