THE PRESIDENT: I'm going to make history here as the first President to live tweet.
Shouldn't the announcer be saying something like that? Does Obama have a shred of self-deprecating humor in him or does he have to be a self-promoting machine all the time? "I'm going to make history!" What a boob. You would think that someone who has already been elected President could give his ego a little bit of a rest instead of banging his chest all the time. He might be the first President to live tweet but in terms of humanity, how many millions of spots down are you? By the way, check out this analysis of his use of "I" here.
MR. DORSEY:And this one comes from William Smith: "What mistakes have you made in handling this recession and what would you do differently?"
THE PRESIDENT: That's a terrific question. When I first came into office we were facing the worst recession since the Great Depression.... I think that -- probably two things that I would do differently. One would have been to explain to the American people that it was going to take a while for us to get out of this. I think even I did not realize the magnitude, because most economists didn't realize the magnitude, of the recession until fairly far into it, maybe two or three months into my presidency where we started realizing that we had lost 4 million jobs before I was even sworn in.
The other area is in the area of housing. I think that the continuing decline in the housing market is something that hasn't bottomed out as quickly as we expected. And so that's continued to be a big drag on the economy.
We've had to revamp our housing program several times to try to help people stay in their homes and try to start lifting home values up. But of all the things we've done, that's probably been the area that's been most stubborn to us trying to solve the problem.
So when asked what mistakes HE made and what HE would do differently, he starts by blaming his predecessor for the recession. He even blames economists for not realizing the magnitude of the recession. Again, this is a question about HIS mistakes. Out of his 421 word answer to a pretty simple question all he admits to is that he didn't explain the severity of the recession to the American people well enough. Really? That's the only mistake? You didn't communicate well? How about all the time you spent on Obamacare instead of focusing on jobs? How about blowing the first stimulus package? Also, last I checked people can't eat the President's speeches, especially if they read them on an IPad. It's amazing that after 2 and a half years he thinks his only mistake is communication.
MR. DORSEY: Mr. President, 27 percent of our questions are in the jobs category, as you can see from the screen over here. Our next question has to do about jobs and technology. It comes from David: "Tech and knowledge industries are thriving, yet jobs discussion always centers on manufacturing. Why not be realistic about jobs?"
THE PRESIDENT: Well, it's not an either/or question; it's a both/and question. We have to be successful at the cutting-edge industries of the future like Twitter. But we also have always been a country that makes stuff. And manufacturing jobs end up having both higher wages typically, and they also have bigger multiplier effects. So one manufacturing job can support a range of other jobs -- suppliers and the restaurant near the plant and so forth. So they end up having a substantial impact on the overall economy.
This answer really makes no sense. Manufacturing jobs have higher wages than tech and knowledge industries? Don't tech jobs pay really well? According to the Bureau of Labor Statistics, the median computer engineer makes $92,430 per year while the median manufacturing worker (aka an "assembler") makes $12.32 per hour or $25,625 per year. Even if Obama is thinking of auto workers, who are the highest priced assemblers, their median wage was $24.91 per hour, putting their yearly salary at a bit more than $50,000 per year. Also, why would they have higher multiplier effects? Don't tech workers go to restaurants too? Don't they have vendors? What a lame excuse for promoting the people who generally will be more likely to vote for him, manufacturing oriented union workers.
MR. DORSEY: So our next question is coming up on the screen now, from Patrick: "Mr. President, in several states we have seen people lose their collective bargaining rights. Do you have a plan to rectify this?"
THE PRESIDENT: The first thing I want to emphasize is that collective bargaining is the reason why the vast majority of Americans enjoy a minimum wage, enjoy weekends, enjoy overtime. So many things that we take for granted are because workers came together to bargain with their employers.
Now, we live in a very competitive society in the 21st century. And that means in the private sector, labor has to take management into account. If labor is making demands that make management broke and they can't compete, then that doesn't do anybody any good.
In the public sector, what is true is that some of the pension plans that have been in place and the health benefits that are in place are so out of proportion with what's happening in the private sector that a lot of taxpayers start feeling resentful. They say, well, if I don't have health care where I only have to pay $1 for prescription drugs, why is it that the person whose salary I'm paying has a better deal?
I'm sure there are quite a few people "enjoying" minimum wage because closed union shops have hiked up wages and limited employment for workers. So in that way the President is correct. He makes it sound like all of us would be toiling 7 days a week for pennies if it weren't for his trusted constituency, unions. I believe the vast majority of people had at least one day off thanks to the sabbath (which I believe was technically invented 3,000 years ago) even when toiling in the mines. Also, less than 5% of workers are getting the minimum wage at any one time, with about half of them being under 25 (remember those minimum wage after school jobs?). I think one can argue that collective bargaining is a net drag on the rest of us. It drastically increases costs per employee, in terms of wages, benefits AND pensions which all of us have to pay for.
It's also demeaning when he says that those of us who are anti-union are only like that because we are "resentful". That reminds me of how he demeaned small town Americans by calling them "bitter" during his infamous San Francisco speech. See people who disagree with him and his worldview are just doing so because they are negative people who have things going wrong in their lives. It is NOT because they just want what is best for this country. He should check out this article about what happened after public sector collective bargaining ended in Wisconsin. One town was able to go from a deficit to a surplus through some minor tweaks to employee contribution levels (an added 2.6% towards healthcare benefits and 5.8% to pensions) as well as through negotiations with their healthcare provider. The collective bargaining agreement forced the town to buy benefits only from the provider started by the union. Naturally the rates were noncompetitive. So once the town was allowed to negotiate with others, the union provider immediately cut their cost estimate. Tell me how having to buy benefits from one provider benefits anyone outside that provider? Oh yeah, unions are great.
MR. DORSEY: Mr. President, 6 percent of our questions are coming in about housing, which you can see in the graph behind me. And this one in particular has to do with personal debt and housing: "How will admin work to help underwater homeowners who aren't behind in payments but are trapped in homes they can't sell?" From Robin.
THE PRESIDENT: This is a great question. And remember, I mentioned one of our biggest challenges during the course of the last two and a half years has been dealing with a huge burst of the housing bubble.
What's happened is a lot of folks are underwater, meaning their home values went down so steeply and so rapidly that now their mortgage, the amount they owe, is a lot more than the assessed worth of their home. And that obviously burdens a lot of folks. It means if they're selling, they've got to sell at a massive loss that they can't afford. It means that they don't feel like they have any assets because the single biggest asset of most Americans is their home.
So what we've been trying to do is to work with the issuers of the mortgages, the banks or the service companies, to convince them to work with homeowners who are paying, trying to do the right thing, trying to stay in their homes, to see if they can modify the loans so that their payments are lower, and in some cases, maybe even modify their principal, so that they don't feel burdened by these huge debts and feel tempted to walk away from homes that actually they love and where they're raising their families.
We've made some progress. We have, through the programs that we set up here, have probably seen several million home modifications either directly because we had control of the loan process, or because the private sector followed suit. But it's not enough. And so we're going back to the drawing board, talking to banks, try to put some pressure on them to work with people who have mortgages to see if we can make further adjustments, modify loans more quickly, and also see if there may be circumstances where reducing principal is appropriate.
The "several million home modifications number" is pretty much an outright lie. According to Neil Barofsky, Special Inspector General for the Troubled Asset Relief Program, the administration is counting people who have only received offers for modifications, not actually had their mortgages modified. The audit of the Home Affordable Modification Program (HAMP) from Barofsky was from early 2010 but he said that while there were, at the time, 1.3 million offers for modification, only 170,000 mortgages were actually modified.
Also, notice that once again, Obama did not answer the question, which was about people who aren't behind on their payments but are "trapped in homes they can't sell." This is NOT about people living in houses they can't afford, but I guess Obama didn't have an answer for this person so decided to toot his own false horn. All he had to do was say something about his plans for reinvigorating the real estate market. I guess he doesn't have any. I guess that would require economic growth and we all know how incompetent he is at that.
MR. DORSEY: "After embarking on a record spending binge that left us deeper in debt, where are the jobs?"
THE PRESIDENT: Well, look, obviously John is the Speaker of the House, he's a Republican, and so this is a slightly skewed question. (Laughter.) But what he's right about is that we have not seen fast enough job growth relative to the need. I mean, we lost, as I said, 4 million jobs before I took office, before I was sworn in. About 4 million jobs were lost in the few months right after I took office before our economic policies had a chance to take any effect.
And over the last 15 months, we've actually seen two million jobs created in the private sector. And so we're each month seeing growth in jobs, But when you've got a 8 million dollar -- 8-million-job hole and you're only filling it 100,000-200,000 jobs at a time each month, obviously that's way too long for a lot of folks who are still out of work.
There are a couple of things that we can continue to do. I actually worked with Speaker Boehner to pass a payroll tax cut in December that put an extra $1,000 in the pockets of almost every single American. That means they're spending money. That means that businesses have customers. And that has helped improve overall growth.
We have provided at least 16 tax cuts to small businesses who have needed a lot of help and have been struggling, including, for example, saying zero capital gains taxes on startups -- because our attitude is we want to encourage new companies, young entrepreneurs, to get out there, start their business, without feeling like if they're successful in the first couple of years that somehow they have to pay taxes, as opposed to putting that money back into their business.
So we've been able to cooperate with Republicans on a range of these issues. There are some areas where the Republicans have been more resistant in cooperating, even though I think most objective observers think it's the right thing to do. I'll give you a specific example.
It's estimated that we have about $2 trillion worth of infrastructure that needs to be rebuilt. Roads, bridges, sewer lines, water mains; our air traffic control system doesn't make sense. We don't have the kind of electric grid that's smart, meaning it doesn't waste a lot of energy in transmission. Our broadband system is slower than a lot of other countries.
We haven't gotten the kind of cooperation that I'd like to see on some of those ideas and initiatives. But I'm just going to keep on trying and eventually I'm sure the Speaker will see the light.
I love the use of the phrase "resistant to cooperating". He sounds like a borg or something (also, is his opinion supposed to represent "the light"?). Maybe Republicans are resistant to cooperate because spending $2 trillion on infrastructure is a dumb idea??? His first infrastructure based stimulus plan was a complete failure, now he wants an even bigger one??? He couldn't even deliver broadband to rural areas without wasting almost 90% of the money. And his 16 tax cuts to small businesses are peanuts compared to the massive hike in spending that will be required to deal with Obamacare. My company had premiums rise by almost 30% last year thanks to his "reforms". Does anyone know any small business owner who says "thank God for Obama, he is really looking out for me"? I'd also want to question his jobs "created" number. As I have shown before, the unemployment rate is actually much higher than is reported thanks to some statistical manipulation and is actually barely off its peak.
MR. DORSEY: So speaking of taxes, our next question is coming from us -- from Alabama, from Lane: "What changes to the tax system do you think are necessary to help solve the deficit problem and for the system to be fair?"
THE PRESIDENT: Well, I think that, first of all, it's important for people to realize that since I've been in office I've cut taxes for middle-class families, repeatedly. The Recovery Act cut taxes for 95 percent of working families. The payroll tax cut that we passed in December put an extra thousand dollars in the pockets of every family in America.
And so we actually now have the lowest tax rates since the 1950s. Our tax rates are lower now than they were under Ronald Reagan. They're lower than they were under George Bush -- senior or George Bush, junior. They're lower than they were under Bill Clinton.
The question is how do we pay for the things that we all think are important and how do we make sure that the tax system is equitable? And what I've said is that in addition to eliminating a whole bunch of corporate loopholes that are just not fair -- the notion that corporate jets should get a better deal than commercial jets, or the notion that oil and gas companies that made tens of billions of dollars per quarter need an additional break to give them an incentive to go drill for oil -- that doesn't make sense.
But what I've also said is people like me who have been incredibly fortunate, mainly because a lot of folks bought my book -- (laughter) -- for me to be able to go back to the tax rate that existed under Bill Clinton, to pay a couple of extra percentage points so that I can make sure that seniors still have Medicare or kids still have Head Start, that makes sense to me. And, Jack, we haven't talked about this before, but I'm assuming it makes sense to you, given Twitter has done pretty well. (Laughter.)
I think that for us to say that millionaires and billionaires can go back to the tax rate that existed when Bill Clinton was President, that doesn't affect middle-class families who are having a tough time and haven't seen their incomes go up. It does mean that those who are in the top 1-2 percent, who have seen their incomes go up much more quickly than anybody else, pays a little bit more in order to make sure that we can make the basic investments that grow this country -- that's not an unreasonable position to take. And the vast majority of Americans agree with me on that.
That doesn't mean that we can just continue spending anything we want. We're still going to have to make some tough decisions about defense spending, or even some programs that I like but we may not need. But we can't close the deficit and debt just by cutting things like Head Start or Medicare. That can't be an equitable solution to solving the problem. And then, we say to millionaires and billionaires, you don't have to do anything. I don't want a $200,000 tax break if it means that some senior is going to have to pay $6,000 more for their Medicare that they don't have, or a bunch of kids are going to be kicked off of Head Start and aren't going to get the basics that they need in order to succeed in our society. I don't think that's good for me; I don't think it's good for the country.
Well he starts that one with another lie. We don't have the lowest tax rates since the 1950's. The top tax rate was only 31% in 1992, before Clinton raised them. What Obama is actually referring to is tax revenues as a % of GDP but that is lower thanks to the recession moving people into lower brackets. And it is in his power to raise this number without any tax law changes by instituting pro-growth policies, though I am seriously getting the impression that he is allergic to anything that might actually help the economy grow. Especially if it doesn't involve specifically paying off his friends and constituencies. Also, how much does he think the top 1-2% make anyway? We are not talking about "millionaires and billionaires". The top 1% income cutoff was $380,000 in 2008, and I'm assuming when he mentions the top 1-2% he is referring to those making $250,000 and up. How many of those have a $200,000 tax break? They wouldn't even owe that much in taxes. "millionaires and billionaires" are a very small % of the country and therefore would not actually help that much in solving the deficit problem. How much money could you possibly squeeze out of a fraction of a percent of the population? He really needs to stop the class warfare and actually start thinking about real solutions.