Mitch Daniels on the State of the Nation
The governor of Indiana, Mitchell E. Daniels Jr., was in New York today and spoke to the Hudson Institute's New York briefing series about the state of the nation.
"Not so damn good," was the way Mr. Daniels summed it up, warning that America faces two or three risks that rose to the level of what he called "survival issues."
The first was mounting government debt, which he called "unsustainable" and "unaffordable," and which could make America end up like Lehman Brothers. "This is not policy, this is arithmetic," Mr. Daniels said, speaking not only of the current debt but of the looming promises such as Medicare and Social Security.
The second was terrorism and the possibility that terrorists could obtain nuclear technology.
Neither of the two parties has "covered themselves with glory," Mr. Daniels said. But the upcoming elections will deal with "larger questions than we are used to dealing with," including, "will the public sector be the servant, the enabler of the free economy…or will they be the master."
He cited two examples where he said President Obama didn't really get it. The first was a session between the president and governors talking about how the stimulus could have been made more effective. Mr. Obama tried to explain that "when they flooded government employees with dollars, they went out and spent it" in stores and in the states.
Second was Mr. Obama's suggestion, before a student audience, of a proposal to forgive student loans for those who go on to work in government or the non-profit sector for a given amount of time. Mr. Daniels said he thought Mr. Obama had it backwards; the loans should be forgiven only if graduates "go out and work in productive sectors."
Mr. Daniels predicted that Americans would come to realize how much of what government now does "we can get by without."
Some of the anger out there now, he said, is directed at "not just Wall Street or overpaid corporate CEOs but government employees and their unions."
Public education, he said, used to be "the bloody shirt of American politics," a kind of conversation stopper that could be invoked as a way of saying if you want cuts, "you hate children." Not anymore, he said, putting himself in the shoes of a voter who says, "The teacher next door I just figured out makes a lot more than I do but doesn't work all year."
Of the Tea Party movement, he said, "A little hell-raising's not a bad way to get a conversation going."
He said he thought people were reacting to "the radicalism of this administration; the bailouts, the takeovers, the power grab."
He called for a "policy of maximum economic growth." That apparently includes encouraging large families, at least among Republicans. Mr. Daniels recounted encouraging Young Republicans to reproduce, telling them, "it's easier to conceive 'em than convert 'em."
On entitlements, he called for a version of a "cut it off" policy that would take care of everyone covered by existing programs, but strike a "new bargain with newer employees."
Mr. Daniels did a version of this on health care for Indiana, which now has about 30,000 state employees, the fewest since 1979. Of these, about 70% have voluntarily enrolled in a health-savings account-type health care plan. "Government unions hate them," Mr. Daniels said. "They want to be between the worker and the employer, delivering the benefits."
On Mr. Daniels's first day in office, he decertified the state government employee unions; in the first eight months, 92% of government employees quit paying their union dues.
Mr. Daniels said that Republicans are "presumptively" the "party of the rich," but said that there were Democrats out there who wouldn't know a working person if their limousine drove over one. Mr. Daniels himself travels his state by motorcycle, staying not in hotels but in peoples' homes.
I asked about farm subsidies and ethanol. "Farm subsidies in general ought to go away," Mr. Daniels said, saying that crop payments for crops such as sugar, rice, and cotton were tilted toward the South. He had "a little different view about ethanol," citing "security grounds" for encouraging domestic energy production rather than importing foreign oil.
Another questioner asked about President Bush's spending record, which Mr. Daniels, who served early in the administration as Mr. Bush's budget director, did not try to defend.
Mr. Daniels denied interest in running for president in 2012, and I've certainly seen politicians who are more dynamic speakers. But with his performance in Indiana and by trooping around to give luncheon speeches to audiences like the one today in New York (he said he also recently spoke at a big American Enterprise Institute conference), he's certainly positioning himself to step in if the right situation presents itself.
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