While there are a great many factors that are currently feeding in to the tense partisan atmosphere that is the norm in Washington these days, President Obama’s State of the Union address wasted no time in calling out the one that is at the forefront of everyone’s mind: the economy. This was to be expected, of course, since it has been more or less the central issue of his entire presidency thus far, a situation that has shown slower progress and less improvements during his first term than most have expected.
In his characteristic dialectical style, the President began by citing positive developments: the addition of 6 million new jobs to the economy, increased sales of American automobiles, increased domestic energy production, a recovering housing market, a rebounding stock market, and stronger protections for consumers. Naturally these are all achievements the President has tried very hard to have associated directly with the actions of his administration, and in this context the speech had much in common with a great deal of what we saw during the presidential campaign last year.
He then moved on to the antithesis, the sort of cautious realism that is ostensibly a reminder that more work is yet to be done, that our recovery is still fragile, and that one administration alone cannot shoulder the entire burden. The addition of 6 million jobs, while desperately needed, is still far short of what is currently required for the health of the American working class. He noted that while corporate profits are at all-time highs, wages for the middle class are stagnant.
By setting up this dichotomy, the president then proceeded to narrow his focus to the issue of the budget deficit and the fiscal cliff debate. He cited the $2.5 trillion dollars of deficit reduction that has already taken place, as a result of bi-partisan efforts, since his tenure as president began back in 2008, after which he cautioned that it was still short of the goal of $4 trillion. Citing spending cuts and tax hikes on the wealthiest Americans as the reason for this, he was at once able to direct his focus to the dreaded sequester, as well as introduce the synthesis that would take care of these seemingly intractable problems.
Calling the sequester a “manufactured crisis”, the President elaborated several proposals for how to deal with the country’s economic conundrum. Ever-mindful of addressing the concerns of both sides of the ideological divide in Washington, he highlighted the importance of deficit reduction, but equally the need to grow the economy, and it is at this point that he introduced concrete proposals to explain his vision for how such a thing might happen.
Pursuing this line of reasoning, the President spoke of “making America a magnet for manufacturing”, and reminded his audience that American manufacturing had added 500,000 jobs over the last three years, after 10 years of contraction. He cited Caterpillar (CAT), Ford (F), Intel (INTC), and Apple (AAPL), and their serious efforts in the direction of bringing good work back to the U.S., as well as announcing government incentives for other companies who would follow suit.
He spoke at length of infrastructure in a similar way, broadening the category’s definition to include not only roads and bridges but education, “market-based solutions” to climate change, internet access and security, going “all-in” on clean energy, the recent boom in domestic energy production in general, and investment in science and innovation. In this vein, the President also announced that the Manufacturing Innovation Institute in Youngstown, Ohio would serve as a model for three more such institutes in towns across the U.S. to be built in the immediate future that would facilitate efforts to have the world’s next manufacturing revolution take place here at home.
The housing market was given substantial attention as well. Citing rising housing prices, increased construction, and mortgage rates at 50-year lows, the President all the same spoke of the need for easier access to housing in general, especially for young families, and a better refinancing plan for those struggling with their mortgages. He also tied the issue of housing directly to the issues of the minimum wage and poverty, calling for a nationwide increase to $9 an hour.
In terms of the economy, President Obama used the State of the Union Address to make a strong case for the ability of the government on the one hand, and the private sector and markets on the other, to work together toward resolving the country’s economic challenges. It was a strong centrist performance, thematically coherent and reminiscent of Bill Clinton in the sense that all the issues addressed, especially regarding the economy, were fairly seamlessly woven together.
[Image via White House]