My Take on the State of the Union Address

Now that I’ve had a couple of days to digest the president’s State of the Union address on Tuesday night, I’d like to share some thoughts.

The constitution requires that the president shall “… from time to time give to Congress information of the State of the Union…”  So, first of all, what is the current state of the union?  There was virtually nothing in the president’s speech that addressed it.  One could argue that the president failed in his constitutional duties in that regard.  It was much more of a campaign speech. 

Our homeowner’s association begins its annual meeting with a treasurer’s report.  Perhaps the president should do the same, or should have the Treasury Secretary lead off with such a report.  What were our revenues vs. spending?  How much did the national debt increase during the past year?  What was our current account deficit (or trade deficit) during the year?  How much did our population grow?  What is the current unemployment rate compared to last year?  What is our labor force participation rate compared to last year? 

Aren’t these some of the very basics that should be covered at the outset so that proposals regarding revenues and spending, trade and job creation can have some context?  Add this to my list of deficiencies in the constitution – that this requirement for a “State of the Union” address needs to be much more specific.  It seems that, as in the case of Congress, the president also can’t be trusted to perform his duties.  That’s not a knock on President Obama alone.  Every president has been guilty of the same thing.

Secondly, I give the president credit for recognizing that restoring our manufacturing base is absolutely critical to any economic revival.  For how long have we listened to our economists and political leaders dismiss manufacturing with talk of “the new economy,” or “a services-based economy” or a “high tech economy?”  It’s been decades and, all the while, our economy has steadily worsened.  Now the pendulum seems to be finally swinging back.  But talking and wishing won’t make it happen.  Nor will simple tax measures designed to lure manufacturing jobs back home.  Foreign nations will simply counter with tax breaks of their own.  We’re still a long way from an understanding that it’s trade policy that has to change. 

I also detected a change in the president’s approach to manufacturing.  Two years ago, he set a goal of doubling exports in five years.  That was going to lead the manufacturing renaissance.  However, although he made mention of that export goal in the address on Tuesday night, there was a much heavier emphasis on bringing jobs home and making products for Americans right here in America.  Perhaps the president and his economic team are recognizing that attempting to export our way out of our manufacturing decline isn’t going to work, as evidenced by the fact that exports have begun to lag the president’s goal.

Then there was the pandering to the Hispanic vote with his pitch for “comprehensive immigration reform” which is nothing more than another round of amnesty.  The president expressed sympathy for foreign students who return home instead of being offered work here, and sympathy for foreigner eager to find work.  Not a word of sympathy for the American workers that they displace. 

Finally, there are a few specifics that I can’t let pass without comment:

Let’s remember how we got here.  Long before the recession, jobs and manufacturing began leaving our shores.

Yes, indeed, let’s remember exactly how we got here and exactly why jobs and manufacturing left our shores!  And let’s not kid ourselves about it either.  It was the shift in trade policy to the blind, across-the-board application of free trade, abandoning 150 years of successfully using the full range of trade policy available to us, including tariffs, to assure that we maintained a surplus.  But I suspect that this isn’t what the president wants us all to remember.

Then there was this: 

Those are the facts.  But so are these:  In the last 22 months, businesses have created more than 3 million jobs.  (Applause.)

Maybe so, but that has just barely kept pace with the growth in the labor force.  Truth be told, unemployment has barely budged from its worst level of the recession.  It’s only thanks to the labor department’s claim that millions have left the work force that official unemployment has fallen from 9.8% to 8.5% during that time frame.  The fact is that just as many people remain jobless today as they did 22 months ago. 

On the day I took office, our auto industry was on the verge of collapse.  Some even said we should let it die.  With a million jobs at stake, I refused to let that happen.  In exchange for help, we demanded responsibility.  We got workers and automakers to settle their differences.  We got the industry to retool and restructure.  Today, General Motors is back on top as the world’s number-one automaker.  (Applause.)  Chrysler has grown faster in the U.S. than any major car company.  Ford is investing billions in U.S. plants and factories.  And together, the entire industry added nearly 160,000 jobs.

We bet on American workers.  We bet on American ingenuity.  And tonight, the American auto industry is back.  (Applause.)

Give the president credit for this one.  He’s exactly right.  In fact, virtually all increase in manufacturing employment in the past 22 months has been tied to the resurgence of GM, Ford and Chrysler.  But also give credit to American consumers.  There’s been a measurable uptick in the percentage of people who favor buying American.  And a car is one product they can still find that’s made in the U.S.  But let’s also give a lot of credit to the UAW.  As part of the bankruptcy settlements, the UAW became a partial owner of GM.  As part of the deal, the UAW insisted that certain manufacturing operations be returned to the U.S.  It’s the very reason that the highly successful Chevy Cruze and the new Chevy Sonic is made in the U.S. today.  Otherwise, the Sonic would be imported from South Korea, as was the Aveo that it replaced. 

I will go anywhere in the world to open new markets for American products.  And I will not stand by when our competitors don’t play by the rules.  We’ve brought trade cases against China at nearly twice the rate as the last administration –- and it’s made a difference.  (Applause.)  Over a thousand Americans are working today because we stopped a surge in Chinese tires.  But we need to do more. 

I almost gagged on that one.  No one has done more than the president to block Congress’s attempts at labeling China a currency manipulator.  “We need to do more.”  Do you think?!?  A thousand jobs?!?  It seems that we need to do about 10,000 times more than that if we want to bring home 10 million manufacturing jobs.   It may be safe to say that no president has ever done less to bring home American manufacturing jobs.

Tonight, I’m announcing the creation of a Trade Enforcement Unit that will be charged with investigating unfair trading practices in countries like China.  (Applause.)  There will be more inspections to prevent counterfeit or unsafe goods from crossing our borders.  And this Congress should make sure that no foreign company has an advantage over American manufacturing when it comes to accessing financing or new markets like Russia.  Our workers are the most productive on Earth, and if the playing field is level, I promise you -– America will always win.  (Applause.)

We’ve heard all of that before for decades.  It’s the same old song. 

I also hear from many business leaders who want to hire in the United States but can’t find workers with the right skills.  Growing industries in science and technology have twice as many openings as we have workers who can do the job.  Think about that –- openings at a time when millions of Americans are looking for work.  It’s inexcusable.  And we know how to fix it.

Is the problem a lack of skilled workers, or a lack of workers willing to do the work at the wages they’re offering?  And how much of it is a function of employers’ unwillingness to spend a few bucks training workers who may need just a little training?  Oh wait, that’s the government’s job now:

Join me in a national commitment to train 2 million Americans with skills that will lead directly to a job.  (Applause.)

I could go on, but I’m just getting myself all worked up again, like I did Tuesday night.  It was all a rehash of the same old rhetoric.  Lower taxes.  (No mention of how to offset the revenue loss.)  Retraining workers.  (Never mind the fact that recent college graduates are one of the groups with the highest unemployment.)  Cut regulations.  Blah, blah, blah. 

Of course, if the President left the Democratic Party and ran against himself as a Republican, he’d fit right into the primary debates since, with a few minor exceptions, we hear all of the same rehashed rhetoric there as well.  And can we believe any of it from any of them?  Don’t be ridiculous.

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2 Responses to My Take on the State of the Union Address

  1. ClydeB says:

    It may be time for the bulletproof glass in front of your TV like I have had to do to mine.
    We watched and listened for state of the union info.,but just as you say, it never came. Campaign speech.
    He referenced Apple when talking of high tech manufacturing. What he did not say was that Steve Jobs told him directly that those jobs would not be coming to the US.
    Did you see the NYTimes piece on Apple manufacturing?

    http://www.nytimes.com/2012/01/22/business/apple-america-and-a-squeezed-middle-class.html?_r=1&ref=general&src=me&pagewanted=all

    Eyeopener.

    Pretty well highlights the differences.

    • Pete Murphy says:

      Thanks for sending this, Clyde. A couple of comments:

      1. Part of the problem with Obama’s approach – coaxing “American” companies to bring jobs home – is that none of these companies are American. They are now global companies that don’t give a rat’s behind about the fate of American workers.
      2. Not mentioned as one of the biggest reasons that Apple and others have located in China is the fact that, if they want to sell in China, they have to make them in China. So, if I’m Apple, my choice is this: do I make them in the U.S. and say goodbye to 1.3 billion Chinese consumers, or do I make them in China, with no risk of losing American consumers?
      3. Tariffs would be a game-changer, making the U.S. the only logical place to manufacture products if you want to sell those products to Americans at a profit.

      I hope that reply from Apple to Obama’s question was a wake-up call slap-in-the-face.

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