In listening to President Obama's State of the Union address, I could not help feeling that he had missed a golden opportunity -- to launch a visionary manufacturing agenda, to launch a long term deficit reduction strategy and thereby increase growth and create jobs. Not a bad reelection strategy.
His reference to the 2002 book by Jim Collins, Built to Last: Successful Habits of Visionary Companies, was clever, but he did not develop the concept, or suggest how it could be applied to the federal government. You were left with the impression that it was a stage prop.
Obama started out strong, laying out a multifaceted approach to reviving our manufacturing sector. He called for a tax system that encourages productive investment, an aggressive campaign to grow exports, increased investment in research and development, and training to enable displaced workers to take jobs in our increasingly sophisticated manufacturing industries. What's not to like? I and many others at the National Association of Manufacturers have been preaching a similar agenda for more than twenty years. It is what we need.
But of course, President Obama could not just leave it at that. It was, after all, the State of the Union address, so he had to touch all the bases and try to be everything to everybody. The speech devolved, as these things always do, into a laundry list of the administration's various priorities, including renewable energy, global warming and higher taxes on the wealthy. The latter was little more than a schoolyard taunt to the Republicans, and will be received in that spirit. He had an excellent opportunity to offer intelligent thoughts about growing income inequality in our country, but declined to do so.
By the time he was through, most of the audience had pretty much forgotten what the President had to say about manufacturing. That is most unfortunate because the program he spelled out had much to commend it. I have never heard any President propose such a far-reaching manufacturing agenda. But he did not package it in any coherent way, and did not return to it. I was left with the distinct impression it is not a top priority.
While taking jabs at the Chinese, the President neglected to mention why we cannot stand up to the Chinese. It is because we depend on China to fund our fiscal profligacy. We have made a devil's bargain which, if not abandoned soon, will lead us to economic disaster. The American people really need to hear this from their leader.
The core issue, of course, is the debilitating budget deficit that can only be managed with serious changes in entitlement programs like Social Security, Medicare and Medicaid, and tax reform. In the present crisis, our most crucial need is a long term deficit reduction strategy. President Obama virtually ignored this issue. I don't believe we can have an economy built to last without a credible fiscal policy.
Jerry Jasinowski, an economist and author, served as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute. You can quote from this with attribution. Let me know if you want to talk to Jerry.