On the campaign trail, candidate Obama delivered a landmark speech on the factory floor of the GM Auto Assembly Plant in Janesville, Wisconsin. He diagnosed the country's economic problems and proposed a concrete solution moving forward. It was the speech through which Obama pivoted away from being the sole-candidate to have opposed the Iraq War and toward the champion of our economic recovery and reinvestment. Much has changed since the Janesville speech in February of 2008. The GM plant did not survive to see the President's Inauguration. Our crisis was deeper than anyone thought. However, looking back at the speech, Obama has remained remarkably on message.
Obama argued that the mortgage crisis was not the root of our economic crisis, but instead the straw that broke the camel's back. For a Rustbelt audience, this diagnosis assumedly resonated and was fairly obvious. After all, the Rustbelt had been one of the hardest hit by decades of divestment from America's real economy. Decades of the Reagan Revolution's prescription for prosperity -- divest at home, invest abroad -> innovate, and outsource -- had take its toll.
Obama's prescription was straight-forward and attuned to the problem, America must invest in infrastructure and clean energy. Through these investments, we would relay the foundation of our real economy which was quite literally now crumbling bridges, broken levies, and spotty uneven drinking water.
Obama was very clear in how he planned to finance our infrastructure and clean energy needs. It was not through any large stimulus or earmarks. Instead, Obama pointed to the fact that enormous amounts of private equity was sitting on the sidelines, in bank accounts and private equity funds. All that money needed was a little push to shepherd it into our real economy. Obama was most concerned with the merits of the projects that we choose, and how to get world-class infrastructure and clean energy at the least possible cost.
In other words, the stimulus financed shovel ready infrastructures were pursued by Obama only out of necessity. They were never meant to be a long term solution, or even a medium term one.
Again, Obama does not have a preference for big government spending. To the contrary, if you read his campaign speeches upon which we elected him, the truth is otherwise. And, even though it's sacrilege to suggest this: Congresswoman Nancy Pelosi takes a similar stance, and consistently. One simply needs to read her speeches closely over time, and look to her actual legislative record over time.
So, yesterday, when Obama made a speech to Forsyth Technical Community College in Winston-Salem, North Carolina, he was remarkably on point.
Obama argued that we have to focus on what's going to make us competitive in the long run -- 10 or 20 years down the line. We need to, in Obama's words, "keep the American Dream alive for our children and grandchildren". He underscored his Janesville speech point: "Obviously this recession had devastating effects here, like it did everywhere else. But the trends -- the trends have been going on for some time."
He spoke yesterday about the costs of the displacement of manufacturing and textiles. Both were caused by the decades-long Reagan Revolution led divestment from America -- not the last several years.
Obama promised that we would hear more on his vision to address this structural problem within the economy in the coming weeks. He's going to be meeting with business leaders and others. The promise -- "a vision that will keep our economy strong and growing and competitive in the 21st century."
Obama is looking abroad for lessons on how to quickly adapt our economy and reinvest so that we can benefit not only decades down the line in increased opportunity and an expanding pie, but also today. I detail this Obama strategy in a book that I released in the Fall: Obama's Bank: Financing a Durable New Deal (Cambridge University Press). It is useful now to quote Obama from yesterday:
Some of you know I traveled through Asia several weeks ago. You've got a billion people in India who are suddenly plugged into the world economy. You've got over a billion people in China who are suddenly plugged into the global economy. And that means competition is going to be much more fierce and the winners of this competition will be the countries that have the most educated workers, a serious commitment to research and technology, and access to quality infrastructure like roads and airports and high-speed rail and high-speed Internet. Those are the seeds of economic growth in the 21st century. Where they are planted, the most jobs and businesses will take root.
The rest of the speech is worth reading. It details not only the lessons that we will learn, but also lays out a vision for how we will build upon our own American strengths to maintain our leadership -- one which involves broad-based participation in the American economy. We can not afford to waste the real economic engine of our economy -- Americans. And not just ones from the three coasts or the banks.
The Janesville Plan and its updating in North Carolina -- with an installment at Georgetown in between -- is importantly an affordable bi-partisan plan. It is based upon public-private-partnerships. These enjoy almost universal bipartisan support, especially when it comes to using them to build things. It is worth noting some of the individuals and groups that have embraced some version of this strategy that uses public-private-partnerships to fuel our reinvestment by building infrastructure and finding sources of energy:
The US Chamber of Commerce, Governor Ed Rendell, David Brooks, Mayor Michael Bloomberg, Governor Arnold Schwarzenegger, the Bipartisan Building Americas Future, Ambassador Felix Rohatyn, Bernard Schwartz, Congresswoman Nancy Pelosi, Senator John Kerry, the SEIU, the AFL-CIO, Governor Rick Perry, Congresswoman Rosa DeLauro, Congressman John Mica, Jeb Bush, Newt Gingrich, Sarah Palin, our major construction firms, our banks, etc.
In the coming weeks, we will no doubt here more and more about the President's proposed National Infrastructure Bank. It's purpose is to ensure that these public-private-partnerships are merit-based.