Obama's Economic Philosophy

President Obama reaffirmed his economic philosophy in the State of the Union address -- a government that works, invests, delivers opportunity, and that we can believe in. It is a lean government, not a big government.
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President Obama reaffirmed his economic philosophy in the State of the Union address -- a government that works, invests, delivers opportunity, and that we can believe in. It is a lean government, not a big government. It is not a problem, but a problem-solver. The approach that Obama laid out for infrastructure and clean energy investment is emblematic. I describe it in my book: Obama's Bank: Financing a Durable New Deal.

Rather than looking to 2012, the State of the Union Address returned to 2008, on the campaign trail in Janesville. In front of an audience of workers at the GM Plant, Obama first set out his economic philosophy. The GM plant would not survive to see his inauguration; however, the approach that Obama set forth in Janesville was the template for the State of the Union address. What Obama said in Janesville in 2008 is far more inspiring and durable than Paul Ryan's rebut tonight.

Importantly, the Janesville speech -- and the State of the Union -- start off by reminding us that our crisis has been decades in the making. In other words, our crisis did not emerge in the subprime mortgage market, and it will note be solved there. Instead, we have divested from our real economy for decades. In the meantime, our new competitors -- China, etc -- have invested in state-of-the art infrastructure. As a result, we risk loosing our competitive edge.

In other words, we do not have the state-of-the-art infrastructure that makes companies like GE see the US as an attractive place to do business. Enlisting Jeffrey Immelt in our recovery effort is valuable for exactly this reason -- he knows what it takes to insource jobs, repatriate the operations of American firms, draw money out of the TARP banks and into our real economy.

And, just as in Janesville, Obama explained how we can co-invest with the private sector to return the country to its prestige place. The State of the Union spoke of the types of co-investments that happened during the Cold War that produced the Internet. Forget about the controversial shovel ready projects, few would deny that Obama's examples tonight of entrepreneurs who benefited from a little federal help -- not a lot -- have excelled in the midst of the crisis. Certainly, this is the story of GE in Schenectady.

When it came to infrastructure investment, Obama too returned to Janesville. We have a long term deficit in the infrastructure field. Our bridges crumble. The American Society of Engineers awarding us a D. Obama once again explained how we have to bring private investment into US infrastructure to solve this problem. Government lends a hand, but only as honey to attract private sector money.

And, it's all about the importance of opportunity -- from the nod to Biden and Boehner and their uniquely American stories to the need to invest in infrastructure not only to make our powerhouse metropolitan regions even more competitive. But instead, to make sure that the off-ramps of the high speed rail and our highways that we build today become the on-ramps of vibrant cities and towns tomorrow. This was the benefit of the Transcontinental Railroad, the Eisenhower national road system, and the Internet. This is the essence of not only the Progressive Movement, but also America Dream

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