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What He Should Have Said
Obama’s inspiring leadership needs more than vague purposes and a few better facts.
In his first address to Congress, President Obama claimed that a “day of reckoning has arrived.” The occasion was a day of reckoning as well for his still young presidency. Obama had a chance to sketch out a plausible plan for long-term economic recovery, beyond the immediate crisis. Instead he delivered what was in effect a recycled speech from last fall’s campaign, full of programs and platitudes that are popular with his liberal base but only marginally relevant to the urgent issue of economic renewal. In less dangerous times, it would be a mistake to expect too much from an informal state of the union address from a new president. But we are in the midst of the worst economic crisis since the Great Depression, and the president needed to assure us that he and his team know what needs to be done. He didn’t, and we are left to fear that they don’t.
When a politician tells you that we must engage in a transformational, epochal program, and then proposes that it be paid for out of pocket change, there is no reason to keep listening.
What Obama Should Have Said
He should have explained that the bubble economy was the result of the toxic interaction of chronic trade deficit nations like the U.S. with chronic trade surplus nations. And the president could have explained that America’s private debt culture was not simply the result of our own greed, but a byproduct of the reality that most workers have not shared in productivity growth. Unable to maintain middle-class living standards with rising wages, many have turned to debt. The president could then have explained the treatment—a gradual increase in consumption by surplus countries (particularly China and Japan) and the opposite combination of more exports, fewer imports and higher savings by the U.S. And while expanding the most productive sectors of the economy, we must undertake reforms like a higher minimum wage and broader unionization to make sure that the gains of growth are shared with the workers, unlike in the past generation.
A brilliant writer with a first-rate speechwriting team, he could have said it in plain English: “In the long run, we have to grow our way out of this mess. And the only way to do that is to make and sell more, not to borrow from people in other countries to buy the goods that they make. That new growth has to show up in pay-checks, not just in dividends and CEO salaries.”
What Obama Said
Instead of explaining the underlying cause of the crisis and the only plausible long-term cure, the president set forth a four-part agenda: renewable energy, health care reform, increased access to higher education, and deficit reduction. While each of these are laudable goals, they do not add up to a convincing program for economic renewal following the near-term crisis, and to make matters worse, Obama’s discussion of each showed a confusion of purposes and sometimes of facts.
Energy
Let’s start with energy. The president claims that we must have “energy independence” and that all energy eventually must be “renewable.” The very idea of energy independence is confused. Most Americans don’t understand that we get more of our oil and gas from Mexico, Canada and the North Sea than from the Middle East or Russia.
Then there’s the president’s repeated claim that we have to move quickly to “renewable” energy. Not “clean” energy that doesn’t contribute to global warming by producing greenhouse gases, but “renewable.” Why the difference? Because the left wing of the Democratic Party is ideologically opposed to nuclear energy, which produces radioactive wastes but does not emit greenhouse gases. According to the U.S. government, in 2006 renewables like solar, wind, hydropower and geothermal made up only seven percent of the US energy budget—compared to eight percent for nuclear, 23 percent for coal, 23 percent for natural gas, and 40 percent for petroleum. The president could have challenged the fantasies of the left about the potential contribution of renewable energy; instead, he pandered to them by omission.
Notwithstanding the unimpressive results of cap-and-trade in Europe, President Obama called on Congress to combat global warming by enacting a cumbersome cap-and-trade system instead of a much simpler carbon tax. He claimed that the resulting revenues (presumably from an auction) would allow the U.S. government to invest in alternate energy sources to the tune of... $15 billion a year. Fifteen billion a year? That’s chicken feed. When a politician tells you that we must engage in a transformational, epochal program, and then proposes that it be paid for out of pocket change, there is no reason to keep listening.
John Talks Joe
Lloyd Grove is editor at large for The Daily Beast. He is also a frequent contributor to New York magazine and was a contributing editor for Condé Nast Portfolio. He wrote a gossip column for the New York Daily News from 2003 to 2006. Prior to that, he wrote the Reliable Source column for the Washington Post, where he spent 23 years covering politics, the media, and other subjects.
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Jacob Bernstein is a senior reporter at The Daily Beast. Previously, he was a features writer at WWD and W Magazine. He has also written for New York magazine, Paper, and The Huffington Post.
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Michael Lind is the editor of New American Contract at the New America Foundation in Washington, D.C., and the author of The American Way of Strategy. He has been a staff writer or senior editor at the New Yorker, Harper’s magazine, the New Republic, and the National Interest.
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Michael Lind is the editor of New American Contract at the New America Foundation in Washington, D.C., and the author of The American Way of Strategy. He has been a staff writer or senior editor at the New Yorker, Harper’s magazine, the New Republic, and the National Interest.
Obama Owns the Room
Michael Lind is the editor of New American Contract at the New America Foundation in Washington, D.C., and the author of The American Way of Strategy. He has been a staff writer or senior editor at the New Yorker, Harper’s magazine, the New Republic, and the National Interest.
Oh just shut up....
How arrogant of you to say what the President "should have said". First of all, you assume that the President somehow missed the mark thereby assuming his intentions. Secondly, you assume that what YOU think should have been said the American people would rather have heard or needed to hear last night. All of this assuming makes you look like a pompous ASS.
KofTX1 - you make no sense. This is Lind's column. He is SUPPOSED to express his opinion. And he did. You do not have to agree with his opinion, but, to criticize him for expressing it is stupid and ludicrous. Pick apart his argument if you wish, otherwise, go elsewhere!
For the record, I have a more favorable opinion of Obama's speech than Lind does, but, while listening to the speech, I arrived at a similar conclusion. Obama ignored/failed one key part miserably.
Let me explain: Obama's attorney general, Eric Holder, recently accused us of being cowards with regards to discussion about race. Well, I will accuse Obama of being a coward (and a liar) with regards to the cause of our economic crisis.
While high fuel prices and the mortgage meltdown have been huge (and do not forget the huge cost of our military actions!), the FUNDAMENTAL problem has been our trade deficit.
I have been to China numerous times. I have walked their factories and their stores. I have witnessed their purchasing habits and we need to learn from them.
In Shanghai, the predominant car on the road is a Volkswagen Santana. MADE LOCALLY in Shanghai. Buick sedans and min-vans are very common. Agains, MADE LOCALLY. In one central China city, Fords are common. Again, MADE LOCALLY. In China, it is not enough to buy "Chinese". You must buy "locally".They understand that to protect their own job, they have to protect the job of their fellow citizen and neighbor.
People in Japan are the same way.
Think of it this way: when you buy a product made in China, what is the actual TRADE. You give them money and they give you a product made with CHEAP labor. When does your money come back to you?(Hint: it doesn't!)
And it was high hypocritical of Obama to criticize American companies for shipping jobs overseas to take advantage of cheap labor while the typical American consumer buys Chinese products to take advantage of cheap labor.
We, the American citizenry/consumer, are just as greedy and guilty as the American CEO. And Obama should have said that last night. But, using Eric Holder's choice of words, Obama was a "coward".
Actually, Mr. Lind has made some excellent points. The core economic problem is income stagnation at the producer's level. As profits from improved productivity have relentlessly been funneled upward, wage earners have been increasingly unable to purchase the products they produced without taking on excessive debt, eventually exhausting demand.
Although it may be regarded as heresy to question conventional wisdom, the best wisdom is indeed unconventional. The value of higher education is greatly overestimated and the cost has spiraled out of the realm of affordability. Information and innovation are flowing so quickly now, because of this very medium, that education will increasingly become auto-didactic, which is the best education anyway. Belief in a classical Renaissance liberal arts education broke down in the 20th century as educational institutions took on a vocational bent. These institutions can no longer adapt quickly enough to economic change to provide vocational instruction for the reasons stated above.
Well done, Mr. Lind.
Except for the part where these kinds of speeches aren't intended to lay out four-hour-long wonky budget and energy proposals. Joint addresses before Congress are meant to provide sweeping oratory and broad strokes. It's a long-standing American tradition.
genoftheheart-- you are not by, any chance, Mr. Lind....?
Anyway, there are many other things Obama could have said, but the things he did say were damn good and on target. I am glad he is President.
Lind is confused. There is a new wave of Nuclear power plants going up across the U.S. right now. In fact, a new one is going up down the road from me in MD. Why focus on Nuclear if we've got clean and never ending sources?
Anyways, the future is wind, solar, hg, bio and geothermal. Chu and others have in the works plans for a new grid, interconnecting wind farms in the central corridor of the U.S. and off the east and west coasts. They know the battery technology they are going to when wind varies. Homes will be able to plug into this new grid and entrepreneurs will be able create their own energy via solar panels and other means and sell the electricity back at competitive rates.
It's coming. Hold onto your horses.
Oh Michael I remember your from school and it's nice to see somethings never change. You were a nerdy dork then and your still a nerdy dork who will never be the smartest person in the room unless it's a kindergarden class.
LOL Yes I see the day Obama takes advice from the likes of YOU..LOLOLOL NOT gonna happen.
@Trilby16-
No, I am one of a kind. I admire Obama as well, all the more reason to question policy decisions. What do you think of Lind's point that American workers are underpaid in relation to their productivity? What corrective measure do you recommend?
Here's what I don't get: the call for "more" from this speech. How, in an hour, can any president lay out a vision for the country, support his argument for forthcoming programs and inspire us all to be responsible citizens? I'm sorry, but if he ponderously weighed in on data/stats and examples, he would have been panned as boring and too detailed.
The purpose of such a speech is to lay out key (abstract) principles by which the administration will run, foreshadow what's coming and keep the American public abreast of key initiatives. I got all that from last night's speech and was inspired.
To the critics of that speech, take your criticism to the Cabinet meetings, sub-committee meetings and hearings where the real work of govt. gets done, but don't ask the president (any president) to do the real work in live broadcasts. That's preposterous.
If I was president... blah blah blah... the trade part was interesting; the energy part was short sighted. then I saw that I had only finished 1 of 3 pages... f that...
KofTX1,
I agree with reidgator. You do sound as if you have no real argument and need to resort to scoulding our of frustration and hopelessness. We have a right to demand of him excellence since all he did will campaigning as a poseur is make vacuous claims for change. As of today, he still is keeping transparency and clarity as far away as possible.
Oh dear, sorry, typos line 2 - out instead of our
line 4 - while instead of will.
My bad.
I agree with sippe here. A lot of what people have asked for are things that will be fleshed out in committees and the like. This address was supposed to be his abstract blueprint of how his administration will attempt to address these problems as he sees them and explain the logic behind why the approach will work, and I think he succeeded in that aspect. However, I did enjoy the irony of asking for more substance while in the very beginning you said the president should address the history of our economy's conceptual form (the bubble economy).
I agree with the bit about nuclear power being minimized in the public sphere and talking solely about "renewable" energy, but renewable energy is key to taking a "life-cycle" approach to our consumption. While this is a longer-term goal, the conversation about it and sustainability need to start hitting the national stage soon.
However, Mr. Lind, I strongly disagree with two of your points. First was the talk about education. Missing from your analysis of his education policy was any talk about the pivotal role of education in innovation that leads to economic and social growth. Education is an important investment of capital in our citizens. The historical progression of society has shown the importance of increased education and academic scholarship and research, which needs me neatly into my last point about the $15 billion investment in alternative energy. R&D has very high returns on it's investment and thus does not require as massive an investment as one would expect. It's a saving grace that in a time that we're so cash-strapped we don't need an enormous amount of money to get a great effect with R&D.
@click212: have you looked at recovery.gov yet? That's a far cry from "keeping transparency and clarity as far away as possible"
The 11 most disturbing things to me:
1. Why is no one talking about the Federal Reserve's role in all of this? (refer to Money, Banks, and the Federal Reserve" on youtube...made in 1996...ignore the slant at the beginning and get to the good stuff)
2. The lack of understanding about FDR's New Deal and the "Bank Holiday" in 1933.
3. The lack of the public's understanding about the modern global economy and it's likeness to a Ponzi scheme.
4. The lack of conversation about the trade situation (refer to IOUSA).
5. The lack of understanding about the real estate market and good plan to deal with it. The current plan is too little and won't do what we need it to. This is the core of this crisis and if a bottom is not put on the market they can give banks all the money they want and it will just disappear (again). People aren't going to buy if there's not a bottom, and there will not be a bottom if people don't buy (a catch 22)...someone needs to intervene... it's spiraling down and taking everything with it.
6. The fact that the extreme global nature of this crisis could have been headed off if they would have paid attention earlier and dealt with the real estate problem. They have let this go into freefall for a year.
7. Paulson's first TARP scam
8. Tim Geitner's lack of a good plan.
9. Nationalize the banks already...it's just stalling the inevitable. Why do these banks have any choice in anything at this point...they're not king anymore.
10. That Capitalism is not working.
11. That we would be in big trouble without China.
Obama's education strategy, specifically targeting greater access to higher education, calls for a stringent cost-benefit analysis. Although higher education is mandatory for entry into a profession, the reality is that these jobs necessarily constitute a relatively small percentage of jobs in the US economy. Approximately 80% of college graduates are currently working at jobs that have no relation to their majors and 7 out of 10 jobs in the US do not require a college degree. If you are skeptical of these numbers, go into your favorite bar or restaurant and ask how many college graduates are working there. Similar trends exist throughout the service sector. Factor in the cost and incurred debt for higher education and the strategy raises serious questions.
Expanded access to higher education will have to target specific sectors, such as alternative energy R&D, in order to be effective at job creation and long term economic growth. Increasing debt for higher education without specific targets will unfortunately exacerbate the core economic problem at this point.
Witness the plummeting numbers as the reality of this new America is realized. Save America and run this moron and his left wing ideologues out of country.
Flowery oration?
When pigs fly!
Stop rewarding failure and crucifying hard work and patriotic payment of taxes. No taxes without representation. Let the tea parties begin. Not with my tax money!
Thank you.
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