WASHINGTON -- It is the constitutional duty of American presidents to annually articulate the way forward for the nation. Ours is a troubled time when a clear vision of the future and a call to action are needed if we are to again prosper and fulfill the promise of America.
President Obama gave it his best effort during the State of the Union Address on Tuesday evening (Jan. 25) before a divided legislative branch that symbolically rearranged its traditional seating arrangement. The president attempted to channel both JFK and Ronald Reagan to remind us that we are a nation still capable of doing “big things.” It’s unclear how well the president’s Sputnik analogy works in the context of spurring an economic recovery. The American response to the Soviet space spectacular was the Apollo program, and we have long favored Apollo-like programs to rebuild America’s infrastructure and, with it, our ability to innovate and compete.
By design, the president spoke in general themes such as the revival of American ingenuity. Much has been made of the president’s “competitiveness” mantra, but some observers argue that this approach, albeit good politics, misdiagnoses our economic problems. Indeed, American workers and engineers can compete with anyone in the world; they just need to be hired in greater numbers to do it.
Critics variously argued that the president’s address was short on details and that he continues to favor government spending in areas like commercialization of energy technologies. Skeptics counter that this is best left to the private sector, and that soaring budget deficits are the fundamental problem. (Maybe, but the so-called “deficit hawks” were conspicuously silent when the Bush tax cuts were extended in December for two years at an estimated cost to the U.S. Treasury of as much as $300 billion alone in 2011.)
Here is a typical GOP response to the president’s address by the new chairman of the House Science Committee, Rep. Ralph Hall of Texas: “If we are to continue to lead the world in innovation, we must invest wisely, and put a stop to Democrats’ job-destroying spending.”
Talking points aside, nearly all politicians agree on the need for jobs. But there is little agreement on the best way to create more of them. However, some sectors of Corporate America may finally be starting to see the light.
The CEO of Dow Chemical Co. asserts in a new book that it is not enough for American companies to merely control intellectual property. They must also control manufacturing processes, for it is there that we find the keys to true innovation. China and Germany “have a holistic approach to manufacturing,” Andrew Liveris said during a recent interview. “We have proof points that say that if you put all your eggs in one basket, and if you're just the idea owner, that you will eventually not generate the ideas that matter in terms of valuating your community, in terms of having the higher-paid jobs.”
Liveris cites the outsourcing of electronics manufacturing as an example of what is happening in America and why the U.S. must have a manufacturing strategy in order to compete. “If you outsource electronics to countries that have initially cheap labor then obviously, they'll start making those devices. But then on top of that, they'll learn how to make the next one - better. And then they'll build the universities around that industry that actually generate the human capital. Then ultimately, what happens is the companies who've maybe initially outsourced start to build facilities there, and they start to build R&D centers alongside and ultimately, you'll outsource the creativity.”
Liveris is correct. The best way for America to again “do big things” is for U.S. companies to invest in manufacturing, not just acquire and protect intellectual property. If they don’t, the result will be fewer and fewer American consumers able to buy products sold by U.S companies.
And, yes, the government must continue to invest. If you consider the word “invest” as code for “tax,” then so be it. If we want the pot holes fixed, better schools and national defense, then we – the wealthy and the middle class alike—must pay for it.
The president’s address was his attempt at a new framework for economic renewal. The real battle begins in several weeks when the Obama administration releases its fiscal 2012 budget proposal. There will be plenty of details. Then Congress must actually approve budget bills funding government agencies, a responsibility it has shirked in recent years by passing a series of stop-gap budget resolutions. Legislators need to start doing what they were sent to Washington to do.
In the final analysis, talk is cheap. The economy will not be revived through one speech. Calls to action must be backed by deeds, and yes, with dollars.