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The President began his roughly hour-long speech with the words, “for this final one, I’m going to try to make it shorter.”
My reaction will be shorter still — far shorter — though I doubt many of you are, in the President’s wisecrack, “antsy to get back to Iowa” (save perhaps those of you reading this in the Caribbean, headed home to Des Moines).
Last night’s speech was built around four key themes. As President Obama put it:
“First, how do we give everyone a fair shot at opportunity and security in this new economy?
“Second, how do we make technology work for us, and not against us — especially when it comes to solving urgent challenges like climate change?
“Third, how do we keep America safe and lead the world without becoming its policeman?
“And finally, how can we make our politics reflect what’s best in us, and not what’s worst?”
As the NewsHour business and economics correspondent, I’ve been reporting on the first two themes for the entire 30 years I’ve been “absurdly fortunate” enough to hold the job. (The words in quotes are from my late father.)
You can read the specifics of themes one and two online. My job here is just to note a few highlights about which I might conceivably have something useful to say.
The first highlight for me was this paragraph:
“Anyone claiming that America’s economy is in decline is peddling fiction.” Huzzahs from the audience followed, Democrats mainly, of course, bumping up and down as audiences do at all such speeches, looking just a bit like marionettes.
As to the accuracy of the statement, well, it all comes down to what you mean by “decline.”
“A basic fact: the United States of America, right now, has the strongest, most durable economy in the world.”
I suppose that’s true, as it has been for about a century now. But when the president took over, the U.S. share of the world economy — world GDP — was more than 24 percent. In the year 2001, it was above 30 percent. Today, it’s barely 22 percent.
So America is in some real sense in decline, at least internationally. I reported a story just last week at the annual economics convention, riding on cable cars and walking the streets of San Francisco with economic historian Robert Gordon, as he made the case elaborated so eloquently in his new book, “The Rise and Fall of American Growth.” (That story will run soon.)
We are slowing technologically, Gordon argues, and political “headwinds” will make things worse. U.S. economic growth in is inevitable decline.
Interestingly, after emphasizing the strength and durability of the U.S. economy, the president acknowledged those same headwinds.
“What is true — and the reason that a lot of Americans feel anxious — is that the economy has been changing in profound ways, changes that started long before the Great Recession hit and haven’t let up. Today, technology doesn’t just replace jobs on the assembly line, but any job where work can be automated. Companies in a global economy can locate anywhere and face tougher competition. As a result, workers have less leverage for a raise. Companies have less loyalty to their communities. And more and more wealth and income is concentrated at the very top.”
Who would disagree? The problem is, what can any president, or any Congress, really do about it?
Better education, said the president. Strengthen Medicare and Social Security. “Equal pay for equal work, paid leave, raising the minimum wage.” To which anyone might mutter: “Surprise, surprise.” Or even: Good luck with that in today’s Congress.
Less predictable, although not very surprising either, I guess, was a nod to Speaker Paul Ryan, sitting behind him as if on botox, it often seemed, perhaps for fear a politically incorrect face or gesture would go viral on Twitter.
“I also know Speaker Ryan has talked about his interest in tackling poverty,” said the President, “and I’d welcome a serious discussion about strategies we can all support, like expanding tax cuts for low-income workers without kids.”
Truth be known, he said almost exactly the same thing in his State of the Union two years ago:
“I agree with Republicans like Senator Rubio,” he said in 2014, talking about the Earned Income Tax Credit — an idea credited to the most famous American conservative economist of the 20th century, Milton Friedman. The Earned Income Tax Credit, said Obama back then, “doesn’t do enough for single workers who don’t have kids. So let’s work together to strengthen the credit, reward work, and help more Americans get ahead.” A bid for bi-partisanship that has gone nowhere slowly in two years.
But let’s end with the one economic line that got the audience up like marionettes on both sides of the aisle:
“I believe a thriving private sector is the lifeblood of our economy.” And then the line that lifted them all from their seats: “I think there are outdated regulations that need to be changed, and there’s red tape that needs to be cut.”
It would be good for Democrats if they realized the extent to which this line resonated, and not only in the hall of Congress. It may well be true, as the president said, that Americans have lost trust in government because special interests dominate in Washington and have, they think, rigged the game against them. But it is also true that regulations can be stifling, regulators imperious and arbitrary, and that to the extent the Democratic Party is identified with Big Government, it is vulnerable.
I wouldn’t bet on it, any more than I’d bet on winning Powerball today, but it would certainly be intriguing if President Obama were to make the cutting of red tape an economic theme of his last year in office.
Paul Solman has been a business, economics and occasional art correspondent for the PBS NewsHour since 1985.
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