Updated at 8:18 a.m. on January 26.
Soothing anxious American workers was the running theme in President Obama’s State of the Union address, and the balm came straight from the corner office.
With job creation the nation’s top priority and the persistently high unemployment rate the key to his reelection prospects, the president offered a full embrace of his onetime nemeses in the business community -- co-opting their diagnoses of economic ills and endorsing many of their preferred treatments, in the hopes of sparking an up to $2 trillion “private stimulus” of corporate investment and hiring.
Along the way, Obama all but ratified Corporate America’s refrain that jobs will return, faster, if government gets out of businesses’ way.
“We know what it takes to compete for the jobs and industries of our time,” he said, in remarks prepared for delivery. “We need to out-innovate, out-educate, and out-build the rest of the world. We have to make America the best place on Earth to do business. We need to take responsibility for our deficit, and reform our government. That’s how our people will prosper.”
Much of that language could have been lifted directly from the U.S. Chamber of Commerce or the National Association of Manufacturers. So could most of the concrete economic proposals Obama offered later in the speech, including increasing infrastructure spending, lowering corporate tax rates, and boosting exports through free-trade agreements with countries including South Korea, Colombia, and Panama.
It was the climax of a lightning-quick rhetorical pivot for a president who seemed to delight in sparring with the chamber in his first two years in office, but held up several recent advisory appointments -- including his new chief of staff, William Daley -- as olive branches to business.
The shift appears to underscore a belief, by Obama and his economic team, that a divided federal government will offer limited options to spark the creation of the hundreds of thousands of jobs per month that economists say the nation needs to bring down the unemployment rate. Mostly, that’s because House Republicans are unlikely to approve any major new spending plans to stimulate demand.
So, Team Obama seems to have concluded, the best chance for more stimulus is to coax businesses to invest some of the nearly $2 trillion currently sidelined on corporate balance sheets in new workers or equipment. Labor leaders are skeptical that the president can do much on that front, even if he accedes to business demands for lower taxes and less regulation -- because consumer demand is driving investment decisions.
The president didn’t talk about spurring demand in his speech. Instead, he offered a blunt assessment of the nation’s economic struggles, acknowledging the nation no longer is a place where “finding a good job meant showing up at a nearby factory” and didn’t require a college degree.
“That world has changed,” he said. “And for many, the change has been painful.”
Obama has changed, too, at least rhetorically. We’ll see how much pain that can soothe.
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