Can Obama Succeed by Touting U.S. as No. 1?

Administration officials say the president’s “buy American” boosterism is part of a broader strategy.

US President Barack Obama speaks at Buck Lodge Middle School in Adelphi, Maryland, on February 4, 2014, detailing progress toward his ConnectED goal of connecting 99 percent of students to next-generation broadband and wireless technology within five years. 
National Journal
Michael Hirsh
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Michael Hirsh
Feb. 5, 2014, midnight

It may not be much solace to Amer­ic­ans strug­gling with long-term un­em­ploy­ment and in­come in­equal­ity, but Pres­id­ent Obama had a point when he de­clared in his State of the Uni­on speech that “after five years of grit and de­term­ined ef­fort, the United States is bet­ter-po­si­tioned for the 21st cen­tury than any oth­er na­tion on Earth.”

Many eco­nom­ists say the United States is not just re­cov­er­ing, at long last, from the dev­ast­at­ing blows to U.S. power and prestige de­livered by a self-in­flic­ted re­ces­sion, but that Amer­ica is also back to win­ning, once again, the glob­al eco­nom­ic sweepstakes. While U.S. growth is not es­pe­cially strong and un­em­ploy­ment is still 6.7 per­cent, oth­ers are fal­ter­ing even more at the mo­ment. China has slowed (to a his­tor­ic­ally slow 7.7 per­cent GDP growth), and is sink­ing fur­ther; it may also face a bank­ing crisis. Above all, China ap­pears un­ready to em­brace the so­cial and polit­ic­al change that will trans­form it in­to a next-level in­nov­at­ive eco­nomy. Mar­ket traders aren’t tout­ing the up-and-com­ing “BRIC” na­tions (Brazil, Rus­sia, In­dia, and China) these days; in­stead they’re fret­ting about the un­depend­able cur­ren­cies of the “Fra­gile Five” (Brazil, In­done­sia, In­dia, Tur­key, and South Africa). Europe is pick­ing up, but re­mains in an ex­ist­en­tial funk over the fu­ture of the Euro­zone, and its debt-laden banks are still drag­ging, with sev­er­al times more lend­ing ex­pos­ure to the un­steady Fra­gile Five eco­nom­ies.

Now, seek­ing to ex­ploit what Obama hope­fully called a “break­through year for Amer­ica,” the ad­min­is­tra­tion is tout­ing its new eco­nom­ic lever­age in world af­fairs as part of an across-the-board strategy. At a seni­or-staff meet­ing held on Jan. 7 to dis­cuss his 2014 agenda, Sec­ret­ary of State John Kerry de­clared that “eco­nom­ics is the center­piece of U.S. dip­lomacy” and said he wanted U.S. dip­lo­mats to know that “every­body has got to be an eco­nom­ics of­ficer.” Kerry be­lieves the U.S. is punch­ing un­der its weight in eco­nom­ic af­fairs, and he is look­ing for “ways to lever­age our eco­nom­ic strength,” a seni­or State de­part­ment of­fi­cial told Na­tion­al Journ­al. The sec­ret­ary of State has made a point of work­ing closely with Com­merce Sec­ret­ary Penny Pritzker on pro­mot­ing U.S. en­tre­pren­eur­ship and trade policy. 

As Obama in­dic­ated in his speech, the ad­min­is­tra­tion is also act­ively seek­ing to en­list a busi­ness com­munity that re­mains some­what leery of him. As part of his out­reach, Obama not only brought in Pritzker, a real es­tate ty­coon, as com­merce sec­ret­ary but nom­in­ated Cathy Nov­elli, Apple’s former vice pres­id­ent of gov­ern­ment af­fairs, as un­der­sec­ret­ary of State for eco­nom­ic growth, en­ergy, and the en­vir­on­ment; as well as Charles Rivkin, who be­fore he be­came am­bas­sad­or to France was a Hol­ly­wood en­ter­tain­ment ex­ec­ut­ive, as as­sist­ant sec­ret­ary of State for eco­nom­ic af­fairs.

Polit­ic­ally, the ques­tion is wheth­er a less-than-in­spir­ing talk­ing point — sure, most Amer­ic­ans don’t feel great about Amer­ica right now, but we should feel bet­ter than every­one else! — can be a path to Demo­crat­ic elect­or­al suc­cess in 2016. Tout­ing Amer­ica as No. 1 prob­ably won’t do much to rally the Demo­crat­ic base, es­pe­cially since a cent­ral part of the ad­min­is­tra­tion’s strategy is to push hard for free-trade agree­ments with Europe and Asia that may only height­en in­come in­equal­ity at home. Lib­er­als are already sus­pi­cious of Obama’s cent­rism and are some­what con­cerned that the party’s po­ten­tial stand­ard-bear­er, Hil­lary Clin­ton, may be more in­clined to fol­low her hus­band’s mod­er­ate, Demo­crat­ic Lead­er­ship Coun­cil-led path than go pro­gress­ive. (Non­ethe­less, Bill Clin­ton’s ap­peals to glob­al­iz­a­tion dur­ing the faster-growth ‘90s were the basis of two suc­cess­ful pres­id­en­tial cam­paigns.)

In the end, Obama’s quix­ot­ic call to Amer­ic­an busi­nesses to “join us” and “do what you can to raise your em­ploy­ees’ wages” will prob­ably make as little head­way as the pres­id­ent’s cease­less ap­peals to the Re­pub­lic­an-led House. “The reas­on busi­nesses are not hir­ing or rais­ing wages is not be­cause they’re act­ing badly and hat­ing Amer­ica. It’s be­cause they’re not see­ing enough de­mand for their stuff,” says eco­nom­ist Heidi Shi­er­holz of the pro­gress­ive Eco­nom­ic Policy In­sti­tute.

Still, when Bob Dylan is out selling Chrysler dur­ing the Su­per Bowl, per­haps the times are a chan­gin’ more than the party’s lib­er­al fac­tion real­izes. In an odd jux­ta­pos­i­tion, Obama is com­bin­ing his free-trade agenda with a sort of neo-pro­tec­tion­ist “buy Amer­ic­an” rhet­or­ic that pleases pro­gress­ives and uni­ons. If eco­nom­ic growth con­tin­ues to pick up over the next two years, that could put the Demo­crat­ic nom­in­ee in a bet­ter po­s­i­tion than ex­pec­ted in 2016. In his State of the Uni­on, Obama de­clared to cheers that “for the first time in over a dec­ade, busi­ness lead­ers around the world have de­clared that China is no longer the world’s No. 1 place to in­vest; Amer­ica is.” By at least one meas­ure, an A.T. Kear­ney study, he’s right.

If the pres­id­ent con­tin­ues to be right — and if he suc­ceeds in get­ting that mes­sage out — the eco­nom­ic story could start look­ing a lot more fa­vor­able for Demo­crats.

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