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United States: State of The Union Address

Yesterday I suggested one ought to listen to what President Obama said in last evening's State of The Union address with respect to:

  • whether the U.S. faced structural unemployment;

  • specific or general manufacturing and service job creation programs;

  • his views on the strength of the U.S. manufacturing base, repatriation of manufacturing jobs, and technology and automation in the context of manufacturing job creation;

  • U.S. defense spending cuts in the context of potential lost jobs;

  • government sponsored infrastructure projects aimed at job creation; and,

  • U.S. wealth disparity.

In what I thought to be a rather bland and uninspiring speech, here is what I heard him say about each of the foregoing, and what he said on other topics and mantras he touched on as I heard him:

  • he didn't mention structural unemployment, either specific or general manufacturing and service job creation near-term programs; or repatriation of manufacturing jobs in any specific 'program-like' way;

  • with respect to jobs in the context of defense spending cuts, he alluded to those in passing when he mentioned the so-called 'sequester' that would see, based on a law passed by Congress in 2011, about $1 trillion in budget cuts that would automatically go into effect this year if agreement now can't be reached on a plan to cut the federal deficit. He said 'sequester cuts' would cost 'hundreds of thousands' of military, education, energy and medical research jobs;

  • he discussed deficit cuts, but always in aggregate (over a period of years) numbers - for example $1.5 trillion, where he failed to mention that amount was scheduled over a period of 10 years;

  • he talked about technology and automation in the context of long-term job creation, citing an innovation center that has been developed in Youngstown, Ohio, and saying that he wanted to introduce a program that would develop 15 more such centers (3 that he was directing to be built immediately) to further the application of technology and automation (he mentioned 3D manufacturing) to manufacturing - which I took he seems to think will create meaningful growth in manufacturing jobs in the United States in the future. If you read this Newsletter you know my view is that technology resultant automation indeed will increase manufacturing productivity, but will do that at the expense of Main Street manufacturing jobs, not add to them. Certainly it will create manufacturing related jobs for those highly trained and skilled individuals who contribute to the technological development of new manufacturing equipment and processes, but those individuals are likely to be comparatively few in number;

  • he did talk about an infrastructure program that would put people to work initially repairing about 70 bridges across America, and made general statements about the importance of good infrastructure and encouraging private capital participation in infrastructure rehabilitation programs;

  • he also talked about a program that would see 20 'depressed areas' in the U.S. employ people in rebuilding what I took, perhaps in error, to be houses in those areas;

  • he emphasized 'strengthening the middle class', and spoke about wealth disparity in the context of a continued 'Robin Hood' mantra of taking from the wealthy and giving to Main Street through increasing taxes paid by the wealthy. While this in some respects admirable it is somewhat Don Quixoteish given the right-wing Republican attitudes to this. Moreover, given the wide wealth disparity in the U.S., as I see things 'the few' don't have enough to accommodate through increased taxation any meaningful improvement in the living standard of 'the many';

  • while he did not use the term 'energy self-sufficiency' (or if he did I didn't hear it) he spoke at length about energy in the contexts of U.S. oil and gas production increases going forward, and the use of batteries and renewable energy to reduce - if not eliminate - car gasoline consumption. He also mentioned policy change with respect to oil and gas permitting, and a U.S. objective of cutting energy costs by 50% over time. All admirable goals;

  • he spoke of education reform, where improved education aimed at increasing employment opportunities for high school graduates and college graduates alike - a long-term proposition - is important to the long-term well-being of the U.S. economy. There can be no doubt that improving U.S. education can only be positive in relative terms. However, in the end I believe that as increased technological change takes hold in all economic sectors, the 'best and brightest' are increasingly favoured - and education itself will become more Darwinian over time, leaving more and more people less able to cope economically;

  • with respect to pre-school education, he declared that he was interested in introducing a program that would ensure first-class pre-school education is made available to every child; and,

  • he spoke about comprehensive immigration reform, climate change, and gun safety stressing their importance as he sees things.

All in all, I did not come away from this year's State of The Union speech hearing a 'take-charge' leader 'take-charge', and did not hear anything I thought was particularly new that is going to result in any near-term, or long-term,economic panacea for America.

In short, I did not hear him break 'important new ground'.

You can read the full text of President Obama's speech at Full Text: Obama's State Of The Union Speech.

Topical Reference: Full Text: Obama's State Of The Union Speech, from Business Insider, Grace Wyler, February 12, 2013 - reading time 10 minutes. Also see Reaction and Analysis to President Obama's 2013 State of the Union, from Brookings, William A. Galston, February 12, 2013 - reading time 4 minutes.


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