President Obama delivered just the right speech in Tucson. Can he replicate that performance for his State of the Union address on January 25? For the sake of our nation’s economic well-being, he must.
Just as our national psyche needed some healing this week, our nation’s hopes and dreams urgently need a boost on January 25. Each day that has passed since our economy hit rock bottom gives us a bit more confidence. At the same time, some startling deficiencies in our economy have surfaced: anemic job creation, a hollowed-out productive base, stagnant wages, and persistent global imbalances.
Americans have not felt this insecure about their economic future since the Great Depression. This generation believes the next generation may be doomed to a lower standard of living with fewer opportunities to climb the economic ladder. The rise of China has made Americans deeply uncomfortable, yet the public sees very little attention to this concern in Washington. Instead, they receive lectures with platitudes about “American Exceptionalism,” the idea that we will always lead simply because we are, in a word, America.
It is true that we have conquered every obstacle thrown our way, including the Soviet threat and the rise of Japan’s economy. But these were not feats aided merely by providence. When the Soviet Union launched the Sputnik satellite, immense public investment in technology, manufacturing, and education allowed us not only to reply, but also to raise the stakes. The support for this effort was bipartisan and sustained.
The President needs to state clearly in his State of the Union address that we face another “Sputnik moment” with implications that may be far more consequential than the launch of that satellite in 1957. He needs to change the debate. In the current political environment, we really have no answer to the rise of China, when, in fact, it should be an issue that unites Americans to a common purpose.
Instead, so much of the time in Washington over the next few months is likely to be focused on divisive issues such as tinkering with health care, regulation, spending, and immigration. I’m not trying to minimize the importance of these issues, but they all avoid the unsettling truth: the best economic days of America may for the first time be behind us, and not ahead of us, unless we think—and act—much more purposefully.
While we dawdle, China dawns. China will file more patents this year than America. China may, in fact, pass the U.S. to become the world’s top manufacturing nation this year; it is a title we have held for 110 years running. China now has the world’s fastest supercomputer and $2.78 trillion in foreign currency reserves.
The lesson here is not to emulate China, nor to blame the Chinese people, who suffer under an autocracy. Many of China’s economic gains are ill-gotten. Its mercantilism could wreck the global economy again. Its political oppression shows no signs of abating. Its military has alarming designs on the Pacific Ocean.
When China does not play by the rules, we must call them on it, through aggressive trade enforcement and clearly defined consequences if it does not revalue its currency in a meaningful way. We must be careful not to enrich the regime in China any further, which means we must lower our staggering trade deficit with China.
Our prime focus, however, must be getting our own economic house in order. And that means starting with basics. Without a strong industrial foundation, our nation will never stand as tall as it should. We’ll never produce family-supporting jobs or see the levels of economic growth that we need to succeed. As long as we consume more than we produce, we will—both privately and publicly—spend more than we have. The Alliance for American Manufacturing (AAM) has outlined a comprehensive program for Congress and the President. We know our plan has broad support among all voters—Republicans, Independents, and Democrats. All that is lacking is the political will in Washington to get it done.
In addition to the trade measures I’ve identified above, the agenda also includes investment in skills and training, and our infrastructure. Our plan would make America the absolute best place in the world to make things by lowering taxes on our domestic producers and making sure that capital is abundant and affordable for firms that want to put our nation back to work.
We know the State of the Union will cover a lot of themes and delineate a mind-numbing number of programs. But if the State of the Union address fails to include a vision on how we make things again in this nation, it will be failing our future. If Tucson is any indication, the President can rise to the occasion. He must.