"The Speech - Another One"

Sydney M. Williams

Thought of the Day

“The Speech – Another One”

September 7, 2011

President Obama’s speech this Thursday to a joint session of Congress is perhaps the most anticipated speech of his oratory career. This morning’s news that the speech will propose between $300 billion and $400 billion in spending increases and tax cuts suggests it will not be bold. When Mr. Obama left for his vacation on Martha’s Vineyard, the White House began a PR blitz marketing this speech as a “pivot” to jobs. Left unsaid, according to the Washington Post, is that jobs have been mentioned 4261 times in 566 speeches by the President during the 953 days he has been in office. While some may find it hard to believe, this President speaks more often than he plays golf!

While the White House and the compliant mainstream media initially hyped the speech, polls suggest the electorate’s expectations are less sanguine. A new Wall Street Journal/NBC News poll taken August 27-31, found that a mere 44% of Americans approve of the job Mr. Obama is doing, with more than half disapproving. Seventy-three percent say the country is headed in the wrong direction, the highest level of pessimism since late 2008. The market in the short term, as we know from Mr. Buffett, is a voting machine. With the S&P 500 down 4.4% thus far in September, expectations for Mr. Obama to say something meaningful on Thursday are very low. In recent days, even the White House has been walking back from anticipation that this speech will be a “be-all and end-all.” The surprise, then, would be that this speech becomes the “Great Conciliation.” The President could lay out a plan that incorporates both his own preferences and those of Republicans. The odds are perhaps low for such an eventuality, but they are not nil.

The odds are low because this will also be a campaign speech. With unions breathing down his neck – Richard Trumka, president of the AFL-CIO, visits the White House several times a week – and the devastation left behind by Irene and Lee over the past week, it is widely expected that the President will recommend some form of an infrastructure program, including a private-public infrastructure bank based on the discredited GSE’s, Fannie Mae and Freddie Mac. In speeches over the weekend, he stated they would be a priority. Of course, any infrastructure spending bill means increased deficits, not an idea particularly popular among Republicans. Thus, they will have to be thrown a bone. Last week the President tossed a small one, halting the EPA’s additional regulations on smog standards.

The problems our country faces are immense. Unemployment is high. Government is dysfunctional. Public education lags the rest of the world. In too many places, infrastructure is crumbling. The housing sector is in depression. Over the past decade, consumers have seen stock portfolios stagnate and their housing assets evaporate. In the immediate years after the Iron Curtain fell in 1989, we strode the world like a colossus. For the last few years, we have assumed a diminished role. We are dependent on emerging nations, not only as a market for our products, but more importantly to finance our deficits. In the weekend edition of the Financial Times, John Gray wrote: “The world is returning to something like its condition towards the end of the 19th century, when no single country or economy was predominant.” Our federal government is running debt to GDP levels not seen since World War II. Banks continue to carry questionable assets, especially in terms of residential and commercial mortgages and in southern European sovereign debt. We are faced with having to dishonor entitlements because of unaffordable promises made by those who came before us. In the past two years, we have foolishly added to those entitlements with a 2000 plus page healthcare bill. New regulations, including the 2000 plus page Dodd-Frank Bill, have been added at the fastest rates in seventy years. Economic recovery has been impeded by a bloating government. A bad situation has been made worse.

People sense we are on a downward slope and that our speed is accelerating. What can the President do to halt this decline? He could propose a pro-growth agenda that represents a departure from current trends – flatter and simpler taxes for businesses and individuals, less regulation, and a willingness to forward to Congress the trade bills that now sit on his desk. To ask to speak before a joint session of Congress, the plan should be bold yet conciliatory.

Unfortunately, President Obama, the candidate of hope and change, is being forced to defend the status quo – not a position he is used to or comfortable with. Richard Trumka represents the past. Mr. Obama must be concerned with the future. The public sector has been the only growth area for unions and, when given the choice, employees have moved away from union membership. In the private sector, union members now represent less than seven percent of all workers. As union leaders fear for their jobs in a globally competitive world, they are willing to sacrifice global growth. A good example being the NLRB’s attempt to prevent Boeing from building planes in South Carolina. Short term demands are trumping long term needs. Nevertheless, it is unlikely that Mr. Obama will throw down the gauntlet. He relies on the money Mr. Trumka collects.

Compounding the complexity of the myriad demands on the President is that this speech is also a campaign speech. Many of his base have been disillusioned: The stimulus was too small; 480,000 jobs have been cut at the state and local levels. They are upset that we are still embedded in Iraq and Afghanistan and that the prison at Guantanamo is still functioning. They are angry that Wall Street bankers were bailed out, while underwater mortgagors have been forced from their homes.

The President’s bigger problem, however, is keeping independents in his circle. Without their support no one can become president. His base has nowhere to turn, as Mr. Hoffa made crystal clear in a speech yesterday that would have been more appropriate on a Wall Street trading floor, or in a locker room. According to polls, independents have been deserting the President as the financial condition of the country worsens. The President surely wants a second term; to be successful, he will need to restore a sense of confidence – of people in themselves, their leaders, the economy and the political process. As Peter Berkowitz writes in today’s Wall Street Journal, “winning and compromise are not antithetical.” The speech might help, but it is action that is needed. To whom will Mr. Obama turn – the liberal base from which he rose, or the independents who put him in office? We will know the answer by game time tomorrow.