Obama finally gets it on jobs

In a post last week, I asked why America’s new strategy is to "pivot to Asia-Pacific" when America itself needs so much attention. Last night the president replied by making it clear that his real pivot is indeed going to be to America. In a paraphrase of John F. Kennedy’s famous "ask not what your ...

Saul Loeb-Pool/Getty Images
Saul Loeb-Pool/Getty Images
Saul Loeb-Pool/Getty Images

In a post last week, I asked why America's new strategy is to "pivot to Asia-Pacific" when America itself needs so much attention. Last night the president replied by making it clear that his real pivot is indeed going to be to America.

In a paraphrase of John F. Kennedy's famous "ask not what your country can do for you, but ask rather what you can do for your country," Barack Obama called on business leaders to reconsider the off-shoring of production and jobs and to "ask what you can do to bring the jobs back." What a beautiful response to the attitude recently expressed by an Apple executive who told the New York Times that Apple has no obligation to fix America's problems.

In a post last week, I asked why America’s new strategy is to "pivot to Asia-Pacific" when America itself needs so much attention. Last night the president replied by making it clear that his real pivot is indeed going to be to America.

In a paraphrase of John F. Kennedy’s famous "ask not what your country can do for you, but ask rather what you can do for your country," Barack Obama called on business leaders to reconsider the off-shoring of production and jobs and to "ask what you can do to bring the jobs back." What a beautiful response to the attitude recently expressed by an Apple executive who told the New York Times that Apple has no obligation to fix America’s problems.

No, no. Not true, the president emphasized. "We’re all in this together. There’s nothing America can’t accomplish if we all work together."

Sweet words. I’ve been waiting nearly 30years to hear a president say things like this. Perhaps sweetest of all were his comments on manufacturing. 

In a White House meeting a year and a half ago, the president asked me why Americans can’t make things like high speed trains, batteries, flat panel computer and television displays. I said we could if we imitated the policies and attitudes of trading partners like Japan, South Korea, Singapore, and China. But Larry Summers, who famously argued that America doesn’t need a manufacturing sector, was then the president’s top economic adviser and that year’s State of the Union speech contained nothing on manufacturing or bringing jobs back from abroad.

Now that Larry is gone, it seems the president realizes not only that he was asking the right questions all along but that an "economy built to last" must have a robust manufacturing base. In that earlier White House meeting, I argued that as long as foreign tax holidays and U.S. tax provisions made the tax load lighter for American companies if they off-shored production, they would do so. I urged the president to reverse those incentives. His proposals on corporate taxes last night are a big step in the right direction. Especially important was his statement that production overseas should not be advantaged over U.S. based production by special financial provisions. His proposals to make it easy for foreign students to stay in the United States after finishing their degrees, to massively upgrade U.S. infrastructure, to enforce U.S. and international trade rules, to turn the unemployment system into a re-employment system, and to drive for energy independence, are all very welcome.

To be sure, the speech was not perfect. The president should not hold his breath until U.S.-made cars roll on the streets of Seoul, as he suggested they will as a result of the recently concluded U.S.-South Korea Free Trade Agreement. He failed completely to mention currency manipulation, one of the most important practices negatively impacting U.S. and global trade. And his goal of doubling exports may be met but will not matter in the face of the fact that U.S. imports are more than doubling, so that the trade deficit is growing larger.

But these concerns should not obscure the importance of the fundamental shift in U.S. economic thinking that the speech represents. Heretofore, the policy of Republican and Democratic administrations alike has been unilateral free trade, unconcern with the structure of the U.S. economy and what it produces and provides, disdain of industrial policy that supports specific economic sectors like the auto and green energy industries, and emphasis on services and financial industries as the future of the U.S. economy. This speech represents an about face.

Less clear, but implied, is the possibility that it also represents a major reordering of national priorities. In contrast to most previous state of the union speeches, this speech hardly mentioned foreign affairs, national security, war, or terrorism. Does this mean that Washington has shifted from a focus on the priority of geopolitics to the priority of rebuilding America’s productive base and reclaiming the American dream? Let’s hope so.

Clyde Prestowitz is the founder and president of the Economic Strategy Institute, a former counselor to the secretary of commerce in the Reagan administration, and the author of The World Turned Upside Down: America, China, and the Struggle for Global Leadership. Twitter: @clydeprestowitz

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