Patrick Doherty is deputy director of the New America Foundation/American Strategy Program.
For a moment last night, watching President Barack Obama’s first state of the Union address, I got excited. Here was that moment:
From the day I took office, I’ve been told that addressing our larger challenges is too ambitious; such an effort would be too contentious. I’ve been told that our political system is too gridlocked, and that we should just put things on hold for a while.
For those who make these claims, I have one simple question: How long should we wait? How long should America put its future on hold? (Applause.)
You see, Washington has been telling us to wait for decades, even as the problems have grown worse. Meanwhile, China is not waiting to revamp its economy. Germany is not waiting. India is not waiting. These nations — they’re not standing still. These nations aren’t playing for second place. They’re putting more emphasis on math and science. They’re rebuilding their infrastructure. They’re making serious investments in clean energy because they want those jobs. Well, I do not accept second place for the United States of America. (Applause.)
For the first time since his inauguration, President Obama talked about solving the really big problems facing America. But last night he went further. Last night, the president actually identified a key element of the global reality facing the United States: China, India, and Germany, among many others, have outpaced America in the race to anchor the next global economy; and they are playing for keeps.
That next global economy will not be some mechanistic regime that can be defined by its geographic centers. The next global economy is fundamentally going to be about solving the twin global challenges of our generation: economic inclusion, or, how to bring 4 billion new consumers into the formal sector of the global economy – and ecological sustainability, that is, how to make the developed world and the developing worlds sustainable before we crash the systems that enable our global economy, like climate, freshwater, forests, fisheries, etc.
Engendering that new global economy requires discrete choices by our government; it requires aiming the reconstruction of our domestic economy decisively at inclusion and sustainability. Our economy, not our military or diplomacy, must do the strategic heavy lifting in the coming era. And the State of the Union is the proper place for announcing that kind of new American agenda.
So it should come as no surprise that I felt the wind go our of the president’s sails when his priority program after such a good set up was…drum roll please…financial reform.
The cart, financial reform, was placed squarely in front of the horse. That’s because while financial reform is absolutely necessary, it is also a subordinate policy framework. Here’s what Nobel Prize-winning economist Joe Stiglitz said here at the New America Foundation just last week:
Our country faces a large number of challenges going forward – demographic problem, changing the structure of our economy from a manufacturing to a service sector economy, the problem of dealing with climate change…. If we had a vision of where we wanted to go, we would have been able to use more of the stimulus, more of what we did and the money we were pouring into the banks to restructure our institutions, our economy, to meet these long range challenges. Instead, what we did is wound up with a bigger deficit, a bigger national debt, so that we have less resources available to deal with these looming problems that we will have to deal with in the coming decades.
America first needs to decisively reshape our economy around a vision of sustainable growth that creates space in the global economy for the inexorable entry of 4 billion more producers and consumers. Then, based on that design, we need to build a regulatory framework around the financial sector that gives Wall Street the incentives to make that economy thrive.
President Obama clearly recognizes that the lost decade has put America at a strategic disadvantage that threatens our prosperity, security, and independence. Even his discussion about the need to encourage American innovation demonstrated the absence of a strategic vision: he conflated solar cells (strategic) with cancer cells (not strategic) and he led off the talk about clean energy with nuclear power plants, offshore drilling, and clean coal.
America can have the prosperity we deserve, and the lifestyle we want but we cannot have it if we continue to prop up the economic engine of the mid-20th Century. China knows that, India knows that, and Germany knows that. The sooner America figures it out, the better.
— Patrick Doherty