The State of our Union is...

There has been a lot of action here in DC the past week. Last week, President Obama hosted Chinese President Hu for a State Dinner. While this State Dinner was less noticeable with respect to not having any party crashers getting into the event, it provided a terrific opportunity for the US to benefit. One of the best ideas that the Administration did during Hu’s visit was to host a meeting with business leaders. For almost his entire term, the Obama Administration has been at odds with the business community. All too often, the President blamed the business community for many of the problems facing the economy and the country. One of the biggest problems many had with the Administration is the complete lack of actual businessmen and women in the senior levels of the government. Who at the White House has actually created a job? Who has had to meet a payroll? You can actually add the Cabinet in those questions. The complete lack of individuals who have faced the issues currently facing today’s business community has really impacted the agenda the Administration has followed. Their questions about why the business community was “sitting” on nearly $2 trillion in cash instead of hiring new employees and purchasing new equipment to strengthen the economy missed the point. The business community has questions about the direction of the economy and the uncertainty surrounding the economy. Recently, the Administration has done more reaching out to the business community. Former Commerce Secretary Bill Daley was named Chief of Staff. The extension of the Bush tax cuts and more outreach meetings with the business community like the one held last week in DC. Following the meeting, more than $45 billion in exports to China was announced. This announcement should provide a boost to the US economy. Economic projections typically estimate that for every $1 billion in exports, there is the creation of 6,000 jobs. Hopefully, this estimate translates into additional job creation over the next few months. Another interesting issues facing the Administration was that with the State Visit, there was not much of a focus on human rights issues in China. During their joint press conference, President Hu mentioned that translation difficulties prevented him from addressing a question about human rights.

This week’s big issue is the President’s State of the Union Address (SOTU). The media and political prognosticators make way too much about this speech. The speech provides the President the opportunity to speak to the American public and push his agenda. We place way too much importance on the speech and what the media believes is the public’s reaction to the speech. All the networks will cover the speech, provide commentary following the speech and even likely will conduct focus groups to see what lines within the speech the “general public” liked and disliked. Typically, the Administration will spend the past few months working on this one speech. It will go through multiple rewrites and every interest group in DC will try to make sure that their pet projects are included in the speech or at the very least are not included in the areas that are no longer relevant or needed. Much will be made about the new programs or initiatives laid out by the President. I think a lot of folks will also be paying attention to what if anything the President proposes to cut in an attempt to reduce the federal budget deficit. The deficit has become one of the biggest issues facing our elected officials. The Republican Study Committee last week presented a plan to reduce the deficit by $2.5 trillion over the next ten years. In order to accomplish this goal, there will certainly be some programs that are very popular with particular segments of the economy see a reduction in their funding. We will also likely hear the President once again mention that job creation is job #1. He stated this in last year’s speech but then decided that getting ObamaCare passed was much more important. Hopefully, the President will focus like a laser on job creation and with the newly improved relationship with the business community, will be able to see some job creation over the next several months. I would imagine that the 9.6% of the American public that is currently unemployed and the larger percentage that are under employed are praying for some miracle program or initiative that will create the environment that stimulates the private sector to add jobs. This issue is the most important issues facing the President in his attempt for re-election. If there is not a sizeable increase in employment, the Obama Administration will be the ones joining the too long lines of those unemployed.