VOL. 126 | NO. 18 | Thursday, January 27, 2011
State of the Business
By Andy Meek
For several Memphis business leaders, the tone and message of Tuesday night’s State of the Union speech reflected a president extending an olive branch to corporate America and hitting the reset button on a relationship that’s been noticeably strained for two years.
President Barack Obama is applauded on Capitol Hill in Washington Tuesday prior to delivering his State of the Union address. (AP Photo/Evan Vucci)
Stephen Rhea, principal at Summit Asset Management, thought it was no ordinary State of the Union address and that President Barack Obama described his vision “in terms my neighbors and I might use.”
David Waddell, president and CEO of Waddell and Associates, thought the speech confirmed Obama’s move to the center, a long-anticipated philosophical shift that coincides with Republicans retaking the House of Representatives in the November midterms.
Jack Dewald, the owner of Memphis-based Agency Services Inc., wasn’t necessarily optimistic about the motivations behind the speech, saying the president is shifting because he has to, “not because he wants to.” Still, he agreed a shift was present, with the caveat “actions will speak more clearly than any speech he might give.”
On substance, he proposed a freeze in discretionary entitlement spending and billions in defense cuts. He called on Americans to unleash a wave of innovation to “win the future,” with a blueprint that included everything from encouraging people to become teachers and for more investment in areas like clean energy and high-speed rail.
Reuters reported a bump in U.S. stock index futures Wednesday in the wake of the speech, following other Obama comments like the need to lower corporate tax rates. The Dow Jones Industrial Average also topped the 12,000 mark Wednesday for the first time in almost three years.
“He was honest that cutting domestic spending alone won’t be enough,” Rhea said. “He spoke of focusing spending on recovering our competitiveness in the world while recognizing it is the private sector that must supply the innovation, initiative and create jobs.”
Lori Turner, managing partner of RedRover Sales & Marketing, also detected a shift toward a more pro-business message.
“This aligns with other recent pro-business strategies from the Obama team such as the appointment of GE CEO Jeffrey Immelt to a presidential advisory board on how to grow jobs, a call for the review and streamlining of business regulations, and a focus on small business growth,” she said. “Regardless of the underlying cause, from a PR perspective, this classic repositioning strategy is a savvy one and should serve the president well.”
Waddell thought the speech showed Obama replacing idealism with pragmatism and reflected a desire to “get America back in the game.”
“Some of the nods were subtle, as he acknowledged that manufacturing job losses stemmed from automation advances rather than off-shoring,” Waddell said. “He also seemed to borrow language from Republicans around trying to equalize opportunities rather than outcomes.
“My favorite moment in the speech was when he acknowledged that the discretionary slice of the budget generates a lot of discussion and promises but only accounts for
about 12 percent. He seems willing to investigate entitlement reforms thanks to the Simpson-Bowles results. He talked about reorganizing government to remove bureaucratic redundancies – Here, Here!”
For the moment, Waddell added, there’s now a window open for bipartisan work to get done. Duncan Williams, president of Duncan-Williams Inc., sees it too.
“As for what I would love to see out of Washington, it’s for both Democrats and Republicans to quit worrying about the next election and actually do what is best for the country,” Williams said.