Obama Kicked Off His 2012 Reelection Campaign during the SOTU by Brian Anderson, Contributing Editor

President Obama’s State of the Union Address (SOTU) wasn’t about the state of the Union. It was Obama’s first campaign speech of the 2012 election cycle. With the exception of Obama’s acknowledgement of Rep. Gabrielle Giffords’ (D - AZ) empty seat and other victims of the Tucson tragedy, the speech was filled with nothing more than the meaningless, ambiguous rhetoric of a political campaign.

The difference between Obama’s campaign rhetoric today compared to 2008 is that his administration is responsible for the direction of America now. Obama cannot attack political leadership and policies like he did in 2008. Therefore, in addition to offering vague campaign rhetoric until November 2012, Obama will contort and inflate what his administration and Democratic leadership in Congress did from 2009 to 2011. Obama will present himself and his policies as centrist until the 2012 election.

As with any national campaign, candidates for president need to appear that they are in the relative middle to appeal to unaffiliated voters. The SOTU was artfully crafted to give the perception that Obama is now a centrist. And Democrats will argue from now until the 2012 election that Obama has always been a centrist, as Nancy Pelosi stated on FoxNews’ On the Record after the SOTU. Pelosi’s assertion was laughable. In reality, Obama remains as far left ideologically as he presided for the past two years of his term.

The only event that brought Obama’s rhetoric remotely close to the middle was the crushing defeat suffered by Democrats and Obama’s ideologically driven policies in the 2010 election. What drove Obama’s rhetoric to the center wasn’t some grand epiphany. Rather, reality forced his rhetoric to the middle. The Republican controlled House of Representatives forced his rhetoric to the middle. For any major legislation to pass the House and Senate and be signed by Obama, it will need to be bipartisan. 

Adding to the campaign tone of the SOTU was Obama’s vague and contradictory policy statements. As I watched the speech I asked “How?” or “What does that mean?” after most of his policy statements.

On the one hand, Obama stated that we need to reduce the deficit. On the other hand, Obama said, “We’ll invest in biomedical research, information technology, and especially clean energy technology.” To pay for this, Obama said, “I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies…So instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.” How will cutting one area of spending while adding another area of spending reduce overall spending?

What Obama essentially called for was a budget transfer of federal subsidies from oil to alternative energy. He did not call for an overall reduction in spending. Also, notice in the above statement how Obama called federal spending a subsidy for something he didn’t like and an investment for something he did like. Whether or not one likes the program on which the federal government is spending taxpayer dollars, it’s still spending.

Beyond the subsidy for alternative energy, Obama called for more federal subsidies in education, Internet access and high-speed trains. He also called to double our exports by 2014. “Already,” he said, “our exports are up.” Our exports are up, though, because our dollar is weak. Obama will need to choose between a strong dollar or doubling our exports.

I agreed with some policy statements but I was left wondering what Obama would do. I agree that we need to review regulations and lower the corporate tax rate. Obama didn’t address which regulations would be reviewed or at what rate he wanted to set corporate taxes. Obama’s statements on deregulation and lowering corporate taxes made him sound like he moved to the center, but we will need to wait and see what he supports if Republicans and Democrats get the chance to debate them.

In sum, Obama’s SOTU left me a little confused and wondering what he would support to achieve his vague policy positions. I also wondered if Obama truly supported some of the centrist policy statements he made. My guess is no.

With the 2012 election cycle starting up, I was not surprised that his SOTU sounded like a campaign speech. Obama will continue to give the perception that he is a centrist, but we all know from the first two years of his presidency that he is far from a moderate candidate. The reality of the political climate and balance of power in Congress will force him to the middle, but he is fundamentally to the far left of the American ideological mainstream. Don’t let him fool you with his ambiguous campaign rhetoric now the way he fooled so many in 2008. 

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Sanjai BhagatSanjai Bhagat is Professor of Finance at the University of Colorado at Boulder. He has worked previously at the U.S. Securities and Exchange Commission, Princeton University, and University of Chicago. He has an MBA from the University of Rochester and a Ph.D. from the University of Washington.

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