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Obama’s state of disunion

india Updated: Jan 29, 2010 23:13 IST
Hindustan Times

Just past his first year in the White House and President Barack Obama no longer walks six inches above the ground. If this week’s State of the Union address is an indication, he walks today with a heavy tread. Three inter-related political developments served as the backdrop to his speech. First, his Democratic Party has faced political reverses at the local level. Second, underpinning these defeats and a slump in Mr Obama’s personal ratings was a double-digit unemployment rate. His administration’s fragmented agenda was popular with his Democratic base but was seen as irrelevant to independents, the crucial swing voters. Finally, Mr Obama cannot claim any countervailing accomplishments in handling hostile regimes.

Unsurprisingly, Mr Obama’s address sounded like an advertisement for a headhunting firm. Whether it was clean technology or boosting exports, the US president leg-itimised it in terms of employment generation. Even his party’s touchstone issue, healthcare, is to be shunted aside to make way for job creation. Part of this message was a long-standing criticism of US corporations who transferred employment to countries with lower corporate tax rates. This has caused needless heartburn in India — corporate tax rates in India are higher than those in the US. The Indian software industry has rightly argued that the larger concern should be whether this signals a broader protectionist sentiment in the US. Barriers to foreigners is one way to shore up employment. Mr Obama has not shied away from protectionism but his target has been Chinese imports. Nonetheless, the world must watch to see how an ‘American Jobs First’ policy will unfold in the coming months.

Amid all this, Mr Obama deserves credit for trying to urge his people to look beyond the bread and butter concerns of the present. He exhorted his countrymen to invest more, both in their own education and physical infrastructure. This is the first time any US president has invoked India as an economic challenge in his address. Indians may feel some pride. They would be equally right to feel surprise: India’s infrastructure is among the world’s shoddiest. However, it is a reminder that India should increasingly expect to find itself being cited as an economic concern by other world leaders. Mr Obama used India to prod his people. Future leaders may be less generous.

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