Statement on The State of the Union Address

CEPR Co-Director Dean Baker issued the following statement after President Obama's first State of the Union address:

President Obama made several useful proposals on retirement savings,
student loans and other areas that will benefit working families.
However, this agenda is not bold enough to address the severity of the
problems facing the economy and the country's workers.

The unemployment rate is currently in double-digits. The newest
projections from the Congressional Budget Office show the unemployment
rate staying above 8.0 percent until well into 2012 and not falling
back to normal levels until 2014. This is a crisis for tens of millions
of workers who will face unemployment solely as a result of bad
economic policy and Wall Street greed.

We know the mechanisms through which we can expand the economy and
bring the unemployment rate down: a much larger stimulus, more
expansionary monetary policy from the Fed, and a lower dollar to bring
down the trade deficit.

If it is not possible to expand the economy, we can also keep people
employed through the sort of work-sharing programs
that have kept unemployment from rising in Germany and the Netherlands.
Most people would much prefer to experience the downturn in the form of
shorter workweeks and longer vacations than in the form of double-digit
unemployment.

All of these
policies face serious political obstacles, but it is the President's
responsibility to tell the truth to the country and to press for the
policies necessary to right the economy. President Obama has apparently
chosen not to fight this fight. If it is not possible to get the
policies needed to restore full employment back on the political
agenda, then tens of millions of people will suffer needlessly for
years to come.