Statement on 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.