Politics

State of the Economy speech today

By Johnny Fuery ⋅ January 31, 2007 ⋅  Print This Post ⋅ Post a comment

The speech isn’t really that bad. Often when I read things Bush says, I just grimace, but there’s not a lot in this one that makes the liberal in me bare its teeth.

One thing struck me as mildly hypocritical:

“I know some of our citizens worry about the fact that our dynamic economy is leaving working people behind. We have an obligation to help ensure that every citizen shares in this country’s future. The fact is that income inequality is real; it’s been rising for more than 25 years. The reason is clear: We have an economy that increasingly rewards education, and skills because of that education. One recent study of male earnings showed that someone with a college degree earns about 72 percent more than someone with a high school diploma. The earnings gap is now twice as wide as it was in 1980 — and it continues to grow. And the question is whether we respond to the income inequality we see with policies that help lift people up, or tear others down. The key to rising in this economy is skills — and the government’s job is to make sure we have an education system that delivers them.”

…but it’s framed in “we need to work on education”, which no one on either side of any fence can really argue with. Better education is always a good thing. I have an issue with presenting education as the only reason income inequality exists — other things, from tax policy to lobbying for government contracts, not to mention that little concept of globalization, are just as much of a factor. Probably a great deal more impactful, actually. I might even go so far as to say that my list is causal and that better education just helps improve the ability to adapt.

Interestingly, he goes on to talk about executive compensation a little later, and doesn’t tie the two together at all. Corporate boards and CEO pay are mentioned within the context of corporate governance — another pretty important issue if we want New York to remain the financial center of the world. (It’s been sliding against London ever since Sarbanes Oxley.)

“Government should not decide the compensation for America’s corporate executives, but the salaries and bonuses of CEOs should be based on their success at improving their companies and bringing value to their shareholders. America’s corporate boardrooms must step up to their responsibilities. You need to pay attention to the executive compensation packages that you approve. You need to show the world that American businesses are a model of transparency and good corporate governance.”

This article I read today from Associated Press via Yahoo was misleading. It implied that the CEO pay was mentioned in conjunction with income ineqaulity, which piqued my interest enough to go read the whole damn thing. That would be pretty surprising given how cozy George and big business have always been.

Alas, the AP article failed to capture the spirit. I guess that’s what you get for pushing out short USA Today style reports in a hurry. I should pick up a copy of the Wall Street Journal tomorrow and see what their army of analysts has to say.

btw, I read the full transcript of the speech here.