Obama and the State of the Union

Last Tuesday, amid the echoes of Benedict XVI’s resignation, the world witnessed the annual ‘State of the Union’ address by the President, in Washington. It is the fifth time that Barack Obama has delivered this speech as president, and the first in his second term.

As he has done since he began his second term almost a month ago, Obama revealed his main objective which is to achieve a sustained economic recovery which — unlike George Bush’s policies — cuts back on military escapades, promotes the reduction of the United States’ horrific deficit, provides answers to questions of immigration and once again stimulates job creation. This last issue, job creation, has been the great unanswered question for Obama’s government. Though he achieved what many thought impossible in rescuing both General Motors and Chrysler from their respective bankruptcies, the reality is that this has not been enough.

This preoccupation with creating U.S. jobs was what came through in Obama’s last concrete, explicit reference to our country, where, with a hint of pride, he spoke of how he had got Ford to return many jobs which had been outsourced to Mexico to the United States.

His mentions of Mexico in matters of migration were hardly more cheering. He spoke of the need to press on with immigration reform in his country, though not in terms of an amnesty like that of 1986’s Simpson-Rodino law. This would leave beneficiaries waiting years for answers, with all that that implies in terms of possible deportation, or, worse, a groundless accusation for some crime, given the documented mistakes and shortcomings of the U.S. judicial system.

What can Mexico do in this sort of scenario, then? In truth, very little. For one, it can ensure that the example of Ford Motor Company is a one-off, so that other car manufacturers or businesses with interests on both sides of the border do not take jobs away from Mexico to the United States. Secondly, we can follow the U.S. example and plump for the creation of jobs whose viability does not depend on the ebb-and-flow of the global economy.

There is another detail in the speech’s text that bears consideration when evaluating the state of Obama’s Union, which relates to the aggressive way in which the U.S. has returned to its dominant role as a producer of energy. And it is not only the production of petrol, which has seen a clear upturn. It is also that of natural gas, as well as biofuels (which also has negative consequences for Mexico) and various forms of solar energy production.

This detail should serve to shake Pemex from its current inertia and recognize that the risks that it currently faces are not just those of potential privatization. Pemex may not want to admit this, because it is not politically correct in some spheres, but the excesses of the oil worker trade union, such as a system that allows jobs to be handed down generations, are also very serious, as is the fact that public spending depends on the fluctuations of global petrol prices.

Obama has sketched out an economic model dedicated to strengthening his domestic market aiming to generate jobs and re-establish the country’s infrastructure of bridges, roads, airports and ports. What is to be done then when it is clear that the world’s biggest economy has given up on the idea of buying low-cost products produced in other parts of the world? What is to be done when the U.S., Japan and Europe are more worried about safeguarding their own citizens’ well-being than engaging in projects of economic globalization?

The tide has turned and not recognizing the risks posed by inflexibility will place us in a position of growing disadvantage, even against other Latin American nations. What is more, although it is almost certain that there will be some solution to the current problem of undocumented immigration, it is also true that the U.S. will not be able to absorb the great swathes of immigrants that it has been able to absorb, for example, in the last decade. Mexico has to create quality jobs; we cannot expect to be dragged into the inertia of the U.S. economy and think that Europe or Latin America will someday take their place as drivers of our growth—that would be absurd. What is needed is a far-reaching overhaul of our very model of development with Einstein’s words at the front of our thinking: “Insanity: doing the same thing over and over again and expecting different results”.