Given that this past week allowed us the opportunity to witness President Obama's first State of the Union address, I wanted to reflect upon it.  What did it mean, what did he say, and how will Obama govern after the Massachussetts Special Election that saw a Republican take over Senator Ted Kennedy's seat?

Needless to say, commentary after the speech ran the full gamut from lauding it as an excellent speech filled with glowing signs of leadership to practical dismissal as anything other than a partisan pep speech with a few bones thrown in to give the patina of bipartisanship.

I think, however, all of this misses the point.  Does Obama understand what the problems facing America are?  I think the answer is no.  That said, I am not too sure many Republicans know either, which leaves the entire country treading along a precarious and dangerous path. 

David P. Goldman, also known as "Spengler" had a great post at First Things which outlined much of what was wrong with Obama's speech, namely that he is not addressing the fundamental need to transform America's economy.  Priming the pump through either spending (as Democrats typically and blindly assert) will only create new bubbles and ephemeral wealth.  Tax cuts (as Republicans typically and monotonously assert) will largely do the same thing.  Americans, both the government and the people, need to spend less while saving and exporting more.  Note these sections,

"Clinton slyly positioned himself to claim credit for the Great Expansion launched in 1983 by the Reagan tax reforms. Employment roared after 1995—the economy added five million jobs in the next two years. Clinton’s theft of welfare reform from the Republicans was like picking up lost money off the sidewalk. It was easy to push people off welfare into a booming labor market. Cutting the capital gains tax in 1997 helped the tech boom at the decade’s end.

In his attempt to emulate Clinton’s success, President Obama resembles nothing so much a the New Guinea aboriginals who built model airfields complete with straw control towers and airplanes after the Second World War and the departure of the American army. The Americans had summoned cargo from the sky through such magical devices, so thought the aboriginals, and by building what looked like airfields, so might they. But Obama can no more conjure up an economic recovery by doing things that look like what Clinton did, than the natives of New Guinea could draw cargo from the sky with straw totems. Marx’s crack about history repeating itself—the first time as tragedy and the second as farce—comes to mind...

Obama really seems to believe that there is enough economic recovery to take credit for, and that what remains is spin. He really does not seem to grasp the severity of his situation. His “spending freeze” on a tiny fraction of the budget, he said, will take effect “next year, when the economy is better.”

The Japan of the 1990s during its so-called lost decade offers a closer parallel to the American economic predicament of 2010. The United States has lost seven million jobs since the recession began, five million of them on Obama’s watch, and the most recent data point to worse to come. Including so-called “discouraged workers” whom the government does not include in the labor force, the unemployment rate is a wrenching 17 percent, and if “long-term” discouraged workers are counted, the rate rises to 22 percent. To put this in perspective, the unemployment rate stood at 15.9 percent in 1931, 23.6 percent in 1932, 24.9 percent in 1933, and 21.7 percent in 1934, at the trough of the Great Depression. The social safety net, the prevalence of two-earner households, and greater household wealth protect the unemployment against indigence, to be sure. Nonetheless the numbers are daunting, and still deteriorating.

Why hasn’t employment recovered, and why is not likely to? America is a creative-destruction economy. Old jobs lost in recessions for the most part are lost forever; new jobs replace them. Small business startups accounted for two-thirds of all net new job creation during the past thirty-five years. During the 1990s it was new industries (cell phones, cable, overnight delivery, as well as retail, financial and clerical). During the 2000s the housing boom dominated job creation, directly or indirectly. Small business remains prostrated—half of all small business owners report cash flow problems—and there are few opportunities to expand...

It certainly is true, as conservative commentators insist, that Obama steered too hard and too fast to the left for the majority of American voters. But underlying all the discontent is the simple and obvious fact that a very large number of Americans are watching their lives go to ruin. They are losing their homes, their savings, their jobs, and their prospects for dignified retirement. The trouble is not the short-term pain, but an adverse and irreparable change in the lives tens of millions.

What will Obama do when it dawns on him that the economy will not be better next year—perhaps a couple percentage points larger in terms of GDP, but worse in terms of employment and household balance sheets? The economy requires major surgery. As Brenner and I argued in the cited article, Americans can increase savings while maintaining full employment only by exporting and investing, and that requires a fundamental shift in the tax burden away from investment income to consumption—a tax reform more sweeping than Reagan’s."

On the foreign policy front, Obama was extraordinarily thin, especially so given the tipping point we seem ready to face with the Iranian nuclear question looming over the non-proliferation regime like the sword of damolces.

Over at the Atlantic Community I offered a variety of thoughts on the failure of Obama to be nearly as bold as so many of his defenders say he is, indeed, I find him to be little more than a particularly gifted politician, but not a true "statesman."

"Obama seems to see the future of economic growth is in Asia. This should not be a surprise, most analysts are saying the same thing and have been for awhile even before the current extreme hype of China's growth.

Obviously, this will probably mean a decline of importance in trans-Atlantic relations in a relative sense. Nothing is going to transform overnight and it is certainly true that American values more closely (though by no means exactly) correspond with Europe than China. This will always assure a grounded relationship. However, with population growth and market explosions in east Asia, its hard to see how Europe, once the primary focus of America, can retain primacy.

As for his diplomatic agenda, he said nothing of note. Its the same thing we have heard and not all that consequential. He barely touched on probably the greatest single security issue- Iran and its program and what he did say seemed cut out and pasted from any number of other speeched.

His focus on climate change was interesting, though unsurprising as it is a key plank for his domestic political constituency. Additionally, while he did throw out some surprising initiatives on nuclear power and the possibility of some off shore drilling, he still seems not to realize that anything that costs as much as the House passed Cap and Trade bill is political suicide in an economically stagnant America.

He could have been far bolder and more focused on unleashing the entrpreneurial spirit for new green technology by holding out more carrots instead of referring to what can only really be considered an implicit stick for most industry in America. Yes, I know he made some gestures that direction, but it is clear the focus is on punishing industry not incentivizing entrepreneurs to develop truly marketable alternatives. Had he done that, his clarion call for America (and perhaps Europe as well) to lead in green technology would have seemed more inspiring and certainly more bipartisan in domestic US politics.

His call for bringing about the end of nuclear weapons was another flight of pie in the sky rhetoric that sounds sweet but is not based in reality. Though I think the desire to implement a way to secure "loose" nuclear materials is wise (but what President doesn't urge for that?).

The thing that struck me the most about the speech was his sly way of constantly demeaning his predecessor and essentially attempting to lay all blame on his problems on the doorstep of Bush. While I have commented before on Bush's flaws, I find it distasteful that he continues to require Bush as a foil in order to justify his own lack of accomplishment.

The problems America faces across the entire board run much deeper than the 8 years of George W. Bush. They go even further than Clinton. They are severe and systemic. The real boldness of "Hope and Change" that Obama so readily embraced and embodied in the 08 Campaign was that he can change things by fundamentally changing politics and by doing what is right in the largest sense. The truth is, Obama has allowed much of his agenda to be drafted by Democrats in Congress who had waited years to push their specific agenda items.

Obama has not transcended politics. He has embraced predominately standard order politics (in his case of the more left wing vintage) with a shiny veneer bolstered by gifted rhetorical capabilities.

He will not change the world. He is not the leader people have been waiting for. He is merely a particulary gifted politician who combines intelligence with stature.

He may accomplish a few things of note here and there, but he is not transformational. He is actually quite ordinary underneath the star power. "

What does the audience think of these reflections?