State of the Union Snuffs Hope of Recovery

As many times as Nancy Pelosi sprung out of her seat to initiate a standing ovation Wednesday night, you’d think President Barack Obama had solved all of the country’s problems with his State of the Union address.

The reality is, though, that an hour-long monologue of finger pointing and populist views in an attempt to reverse his precipitously falling ratings isn’t going to restore Americans’ faith. A lot of people simply aren’t buying the story anymore. After all, in politics, actions speak much louder than words.

Over the past year, Obama has proven just that, reneging on numerous campaign promises. He’s sidestepped critical problems hindering economic growth and supported bills that many Americans don’t agree with.

Feeling pressured by America’s frustration with unemployment, Obama finally acknowledged the dire job situation on Wednesday and promised to prioritize it.

On the one hand, it’s a relief that after a year in office, the president has publicly addressed the 10% unemployment rate. On the other hand, his approach to handling the situation makes one question how this current administration thinks capitalism works.

Any day now, we can expect a jobs bill on Obama’s desk, as he demanded to have one delivered “without delay.” But a bill won’t solve the problem. The government can’t just create jobs out of thin air. That’s not how capitalism works. Obama has one responsibility in regards to job creation: restoring faith in this country.

In some ways, he’s the person prohibiting just that.

Jobs are created through growth. And growth is generated through the confidence to take risks. A weak economy alone causes businesses to think twice before taking risks and slows growth. Throw in an administration that’s shoving unwanted bills down the throats of businesses and its people, and growth become near impossible.

There are simply too many unknowns right now -- unknowns that could have serious ramifications on businesses across America.

The proposed proprietary trading ban, for example, will have significant effects on major US banks, including Goldman Sachs (GS), Morgan Stanley (MS), and Bank of America (BAC). The health-care plan reform poses potential additional employee expenses if passed. These are initiatives that do anything but spark hiring.

While simultaneously proposing a federal budget spending freeze, Obama proposed a jobs bill that could cost between $80 billion and $115 billion. These steps are doing anything but securing trust.

Capitalism works under the notion that winners win and losers fail. It works when business leaders, from entrepreneurs to corporation executives, have faith that the future is bright and that the free markets, not government, determine the fate of their success. That model has broken.

I’m not targeting one political party here -- both sides have greatly contributed to the economic unease.

But it’s time to stop the blame game. Obama is the current president and it’s his responsibility to get America excited for its future again, the key to economic recovery. He needs to listen to what the people want and provide the transparency he promised with all governmental decisions.

It’s doubtful that any of that will happen and it’s probable that the economy and capital markets will remain on edge during the remainder of Obama’s term. And it’s highly unlikely that the economic prosperity of America will be regained in the next three years.