Here Are Four Ideas Obama Should Have Pushed In The State Of The Union

If you listen regularly to President Barack Obama’s speeches, you heard very little new policy in tonight’s State of the Union address.

Mostly, the president reiterated his existing policy platform. And that makes some sense: The President has a number of priorities (like immigration reform, a minimum-wage hike, and a small corporate-tax increase) on which Republicans in Congress won’t cooperate. Continuing to push those ideas necessarily involves repeating himself.

There was a little news: Obama announced an executive order that will raise the minimum wage to $US10.10 for workers on federal contracts, likely affecting a few hundred-thousand people. He also announced a retirement savings account program called MyRA that a Treasury Department spokesperson tells me we’ll learn more about tomorrow.

But the president could have broken more new ground. Here are a few ideas about how. You’ll notice they overlap a lot with my new supply-side economic agenda; more broadly, they’re ideas that wouldn’t get bogged down in a fight over whether government should be larger or smaller.

Marijuana. Obama didn’t mention it tonight. But last week, he told The New Yorker’s David Remnick he doesn’t think marijuana is any more dangerous than alcohol. If that’s his view, what possible moral justification could there be for continuing to use federal resources to arrest and imprison people for engaging in the marijuana trade?

Obama could have used the State of the Union to announce that he was directing the Drug Enforcement Administration not to interfere with the legal marijuana trade in Colorado and Washington, and to call on Congress to repeal federal laws against marijuana.

Infrastructure. Obama talked about the need to invest in infrastructure. But as usual, he framed it almost entirely as a demand-side measure — that is, a way to create construction jobs. The key value proposition from infrastructure should be on the supply side: Better infrastructure would make it easier for people to hire, produce, learn and grow.

Even Obama’s one nod to the supply-side benefits of infrastructure was off: “In today’s global economy, first-class jobs gravitate to first-class infrastructure.” That depends on what “first-class” means. The desire to be first-class had led to such boondoggles as a very pretty $3.7 billion subway station in lower Manhattan that doesn’t add any new transportation capacity and won’t make it any easier to work or start a business in the Financial District.

The best infrastructure investments, from a supply-side perspective, should be inexpensive and unsexy tweaks that allow us to get more out of infrastructure that already exists. These are things like realigning service at New York Penn Station so more trains can use the existing platforms; installing smart electrical meters so homeowners and businesses are encouraged to use electricity at off-peak hours; repricing airport landing slots and upgrading Air Traffic Control technology so fewer planes are delayed; tolling existing roads at rush hour to reduce losses to traffic congestion; and giving buses priority in traffic so more people can move through existing lanes.

An infrastructure agenda that is built around saving money and optimising existing assets should be easier to sell to Republicans than one that focuses on spending lots of new money. It would also do more, per dollar spent, to create jobs and grow the economy.

Intellectual property reform. The President said one line on this, calling on Congress to “pass a patent reform bill that allows our businesses to stay focused on innovation, not costly and needless litigation.” Such a bill has already passed the House of Representatives. But as Tim Lee describes, this approach to patent policy is an improvement over the status quo, but doesn’t go nearly far enough to fix the problems in intellectual property policy.

First, the law would shut down many frivolous “patent troll” lawsuits, but it wouldn’t address the problem of legitimate firms being allowed to patent inventions that shouldn’t be patentable in the first place. Apple would still be able to patent its “slide-to-unlock” feature on the iPhone and sue Samsung for infringing it, producing no return to cell phone users.

And a patent-only approach doesn’t do anything to address copyright protections, which Congress has repeatedly made stronger even as global markets increase the return to producing interesting media products. Obama could have laid down a marker: That the purpose of intellectual property law is not to reward and enrich inventors but to elevate standards of living. That principle would be a basis for a much broader rollback of IP protections.

Local regulation. The president can’t make state and local governments allow more dense development in urban centres or stop harassing food truck operators. But as we’ve seen with Race to the Top, the federal government can do a lot to steer lower-level governments toward good policy decisions. Republicans are itching to fight government regulation. This would be an opportunity to get them on board and create jobs simply by getting government out of the way.

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