President Obama is set to unveil the administration's agenda for the third year of his term and what most business leaders are looking for is for a shift in rhetoric. T
he first two years of the administration were focused on highlighting business excesses and painting the ills of the economy as directly the result of greed and corruption.
Business has been an easy target.
The tone certainly does seem to be changing with the appointment of Jeffrey Immelt, CEO of General Electric , to head up an advisory committee on job creation and spurring economic growth. It appears as if a Clintonian strategy of centrist policies is beginning to emerge.
The future of economic prosperity lies in a coordinated strategy between government and business to move the United States economy forward out of it's current malaise. This includes having a shared view on the changing world economic landscape. A measure of economic growth will be due to global economic expansion and the private and public sector needs to recognize that foreign economic expansion is not a threat but an opportunity.
Corporations like IBM , McDonald's , and other global franchises recognize that profits for these institutions rely on capitalizing on emerging market affluence and not relying on US economic expansion. In the best of scenarios, the US economy will grow at a 3% to 4% rate per year. In contrast, emerging market economies are slated to surge at a rate in excess of 8%. Capturing this market opportunity by US corporations will directly benefit the United States' economy. We need to embrace China as a trading partner, not a threat. We need them just as they need us.
We hope the President talks about attacking the unemployment rate as primary 3rd year mission. We continue to believe that targeted efforts towards job creation are imperative if the US economy is to grow fast enough to help reduce deficits. This combined with a real effort to reduce overall debt loads (including addressing rising entitlement spending) is likely the best path towards a robust economy not saddled by the legacy of excess spending.
Deficit cutting must not be symbolic and to be effective must be painful; there is simply no alternative to making hard choices.No one wants cuts to benefits but everyone wants a balanced budget. Nirvana is a lofty goal but not reality when it comes to fiscal matters. The sooner we recognize that a shared burden is the best way out of our current fiscal quagmire, the sooner we can move forward as a global economic power.
The United States is faced with difficult choices that must be made in the next 24 months. The debt avalanche cannot continue if America wishes to be relevant in the global marketplace. It's our hope that President Obama will outline a path towards greater job growth and fiscal responsibility. And let's also remember that words in a speech are not enough; tangible action must follow.
The time for posturing has long passed and all parties including Republicans, Democrats, and Independents must come together NOW. The clock is ticking and the world watches to see if America has the discipline and determination to write a new great chapter for the United States economy.
Michael A. Yoshikami, Ph.D., CFP®, is Founder, President, and Chief Investment Strategist of YCMNET Advisors, Inc., a registered investment advisory firm (www.ycmnet.com). He oversees all investment and research activities of YCMNET. He is a respected lecturer speaking frequently on market issues, tactical asset allocation, and investment strategy. Michael and YCMNET were ranked as one of the top 100 investment advisors in the United States for 2009 and 2010 by Barrons. He appears regularly on CNBC and CNBC Asia and can be reached directly at email@example.com.