The Pillars of Economic Transformation By James K. Galbraith, University of Texas at Austin

In his 2011 State of the Union, President Obama outlined a sweeping program for economic transformation, resting on innovation, education, infrastructure, deficit reduction, and governmental reform. The New America Foundation asks whether these are the right “pillars” of a national agenda. 
Three of them – innovation, education and infrastructure – are on the mark.  But deficit reduction, as a goal of policy, contradicts these goals. And “government reform” is just an old slogan without substantial content, as the text of the State of the Union address itself reveals.
From the beginning, the Great Crisis has demanded a strategic response.  The President's conceptual failure in 2009 was the notion that a sufficient “stimulus” program, coupled with measures to preserve Wall Street, would suffice to “restore credit flows” and “get the economy moving again.”  This was never true. The stimulus and financial measures could stabilize things, but they could not by themselves restore growth, prosperity, and high employment.  Policies based on this vision would have disappointed, even if the “stimulus” had been markedly bigger and better than it was.
The new vision stresses innovation to cope with our energy and climate challenges.  It stresses education as social policy and for economic competitiveness.  It stresses infrastructure not only for competitiveness, but also for quality of life.  These are simple matters to speak of – matters of vision, direction, orientation stated in very general terms – but they are moves in the right direction.
However, the President chose not to specify what actions Congress should take. Implementation, in other words, was missing. Given the futility of our politics, one can understand why he was reticent. But in the real world, the path from intention to results is paved with actual proposals and actual decisions, which must be based on realistic technologies, not pipe dreams.  You cannot simply wave a wand.
On innovation: did the President really hold out hope for fueling cars with water and sunlight? (Yes, he did.)  Did he promise that 80 percent of our electricity can come from “clean” sources (and what, if anything, does that mean?) Does he really think that biofuels can “break our dependence on oil”?  He said so.  That he said so is a sad commentary on the place of science in the Obama White House.  That he didn't mention the threat these initiatives are supposed to deal with – global warming – is sadder still.
So how about a new set of national labs, spread across the states, to carry out basic research, technical development and evaluation – to get credible and apolitical answers to these questions and to plot the best path? How about a new program of research consortia, research parks and joint ventures, again on proven models and with competent, autonomous review boards?  How about regional planning centers to adapt new technologies to local conditions?  How about a Cabinet department to coordinate these efforts for energy security and against climate change?