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Faculty react to State of the Union

On topics of energy, regulation and policy, politics and bank bailouts our faculty members chime in after tuning in to President Obama’s speech.

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This story originally appeared on Texas Enterprise.

Among the viewers who tuned in to the State of the Union address on Jan. 24, at least a few were University of Texas at Austin faculty.

President Barack Obama struck a sharply upbeat tone with his speech. “As long as we are joined in common purpose, as long as we maintain our common resolve, our journey moves forward, and our future is hopeful and the state of our Union will always be strong,” the president said in his closing remarks.

Texas Enterprise, a McCombs School of Business website, contacted faculty members for their impressions of remarks relevant to their areas of expertise. Here are their thoughts:


“They’re not going to come up with a bold energy policy before the election. It’s more of a campaign speech than anything else. I think [President Obama] is in favor of pushing ahead with renewable energy. He showed that he understands that renewable energy by itself isn’t going to be sufficient, so we need to develop hydrocarbons. The speech is just a signal that he’s interested in renewable energy but that he realizes we need to do other things as well.”

— Sheridan Titman, finance professor, executive director of the Energy Management and Innovation Center (EMIC), and president of the American Finance Association


“As with all [State of the Union addresses], the devil is in the details. This is an opportunity for the President to lay out his vision in broad strokes. It remains to be seen what the specifics of his proposals will entail, especially on complicated issues such as repatriating manufacturing jobs. It is easy to call upon businesses to do that and much harder to address the underlying challenges of the American workforce. Calling upon Congress to ‘send a bill for signing’ that solves all these problems is easy and effective rhetoric. It’s much harder to craft and implement good policy.

“I was interested in his remarks on regulation, mostly because I served [2001-2003] in the Office of Information and Regulatory Affairs (the office of the ‘regulatory czar,’ who was at that time John Graham). The big initiative in the Bush Administration was ‘smarter regulation,’ exactly the kind of reforms that Obama touted last night. In fact, he has continued those policies in an effort to court the business community.

“With regard to banks’ ‘living wills,’ a Financial Crimes’ Unit and a special unit of prosecutors, the cynic in me views this largely as a response to criticism that this Administration has been soft on the worst examples of those viewed as causing the financial crisis. Again, it will be very interesting to see the details of these proposals and how they affect current regulations and oversight agencies, like the SEC.”

— Veronica Stidvent, lecturer in business, government and society and former assistant secretary for policy at the U.S. Department of Labor during the George W. Bush administration


“The President sent a series of clear signals about the campaign he intends to run against the Republican candidate (and by extension, congressional Republicans). He has moved away from an overriding effort to push deficit reduction toward a campaign with more populist themes. Many of the specific proposals put congressional Republicans on the defensive. If the House leadership, in particular, continues to pursue a strategy of stonewalling the president, they are now in the position of being blamed for resisting initiatives — such as those related to tuition inters rates, congressional ethics, and domestic infrastructure spending — that are relatively popular and seen as efforts to help create jobs and help the middle class.”

— James Henson, lecturer in the College of Liberal Arts, director of the Texas Politics Project and co-director of the University of Texas/Texas Tribune Poll.

Bank Bailouts

“Obama is simply recognizing the reality that it is hurtful to all other banks to liquidate a large bank and the FDIC does not have the insurance reserves to liquidate large banks. Nor will the body politic stand for another TARP recapitalization. Hence, he is left with ignoring the problem — better known as forbearance.”

— Lewis Spellman, professor, Department of Finance