The Most Important Sentence in Obama's Speech

"We now live in a world where technology has made it possible for companies to take their business anywhere."

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President Obama needs to give his jobs speech again. This time he should start in the middle.

To addressing the American people's concerns and to win in 2012, the President needs a narrative--a story that explains how and why we got into this mess, what he has done to help so far, and how his latest proposals might help get the economy out of a ditch.

The good news: Thursday's jobs speech contained the beginnings of a powerful story about the need to restore U.S. competitiveness. As Obama said:

"We now live in a world where technology has made it possible for companies to take their business anywhere. If we want them to start here and stay here and hire here, we have to be able to out-build, and out-educate, and out-innovate every other country on Earth."

The bad news: Obama buried this nascent narrative in the second half of the speech. What's more, most of his proposals last night--including the payroll tax cut--did not directly attack the competitiveness problem he identified.

Obama must do better than that. He should be telling the story of how America got distracted--by 9/11, by political infighting, and by excessive confidence. He should be explaining how we allowed ourselves to emphasize consumption and the present, rather than production and the future. And he should link each of his policy proposals to the idea of rebuilding the production economy.

Still, Obama should be applauded for even his tentative shift toward a competitiveness and production narrative. Now, it's true that the President has used the "out-build, out-educate, and out-innovate" mantra before, most notably in his 2011 State of the Union address.

But I can't find any previous White House speech or remarks where the President acknowledged quite so bluntly the truth of globalization--that "technology has made it possible for companies to take their business anywhere." The closest I've found is a June 2011 statement on foreign direct investment where Obama noted that: "In a global economy, the United States faces increasing competition for the jobs and industries of the future."

But even in that June statement, Obama repeated the theme of American economic supremacy that has been a touchstone of his rhetoric up to now. He talked about the U.S. having "the world's most productive workforce" and "a unique culture of innovation and entrepreneurship." These phrases, or similar ones, have come up over and over in Obama's speeches up to now. The underlying idea: The economy is fundamentally in good shape, if only the Republicans would get out of the way.

In Thursday's speech, Obama finally dropped his insistence on the world-beating productivity of the American worker, an idea that was harder and harder to sustain in the face of the inability of these same workers to find employment. He also did not make any allusions to his usual theme of green jobs, a delicate subject so soon after domestic solar panel manufacturers Evergreen Solar and Solyndra have gone bankrupt in the face of cheaper Chinese products.

There's the sense that Obama and his advisors are finally beginning to get that the U.S. has a competitiveness problem. But more broadly, they need to understand that the U.S. has a production problem. We are not saving, we are not investing, we are just not shouldering our fair share of the global production burden. Instead, we seem to be content to borrow and consume.

The scariest statistic to me: Net national savings over the past year is still in the negative column, to the tune of -$17 billion. Net national savings is total savings, both private and public, minus depreciation. When net national savings is negative, that means as a country we are not even saving enough to cover the depreciation of our assets. We are, as the saying goes, eating our seed corn.

So when the President talks about jobs, as he surely will, he should start at the middle of his speech. Competitiveness, production, investment, jobs: These are the elements to a narrative that Americans can understand, appreciate, and perhaps even vote for.