...politically I don’t think fairness is enough. Average Americans care about fairness, but not really all that much. People who have incomes comfortably above the median but who still aren’t rich are going to suspect that fairness means something is coming out of their hide. What they do care about, though, is growth. Everybody from Bill Gates to his janitor wants the economy to grow. So the case for these programs that Obama needs to make consistently going forward is not the case for their fairness, but the case that these policies, and not tax cuts for the wealthy or more draconian domestic budget cuts or less regulation, will promote growth.Yup, if only Obama would say something like "in America, our prosperity has always risen from the bottom-up" and make the case that prosperity is not sustainable when inequality is rising. As he did in Raleigh, NH in June 2008:
We've done this because in America, our prosperity has always risen from the bottom-up. From the earliest days of our founding, it has been the hard work and ingenuity of our people that's served as the wellspring of our economic strength. That's why we built a system of free public high schools when we transitioned from a nation of farms to a nation of factories. That's why we sent my grandfather's generation to college, and declared a minimum wage for our workers, and promised to live in dignity after they retire through the creation of Social Security. That's why we've invested in the science and research that have led to new discoveries and entire new industries. And that's what this country will do again when I am President of the United States.And in Georgetown in April 2009:
It is simply not sustainable to have a 21st century financial system that is governed by 20th century rules and regulations that allowed the recklessness of a few to threaten the entire economy. It is not sustainable to have an economy where in one year, 40% of our corporate profits came from a financial sector that was based too much on inflated home prices, maxed out credit cards, overleveraged banks and overvalued assets; or an economy where the incomes of the top 1% have skyrocketed while the typical working household has seen their income decline by nearly $2,000.And in Osawatamie, KS in December 2011:
This kind of inequality – a level we haven’t seen since the Great Depression – hurts us all. When middle-class families can no longer afford to buy the goods and services that businesses are selling, it drags down the entire economy, from top to bottom. America was built on the idea of broad-based prosperity – that’s why a CEO like Henry Ford made it his mission to pay his workers enough so that they could buy the cars they made. It’s also why a recent study showed that countries with less inequality tend to have stronger and steadier economic growth over the long run.
And on the campaign trail, ad nauseum, in 2012 (e.g., in Tampa in June):
I believe we should do everything we can to help our entrepreneurs succeed. (Applause.) I want our companies to be as profitable as they can be. But that alone is not enough. Because the central challenge we face right now -- the challenge that we’ve faced for over a decade -- is that bigger profits haven’t led to better jobs. Bigger profits haven’t led to higher incomes.And two weeks ago, at the Center for American Progress (in a detailed ase supported by more studies than I've ever heard a president cite):
And the reason is, in this country, in America, prosperity has never come from the top down -- it comes from a strong and growing middle class, and all those people who are striving and working to get into the middle class. (Applause.) It comes from successful, thriving small businesses that grow into medium-sized businesses, and then large businesses.
We don’t need more top-down economics. What we need is some middle class-out economics, some bottom-up economics. (Applause.) We need a plan for better education and for better training, for energy independence, for innovation, for infrastructure that can rebuild America. (Applause.) What we need is a tax code that encourages companies to create jobs and manufacturing here in the United States -- (applause) -- and that asks the wealthiest Americans to help pay down our deficit, to do their fair share. (Applause.)
So let me repeat: The combined trends of increased inequality and decreasing mobility pose a fundamental threat to the American dream, our way of life and what we stand for around the globe. And it is not simply a moral claim that I’m making here. There are practical consequences to rising inequality and reduced mobility.The key words there are "let me repeat myself." I suspect we'll hear him only in retrospect.
For one thing, these trends are bad for our economy.
One study finds that growth is more fragile and recessions are more frequent in countries with greater inequality.
And that makes sense. You know, when families have less to spend that means businesses have fewer customers and households rack up greater mortgage and credit card debt. Meanwhile, concentrated wealth at the top is less likely to result in the kind of broadly-based consumer spending that drives our economy and, together with lax regulation, may contribute to risky, speculative bubbles.
And rising inequality and declining mobility are also bad for our families and social cohesion, not just because we tend to trust our institutions less but studies show we actually tend to trust each other less when there’s greater inequality. And greater inequality is associated with less mobility between generations. That means it’s not just temporary. The effects last. It creates a vicious cycle.
I can imagine someone responding, "it's not what the man says, it's what he does." If only he hadn't let Republicans slip the country into the austerity noose in August 2011 -- and failed to break the rope in January 2012, when the expiration of the Bush tax cuts put a $4 trillion tax hike at his back. If only he hadn't let Wall Street off the mat, or failed to provide any substantial foreclosure relief. If only he'd fought for a public option in the Affordable Care Act, or more generous subsidies.
There's a lot of truth to some of those criticisms. I myself have argued that Obama basically lost the budget wars with the GOP -- or rather, enabled them to do a lot more damage than he need have.
And yet, the consistency in speech messaging bespeaks a consistency in long-term goals, and an ability to maintain focus on them. This trip down memory lane brought me back to an agenda laid out in Obama's most neglected great speech, his "new foundation" speech on the economy delivered in April 2009, when the country was still in economic freefall. Here's, literally, his platform:
It's a foundation built upon five pillars that will grow our economy and make this new century another American century: new rules for Wall Street that will reward drive and innovation; new investments in education that will make our workforce more skilled and competitive; new investments in renewable energy and technology that will create new jobs and industries; new investments in health care that will cut costs for families and businesses; and new savings in our federal budget that will bring down the debt for future generations. That is the new foundation we must build. That must be our future – and my Administration's policies are designed to achieve that future.That, dear reader, is an agenda -- and one in striking degree fulfilled, or en route to being fulfilled if Republicans don't manage to sabotage it in its entirety. I believe education reform in the U.S. is more or less on a wrong course -- I don't like high-stakes testing or other aspects of corporate reform, though I do hope Obama is making headway on making college more accessible and accountable. And many critics have argued powerfully that the Dodd-Frank banking reform didn't go deep enough, didn't reduce the banking giants' size or power -- though Wall Street's howling and scrambling to restructure as the Volcker Rule was finalized this week tells a different side of that story. But, per Michael Grunwald's unanswerable book-length demonstration in The New New Deal, the 2009 stimulus set an energy revolution and several alternative energy industries in motion. The Affordable Care Act, despite its rocky rollout, is pretty clearly bending the healthcare cost curve and most likely will, over time, shrink the ranks of the uninsured by at least two-thirds. The apparent reduction in healthcare inflation is a more significant and more constructive act of deficit reduction than the outsized discretionary spending cuts forced on Obama by the GOP -- but long- and short-term, the deficit has receded as the existential challenge so many built it up to be.
Obama spoke sloppily and therefore broke a promise when he asserted repeatedly, with respect to health insurance, "If you like your plan, you can keep it." (I call that a broken promise powered by self-deception, not a lie: you don't lie when you know that the event will expose you.) But look at the larger picture. Repeatedly, from 2007 to the present, Obama told us what he wanted to do, what he would strive to do, what he would do. And he's done an awful lot of it.