Obama's Underwhelming Speech

President Obama’s team hyped his economic speech yesterday beforehand. My friend E.J. Dionne perceives Obama trying to make his mark on history with the speech. I found myself supremely underwhelmed by Obama’s effort.

It is true that the most basic domestic problem facing the nation is growing income inequality. A series of measures, most of them beginning in the Reagan years, have made income inequality the norm. Reagan’s attack on striking air traffic controllers made it easier for private companies to reject unions. Reagan’s trickle down economic theories succeeded in pumping up the overall economy but that goal was achieved by rewarding the very wealthy without requiring much trickle down. If the minimum wage had been tethered to productivity gains, it would now stand at roughly $22. per hour, but it wasn’t and Obama is having trouble making the case for raising it to $9. an hour. Bill Clinton’s biggest mistake in office – besides Monica – was agreeing to a massive cut in capital gains tax rates, further encouraging income inequality. President Obama, then, is correct to identify the problem and to say that it must be addressed.

Unfortunately, there was precious little in the way of policy to back up his rhetorical goals. And, with a malcontented Congress, there was nothing the President proposed that seems likely to get enacted anytime soon.

Perhaps most depressingly, the President finally mentioned the word “poverty” but failed to make the moral case for why we, as a wealthy nation, should care for those who fall behind no matter what happens to the macroeconomic numbers. He talked about the need for better education, and that is undoubtedly one of the keys to breaking the chains of poverty, but how, precisely, he hoped to improve our nation’s schools went unmentioned. Hint: Mr. Obama, you could start by saying that you are willing to break with the teachers’ unions and support vouchers for private and parochial schools in every city and town that has been unable to provide a solid education for its children with public schools. Hint #2: Use your faith-based office to ignite new anti-poverty programs. Republicans like the faith-based office too.  

The President strangely did not put tax reform anywhere on his agenda. If you want to play the populist card, this is a no-brainer. Inequality is not merely the result of overall tax brackets, but of special tax breaks, placed into the tax code by an army of lobbyists and harvested year-in and year-out by an army of accountants and lawyers, all of whom could find other, productive work if the tax code were radically simplified. This would also be smart politics. Speaker Boehner yesterday called Obama’s speech “an Easter egg with no candy in it.” Mr. Boehner is famous for mangling metaphors – the Easter basket holds the candy, not the egg. But, the tax code is filled with candy. President Obama could aim to eliminate 90% of the special tax breaks and still use the remaining ten percent to cut deals with House Republicans to get other important goals passed.

The main problem with Dionne’s comparison of Obama with Franklin Roosevelt and Ronald Reagan is that Obama is trying to change the debate in his second term, not his first. This is not entirely his fault: When he came into office, he faced a monumental economic mess. But, in 2009, the Stimulus Bill, though necessary, became a grab bag, not an overarching strategy to combat income inequality. How different the political – and economic – landscape would look today if all of the Stimulus money had gone to infrastructure projects, things that people could actually see and appreciate and which they would want to continue funding now in his second term. He had a good line yesterday about some bridges being old enough to qualify for Medicare, but where was the concrete offer to Republicans to dedicate new infrastructure spending for a set period of time, after which tax rates would lower? Where was the proposal for matching grants to states and localities which are primarily charged with fixing our ailing infrastructure?

It turns out that President Obama is better at campaigning for himself than for his policies. Why has he still not put a face on the Affordable Care Act? Why does he not match his rhetoric to his policies in ways that might possibly produce congressional action? It is a mystery to me that such an obviously gifted politician, surrounded by such obviously smart people, is still pretty lame when it comes to shaping public opinion.

The Catholic Left needs to continue standing up to right-wing craziness of the kind displayed, yet again, by Cong. Steve King yesterday who suggested that most immigrants were drug mules. (Whatever Obama’s mistakes, and they have been many, he is not hateful.) But, the Catholic Left also has to be less concerned with defending Obama and more concerned with pushing him towards the kind of policies that reflect the solidarity that is at the heart of both Catholic Social Teaching and the historic compact between American liberalism and the American people. We did not see a lot of that yesterday. I doubt, frankly, we will see much more in the days and weeks ahead. It is a shame, and a lost opportunity. And, we need to look to progressive governors willing to experiment with public policy at the state level in creative ways. States, too, can raise the minimum wage and index it to productivity. States, too, can experiment with anti-poverty programs. States, too, can work to improve education. The Democratic Party needs to take the President’s narrative and turn it into policy, whether he will or not.