Obama’s Second Act

Robert Borosage

F. Scott Fitzgerald warned, “There are no second acts in American lives.” And for recent American presidents, second acts have been brutal.

The hope of the first act succumbs to the karmic reckonings of the second. Nixon cast out by his crimes in Watergate. Reagan laid low by his Iran Contra follies. Clinton shamed from his personal excesses. Bush Jr. ostracized after Iraq, Katrina and economic calamity stripped away his strut.

Can Barack Obama avoid that reckoning? Already, his second term is mired in the intolerable negotiations with his wingnut opposition, intent on holding the economy hostage over and over again to extort destructive cuts in the pillars of family security – Social Security, Medicare and Medicaid – while throwing a monkey wrench into an already sputtering recovery. What the theatrical might consider harsh retribution for Obama’s hubris that he could bring lion and lamb together threatens to consume his second act.

The challenge for the President and the country is whether he can lift himself out of that mire, and provide new direction and hope for a beleaguered people. For a presidency defined by dramatic speeches, his second inaugural address on Monday and his State of the Union address that follows in February will reveal much.

The president has already teed up major efforts for the second term – curbing gun violence and comprehensive immigration reform, both ambitious goals. Global warming has received less attention but surely will be high on the agenda. Given the storms, floods, droughts, and calamities already savaging our land and people, history will harshly scorn any president who fails to lead here.

But Obama defined the central challenge for his second act when he called the election the “defining moment for the middle class.” In the wake of the Great Recession, in a country scarred by extreme inequality, a sinking middle class, spreading poverty, and a corrupted politics, can the president define and rally Americans to embrace a new foundation for growth and shared prosperity?

Here, the president would be well advised to draw upon his own words in in his remarkable “economic sermon on the mount,” delivered at Georgetown in his first months in office.

There he described his initial policies – the Recovery Act, bank bailout, the rescue of the auto industry – as essential to saving an economy in free fall, and beginning to “clear away the wreckage.” That much has been accomplished.

The economy has witnessed 34 months of private sector jobs growth. There is much hysteria around the deficits, but in fact, deficits have been cut by 25 percent in relation to the economy. They are coming down faster now than any time since the demobilization at the end of World War II. If the economy continues to grow, the deficits will continue to fall, and our debt is already stabilized in relation to the economy for the next decade. The wreckage has been great; the recovery hard and incomplete.    Much more needs to be done to curb Wall Street excesses, to fix our broken health care system.

But now, Obama can argue, it is time for a second act. In his April 2009 speech, he argued correctly that we couldn’t go back to the old economy that was built on unsustainable debt and bubbles. “We cannot rebuild this economy on the same pile of sand. We must build our house upon a rock. We must lay a new foundation for growth and prosperity – a foundation that will move us from an era of borrow and spend to one where we save and invest; where we consume less at home and send more exports abroad.”

The president can then lay down the building blocks of that new foundation. Stop squandering lives and resources abroad, and invest in rebuilding America, from roads and rail to broadband and the electric grid.

Invest in the clean energy, the energy efficient buildings and appliances and manufacturing techniques that are at the heart of the green industrial revolution that is sweeping the world. These global markets will explode as nations have no choice but to address the threat posed by global warming and extreme weather. With our great strengths of innovation and technology, we can and will lead this revolution.

Provide our children with the invaluable legacy our parents left to us, and our grandparents to them – the best public education in the world. The first term drove reforms in education to measure progress, and to hold teachers and schools accountable. The second must focus on insuring every child has the opportunity to learn – from universal preschool to affordable college.

Move to balanced trade and make things in America once more. We cannot continue to run trade deficits of over $1 billion a day. The first term set out the goal to double our exports. Now the president could set a new goal – to balance our trade in the next decade. Put companies and countries on notice: America seeks more trade, but balanced trade. We will enforce a level playing field; we will no longer abide countries playing by a different set of rules.

Finally, address the challenge that was the centerpiece of this last election – rebuilding a broad middle class by insuring that the rewards of new growth are widely and fairly shared. Corporate profits are now at record heights in relation to the economy; worker wages are record lows. We suffer a crippling inequality in which the top 1 percent captured a staggering 93 percent of the income growth in 2010. So, raise the floor – lift the minimum wage so a full-time worker can afford to lift his or her family from poverty. Empower workers to organize and bargain collectively so that they can gain a fair share of the productivity and profits they help to generate. Curb the reckless executive compensation schemes that give executives multimillion-dollar incentives to ship jobs abroad, and plunder their own companies’ futures for short-term returns. Comprehensive immigration reform will bring millions out from the shadows, where they cannot defend themselves against predatory employer who rob them of wages and rights. This shadow economy penalizes the honest employer and the sound company, even as it offends basic human decency.

This is an agenda that won’t be accomplished in four years. It will meet with fierce resistance from entrenched interests and purblind ideologues. But it is the rock upon which we can rebuild our future economy.

The president will have to address the deficit hysteria that now suffocates all thought in Washington. Here he has a proud history to draw on.

Some will howl that we can’t afford it, that America is broke. Don’t believe it. America was far more indebted at the end of World War II – with debts of 120 percent of GDP. But our leaders were worried that as the GIs came home, we would plunge back into the Depression. They focused on fixing the economy, not fixing the debt. They passed a GI bill that educated a generation. They subsidized housing and built the suburbs. They aided the conversion of wartime industry to peacetime production. They sent billions abroad to rebuild Europe, creating allies and markets for our products. They kept the top tax rate at 90 percent, asking the wealthy to help pay for the reconstruction. Unions ensured that workers shared in the rewards of growth. We witnessed the greatest era of growth in history, and all Americans benefited, with the lowest incomes rising somewhat faster than the top. They forged the first broad middle class in history, making America truly exceptional.

They were sober about costs, but generally ran deficits, adding to our total national debt. But the economy grew faster and by 1980, the debt was down to less than 40 percent of GDP and not a problem. We call them the greatest generation. Now it is this generation’s time for greatness.

Needless to say, the president could frame this in far more compelling and poetic language. The question is whether he chooses to do what he was loathe to do in his first term: lay out an agenda that he knows will not pass the Tea Party-dominated House, rally the country to it, drive portions of it through allied governors in blue states, make it clear to Americans who is standing in the way. Governing in campaign mode, the president might well succeed in turning 2014 from a bi-election in a stagnant economy where the president’s party is punished to a referendum on America’s future, in which those standing in the way are rebuked.

This violates political and theatrical convention. Second acts aren’t for new ideas or characters. They feature the remorseless winding out of the action and plot set up in the first term. But Obama wouldn’t be president had he followed convention. And he wouldn’t have won re-election if he had not embraced the Occupy moment and made it a referendum on the middle class. Why not break the mold? Better to fail being bold than to flounder entangled in the tired plots of the first act.

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