The State of the Union Stakes

Robert Borosage

The president will stand before Congress for his State of the Union address as the leader of an emerging progressive majority coalition that he has helped to forge.  Empowered by that coalition, he has already teed up an ambitious agenda: comprehensive immigration reform, action on climate change, legislation on gun violence and more.

But the president has little choice but to focus on the central challenge now facing the country – and his emerging progressive coalition today.  That is the same challenge that drove the original progressive movement – an economy scarred by extreme and corrupting inequality that works only for the few and not the many.  This is, as the president put it in his speech at Osawatomie, Kansas, the make or break moment for the middle class – and for all those who aspire to join it.  At question is the basic American dream: the assumption that a decent life can be earned by hard work.

Consider where we are. For over three decades, the rich have gotten far richer, while working families have struggled to stay afloat.  The reality is that the rising American electorate – the young, minorities, single women, union workers – are sinking together.

More than 20 million people are in need of full-time work.  Corporate profits are at record highs; CEO salaries are soaring.  But wages are at record lows in relation to the economy, and falling.

More than a fifth of our children live in poverty, the second worst of all advanced economies.  College is being priced out of reach for more and more people, even as student debt exceeds credit card debt.   Our broken health care system threatens to bankrupt a country, yet life expectancy for America’s 50-year-olds is the worst in the industrial world. We’re spending more on our military than at the height of the Cold War, while we can’t find the money even to rebuild our bridges.

In 2010, the richest 1 percent pocketed fully 93 percent of the nation’s income growth. A typical male worker earned less in 2011 than he would have in 1968.

We can’t simply recover to the old economy – for that economy wasn’t working before Wall Street blew it up.  In fact, our problem is that the old economy is reasserting itself.  Inequality is rising; the middle class is sinking.  Good jobs are still shipped abroad.  The trade deficit is back over $1 billion  day.  The big banks are more concentrated and less controllable than before the crash.

Early leaks of the State of the Union address suggest that the president gets this.  He’ll be more optimistic about the recovery, no doubt, but the press reports he will focus on jobs, growth and inequality.

The test will be how bold he is.  Political addition is forcing Republicans to negotiate on immigration reform.  Public outrage may drive some modest change in our gun laws.

But on the economy, there will be no cooperation.  Republicans seem intent on holding the economy hostage over and over to exact deep cuts in the basic pillars of family security – Social Security, Medicare and Medicaid.  They are fixated on cutting spending rather than fixing the economy.

This reality enables – forces – the president to use his bully pulpit to help Americans understand, and to show them that he understands, the fundamental change of direction we need to rebuild a broad middle class.  Obama can win precious little reform until he wins the argument – and enlists  his progressive majority coalition in the fray.

Obama is criticized for having too much on his plate.  But, in fact, the fare has been too meager.  Elements of a real plan to fix the economy might sensibly begin with:

  • A five-year plan to rebuild America, to modernize and strengthen an infrastructure now so decrepit that it threatens lives as well as our economy.
  • A new global strategy to export good products rather than good jobs. This begins with a bold initiative to capture a lead in clean energy and the green industrial revolution that is already sweeping the world.  It requires sustaining our leadership in science and technology, and innovation.  It requires a trade strategy that balances our trade and takes on the alliance of multinational companies and mercantilist nations.  And it requires dramatically reducing our empire of bases, and ending our unaffordable and misguided effort to police the world.
  • A commitment to shackle Wall Street, break up the big banks, crack down on automated gambling, starting with a financial speculation tax.
  • A call to renovate education, from pre-school to affordable college, so that every child no matter what zip code they are raised in has the opportunity to learn.
  • A strengthening of family security, from infant nutrition to Social Security and Medicare, and fixing a broken health care system that is the sole source of our projected debts.
  • A fair share agenda that brings millions out of the shadows with immigration reform, lifts the minimum wage, empowers workers to organize and bargain collectively so that they may once more capture a fair portion of the profits and productivity they create, and reforms the utterly perverse executive compensation schemes that now give CEOs multimillion-dollar incentives to cook their books or plunder their own companies.
  • Progressive tax reform that provides the resources we need for the society we want. That would mean investors would pay the same tax rate as workers, billionaires would pay a higher rate than their secretaries, and corporations would be unable to stash their profits in overseas pirate dens.

And the president should be clear about what stands in the way:  Not just the ideologues and interests peddling failed conservative nostrums, but a politics now deeply corrupted by extreme inequality.

Americans think the rules are rigged against them – and they are right.  Change our trade policy; face the power of the multinational lobby.  To fix health care, you have to take on the drug and insurance companies.  Clean energy? Meet big oil.  These folks have billions at stake.  They’ve learned they can make more money from collusion than competition.  They lobby rich, wired and relentless.

Will the president lay out a bold new foundation for growth – and challenge the failed ideologues, entrenched interests and partisan posturing that stands in the way?

Republicans would denounce the speech as socialist.  The punditry would criticize the president for being combative.    But the speech could offer a vision and a roadmap – and set the terms of the debate of the next two years.   The Republican Congress would be irate, but the country would be well served.

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