Obama, Inequality and the Bully Lectern

Robert Borosage

President Obama on Wednesday put before Americans the “defining challenge of our times: turning around a “dangerous and growing inequality” and “making sure our economy works for every working American.”

This was a bold step for a president presiding over a recovery marked by rising inequality, in which the top 1 percent are capturing a staggering 95 percent of the rewards of growth while most Americans struggle to stay afloat.

To address that challenge, the president offered elements of an agenda that Democrats should drive into the political debate and make the center of the 2014 election. He teed up what will be a furious fight to raise the minimum wage. He called for moving on pay equity for women. He put making college affordable and providing pre-school for every child as next steps in insuring a good education to every child. He challenged Congress to sustain unemployment benefits. He opened a discussion on how to strengthen Social Security and replace disappearing pension plans. He even made empowering workers – defending the right to organize and bargain collectively – a centerpiece of the reform agenda.

It is worth noting what was omitted from or diluted in the president’s call for action. The best remedy for rising inequality is full employment. Tight labor markets allow workers to demand higher wages. The only time since the 1970s that inequality was tempered and America grew together was at the end of the Clinton years when, in the midst of the dot.com bubble, workers benefited from a close-to-full-employment economy.

The president gets this, pledging, “to relentlessly push a growth agenda.” But here his agenda is weak or irrelevant. He promotes “closing wasteful loopholes” and “simplifying our corporate tax code” to lower rates to encourage companies to hire here. But corporations are sitting on record profits waiting for customers. The problem is demand. The president would use “some of the money” to rebuild roads and bridges – but this is far from a clarion call to rebuild America and put people to work doing work that must be done.

He nods rhetorically to the business lobby in calling for “streamlining regulations” and a “responsible budget.” But this is a far remove from taking on the entrenched interests and their wasteful subsidies and tax dodges and using the money to make investments vital to our future – in everything from education to research and development to new energy.

Also missing is any mention of curbing Wall Street and insuring that the banks serve the real economy rather than gamble in the financial casino. Or of transforming our corporate trade policies that continue to rack up record trade deficits with China and others, costing jobs and eroding wages.

Rising inequality and a sinking middle class are the kindling for hot-fire populism. But Obama chose characteristically not to be the preacher at the “bully pulpit” rousing Americans against injustice, but rather the professor at the lectern, wading through an economic analysis, complete with statistical backup.

Obama clearly chose to enter the fray, but to pull his punches.

He described how the broad middle class was built, and how in the 1970s, its decline began. Why did inequality grow? The story is no secret. Corporations and the wealthy, pressed by declining profits and vibrant labor, consumer and environmental movements, went on the offensive. They mobilized money, built lobbies, think tanks, funded right-wing movements and politicians in both parties. They assaulted labor unions and trampled labor laws. They succeeded in slashing top-end taxes and carving out huge loopholes to avoid paying taxes. Corporations defined trade policies to enable them to ship jobs and hide profits abroad. Banks shredded regulation and opened the financial casino. And corrupted conservative politicians in both parties helped rig the rules. They ushered in the era of big money politics in which entrenched interests were served and incumbent politicians were succored.

Conservative politicians championed the middle class but served the rich. They protected multinationals, not small business; agribusiness, not small farmers; Wall Street, not Main Street or even small bankers.

Little of this appears in the president’s speech. Instead, when describing what went wrong, he reverts to the passive voice. The “social compact began to unravel.” “Technology” let companies “do more with less.” A “more competitive world led companies” to ship jobs abroad. “A trickle-down ideology became more prominent.” Only once is there an actor: “businesses” facing increased “competitive pressure” “lobbied Washington to weaken unions and the value of the minimum wage.”

Why has Washington failed to tackle rising inequality? Here, too, the president is circumspect. Washington’s failure isn’t that it is corrupted. It isn’t that the powerful call the shots and fix the deal. Rather Washington is confused, misled by “myths that have developed around the issue of inequality”: the myth that this is about the “minority poor”; the myth that inequality serves economic growth; the myth that government can’t do anything to help. But no mention that these myths were propagated by those who would profit from them. Obama patiently explains where they are wrong, with a professor’s confidence that reason will carry the day.

And at the end, the president doesn’t indict Republicans for standing in the way. He doesn’t call on Americans to rouse themselves to clean out Washington, and take on the entrenched interests that feed at the public trough. Rather, he pleads only for a “vigorous and meaningful debate,” challenging Republicans to offer their own ideas. “You owe it to America,” he says, “to tell us what you are for, not just what you’re against.”

None of this detracts from the importance of this speech – particularly if the president continues to pound on these themes over the rest of his administration (a big “if”). He has elevated the reality that this economy does not work for working people to the “defining issue of the day.” He has reopened a debate about how to address the growing and extreme inequality that the Occupy Movement first brought to America’s attention. His agenda offers clear measures – like a fight over raising the minimum wage at the local, state and national level – that can inspire and mobilize people.

And if Democrats expand and expound on this agenda, it promises to offer people a clearer choice in the 2014 elections. For there is no question that the reason that no progress is being made isn’t because of myths, but because Republicans are standing in the way. The Republican majority in the House won’t allow a vote on raising the minimum wage. They vote to cut food stamps while standing tall to protect every tax haven that allows multinationals to avoid taxes. They would cut Medicare and Social Security while protecting indefensible loopholes for hedge fund billionaires. The “myths” that may have misled Washington were exploded in the financial collapse and Great Depression. This is less a battle of ideas, than a simple question of whose side are you on?

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