Really, Obama? That's All You've Got on Income Inequality?
President Obama gave a big speech today about rising income inequality and declining income mobility, and I was glad to see him give a shout out to my favorite theory of why we should care about this:
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. 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.
Or, as I like to put it : (1) the rich suck up more and more of the money, (2) eventually they can't find anything useful to do with it all and start making lots of dodgy loans to stagnating middle-class consumers, (3) this works great for a while, but then (4) kablooey.
Obama's speech was chock full of statistics, which may or may not have been a good idea, but all of them are probably familiar to anyone who reads this blog regularly. Personally, I was more interested in what kinds of policy changes he wanted us all to get behind. Here they are:
To begin with, we have to continue to relentlessly push a growth agenda....simplifying our corporate tax code in a way that closes wasteful loopholes and ends incentives to ship jobs overseas....a trade agenda that grows exports and works for the middle class....coming together around a responsible budget.
....Step two is making sure we empower more Americans with the skills and education they need....supporting states that have raised standards for teaching and learning....helped more students go to college with grants and loans that go farther than before....innovation that reins in tuition costs....worked to connect local businesses with community colleges....making high-quality preschool available to every child in America.
....The third part of this middle-class economics is empowering our workers....collective bargaining laws function as they’re supposed to....raise a minimum wage that in real terms right now is below where it was when Harry Truman was in office.
....Number four, as I alluded to earlier, we still need targeted programs for the communities and workers that have been hit hardest by economic change....And we're also going to have to do more for the long-term unemployed.
....Fifth, we've got to revamp retirement to protect Americans in their golden years....encourage private savings and shore up the promise of Social Security for future generations.
I understand that even a fairly anodyne prescription like this is going to get the Fox News crowd all lathered up about how Obama is finally tearing away the disguise and revealing his true Marxist colors, but still. It's kind of weak tea, isn't it?
Maybe it's not reasonable to expect an awful lot more from a sitting US president, but I guess I'm not feeling all that reasonable these days. Or am I just being crotchety because I'm fighting off a cold? In any case, I sure wish there had been at least one genuinely big, newsworthy proposal here. It might have no chance of going anywhere, but then again, neither does most of this other stuff. At least something big might have started driving the conversation in a more interesting direction.