Obama Threads the Needle

For Democrats, for liberals, today’s political climate poses a singular challenge. On one hand, poll after poll shows the public believes the economy is rigged against all but the rich. On the other, poll after poll shows that the same public—particularly after the disastrous roll-out of Obamacare—doesn’t believe government is the answer to the failings of the market economy. Indeed, recent polls show that the public mistrusts big government more than it does big business (which does not mean it holds big business in high, or even middlin’, esteem).

Now, there’s precious little that can mitigate the growing inequalities of the current American market other than government and unions. But government is in disrepute and unions, in the private sector, have all but vanished. To his credit, President Obama not only knows this but has on occasion delivered robust defenses of government’s ability to counteract the structural deficiencies of the market through programs like Social Security, Medicare, environmental protections and, of course, the Affordable Care Act.

He delivered a particularly effective defense of the ACA in last night’s State of the Union address, tallying the number of Americans who’ve received coverage through its provisions, and telling the story of a nurse, strategically seated in the First Lady’s box, who had emergency surgery on January 6th and who didn’t have to go bankrupt as a result because her Obamacare had kicked in six days earlier.

Other than that, however, the president’s State of the Union speech was singularly free of advocacy for any major governmental program. Raising the minimum wage, yes. Restructuring the Earned Income Tax Credit—an anti-poverty program beloved by Ronald Reagan and championed last week by Marco Rubio—yes. More infrastructure spending, yes, but only as part of a deal to reduce corporate taxes. Immigration reform and gun control, both touched on briefly, yes, but neither involves major government spending. An emphasis on revitalizing our apprenticeship programs—something that successive administrations have overlooked for decades—yes, and about time. Micro-initiatives such as high-tech manufacturing hubs, yes. Government by inches, populism by miles.

Given that Obama needs to boost his standing in the polls if the Democrats are to hold the Senate and gain seats in the House, the speech has to be judged a success. He identified himself with the public’s exasperation with Washington’s stasis and didn’t leave much on which the Republicans could attack him. He wasn’t proposing any big government programs. He may judge that he’s done that with the ACA, and the best he can do now is ensure it covers more and more Americans with no further slip-ups. He was the people’s tribune, consistently citing what people, companies, cities and states were doing by way of contrast to the congressional Republicans’ continued obstructionism.

As politics, it was terrific. As policy, it falls woefully short of what it will take to jump start American wages and re-link increases in economic productivity to the incomes of workers. Changing the very nature of American capitalism will require major governmental initiatives in both taxing and spending. In Obama’s defense, no one on the left can as yet clearly articulate just what those initiatives should be. In Obama’s defense, he has to win the political battle—avoiding a wipe-out in the midterm Congressional and state elections—before any serious policy initiatives are possible. Given that, he probably delivered the most strategically savvy State of the Union he possibly could have. He threaded the needle.   

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