The president's dilemma: His proposals are both too small-bore to deal with the scale of the crisis he wants to address and also way too big for Congress
If you're looking for the ur-text of President Obama's State of the Union address, you could do worse than go back to pictures from September and October 2011 of protesters assembling in Zuccotti Park.
When Occupy Wall Street first captured the nation's attention last year, I remember reading those dozens of placards (on the streets and online) that spoke for the new ragtag populist movement. It struck me as both a beautiful and inauspicious experiment. Here were thousands of struggling Americans finding an honest voice for their fears, touching issues like student debt, income stagnation, and health care costs that really are vital to understanding the plight of the average American. They said "Make the Banks Pay" and "Fix Capitalism" and "Tax the Rich!" But judged against the scale of their challenges, these solutions felt either too broad to stick, or too small to count. (What does "Make the Banks Pay" really mean? How do higher taxes, on their own, revitalize the middle class?)
In short, the protesters were asking questions whose answers would not fit on their signs.
You got the same feeling watching President Obama's State of the Union address Tuesday night. A 7,000-word speech is bigger than a placard. But Obama's address shared the same virtues and shortfalls of the populist movement. Like OWS, the president offered a diagnosis of the middle class crisis that was informed, passionate, and often insightful. Also like OWS, his solutions seemed small, misguided, or confused when matched against the scale of the crisis.*
Americans are struggling, Obama said, not only because of the credit crunch of the Great Recession, but also because of efficiency monster that delivered a greater recession long before 2007. Manufacturing jobs were already disappearing, wages were already stagnating, technology was already eating our work, medical and education prices were already galloping while earnings were trotting.
How do you fix a problem like the greater recession and income inequality? The honest, realistic answer is that solving such a problem is likely beyond the reach of a president or Congress. But the purpose of the State of the Union is precisely to make oversized promises that Congress can underdeliver, so the president offered a laundry-list of measures guaranteed to please liberals and infuriate conservatives for basically the same reason: They cost money.
Oh, this speech doesn't lack for solutions. There's the tax solution (raise effective tax rates on all millionaires above 30%), the industrial solution (focus on manufacturing to drive economic growth), the education solution (pressure schools to lower tuition), the regulation solution (find regulations that are keeping entrepreneurs from starting companies), the deficit solution (exchange revenue increases with mild entitlement reform), the housing solution (a massive refinance plan to save homeowners money today), the energy solution (work with private sector to unlock the potential of natural gas), the infrastructure solution (build more road, bridges, and broadband), the quasi-mercantalist solution (take the trade fight to China and punish companies that outsource work), and the list goes on.
Most of these solutions cost money. Many of them are wise. Some might even have the potential to be transformative. But taken together, they felt scattered, lacking organization or priority, like a sea of Occupy placards -- millions of little messages looking for a Message.
What Obama wants is ultimately what we all want: More good jobs. Manufacturing has hollowed out in the last 40 years, and we're all looking for something to replace it. The economy has reflexively replaced many of those decent-paying jobs for non-college graduates with worse-paying jobs in services, which has lacked manufacturing's efficiency gains. The president suggests a revitalization in manufacturing or energy to fill the hole.
This is a fine ambition. But building a new industry to house the middle class is exceedingly tough work. Reaching for his grab-bag, the president pulls out a couple whoppers. In particular, the emphasis on onshoring work by punishing companies who outsource work is populist gold and policy iron pyrite. When Toyota opens a factory in the U.S., does it mean we're stealing Japanese jobs? Not really. It's more like Toyota has identified a plant in the south as a better stop on its global supply chain. As Don Peck explained this morning, onshoring won't stop the most important thief of middle class work: the march of technology. Instead, Peck wrote, "we need to bend technological progress towards job creation, not just job destruction. That means investments and regulatory changes that can lead to breakthrough technological progress -- the creation of whole new products and industries."
The White House doesn't have a reputation for humility, but they're not so vain as to think they can bend globalization and 40-year trends in a speech. Maybe that's why the president meets two of the most important challenges -- higher education costs and job creation -- with outright pleading, in addition to policy. The president asks businesses to do everything they can to keep jobs stateside and college to "do their part by working to keep costs down."
Perhaps there is honesty in begging. Rescuing the middle class requires bending the medical cost curve, reversing college inflation, building industries, re-training millions of Americans, and all of this after getting the economy back to full strength. This is hard work and long work. And even for those of us who think the president's proposals were too small-bore to deal with the scale of the crisis, the sad reality of things is that they are also way too big for Congress.
*"Shut up Derek, it was just a campaign speech," is a reasonable critique of that sentence, and the entire column. But read on, please? For me?
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