This year President Obama wants to give Americans a “better shot” while expanding the economy from the “middle out.” Whatever slogan characterizes Obama’s latest economic plan, however, the real message is this: There’s nothing more Washington is likely to do to help struggling Americans.
After pleading for immigration reform, tougher gun controls and smarter spending cuts than the recently enacted sequester, Obama has returned to the economy and the fortunes of the middle class as a theme he’s likely to pay a lot of attention to during the next few months. In a campaign-style speech in Galesburg, Ill., Obama declared that “I am laying out my ideas to give the middle class a better shot” while warning that “the position of the middle class will erode further” if they’re not enacted.
For those keeping score, Obama basically outlined six broad economic proposals: cultivate more manufacturing jobs, invest more in infrastructure, improve education, better train displaced workers, help more people buy homes or refinance their mortgages, and raise the minimum wage. If you feel like you’ve heard those ideas before, you’re right. Obama’s latest economic program is basically a lite version of the State of the Union Agenda he outlined in February, which itself recycled many pet ideas from Obama’s first term.
Many of Obama’s proposals are centrist ideas that economists think would likely help boost economic growth. As any sentient being knows, however, Washington is a place where sensible ideas go to die. Obama knows that, too, and even suggested some unconventional ways he might try to get something done, since normal legislative channels are twisted and clogged. “Whatever executive authority I have to help the middle class, I’ll use it,” he assured Americans. “Where I can’t act on my own, I’ll pick up the phone and call CEOs and philanthropists and college presidents – anybody who can help – and enlist them in our efforts.”
So this is what the President of the United States has been reduced to: A glorified telemarketer calling up big shots and begging them to help save the country. The thing is, if Obama or any president were able to make a difference on his own, or even with a coterie of like-minded reformers, it would have happened by now. It hasn’t, which means even if Obama’s heart is in it, there’s really not much he can do for the middle class at this point.
Obama, of course, is playing politics just as his Republican foes are, by using the bully pulpit to shore up his Everyman appeal as big partisan battles loom in the fall over funding the government and extending Washington’s borrowing limit. That may help explain why he’s telling voters he wants to pass new stimulus plans that have already hit a dead end in Congress. His point seems to be: At least I’m trying, compared with the obstructionist Republicans who would rather shutter the entire government.
Straight talk needed
But Obama might do voters a bigger favor if he just came out and said: Look, you’re on your own. I tried. I might have the world’s mightiest military at my disposal, but it would be easier to go to war with Russia than raise the minimum wage by $1.
Caustic as it might be, that sort of message might reflect what’s really happening in the economy. Washington has done more to harm the economy than help it this year, through herky-jerky tax and spending decisions and the dim-witted across-the-board sequester spending cuts that just about every economist considers to be the worst possible way to reduce federal deficits. Private-sector employers have been hiring anyway. Businesses are figuring out how to make money despite a lousy government.
Congress and the president matter a lot less than the Federal Reserve anyway, and despite some friction, the Fed’s policies do seem to have convinced investors that everything will turn out okay. That’s why the stock market has glided from one record high to another this year, even as politicians on the ground lob stones at each other.
A lot of economists think the slow-motion recovery might actually start to pick up steam later this year and next year, as long as Washington basically stays out of the way. Obama may wish he could generate a tailwind that powers the nation back toward prosperity faster, and allows him to finish his second term as the president who rebuilt America. But the best he can probably do is tell Americans the truth about the economy and sympathize with those who are left out of the recovery. Of course, he might need a new slogan for that.
Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.