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07/24/2013

Obama’s Galesburg Economy Speech—Does He Get It Yet?

As I explained in The Golden Calf, when Barack Obama was elected, he was rather a disappointment to anyone whose agenda was calling out and exposing the fallacies of economism. Obama was elected on a centrist, peacemaker platform, the man who would go to Washington and bring the partisans together and get them to stop bickering and act for the public good. Of course the Republicans decided right off the bat that Obama was illegitimate and that they would oppose everything he stood for, so that platform never really worked. And, over time, Obama has been gradually inching toward a more open confrontation with economism.

On July 26, he gave a much-heralded speech at Knox College in Galesburg, IL. This was planned as his first of a series of speeches on the economy, designed to take back the ability to frame the issue from the Republicans. For our purposes, the question is—does he seem, yet, to get it about economism? The answer is that there are positive glimmers but he has a way to go.

First, the politics—Obama says in this speech that the Number One priority of American policy ought to be to restore the prosperity of the middle class, along with making it possible for the poor to advance and become a part of the middle class. He accuses the Republicans who refuse to work with him as having no alternative program except opposition to his own policies. One of the memorable lines from the speech (there aren’t many, though it’s far from a bad speech) goes: “Repealing Obamacare and cutting spending is not an economic plan. It’s not.”

 So where is the positive evidence about taking on economism?

First, Obama is fairly consistent all through the speech in addressing income inequality. He hammers away on how middle class income has stagnated while the wealth of the very wealthy has taken off. At one point he even connects the dots to the reason why so many Americans have lost faith in our democracy—if we don’t change course, he warns, “Inequality will continue to increase. Money’s power will distort our politics even more.”

Second, he says what most economists seem to be saying about the sluggish state of the economic recovery today, even though the mainstream media won’t report this story as the major headline it deserves to be—that the sequester is right now one of the main reasons why the recovery has stalled out so badly. Now, think about this. The advocates of economism say that under any and all circumstances, cutting government spending is a recipe for economic prosperity. On that basis alone, what has happened since the sequester, as thousands of Federal employees have either been laid off or their income reduced and their ability to spend in our consumer economy proportionately diminished, is a disproof of the ideology of economism. So saying that the sequester is directly responsible for economic bad news is a direct attack on the economism belief system. At least in one portion of the speech, Obama is willing to say this out loud.

Third, Obama gives a boost to increasing government spending on infrastructure. He throws in a gag line, “We’ve got more than 100,000 bridges that are old enough to qualify for Medicare.” He asks: does it make any sense to allow our infrastructure to fall apart, to the extent that eventually industry will want to relocate somewhere else where the roads, bridges, and power grid are actually reliable, when we have thousands of construction workers out of work or underemployed,and getting them back to work would hugely stimulate the economy as well as repair our aging infrastructure? Such talk, of course, is fighting talk to any economism true believer, since again it argues for a positive role for increased taxes and increased government spending.

Now the downside. Obama says that the Republicans don’t have a real policy alternative, since just saying no to everything Obama is not a policy alternative. He says if they do have ideas, say what they are and he’ll happily discuss these ideas with them. But he never says what desperately needs to be said—that almost the entire Republican party believes in a false ideology that has been proven both fallacious and unworkable time after time, and until they stop believing those things, they will never see what actually needs to be done to fix the economy. I’m sure there is a nicer and more polite way to say this than the way I have just said it, but as Obama is credited with being the best orator to occupy the White House in a good while, he ought to be able to figure out how to say that.

Second, and more minor—when he ticks off what has been working so far in producing whatever economic recovery has occurred, while still insisting that we need to do a lot more to restore the middle class to its rightful place, he lists almost solely private sector activities. He hints, by omission, that the government really has no role in turning the economy around.

So give President Obama credit for moving in the right direction, but in my view he has to come farther to provide the true leadership we need on this issue.

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