Tag Archives: state of the union

Shhh. The American Dream’s Dead

Many people view last night’s State of the Union Address to be the kick off of the 2016 Presidential Campaign. If that is true than it will be very interesting to see if a major political party can win the Presidency by admitting that the American Dream is dead or at least needs an assist from government.

President Obama laid out a series of policies that are directly aimed at the middle class in an attempt to help them to have a chance to achieve the Dream. These policies, including increased child credits, paid medical leave, free community college, and a middle class tax break will be paid for by tax increases on the 0.1%. Not exactly allowing the invisible hand to work its magic!

The SOTU is the latest salvo in a series that includes numerous proposals from Elizabeth Warren and even some from the recently converted to the cause of combatting inequality, Larry Summers. Many of these proposals are in response to the perceived continuing increase in inequality and the fact that Progressives believe that without significant government intervention the Dream will die.

All of this has the effect of forcing the all but anointed 2016 Democratic candidate, Hillary Clinton to embrace significant parts of this progressive agenda. While this seems to be something of an anathema to the centrist Hillary, it is becoming apparent that this is what many in the party want. But can they convince the nation that the American Dream needs to be provided with the assistance of government?

The American Dream has been part of our nations folklore for almost a century. While the story of Ragged Dick is almost 150 years old, the mention of the American Dream dates to 1931 and is attributed to James Truslow Adams., Adams envisioned not “a dream of motor cars and high wages merely,” but rather “a dream of a social order in which each man and each woman shall be able to attain to the fullest stature of which they are innately capable, and be recognized by others for what they are, regardless of the fortuitous circumstances of birth or position.”

Amazingly, on overwhelming majority of Americans still believe in the American Dream. Perhaps this is the reason why Americans tolerate such a high degree of inequality and have traditionally disliked government intervention in the engine of capitalism. Americans believe that very soon they or their descendants are going to be rich. As recently as 2009, the Pew Charitable Trust found that 39 percent of Americans thought that it was common for someone to be born poor and become rich. In fact 31 percent of Americans believed that they were going to become rich in their lifetimes.

Now the truth is that the American Dream, at least from a socio economic perspective has always been something of a myth. According to Timothy Noah in the Great Divergence, the United States (along with the United Kingdom) are the two developed nations in which income heritability is highest and intergenerational mobility is lowest. In simple terms it means that birth is the greatest determinant of an individuals career and income. Across all of the “Old World, less competitive” nations in Europe, mobility is higher and in places such as the “socialist” Nordic countries socio-economic mobility is orders of magnitude greater. Does anyone other than me see a link between this and income distribution?

So how will this work. While Republicans like to state that President Obama used government largess to win votes, there is little evidence that he actually did so. In fact, the last president to campaign on reducing inequality and actually win the office was Lyndon Johnson in 1964. Lets think about 1964. The American economy was strong, the American people strongly believed that government was a force for good, the top marginal rate on personal income had just been reduced from 91% to 70% (that is not a Typo!), and the incumbent LBJ presided over the most overwhelmingly Democratic congress of modern times.

I think that the road to convincing Americans that government intervention, not just to grow the economy but also to grow economic opportunity for the largest number of Americans will be difficult. This will likely entail convincing those in the middle income and middle of the road politically that inequality is not only unfair, but bad economically for everyone. It will take a candidate whose credentials are not “Harvard Liberal” but one who is viewed as centrist. It also will take a candidate with incredibly thick skin that will be able to withstand the assault of the vested interests.

It will also take a bit of luck I suspect. The best hope for electing a Progressive minded president, Hillary isn’t a Progressive but can be pushed that way by her party, is to have the Republicans to nominate a candidate who stands in clear contrast to these ideals. Ted Cruz would be a dream but even his party knows he’s unelectable. Lets just hope that Jeb doesn’t survive the primaries.

The challenge to make the pro-government case is a daunting one. If were a betting man I’d be betting “Don’t Pass”. Fortunately, as I go to sleep tonight, I am heartened that some of us are discussing the rapidly fading American Dream. Of course Jodi Ernst is discussing Hardees…………….

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Obama’s Last Stand

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After five years of what could best be called mixed results the President’s State of the Union speech tonight likely is his last opportunity to make an impact on America’s path. How will/should he proceed?

During my long and varied career I always held a few things to be essential to my success. First among them was that its better to act decisively and be wrong than to not act.

As President Obama approaches the lame duck portion of his time as President, I feel comfortable in saying that his Presidency will likely be viewed as a below average one when the history is written. It’s not that there haven’t been accomplishments such as the ACA, surviving the financial crisis, and surviving an opposition who’s entire raison d’être was to block ANY legislation that came from the President. Rather it’s that Obama has never seemed to lead. He has picked his priorities poorly and worse than that, he never has seemed to understand that he owns the biggest bully pulpit on the face of the earth.

Tonight the President will own the stage. While many Americans don’t even know what the State of Union address is, never mind actually watch it, this is still the most watched political speech of the year. So what should the President do?

Many pundits believe that the President should again reach across the aisle and find common ground with Republicans. I believe that this would be a tragic mistake as Republicans would be happy to do nothing and run against the President’s record (or lack of one) in the midterm elections this November.

My choice would be for the president to state that he is making a partisan speech (he will be accused of this in any case) by saying that, “I am a partisan, a partisan of the overwhelming majority of Americans for whom this government no longer works”. I would go on to say something like, “We should all be ashamed and embarrassed by our performance in Washington.”

I would then go on to define a few priorities that I know are widely supported by Americans. This list would include increasing the minimum wage, increasing access to preschool, and reducing the deficit through select spending cuts and tax increases on the wealthy (capital gains, duh!). Interestingly, you will see that I have not included immigration reform on this list. This is because action on immigration is not a considered a priority by the majority of Americans. Next, I would clearly state that if these priorities are not accomplished within 30 days, I will take Executive Action to implement these changes to the extent that I am legally able to do so. The President then should be on TV and Social Media every day making his case and forcing the opposition to defend their positions.

Yes the Republicans will scream. But the goal of this is not to take Executive Action, it is to force both sides to find a deal, any deal on these issues. Laying down the gauntlet tells Republicans that they can try to stop the President from taking action but to do so will likely mean a trip through the courts. Imagine going on the campaign trail and explaining that you are suing the president from taking action that is wanted by the great majority of Americans. I just love the game theory here.

Now I’m pretty sure that Obama won’t do anything like this but a man can dream……..