We were hoping to get from President Obama's State of the Union address Tuesday night a bold, galvanizing vision of how the economy could be made to work once again for the 99 percent, the majority of Americans who are being left behind as the nation's wealth flows upward. We wanted to hear a sharp contrast between the progressive course he was elected to chart and the conservative obstructionists who have gone out of their way to sabotage efforts to repair the economic damage their policies wrought. And, most of all, we were hoping that the president would use his “we can't wait” mantra to push a plan to put as many of the 23 million Americans who are unemployed or underemployed back to work as possible—not eventually, but now.
There were a few disheartening misses, but the president deserves credit for several refreshingly audacious moments in his speech, including a pronouncement that addresses a campaign we and several other organizations launched to oppose a sweetheart deal with big banks whose behavior caused the financial crisis.
At the very least, we now know that whatever deal the administration cuts with these banksters won't include a White House concession of immunity from investigation and prosecution of criminal behavior. President Obama announced the creation of a “financial crimes unit” that will “crack down on large-scale fraud and protect people’s investments.” There will also be an investigative unit that will investigate “the abusive lending and packaging of risky mortgages that led to the housing crisis. This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.”
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This gets at the heart of a major concern of Americans across the political spectrum: that the leaders of the financial institutions who brought down the economy, causing millions to lose their homes and their jobs, would never be held to account. There was a real fear that in exchange for banks giving homeowners a reported $25 billion in relief—just a slice of the profits they earned from the financial manipulation they engaged in in the years leading up to the crisis—they would receive a “get out of jail free card” from the Obama administration.
It is particularly heartening that the person who would be in charge of the financial crimes unit would be New York Attorney General Eric Schneiderman. He has been at the forefront of the resistance against a mortgage settlement deal that protected the banks from prosecution. His appointment to lead the Justice Department investigation would put a champion in charge and give the whole effort tremendous credibility.
The initiatives Obama announced would have to be approved by Congress, The New York Times reports. “Given the election-year pressures and the continuing gridlock on Capitol Hill, neither measure is certain to win approval in this session of Congress,” the paper writes. But Republicans would obstruct this measure at their peril given the anger at Wall Street that exists as much within the Tea Party as it does the Occupy movement. Likewise, the administration would be at peril if it merely threw up its hands at Republican obstruction and did not use the considerable powers it already has to identify and prosecute Wall Street fraud.
On the economy, the president correctly called the restoration of “the basic American promise” that people who educate themselves, work hard and play by the rules can climb the economic ladder “the defining issue of our time.” He then called out the “outsourcing, bad debt, and phony financial profits” that contributed to the breaking of that promise.
But here's where Obama needed to go farther. The maladies Obama cited are largely rooted in a conservative ideology that, in spite of the catastrophic consequences brought on by the policies spawned by that ideology, is boldly reasserting itself. Perhaps President Obama was being polite in front of a Congress that conservatives effectively control. But when Obama late in his speech proclaimed that “Washington is broken,” he should not have fallen into the “both parties are to blame” rhetoric that dominates the inside-the-Beltway punditry. Liberals and conservatives do not, in fact, have equal culpability.
Conservatives have been unabashedly dedicated to the mission of “breaking Washington,” and they have had a disheartening level of success. Had Obama called them out on this, he would have been derided as a crass partisan. But, having shown restraint, he still was called a crass partisan before he even had a chance to give his speech. Might as well tell the plain truth that would remind voters who is keeping the government from functioning for them.
There were some notable economic specifics in the speech. Zeroing government efforts in on reviving the nation's manufacturing sector was an important contrast to the c'est la vie approach supported by all of the Republican presidential candidates. It is about time that Obama announced a trade enforcement unit that promises to get tough with countries such as China that repeatedly violate the rules of fair trade. His announcement of an “all-out, all-of-the-above” energy policy is a signal that he will not be cowed by Republican efforts to turn the Solyndra solar investment failure into an excuse to back away from using government to support a new energy economy, just as do such major countries as Germany and China. (But he must be mindful of the alarms his push to expand natural gas production is raising among environmentalists.) And his call that 50 percent of the savings from defense spending cuts and the ending of the wars in Iraq and Afghanistan be put toward “nation-building at home”—fixing our public resources—is common sense. So is, as he put it, tax reform that requires millionaires and billionaires to pay the same share of their income in taxes as the people who work for them. “Washington should stop subsidizing millionaires,” Obama said.
But when President Obama mentioned one laudable direct job-creation program—asking Congress to support a job corps that gets veterans into jobs as first responders—it was a stark reminder of how small the president's solutions sometimes are to the scope of the need.
In December nearly 5.6 million people were unemployed for more than 27 weeks; the average duration of employment overall is almost 41 weeks. That is intolerable. The federal government must be unleashed to make moves now to get these people into productive jobs. We must do it for veterans, yes, but we must do the same for every American who is sending out resume after resume with no effect. Better job training programs help. So would initiatives to keep college education affordable. So would improving the quality of elementary and secondary schools. So might specific changes in the tax code that would encourage small business formation and reward actual job creation rather than financial speculation.
But the continuing unemployment crisis demanded that President Obama made a bold case for government intervention. It is true that the Republicans would have resisted, and enough Democrats would have been cowed to doom any legislative push to failure. No matter. This was Obama's moment to offer a tangible jobs plan that would have not only addressed the short-term jobs crisis but illustrated the vision that Obama tried to paint of the difference between an illusory America of individual opportunism and the real America that was built by a collective—albeit imperfect—commitment to shared opportunity and shared prosperity.
Conservatives derisively toss the label of the “entitlement society,” but even Newt Gingrich realizes that at least sometimes it is the wealthiest who get the entitlements, while the rest of us are left to wrestle for what crumbs we can get. The America we want to build holds true to the promise that Obama mentioned in his speech: that each person has an opportunity to prosper, and each person who prospers has a responsibility to the society from which that prosperity was earned.
At least on this defining issue of our time, conservatives have it catastrophically wrong, and the president is pointed in the right direction. The challenge for the progressive movement is to add the bold demands and sharp contrasts needed to fill out the vision of the America we must move toward.