Obama Channels Teddy Roosevelt

Obama's speech in Kansas was the most important economic address of his presidency, says a delighted Robert Reich. Maybe so, if this was the moment the president definitively rebranded himself as a populist progressive, as Reich hopes. We'll see. Obama has many personas. Another day, another theme. But in Osawatomie, the president heavily stressed his "willingness to take on the powerful and the privileged that have gamed the system to their advantage". It was fighting talk.

Look at the statistics. In the last few decades, the average income of the top 1 percent has gone up by more than 250 percent to $1.2 million per year. I'm not talking about millionaires, people who have a million dollars. I'm saying people who make a million dollars every single year. For the top one hundredth of 1 percent, the average income is now $27 million per year. The typical CEO who used to earn about 30 times more than his or her worker now earns 110 times more. And yet, over the last decade the incomes of most Americans have actually fallen by about 6 percent...

This kind of gaping inequality gives lie to the promise that's at the very heart of America: that this is a place where you can make it if you try. We tell people -- we tell our kids -- that in this country, even if you're born with nothing, work hard and you can get into the middle class...

And yet, over the last few decades, the rungs on the ladder of opportunity have grown farther and farther apart, and the middle class has shrunk. You know, a few years after World War II, a child who was born into poverty had a slightly better than 50-50 chance of becoming middle class as an adult. By 1980, that chance had fallen to around 40 percent. And if the trend of rising inequality over the last few decades continues, it's estimated that a child born today will only have a one-in-three chance of making it to the middle class -- 33 percent.

It is good to hear Obama talk about economic mobility. (Rising out of poverty in America is not only harder than it used to be, but harder than in many other rich countries, which might be even more shaming.) It was depressing, though, to hear him link that question to incomes at the top. The connection is specious. It isn't "gaping inequality" that "gives the lie to the promise [of opportunity] that's at the very heart of America". You aren't going to loosen the bonds of poverty by taxing the 1% more heavily, even if that makes sense for other reasons.

It's true that some of the things the government might do to improve opportunities for the poor involve public spending, which implies higher taxes--but not just for the top 1%, as Obama tried to imply. That doesn't raise much money. If he were serious about attacking poverty through higher public spending he'd be proposing higher taxes for the top 50%, not just the top 1%. I suspect, therefore, he isn't.

I wasn't much impressed, either, when he told CEOs that their obligations aren't just to shareholders, but extend to "deciding that it's time to bring jobs back to the United States--not just because it's good for business, but because it's good for the country that made their business and their personal success possible." I agree with Mickey Kaus: patriotic charity is better at entrenching corporatism than promoting economic strength. (It might be good for CEO pay too. Fuzzy corporate governance tends to be. Obligations to shareholders? It's more complicated than that...)

Obama did talk briefly about the importance of education and training, which are precisely on point, but I do mean briefly. No substantive proposals. The theme he emphasized in Kansas was economic justice. Here's the plan, apparently: get more inner-city children through high school by telling the very rich, "Enough!"

It's nonsense as policy. Whether voters buy it--assuming he sticks with this motif--we'll find out.