Obama Gingerly Embraces Occupy Wall Street

Posted by: Joshua Green on December 9, 2011

On Tuesday, President Obama delivered a speech in Osawatomie, Kans., on the erosion of American middle-class opportunity and the government’s duty to turn this around, which he cast as ”the defining issue of our time.” The choice of Osawatomie was significant because that’s where, in 1910, Teddy Roosevelt issued his famous call for a ”New Nationalism” built upon ”an economic system under which each man shall be guaranteed the opportunity to show the best that there is in him.” Obama plainly meant to evoke this legacy, and like Roosevelt, he cast the well-being and advancement of an expanding middle class as central to the American ideal.

Over the past few months, Obama appears finally to have recognized the fruitlessness of trying to govern in the post-partisan mode on which he campaigned for president. His Kansas speech offered an alternate approach that laid out the themes of his reelection campaign. ”For most Americans, the basic bargain that made this country great has eroded,” he said. ”Long before the recession hit, hard work stopped paying off for too many people. Fewer and fewer folks who contributed to the success of our economy actually benefited from that success.”

The most striking aspect of the speech was how it adopted and amplified the economic critique of the Occupy Wall Street movement and, to a lesser extent, the Tea Party, both of which Obama alluded to. He also signaled that he’ll take on two issues from which a generation of Democrats has shied away: raising taxes on the rich and pushing for a stronger government role in establishing economic security for all Americans.

Obama’s populist tone has drawn the most attention, but the latter initiative is the more politically significant — and risky. Opinion polls are nearly unanimous in showing deep concern about economic security and a willingness among Americans of all political persuasions to accept higher taxes on the rich. Democrats’ reluctance to capitalize on this has long been a source of frustration among liberals. But the party has struggled for years to marry the public’s apparent willingness to impose higher taxes with a successful strategy for governing, encountering many brutal failures along the way.

Democrats have been traumatized by the issue ever since 1984, when Walter Mondale explicitly promised in a presidential debate to raise taxes (”Mr. Reagan will raise taxes, and so will I. He won’t tell you. I just did.”) and went on to suffer a landslide defeat.
Obama’s decision to forge ahead anyway was no doubt encouraged by the huge numbers of people now suffering from the downturn. While he focused on the growing challenge of climbing into the middle class, a new study from the Rockefeller Foundation shows how easy it is to fall out of it.

This report by Jacob Hacker, director of the Institution for Social and Policy Studies at Yale University, and a team of researchers seeks to gauge economic insecurity more comprehensively than standard measures like the rates of unemployment and bankruptcy allow, and does so by measuring how many Americans experience a major income loss from one year to the next without sufficient savings to fall back on. The report defines the economically insecure as those who suffer a drop in household income of 25 percent or more after taking into account medical costs and debt repayments, but also the offsetting effects of government aid. By this measure insecurity has been rising — and steadily so since long before the current recession.

In 1986, 14.3 percent of Americans experienced a major economic loss, a figure that rose to 18.8 percent in the 2001 recession and 20.5 percent—62 million Americans in all — in 2010. ”Not only are more Americans experiencing large declines in their economic
standing,” the authors note, but ”the depth of those drops has also become greater.” The recession has spread anxiety about economic stability even among those not yet affected by it. As a political matter, its salience has probably never been higher for decades.

Where Obama runs a greater risk is in echoing Roosevelt’s contention that government is the entity best suited to alleviate it. ”Americans are receptive to the idea that the decline of the middle class is a huge problem and not inevitable,” Hacker says. ”But articulating a vision for government that is simultaneously robust and not threatening is much harder.”
That’s the real challenge that Obama has set for himself—and in light of public attitudes toward government, perhaps a more difficult one than Roosevelt issued.

Joshua Green writes a weekly column for the Boston Globe. Follow him on Twitter @JoshuaGreen.

Reader Comments

Derghutta

December 9, 2011 4:39 PM

One of the best things the government can do for the country is to restrict the salaries + benefits +stock options (etc) that are given to an executive of a company (that has at least 500 employees) to be 20 times the lowest paid wage of a U.S. employee who works for that company.
If the company wants to pay any employee more than that amount, then the public should have to vote for it.

madison

December 9, 2011 6:04 PM

Ho Ho Ho

Are you kidding? People work and show their best, fascist regime takes everything away. You have to be kidding me???

texasjimbob

December 9, 2011 8:32 PM

Derghutta, not very workable. First off why should the public vote on what a PRIVATE company pays its employees? Secondly, under your formula, if the company has a single minimum wage employee then the pay and benefits of the highest paid executive would be limited to about $312,000 a year. Not much incentive for top people to remain in the U.S. when they could make much more moving to Europe. Unless of course you want to be even more like the failed former Communist states and keep people from legally leaving the country. Instead, how about let's limit the pay and benefits of PUBLIC employees to twice the minimum wage?

B. Cayenne Bird

December 9, 2011 9:50 PM

After instructing Homeland Security to raid and shut down OWS in 18 major cities, getting us into more wars, laughing about his stepping up the drug war and turning his back on his base, Obama has been exposed as a corporate shill. The progressive running for office is Dr. Jill Stein of the Green Party. Anti War, Anti Drug War, an expert on health care, 15 million new jobs, stimulate the economy by forging student loans. She is the one most closely aligned with OWS.

Robbie

December 9, 2011 10:07 PM

Texasjimbob, so you are more worried about a mass exodus of CEOs to Europe, which would leave jobs paying $312,000 open for other less greedy people who know how to manage a family budget of $312,000, then you are about having public employees who have to find "alternative means" to make ends meet?

Robbie

December 9, 2011 10:09 PM

Texasjimbob, so you are more worried about a mass exodus of CEOs to Europe, which would leave jobs paying $312,000 open for other less greedy people who know how to manage a family budget of $312,000, then you are about having public employees who have to find "alternative means" to make ends meet?

StudentVeteran

December 10, 2011 2:33 PM

Texasjimbob your reasoning makes about as much sense as selling your car for gas money. Maybe you should run for Congress.

Niall1

December 10, 2011 8:29 PM

Actually, Texasjimbob's reasoning makes a fiar amount of sense, since EVERYONE in this country benefits when US Based corporations do well. What you'd have, however, wouldn't be top execs leaving, it'd be a mass exodus of companies, placing their headquarters out of country, and if tariffs went to high to adjust, simply the mass laying off of tens of millions of Americans, in favor of cheaper labor in 3rd world nations. Always look at the side effects of actions in great detail.

And his point about the public voting on private citizens was also spot on.

Let's further go on to mention how this could also affect smaller companies negatively....example, bar I used to work for, had numerous part time employees. One girl, worked one 5 hr shift per week. At $8.67/hr, that's....$2,254.20/year...so 20 times that would be...$45,084/year, max anyone in that company could make? Let's say the business does well, the top level exec happened to be the owner or the bar, which was incorporated, btw, so this applies for certain....he is therefore required to do what, exactly, with the surplus money? Give it away? Single owner corporations ARE the business....so he'd have not been allowed to keep the money his own risks finacially, made for him?

Niall1

December 10, 2011 8:31 PM

Sorry, missed the 500 or more employee part....even so, technically, a similar number could arise....as many companies have multiple branches, restaurant/fast food franchises are good examples.

Niall1

December 10, 2011 8:35 PM

I don't agree with limiting public employees pay to twice minimum wage, however, as too many of those jobs require college educations, and are skilled labor.

Sue

December 11, 2011 12:00 AM

Most of the companies with over 500 employees are not "private" companies. They are public, and owned by shareholders. Shareholders do not have easy control over the pay of the company officers. I do agree that salaries should be capped. Also, proportional to profits. More important all companies should be paying higher taxes on profits. The US corporate tax rate is one of the lowest in the world. Raise it. Higher taxes causes comapnies to re-invest profits and pay higher salaries to reduce tax burdens.

Jamie

December 11, 2011 5:37 AM

Actions speak louder than words:

Obama tops list of recipients of most funds received from Wall Street in U.S. history: http://www.opensecrets.org/industries/summary.php?ind=F07&cycle=All&recipdetail=M&sortorder=U

Not just banks but also corporation like, Boeing: http://www.opensecrets.org/orgs/recips.php?id=D000000100&type=P&cycle=2008&state&sort=A

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About

Led by Bloomberg Businessweek's Washington correspondent, "Joshua Green on Politics" is a blog devoted to national politics and public policy issues, from Congress to the 2012 Presidential campaign trail. A special focus will be the intersection of business and politics. Follow the author on Twitter (@JoshuaGreen). To book for television or radio appearances, call Patti Straus, 212-617-3279, or e-mail pstraus@bloomberg.net.

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