In his farewell State of the Union address to Congress, President Obama put the struggle to reduce inequality in the United States front and center. The President presented a clear choice to the American people. They need to decide “what role the government should play in making sure the system’s not rigged in favor of the wealthiest and biggest corporations.”
Obama is essentially asking how can we shape an economy where everyone can thrive, not just those at the top of the economic ladder. An excellent question for voters looking to the next election, but a difficult one looking back on the Obama legacy.
The President went on to describe a “new economy” that includes an improved version of our tax code, our regulatory system, and our electoral process. He directed the bulk of his attention to the misdeeds of the wealthy. As the President put it, “Food Stamp recipients didn’t cause the financial crisis; recklessness on Wall Street did.”
“It’s sure not the average family watching tonight,” President Obama added, “that avoids paying taxes through offshore accounts.”
Without going into much detail, Obama touched on his support for closing offshore tax loopholes, breaking up Wall Street banks, and fixing our broken campaign finance system. His lack of detail on these topics probably reflected the reality that he has only a year left to accomplish these goals and little chance of getting any legislation through Congress.
I’ve written about each of these topics during the Obama Presidency, with both praise and rebuke for what the President and Congress have and haven’t done. I do appreciate the President’s acknowledgement that the central drivers of our growing inequality need to be addressed. But it’s impossible to ignore that inequality has skyrocketed during his two terms despite the strong economic indicators he cited in his speech.
Nearly all new income since the Great Recession has funneled to the top 1 percent. The President didn’t mention that. He also left out his support for the extension of the Bush tax cuts on the wealthy in 2010, a terrible decision that gave tax cuts to the families that needed those cuts least. And he touted his support for the TPP free trade deal, an ill-fated doubling down on the failed free trade policies that came before.
It will inevitably fall on future administrations to stem the rise of inequality and, as President Obama put it, Americans have a choice to make. The good news is that polling shows the public strongly supports policies that reduce inequality. The bad news is that public support does not guarantee passage of sound public policy.
For his part, Obama has laid out a firm platform for addressing inequality, even if his tenure has not achieved the success inequality advocates had hoped for.
Josh Hoxie tracks the debate over the estate tax and other grand divide-related concerns for the Institute for Policy Studies Program on Inequality and the Common Good.