The President puts income inequality front and center: "the defining issue of our time", by @DavidOAtkins

The President puts income inequality front and center: "the defining issue of our time"

by David Atkins

One of the primary critiques of the left against the President is that his speeches are so rarely backed up by actions. But even so, when a sitting President gives a landmark address on a topic so infrequently tackled as income inequality, one can't help but applaud and notice. From the speech:

But we know that people’s frustrations run deeper than these most recent political battles. Their frustration is rooted in their own daily battles, to make ends meet, to pay for college, buy a home, save for retirement. It’s rooted in the nagging sense that no matter how hard they work, the deck is stacked against them. And it’s rooted in the fear that their kids won’t be better off than they were.

They may not follow the constant back-and-forth in Washington or all the policy details, but they experience, in a very personal way, the relentless decadeslong trend that I want to spend some time talking about today, and that is a dangerous and growing inequality and lack of upward mobility that has jeopardized middle-class America’s basic bargain that if you work hard, you have a chance to get ahead. I believe this is the defining challenge of our time: making sure our economy works for every working American. That’s why I ran for president. It was the center of last year’s campaign. It drives everything I do in this office.
One might ask why the President has made certain policy decisions that negatively affect the middle class while benefiting the financial sector, if this is the case. But that a President is willing and able to come out and publicly say something like this in the post-Reagan era is itself a singular victory and an acknowledgment that something is deeply wrong with the economy. It is likely to be the issue that drives the Democratic presidential primary for 2016 as well.

Greg Sargent has a few other important points of note:

Obama described the decline in economic mobility as a direct consequence of inequality — as opposed to arguing that lack of mobility is itself the problem — and as the product of trends that are decades in the making. He cast the need to ensure that ”opportunity is real” for our children as "the defining issue of our time."


And, crucially, Obama described the overall problem as the result of the rich pulling away from the rest. He noted that the share of the country’s wealth is increasingly going to the top while tax cuts for the wealthiest have cut into investments that benefit the rest, emphasizing that this has made it harder for poor children to escape poverty. Meanwhile middle class incomes have stagnated thanks to technological advances and declining unions. Result: The “basic bargain at the heart of our economy has frayed.”

“The speech was not just about the top one percent, or about the middle class, or about the poor,” Smeeding says. “It was about the three of them together. It was about all three parts of the distribution — the whole thing.”
It is somewhat frustrating that inequality gets so little attention today that the speech is noteworthy. After all, the position of the middle class been eroding for decades now, even as the incomes of the wealthy have skyrocketed and their effetive tax rates have decreased.

The time to have started this important conversation was 20 years ago. Today, the facts of inequality and global economic trends of mechanization and deskilling mean that we now need to be having conversations about what a light-labor economy begins to look like.

Still, a major presidential address on income inequality is a good start. The key now will be to see what legislative actions follow from the President's words. One place he can start would be raise wages for workers employed through federal government contracts with private companies through executive order.