Slate: Obama's war on inequality

[Enrique]

http://www.slate.com/id/2278914/

Wasn't reversing the decades-long trend toward income inequality supposed to be the big theme of the Obama administration? The new president sounded it strongly in his inaugural address, stating that "a nation cannot prosper long when it favors only the prosperous." He followed up with a 2010 budget proposal that sought, in the words of the New York Times' David Leonhardt, "to reverse the rapid increase in economic inequality over the last 30 years." Obama has raised the issue at major occasions since, including his first State of the Union address in 2010, when he noted, "We cannot afford another so-called economic 'expansion' like the one from last decade … where the income of the average American household declined."

But if Obama has declared war on inequality, inequality seems to be winning. In the deal he just cut with congressional Republicans, the president not only agreed to extend the Bush tax cuts for the highest earners but also to eliminate the estate tax for all but the microscopic percentage of people passing down more than $5 million—causing inheritance tax proponent Ray Madoff to declare the battle lost for good.

And despite the role skewed financial rewards played in cratering the global economy, the Obama administration's policy response has failed to address outsized Wall Street and CEO compensation in any meaningful way. Bonus season is upon us, and with the big banks now liberated from their TARP obligations, the general attitude seems to be, "What financial crisis?" Class war, prosecuted from above, is depicted as a threat from below. A few months ago, billionaire private equity manager Steve Schwarzman had the gall to compare the Obama administration's attempt to tax "carried interest" at the same rate as other forms of income to "when Hitler invaded Poland in 1939."

When it comes to raising working-class incomes, Obama has been similarly ineffective. As it is implemented over time (and assuming it survives legal challenge), Obama's health care reform may become a significant factor both in reducing the burden of medical costs on middle-class families and in promoting social equality. From 2008 to 2009, however, the number of people without health insurance rose from 46.3 million to 50.7 million. In the longer term, the key to combating inequality is upgrading the education and skills of American workers. But with the Republicans now in charge of the House, Obama's hopes for major new investments in worker skills seem more elusive than ever. In particular, his goal of every American receiving some higher education is going nowhere. In the coming year, the president will be lucky to protect pro-egalitarian programs that already exist.

(...)

Obama deserves fault for failing to articulate this abstract threat in a way ordinary people can appreciate. Like the deficit, income inequality never killed anybody—it merely has the potential to sap the entire country's health and spirit. Moving toward an income distribution like Brazil's threatens individual happiness, social peace, and American values. But so far, the president hasn't figured out how to get the public to relate to the issue. In April, Obama told a group of frowning bankers at Cooper Union, "There is no dividing line between Main Street and Wall Street." But there is, and it is growing deeper every year.

[WingDinger]

1. I, for one am glad he didn't live up to our expectations. No one man can change inertia.

Had he done all we voted him to do, it would fizzle into about what we have now. It will take all of us rising up.