Joshua Green

Obama sets his goal on the middle class

ON TUESDAY, President Obama delivered a speech in Osawatomie, Kans., on the erosion of American middleclass 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.

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Democrats have been traumatized by the issue ever since 1984, when Walter Mondale explicitly promised in apresidential 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 is a national correspondent at Bloomberg Businessweek. Follow him on Twitter @JoshuaGreen.