A(nother) Missed Opportunity – Obama’s 2014 State of the Union Address

By Bill Barclay

In 1934, FDR relabeled what had been known as “the President’s Annual Message” (SOTU) using the “State of the Union” phrase found in Article 2, Section 3 of the Constitution. Since then, presidents have used the event to outline their plans and hopes, not so much to Congress but rather, speaking over the heads of  Congress to “the people.”  In trying to reach beyond Congress, both presidents themselves and other political leaders have increasingly used the media to shape expectations. In advance of his 2014 SOTU, President Obama announced the decision to raise the minimum wage for federal contract workers to $10.10/hr,[*] fueling expectations about a full-throated attack on “income inequality” – and then never used the term in the address. Nor does the word “wealth” appear in the entire SOTU.

This was a missed opportunity to build upon – and further – the changing shape of political discourse in the U.S. and the globe. Even our economic rulers, meeting in Davos for the World Economic Forum last week, heard about inequality of both income and wealth. Obama, however, chose to use the framework of opportunity and poverty. Of course, everyone is for opportunity and most are against poverty (couldn’t be sure about John Boehner). In contrast to only three mentions of inequality, Obama talked about economic opportunity 11 times, summarizing his perspective by claiming that “opportunity is who we are,” a claim unfortunately not borne out when the U.S. is compared to other wealthy countries. Obama organized his ideas for increasing opportunity by urging that we “build new ladders of opportunity into the middle class.”  He then articulated some proposals to increase opportunity, including increasing access to college, assisting with payment of student loans, training for manufacturing jobs and calling for everyone “to give every woman the opportunity she deserves.” (He got a decent round of applause for this line.)  Even in his announcement of raising the minimum wage for federal contractors, however, Obama, while asking Congress to also act on this issue, largely called upon individual companies, state legislators and mayors to take action.

But this opportunity approach to the political economy misses two crucial factors. First, the level of both income and wealth inequality that exists in the U.S. today is greater than at any time since at least the 1920s – and this has a profound impact on our politics. Second, the structure of job creation in the U.S. economy is not one that will reward a college education.

Speaking more than a century ago, a Republican president charged the “malefactors of great wealth” with causing the financial panic – of 1907. Theodore Roosevelt argued that the contest was between the power of wealth and that of democratic government, with the wealthy more than willing to use their financial wealth to undermine and reverse government policies with which they disagreed. Obama failed to recognize and call out a very similar dynamic today – to name the causal agents of our own economic troubles, particularly our bloated financial sector (finance was never mentioned). This failure left him to fall back on the culturally hegemonic theme of individual effort. Each of us, individually, is to achieve success through improving our skills and talents that we can then sell them in the competitive market.

And that brings us to the second problem: what kinds of jobs are being created in the U.S. political economy?  Fifteen occupations are projected to generate almost one-third of total new jobs during the current decade. Eleven of these do not require a college education, and several do not even require a high school degree. Not surprisingly, 10 of these job-creating occupations also pay below, often substantially below, the median wage. Without addressing the hard question of how the U.S. political economy can be restructured away from a low-wage and toward a high-wage economy, the degrees earned by the millennials in the “STEM” fields – S(cience), T(echnology), E(ngineering) and M(ath) – will remain of little use. They are irrelevant to the jobs being created for laborers, food preparation, personal care aides, hospital orderlies, etc.

Obama also spent a significant portion of the SOTU on questions of war and peace. On the one hand, he made some good arguments about negotiations with Iran and again asked for the closing of Guantanamo. But also, a little worrisome in terms of future interventions, he promised that “from Tunisia to Burma, we’re supporting those who are willing to do the hard work of building democracy.”

The most interesting aspect of this part of the SOTU was the different audience reactions to two distinct parts of the speech. Obama argued that “America must move off a permanent war footing,” using this line to argue for his proposed reforms in surveillance and closing Guantanamo. The audience reaction was tepid. However, Obama closed his talk by telling the story of Cory Remsburg, an Army ranger, who was in the audience. Remsburg was badly wounded on his tenth tour of duty in Afghanistan but is making significant steps toward recovery. The very leaders who send us off to fight and die loved it, providing a long, standing ovation for Remsburg and leaving Obama with a closing high as he walked off the dais.