The Anti-Economist — February 13, 2013, 5:11 pm

The Economic Understatement of the Union

If the president wants the public???s support, he should be making a forceful case for spending

President Obama has for some time now been building a Procrustean bed on the issue of deficit cutting. We have no room to increase spending, his fixed position goes, because we must cut the deficit now — and never mind that serious deficits will not afflict the economy until the late 2020s, if then. Obama began moving in this direction with his appointment of two conservatives, Erskine Bowles and Alan Simpson, to head his budget-balancing commission, and he has reinforced the argument time and again since.

For all that, the president’s State of the Union address last night offered an admirable if weak laundry list of proposals. They included a commission on protecting voting rights (largely overlooked in post-speech analysis), and a much-needed minimum-wage rise, to $9 an hour. Neither of these would require additional government spending. But does anyone believe that voting commission will be aggressive enough? Does anyone believe this Congress will pass a $9 minimum wage?

Obama also offered general proposals on the hot-button issues of immigration reform, emissions constraints, and gun control. Only on the last of these did his speech become emotional, as he demanded that Republicans allow a vote on the issue. The strategy seems to be to force them to vote against reform, then send them home to constituents who will wonder why they refused to back sensible controls.

Less controversially, Obama proposed a high-quality system of pre-kindergarten education in partnership with the states. He also talked about infrastructure spending (though only of enacting a previous proposal), and mentioned in passing that cutting spending during sequestration could hurt the economy. His tone was so quiet on the latter issue that I doubt the public understood its importance. It ought to have been his focus.

The economy could be making progress right now, but the president’s opponents are holding it back with unreasonable demands for cuts in social spending and threats to vote against the next debt-ceiling increase. If the economy grows slowly this year, Obama might have said, we know whose fault this will be. But, sadly, he didn’t go to battle, instead falling into his Procrustean bed. None of his new proposals, he made sure to say, would add to the deficit.

Herein lies the problem. With no way to finance his pre?K program, for example, why should anyone take it seriously? Nor did he offer a strong defense of social programs in the face of proposed cuts. To the contrary, he said he’d reform Medicare along the lines suggested by the Bowles–Simpson commission, which was conspicuously free of specifics.

The economy needs more government spending — or at least a hold on spending cuts — in order to grow and to reduce unemployment. It needs bolder investment programs.  Perhaps Obama thinks speaking quietly is the path to credibility on the economy. With unemployment still hovering around 8 percent, he appears not to want to risk adopting forceful policies, yet his modest, compromised actions to date have failed to get the recovery on track. He and his team failed to implement bold mortgage relief, to back a strong public option in Obamacare, and to advertise how well their stimulus program had worked, which made it difficult to come back for a second one.

The groundwork is there, however. Obama came up with an effective jobs program at the end of 2011. His infrastructure proposal can be built upon, as can Obamacare. In the State of the Union, he made a good case for government. But even so, he was careful to state, “It’s not a bigger government we need, but a smarter government.” He might instead have established a set of priorities, proposing two or three programs to which he devote all of his — and the government’s — energy. And he might have adopted a tone appropriate to today’s jobs emergency.

We have an intelligent president who is moving in the right direction. But he is moving too slowly, hobbled by his obeisance to the deficit hawks.

Share
Single Page
writes the Anti-Economist column for Harper’s Magazine.

More from Jeff Madrick:

From the February 2014 issue

How Germany Reconquered Europe

The euro and its discontents

Get access to 165 years of
Harper’s for only $45.99

United States Canada

  • gentsugen

    So all of the sudden Progressives care that “the economy could be making progress right now…”? Every policy Progressives support hurts the economy. Raise taxes. Increase regulation. Stop the pipeline, stop fracking,stop drilling, stop stop stop. You folks crack me up….

  • william reichert

    I loved the comment ” deficits wont be a problem till the late 2020′s IF THEN ”
    I assume this is sarcasm. I cetainly hope so.

CATEGORIES

THE CURRENT ISSUE

July 2015

One Day Less

= Subscribers only.
Sign in here.
Subscribe here.

Dressed to Kill

= Subscribers only.
Sign in here.
Subscribe here.

Wrong Prescription?

= Subscribers only.
Sign in here.
Subscribe here.

Travel Day

= Subscribers only.
Sign in here.
Subscribe here.

Fugue State

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content

FEATURED ON HARPERS.ORG

Article
Avian Voices·

= Subscribers only.
Sign in here.
Subscribe here.

“The mockingbird’s bath is an orgy of thrashing and writhing about. When he has finished, one of the innocents alights on the rim of the basin and looks with disbelief at the thimble of water remaining.”
Illustration by Eric Hanson
[Browsings]
Before the War·

= Subscribers only.
Sign in here.
Subscribe here.

“I’m worried that what the Houthis did to push Yemen into a civil conflict in September 2014, the Saudis may end up doing again when they end their campaign by eliminating the Houthis.”
Photograph by Alex Potter
Article
The Speakeasy·

= Subscribers only.
Sign in here.
Subscribe here.

“In order to understand how Marty’s could survive as an institution, I returned a year after my first visit to spend a week at what was sure to be the world’s bleakest comedy club.”
Photograph by Mike Slack
Post
The Lost Land·

= Subscribers only.
Sign in here.
Subscribe here.

“I had first encountered some of these volumes—A Swiftly Tilting Planet, The Giver—as a child, and during adolescence, they registered as postcards from a homeland recently abandoned.”
Photograph by the author
Article
Wrong Prescription?·

= Subscribers only.
Sign in here.
Subscribe here.

“Whatever the slogans suggested, the A.C.A. was never meant to include everyone.”
Illustration by Taylor Callery

Estimated cost of the environmental damage caused each year by the world’s 3,000 largest companies:

$2,200,000,000,000

Two thirds of U.S. teenagers experience uncontrollable rage.

Beekeepers began extracting 1 million honeybees living beneath the siding of a house in New York State.

Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!

HARPER’S FINEST

Subways Are for Sleeping

By

“Shelby is waiting for something. He himself does not know what it is. When it comes he will either go back into the world from which he came, or sink out of sight in the morass of alcoholism or despair that has engulfed other vagrants.”

Subscribe Today