President Barack Obama speaks about the economy, Tuesday, December 6, 2011, at Osawatomie High School in Osawatomie, Kansas. (AP Photo/Carolyn Kaster)
It’s become a cliché to say that Occupy Wall Street has changed our country’s political conversation. But if you want to know exactly how the Occupy movement has impacted the debate in Washington, read Barack Obama’s speech in Osawatomie, Kansas, today.
For much of 2011, Obama’s speeches were all about the deficit. Today the central theme of his speech was income inequality—and how this mounting problem weakens our economy and our democracy. At long last, the president sounded like he was channeling his inner Elizabeth Warren.
Obama’s pivot away from austerity orthodoxy and toward public investment began with his jobs speech in September, but he’s subsequently sharpened his language and focus in recent months in response to pressure from Occupy Wall Street. He’s now tackling issues of basic fairness and attacking the GOP’s brand of “your-on-your-own economics” in a much more direct way. His nod to Teddy Roosevelt, who delivered his “New Nationalism” speech in Osawatomie in 1910, could not have come at a more appropriate time. Here’s the relevant section:
Now, just as there was in Teddy Roosevelt’s time, there’s been a certain crowd in Washington for the last few decades who respond to this economic challenge with the same old tune. “The market will take care of everything,” they tell us. If only we cut more regulations and cut more taxes—especially for the wealthy—our economy will grow stronger. Sure, there will be winners and losers. But if the winners do really well, jobs and prosperity will eventually trickle down to everyone else. And even if prosperity doesn’t trickle down, they argue, that’s the price of liberty.
It’s a simple theory—one that speaks to our rugged individualism and healthy skepticism of too much government. It fits well on a bumper sticker. Here’s the problem: it doesn’t work. It’s never worked. It didn’t work when it was tried in the decade before the Great Depression. It’s not what led to the incredible post-war boom of the ’50s and ’60s. And it didn’t work when we tried it during the last decade.
Remember that in those years, in 2001 and 2003, Congress passed two of the most expensive tax cuts for the wealthy in history, and what did they get us? The slowest job growth in half a century. Massive deficits that have made it much harder to pay for the investments that built this country and provided the basic security that helped millions of Americans reach and stay in the middle class—things like education and infrastructure; science and technology; Medicare and Social Security.
Remember that in those years, thanks to some of the same folks who are running Congress now, we had weak regulation and little oversight, and what did that get us? Insurance companies that jacked up people’s premiums with impunity, and denied care to the patients who were sick. Mortgage lenders that tricked families into buying homes they couldn’t afford. A financial sector where irresponsibility and lack of basic oversight nearly destroyed our entire economy.
We simply cannot return to this brand of your-on-your-own economics if we’re serious about rebuilding the middle class in this country. We know that it doesn’t result in a strong economy. It results in an economy that invests too little in its people and its future. It doesn’t result in a prosperity that trickles down. It results in a prosperity that’s enjoyed by fewer and fewer of our citizens.
Look at the statistics. In the last few decades, the average income of the top one percent has gone up by more than 250 percent, to $1.2 million per year. For the top one hundredth of one percent, the average income is now $27 million per year. The typical CEO who used to earn about thirty times more than his or her workers now earns 110 times more. And yet, over the last decade, the incomes of most Americans have actually fallen by about 6 percent.
This kind of inequality—a level we haven’t seen since the Great Depression—hurts us all. When middle-class families can no longer afford to buy the goods and services that businesses are selling, it drags down the entire economy, from top to bottom. America was built on the idea of broad-based prosperity—that’s why a CEO like Henry Ford made it his mission to pay his workers enough so that they could buy the cars they made. It’s also why a recent study showed that countries with less inequality tend to have stronger and steadier economic growth over the long run.
Inequality also distorts our democracy. It gives an outsized voice to the few who can afford high-priced lobbyists and unlimited campaign contributions, and runs the risk of selling out our democracy to the highest bidder. And it leaves everyone else rightly suspicious that the system in Washington is rigged against them—that our elected representatives aren’t looking out for the interests of most Americans.
More fundamentally, this kind of gaping inequality gives lie to the promise at the very heart of America: that this is the place where you can make it if you try. We tell people that in this country, even if you’re born with nothing, hard work can get you into the middle class; and that your children will have the chance to do even better than you. That’s why immigrants from around the world flocked to our shores.
And yet, over the last few decades, the rungs on the ladder of opportunity have grown farther and farther apart, and the middle class has shrunk. A few years after World War II, a child who was born into poverty had a slightly better than 50-50 chance of becoming middle class as an adult. By 1980, that chance fell to around 40 percent. And if the trend of rising inequality over the last few decades continues, it’s estimated that a child born today will only have a one-in-three chance of making it to the middle class.
It’s heartbreaking enough that there are millions of working families in this country who are now forced to take their children to food banks for a decent meal. But the idea that those children might not have a chance to climb out of that situation and back into the middle class, no matter how hard they work? That’s inexcusable. It’s wrong. It flies in the face of everything we stand for.
You’re likely to hear elements of this speech over and over as the campaign heats up, as the Obama campaign attempts to stand with the 99 percent and paint Gingrich or Romney as core defenders of the 1 percent. None other than Chuck Schumer, one of the senators who represents Wall Street, told Washington Post blogger Greg Sargent that Democrats would focus on income inequality “like a laser” in 2012.
That will entail, however, a shift not only in rhetoric, but also in policy for a party and president that has too often been seen as prioritizing Wall Street over Main Street. Nor is it realistic to think that the Obama campaign will suddenly win over disaffected former supporters with a series of speeches. Indeed, Occupy Wall Street is aimed as much at the president and the rigged political system in Washington as it is at the nation’s largest banks. As one OWS leader told New York magazine: “These [protesters] aren’t out here because they’re offended that they haven’t been spoken to nicely. They’re out here because they owe shitloads of money in student-loan debt and can’t find a job. Or they can’t afford their mortgage. And if Obama thinks that they’re gonna be able to divert this energy by talking about doing something, he’s got another think coming.”
To paraphrase Hillary Clinton, Obama now needs to prove to the movement that he has more to offer them, and the country, than just words. Still, the populist moment captured by Occupy Wall Street provides an opening for the president as well. It’s still an open question whether he’ll end up on the right or the wrong side of this movement. But today Obama took an important step in Occupy’s direction.