The president made his fourth or fifth, or maybe it’s the seventh or eighth, pivot to the economy on Wednesday, and a revealing speech it was. We counted four mentions of “growth” but “inequality” got five. This goes a long way to explaining why Mr. Obama is still bemoaning the state of the economy five years into his Presidency.
Some might say this is unfair, but a brief chronology of the president’s pronouncements on the economy makes it all but obvious.
- February 2009: The president tells Congress “now is the time to jumpstart job creation” and his agenda “begins with jobs.”
- November 2009: Meeting with his Economic Recovery Advisory Board, the president says his administration “will not rest until we are succeeding in generating the jobs that this economy needs.”
- April 2010: Obama goes on a “Main Street” tour, saying “it’s time to rebuild our economy on a new foundation so that we’ve got real and sustained growth.”
- June 2010: The president declares a “Recovery Summer” to highlight the jobs created by stimulus-funded infrastructure projects. “If we want to ensure that Americans can compete with any nation in the world, we’re going to have to get serious about our long-term vision for this country and we’re going to have to get serious about our infrastructure,” he said.
- December 2010: The president tells reporters “we are past the crisis point in the economy, but we now have to pivot and focus on jobs and growth.”
- August 2011: After lawmakers reach a compromise to avert default, the president vows “in the coming months, I’ll continue also to fight for what the American people care most about: new jobs, higher wages and faster economic growth.”
- February 2013: At the start of his second term, the president refocuses on job creation in his State of the Union address, saying “a growing economy that creates good, middle-class jobs–that must be the North Star that guides our efforts.”
- May 2013: Kicking off his “Jobs and Opportunity Tour,” the president says “all of us have to commit ourselves to doing better than we’re doing now. And all of us have to rally around the single-greatest challenge that we face as a country right now, and that’s reigniting the true engine of economic growth, a rising, thriving middle class.”
The problems we have with economic policy and inequality is that inequality is best addressed by distributing the benefits of growth as that growth occurs, not redistributing the wealth after the fact. As the WSJ puts it in today’s editorial:
The core problem has been Mr. Obama’s focus on spreading the wealth rather than creating it. ObamaCare will soon hook more Americans on government subsidies, but its mandates and taxes have hurt job creation, especially at small businesses. Mr. Obama’s record tax increases have grabbed a bigger chunk of affluent incomes, but they created uncertainty for business throughout 2012 and have dampened growth so far this year.
The food stamp and disability rolls have exploded, which reduces inequality but also reduces the incentive to work and rise on the economic ladder. This has contributed to a plunge in the share of Americans who are working—the labor participation rate—to 63.5% in June from 65.7% in June 2009. And don’t forget the Fed’s extraordinary monetary policy, which has done well by the rich who have assets but left the thrifty middle class and retirees earning pennies on their savings.
Mr. Obama would have done far better by the poor, the middle class and the wealthy if he had focused on growing the economy first. The difference between the Obama 2% recovery and the Reagan-Clinton 3%-4% growth rates is rising incomes for nearly everybody. …If only Mr. Obama understood that before a government can redistribute wealth, the private economy has to create it.