NATIONAL REVIEW ONLINE
January 28, 2014 12:00 AM
State of Exhaustion
Don’t expect any fresh ideas on reviving the economy in tonight’s SOTU address.
By Mona Charen
Only 28 percent of respondents to a recent Harris poll said they plan to watch the State of the Union address. And some of those are lying. It’s clear that the Obama charm has worn extremely thin.
The rapturous excitement Obama once elicited was based, at least in part, on the idea that he had something new to offer; that he transcended the “old politics.” It’s not enough to say that those expectations were misplaced — that was obvious from the beginning. But he has proved to be one of the most polarizing leaders of the modern era, encouraging a corrosive sense of grievance between Americans and undermining people’s faith in the essential justness of their country.
Tonight, we are told, the president will once again mount his horse and fix his lance at the scourge of “income inequality” and declining upward mobility in an attempt to convince voters struggling with the Obama economy that the wealthy are to blame for their problems. It’s the leftist mantra and Obama never tires of it. He hasn’t read Adam Smith. He doesn’t know that one man’s prosperity is not the cause of another man’s poverty.
It’s awkward for Obama, so he probably won’t mention it, but income inequality has increased since he assumed office. And while he’s waxing indignant about declining upward mobility, he probably won’t acknowledge that, thanks to the strength of the U.S. economy before he got his hands on it, economic mobility has improved in recent decades as incomes have risen. Median family income (adjusted for inflation) is 12 percent higher today than it was in 1980. People have more disposable income than their parents did at the same stage of life.
Though he has referred approvingly to the work of Emmanuel Saez in the past, the president will probably avoid the economist’s most recent study, “Where Is the Land of Opportunity?” because Saez concludes that the chief obstacle to upward mobility is not the “1 percent” but family structure. Even children in intact families suffer when they grow up in communities with large percentages of single-parent families.
Responding clumsily to the problem of joblessness — which has assumed nearly European levels under his leadership — President Obama will reach into his 1930s kit bag and propose an increase in the federal minimum wage. Sigh. First, most economists agree that increasing the minimum wage has a tendency to discourage hiring. Second, most people who earn minimum wage are not heads of households. Third, 80 percent are not poor. Fourth, most receive a raise within twelve months. Fifth, the states containing half the population already have minimum wages above the federal level.
What the soft shoe about income inequality and declining upward mobility is meant to disguise is that President Obama has presided over an economy that is providing diminishing opportunities for work. People who work full time are almost never poor. The Current Population Survey of the Census Bureau found that among full-time workers the poverty rate in 2013 was 2.9 percent. Most of those who are poor are not working at all, or are working only part time.
Long-term unemployment is demoralizing for the jobless and expensive for taxpayers. Rather than attempt to set wages from Washington, Mr. Obama’s entire focus ought to be on removing obstacles to hiring. The first candidate is Obamacare. As Bloomberg’s Megan McArdle has noted, we just enacted a huge new entitlement to ensure coverage to the “45 million uninsured,” but as of December, fewer than 750,000 have signed up. Meanwhile, the entire health-care sector has been thrown into chaos, and employers throughout the country are hesitating to hire.
Mr. Obama will boast that he has a “pen and a phone.” He can use his pen to relax some of the job-depressing regulations his administration has imposed, particularly in the health, financial, and energy sectors. He can use his phone to approve the Keystone pipeline. And he could use his influence to extol the essential habits of success without which more and more Americans will fail to flourish. As the Annie E. Casey Foundation reported years ago, if Americans do three simple things, they will not be poor: 1) graduate from high school, 2) get a job, and 3) wait until marriage to have their first child.
But that would require more imagination than Obama has ever demonstrated. Instead, he’ll stubbornly continue to push policies that have failed everywhere they’ve been tried. When they fail for him, he will blame Republicans. Once hailed as a messiah, he’s now revealed as just a mess.