More politics, sorry. Still, if you want science, RC and J+J are blogging AGU. But CIP is delighted with Obama’s speech on the economy. I’m less so; the comment there from Wolfgang (He always gave great speeches… this was one reason he won in 2008. The problem is that great speeches are not sufficient once the elcetion is over…) looks all too correct. But there is far more to talk about than that, so…
[Note: these quotes are heavily cut to compress them; please check the originals. But I don’t think I’ve altered the sense.]
For many years, credit cards and home equity loans papered over the harsh realities of this new economy. But in 2008, the house of cards collapsed… Mortgages sold to people who couldn’t afford them… It was wrong. It combined the breathtaking greed of a few with irresponsibility across the system… It claimed the jobs, homes, and the basic security of millions – innocent, hard-working Americans who had met their responsibilities, but were still left holding the bag.
What is badly wrong here is blaming all the problems on a greedy few. The problem was the greedy many. All those people who bought ridiculous houses they could not possibly afford. All those people who piled up debt. These were not innocent people exploited by a greedy system; these were greedy people doing their best to exploit what they thought was an easy system. So this isn’t an honest attempt to move forwards and solve problems: it is lying to people who are looking for scapegoats. Much much later on he concedes this point, saying It will require greater responsibility from homeowners to not take out mortgages they can’t afford, and remember that if something seems too good to be true, it probably is.
You see, this isn’t the first time America has faced this choice. At the turn of the last century… would we settle for a country where most of the new railroads and factories were controlled by a few giant monopolies that kept prices high and wages low? Theodore Roosevelt… believed then what we know is true today: that the free market is the greatest force for economic progress in human history… But Roosevelt also knew that the free market… only works when there are rules of the road to ensure that competition is fair, open, and honest. And so he busted up monopolies, forcing those companies to compete for customers with better services and better prices. And today, they still must. He fought to make sure businesses couldn’t profit by exploiting children, or selling food or medicine that wasn’t safe. And today, they still can’t.
So, Obama isn’t complaining that we’ve rolled things back; all the old protections are still in place, it seems. Incidentally: compared to what R is said to have done, Obama looks very lightweight.
[some economics, which I’m ignoring.]
This kind of inequality… hurts us all… America was built on the idea of broad-based prosperity… Inequality also distorts our democracy. It gives an outsized voice to the few who can afford high-priced lobbyists and unlimited campaign contributions… And it leaves everyone else rightly suspicious that the system in Washington is rigged against them… That’s why immigrants from around the world flocked to our shores.
What do you mean, “flocked“? You mean “flock”: they still do. You have to build fences to keep them out. But on:
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%. 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 1 in 3 chance of making it to the middle class.
And if the trend continues much longer, the chances will become negative! Woo. sorry, bit of a cheap shot.
It’s not a view that we should somehow turn back technology or put up walls around America.
Bit late for that, I’m afraid.
So what does that mean for restoring middle-class security in today’s economy?
Ah, good. The “solutions” bit is coming. First notice, though, how all he talks about is the middle class (I’ve cut most of them. Check the original). This is a very targeted speech.
The race we want to win – the race we can win – is a race to the top; the race for good jobs that pay well and offer middle-class security. Businesses will create those jobs in countries with the highest-skilled, highest-educated workers; the most advanced transportation and communication; the strongest commitment to research and technology.
OK, good. Sounds sensible. How are you going to manage it, though – its a bit motherhood-and-apple-pie, no? Quick test: suppose you invert it, is it obvious nonsense? “We want to win the race to the bottom… the race for bad jobs”. Yep, its nonsense. The obverse of nonsense isn’t wrong, but it is trivially right.
…We shouldn’t be laying off good teachers right now – we should be hiring them…
Sounds plausible, but I suspect it to be code for politicking.
That’s why the over one million construction workers who lost their jobs when the housing market collapsed shouldn’t be sitting at home with nothing to do. They should be rebuilding our roads and bridges; laying down faster railroads and broadband; modernizing our schools – all the things other countries are already doing to attract good jobs and businesses to their shores.
This sounds like: we need a government stimulus package, New-Deal-y type stuff I suppose. Do I believe it? Dunno.
But in the long term, we have to rethink our tax system more fundamentally. We have to ask ourselves: Do we want to make the investments we need in things like education, and research, and high-tech manufacturing? Or do we want to keep in place the tax breaks for the wealthiest Americans in our country?
End tax breaks for the wealthy. Yes, might as well, though I gather there is opposition to that, too.
When times get tough, the workers agree to give up some perks and pay, and so do the owners.
Pay flexibility instead of layoffs? Probably a good idea, but there are lots of laws in place that make this hard.
… [chap from company:] it’s about the community: “These are people we went to school with,” he said. “We go to church with them. We see them in the same restaurant. Indeed, a lot of us have married local girls and boys… [Back to the Prez:] That’s how America was built… Our success has never just been about survival of the fittest. It’s been about building a nation where we’re all better off
So yes: you can do that kind of pay flexibility in small companies and local areas where the workers and the bosses know and trust each other. But it is very hard to do outside that environment. And yes, building a successful country has to involve cooperation as well as competition: but that doesn’t usefully tell you quite where the boundary should lie.
Conclusion: probably, it sounded much better as a speech (itself a bad thing :-). As written-down text, it is only so-so, mostly partisan politics, nothing new or exciting in it that I can see.