Obama Takes on Inequality

In a major economic speech delivered yesterday, President Obama called America's growing inequality and lack of upward mobility “the defining challenge of our time”. Though he may have diagnosed the disease, did he prescribe an effective cure?

The United States is beset by levels of inequality on par with Jamaica and Argentina, notes the Editorial Board of The New York Times, "and such concentrated wealth leads to more frequent recessions, higher household debt and growing cynicism and despondency." How did the country arrive at this crisis? The Board points to "[t]he emphasis on cutting taxes and spending that began in the Reagan years [as the] direct cause of economic insecurity now."

But if government is essentially the cause of the problem, can it also be the solution? Obama rolled out a number of policy prescriptions, many of which he's preposed before and few of which have much of a chance of passing Congress. For John Cassidy, writing in The New Yorker, these "small-bore measures" are inadequate to addressing the challenge, even if all were enacted:  

Rather than simply trying to push the ball a bit farther up the Washington playing field, the President might have been better served to pick up on some of the larger themes that often get left out of the debate in the capital, but which commentators as far afield as Warren Buffett, Bill de Blasio, and Pope Francis have recently been addressing: a tax system which, over all, remains heavily tilted toward the very wealthy; a rampant financial sector, which is itself responsible for much of the rise in incomes at the top of the distribution; corporate-governance standards throughout the business sector that put stockholder value above everything else, and shower great rewards on C.E.O.s who cut labor costs to boost profits; and a change in social norms more generally in a society where, to quote the Pope, issues of ethics and morality are often “treated with a scornful derision.”

Full Story: The President on Inequality


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