Obama's Economy Speech Lays the Smackdown On Austerity
Eight years after speaking about the importance of a strong middle-class workforce at Knox College, President Obama returned to the Illinois school on Wednesday with a similar message: A strong and vibrant middle class is the key to creating a robust American economy.
Obama laid out his vision for economic growth and improvement in the much-hyped speech, which some prominent pundits are saying is his “return to returning to the economy.” He acknowledged that the economy — albeit no longer in a free fall — remains fragile.
“We’re not there yet; we’ve got more work to do,” Obama said. “Nearly all the income gains in the last 10 years have continued to flow to the top 1%.”
Obama is embarking on a series of speeches promoting his economic policies. If this sounds familiar, that’s because it is. The president took a similar approach shortly after his most recent State of the Union Address, when he stopped in several cities across America to discuss job creation and economic growth.
As he hits the road again, the president plans to stop in Illinois, Missouri, and Florida.
In his speech, Obama also touched on the need for greater investment in our infrastructure, including technological resources. In the 21st century, he said, “jobs have no borders,” and companies will locate workers anywhere they can find the infrastructure and resources for success.
Experts say austerity and spending cuts are bad policies at a time when government needs to invest more in its future through infrastructure, social programs, and education.
Larry Summers, the former National Economic Council director and former secretary of the treasury, noted in an op-ed for the Washington Post, “Governments that enjoy such low borrowing costs can improve their creditworthiness by borrowing more, not less, and investing in improving their future fiscal position.” (Summers is also a distinguished senior fellow at the Center for American Progress, our parent organization.)
This means investing in higher education, investing in job training, and investing in health care.
“If you think education is expensive,” Obama said. “Wait ’till you see the cost of ignorance in the 21st century.”
At today’s speech, the president covered a wide range of topics from health care to homeownership to education and student debt — issues that are very important to Americans, especially millennials.
These issues are not mutually exclusive. Each of them has a role in creating a better, more prosperous economy. In his remarks, Obama noted that he once had student debt, and said he now sees how student debt is crippling young Americans and preventing them from achieving the “American Dream,” which includes homeownership and having access to credit.
Despite continued efforts to push Congress to take more action, there remains a loud and obstructive minority which occupy its time voting to repeal Obamacare, a key accomplishment for the president. In fact, as the president begins his tour today, the House is expected to vote twice to repeal the Affordable Care Act, marking the 38th and 39th times the House has attempted to overturn the law.
But partisanship continues to create obstacles in Washington. Take the Consumer Financial Protection Bureau: Republicans in the Senate refused to confirm the president’s nomination for the bureau’s leader — not because he was unqualified or inept, but because they fundamentally disagreed with the notion that there should be a consumer-watchdog organization.
Partisanship has reached a new level of pettiness, and gridlock has reached an all-time high. Congress has managed to pass only 13 bills this year, and none have been related to jobs.
Another of the president’s cornerstones is his push to increase the minimum wage. In his State of the Union address this year, Obama urged Congress to raise the minimum wage to $9 per hour. Raising the minimum wage is a wildly popular policy — over two-thirds of Americans support an increase to at least $10 per hour. But some top members of Congress have been vocal in their opposition to increasing the minimum wage.
“I think it’s inflationary. I think it actually is counterproductive in many ways,” said Rep. Paul Ryan (R-Wisc.). “You end up costing jobs from people who are the bottom rung of the economic ladder.”
A recent study shows that raising the minimum wage has not been shown to increase unemployment in this country.
Currently, Washington is the only state with a minimum wage above $9, so raising the minimum wage would benefit millions of low-income earners across 49 states by injecting them with more income each month, which two-thirds of low-income earners say would benefit their quality of living. Adjusted for inflation, the minimum wage today is lower than it was in the 1960s. Some view an improvement in the minimum wage as a first step in dealing with the complex income inequality that plagues America.
Minimum wage laws also disproportionately impact young people. Workers under 25 represent about half of those paid at the federal minimum wage level or less. In 2011, a total of roughly 2.2 million Americans were being paid at or below minimum wage.
Obama’s speech and policies show an understanding of the crisis at hand and the challenges that millions of Americans face each day — living from paycheck to paycheck, seeking employment, or searching for more stable work. This Congress is already set to be the most unproductive since the 1940s, but America needs productivity in Congress in order to spur productivity in the economy at large.
Our generation has to grapple with countless challenges and issues from student debt, to climate change, to changes in the workforce. Inaction from our elected leaders simply cannot not be tolerated.