Since the end of the 1970s, something has gone profoundly wrong in America.
Inequality has soared. Educational progress slowed. Incarceration rates quintupled. Family breakdown accelerated. Median household income stagnated.
“It’s morning again in America” — that was a campaign slogan by President Ronald Reagan in 1984. But, in retrospect, the average American has been stuck since the Reagan era in a predawn darkness of stagnation and inequality, and we still haven’t shaken it off, particularly since 2000. Inequality has increased further under President Barack Obama.
That’s the context for Obama’s call, in his State of the Union address, for greater economic fairness. But first, the caveats. His proposals are dead on arrival in Congress. They won’t be implemented and probably won’t change the public’s thinking: Research by George C. Edwards, a political scientist, finds that presidential speeches rarely persuade the public much.
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Remember the 2014 State of the Union address? Of course not. Of the 18 proposals in it, there was action on two, according to PBS. Or Obama’s passionate call in his 2013 State of the Union for measures to reduce gun violence? Nothing much resulted, and the word “guns” didn’t even pass his lips this time.
Yet the bully pulpit still can shape the national agenda and nag at the American conscience. I don’t fully agree with Obama’s solutions but he’s exactly right in the way he framed the inequality issue: “Will we accept an economy where only a few of us do spectacularly well?”
Some background: Even with the global Great Depression, the United States performed brilliantly in the first three-quarters of the 20th century, with incomes and education mostly rising and inequality flat or falling — and gains were broadly shared by poor and rich alike. High school graduation rates surged, GI’s went to college, and the United States led the world in educational attainment.
And, in part of this remarkable era, the top federal income tax rate exceeded 90 percent. Republicans might remember that point when they warn that Obama’s proposals for modestly higher taxes would savage the American economy.
Then, for average Americans, the roof fell in around the end of the 1970s. The ’70s were “the end of normal,” the economist James Galbraith argues in a new book of that title. Afterward, the economy continued to grow overall, but the spoils went to the wealthy and the bottom 90 percent barely benefited.
Median household income is little greater today than it was in 1979. Today, the typical family in Canada appears better off than the typical American family.
By some measures, education — our seed corn for the future — has pretty much stalled. More young American men today have less education than their parents (29 percent) than have more education (20 percent). Among industrialized countries as a whole, 70 percent of 3-year-olds go to preschool; in the United States, 38 percent do.
I wonder if the celebration of unfettered capitalism and “greed is good” since the Reagan era didn’t help shape social mores in ways that accelerated inequality.
In any case, Reagan was right on one point — “the best social program is a productive job” — and Obama offered sound proposals to increase incentives for work. Better child-care and sick-leave policies would also make work more feasible. The United States is the only country among the 34 in the Organization for Economic Cooperation and Development that provides no paid maternity leave.
In America, we have subsidized private jets, big banks and hedge fund managers. Wouldn’t it make more sense to subsidize kids? So if higher capital gains taxes can pay for better education, infrastructure and jobs, of course that trade-off is worthwhile.
Congressional Republicans seem focused on a pipeline that isn’t even economically viable at today’s oil prices. Let’s hope that the national agenda can broaden along the lines that Obama suggests, so that the last 35 years become an aberration rather than a bellwether.