If President Barack Obama has entertained an economic insight that wasn't fashionable in 1933, I haven't heard about it. It's doubtless he's for recycling glass and plastic, but he's even more wedded to recycling ideas that were fresh and interesting during the New Deal era but have since been discredited.
All of this was clear when he became the Democratic Party's pinup in 2008 (just by way of example, I wrote then that while Obama was "shiny, bright and new," his ideas were "suffering from senility"). What's dumbfounding now is Obama's detachment from his own presidency. He continues to campaign (well, speak, but it always sounds like a stump speech) as if someone else were sitting in the Oval Office, as if someone else's policies were responsible for the state of things and as if someone else should shoulder the blame.
This week, the president delivered a lengthy (his admirers would say "important") speech about income inequality -- the "defining challenge of our time," he declared. The speech was a kite string of flapping factoids -- many of them untrue, such as the hoary nonsense about women earning only 77 cents on the dollar compared to men -- held aloft by an attitude of resentment. Obama excels at striking poses. The man has been president of the United States for five years. His policies were enacted by a Democratic congress in 2009 and 2010. Yet he continues to act as if getting the sensibility right is the key thing. Obama is all pose and no posse.
The gap between the rich and poor is nothing to celebrate, but it pales in comparison with the prolonged economic doldrums of the Obama years. Tellingly, the president doesn't acknowledge that income inequality has actually increased on his watch. That's right, it's more pronounced than under George W. Bush. Too much can be made of these income inequality data (most come from Emmanuel Saez) -- there's so much they omit, like government transfers. But the problem of stagnating wages for middle class earners is real, and serious people have contemplated how to combat this through growth-generating government policies. Among the most promising are tax simplification, domestic energy development and regulatory relief. Obama doesn't even consider those.
In a burst of Rooseveltian ingenuity, Obama's solution for the problem of increasing inequality is extending unemployment benefits, increasing the minimum wage and "investing in education." Rip van Obama seems to have dozed off for a few years. He and his party increased the minimum wage in 2009 and extended unemployment benefits to 99 weeks. It's impossible to say for sure whether such extended benefits prolonged joblessness, but this much is indisputable -- long-term unemployment (6 months or more of joblessness), combined with those who've given up searching at all, is at its highest rate since the Great Depression. When people remain unemployed for prolonged periods, they lose skills and their likelihood of ever finding a job declines.
Increases in the minimum wage are linked to joblessness, as well. Studies have shown that increasing the minimum wage causes increased unemployment among the young (the vast majority of minimum wage earners). Besides, if minimum wages were able to successfully combat poverty, why stop at $10.10 per hour? Why not $15 or $115?
Obama's explanation of recent economic history included this bit of agitprop: "As a trickle-down ideology became more prominent, taxes were slashed for the wealthiest, while investments in things that make us all richer, like schools and infrastructure, were allowed to wither." The man really does require a thousand full-time fact checkers. Taxes were slashed for the rich? Didn't Obama agree just last year that all Bush tax cuts were to be preserved except those for the rich? Didn't he thereby acknowledge that taxes were cut for everyone?
As for those "withering" investments in education -- making this claim is really a form of political malpractice. Politicians reliably crow for more money for education and just as reliably get it. Between 1969 and 1989, per-pupil expenditure at all levels doubled in the U.S. Federal spending quadrupled between 1973 and 2004. Concordia University reports that in the past 10 years, the federal government alone has spent $8 trillion on education. Test scores have remained flat, and students in urban schools are being robbed of their only possible hope of a better life. If Obama were serious about income inequality, he'd unshackle his mind and support true school reform.
Obama's presidency has been marked by the most stifling bureaucratic vise grip since the New Deal, hostility to the wealth-generating private sector, excessive debt, profligate "shovel-ready" spending and contempt for law and procedure. It's all been brought to you by a president who's never run so much as a lemonade stand. Reversing that will be the "defining challenge of our time."