Opinion

The Great Debate

Obama’s address: Borrowing from Bubba and the Gipper

Many presidents don’t have the problem of salvaging their second terms because the voters threw them out of office. Among those who win reelection, the successful communicators, such as Ronald Reagan and Bill Clinton, used many of the techniques that President Barack Obama deployed in his State of the Union Address last night. He is likely to repeat them often this year, which is one that will determine whether his administration is remembered as transformational or transitional.

Giving Americans credit: While most recent presidents began their State of the Union addresses by rattling off positive economic statistics, Obama did it differently. Using archetypal anecdotes — a dedicated teacher, a high-tech entrepreneur, a night-shift worker – Obama gave regular Americans credit for reducing unemployment, adding manufacturing jobs and increasing high school graduation rates. In so doing, Obama emulated Reagan, who declared in his second State of the Union address of his second term: “Today, the American people deserve our thanks.”

By speaking for the American people instead of talking at them, Obama seeks to do what Reagan and Clinton accomplished: appeal to swing voters frustrated with political bickering.

Advocating action: Presenting himself as the leader of a united people rather than a divided government, Obama declared, “The question for everyone in this chamber, running through every decision we make this year, is whether we are going to help or hinder this progress.” With aides calling for “a year of action,” Obama echoed Clinton who said in his 1997 address that “the enemy of our time is inaction.”

Using this action-versus-inaction frame, Obama presented his increasing emphasis on executive orders as an exercise in pragmatism, not partisanship: “What I offer tonight is a set of concrete, practical proposals to speed up growth, strengthen the middle class, and build new ladders of opportunity into the middle class. Some require congressional action, and I’m happy to work with all of you. But America does not stand still, and neither will I.”

How do we measure whether Americans are better off than in the past?

Are you better off than you were twenty years ago? Probably not relative to very rich people today, but what about relative to you, or to someone your age and position twenty years ago? Income inequality has been called the defining issue of our time. Powerful leaders, from President Obama to Pope Francis, have cited it as evidence that the unfettered capitalism that has enriched the wealthy hasn’t been shared. Of course, there’s a difference between the gains in income being shared evenly, shared a little, or making everyone else poorer. In many ways the average American is much better off than he used to be; in other ways he’s worse off.  But even if we focus on what’s gotten better, we may still need to worry about the future.

The most common metric used to measure changes in our economic condition is income, but several other factors determine quality of life: health, consumption, leisure time, financial security, and prospects for the future. Which of these factors matters most comes down to personal values. Some people prefer more leisure to income. If they work less, even at the cost of lower earnings, they’ll be happier. Some people are more comfortable with risk; health care coverage and financial security matter less if they can buy more stuff.

In order to assess economic improvement, we must also consider demographics. Over the course of your lifetime, you will probably see an increase in earnings and wealth and accumulate goods. Most people get pay raises as they age and acquire more skills. They also become more risk averse and have more years to collect wealth. In this respect, the relevant question is: are your finances improving at the same rate they used to? Or did people your age used to have more than you do now?

Heads, the rich win; tails, the poor lose

The rich, to mangle F. Scott Fitzgerald slightly, they rationalize differently than you and me. Whether they succeed or fail, they’ve always got a pseudo-scientific excuse. If they do well, it’s because their habits are better than those of the rest of us peons. If they do badly, it was their upbringing, since wealthy parents too readily substitute lucre for love.

Don’t believe me? Let’s turn to the headlines.

Last month, personal finance and self-responsibility guru Dave Ramsey posted a list on his website entitled, “20 Things the Rich Do Every Day,” originally written by New Jersey accountant and certified financial planner Thomas C. Corley, who, according to his website “studied the daily activities of 233 wealthy people and 128 people living in poverty.”

The list, which quickly went viral, was filled with the self-improvement tropes that could be called “Why the Rich Deserve Their Money.” Prosperous people eat less junk food than poor people. They read more books. They watch less reality television and make their children volunteer more time to charity.

Steven Cohen: The Gilded Age revisited

There he is in all his tarnished glory: Steven A. Cohen, arguably the most famous, and infamous, hedge fund manager in the United States. Maybe the world.

He lives in a 35,000-square foot Greenwich, Connecticut, mansion with an indoor skating rink, golf course and everything an exclusive school might offer. His New York City duplex in Bloomberg Tower is for sale at $115 million. He’s staying in a $23.4 million Greenwich Village maisonette, while his $38.8 million 8,250 square-foot house nearby is being renovated. Last summer he bought an East Hampton beach house for $60 million. He has another place there — 10 bedrooms and a spa — but it isn’t close enough to the water.

Cohen’s extensive art collection could fill a private museum. It includes Jeff Koons’ enormous yellow balloon dog sculpture and Pablo Picasso’s “Le Rêve.” Damien Hirst’s dead shark, preserved in formaldehyde, hangs from the ceiling in Cohen’s office. This may or may not be an intentional symbol of his methods of operation.

Why low social status can be bad for your health

Inequality is at an all-time high in America. Since the 2008 crash, recent IRS figures show, the wealth of the top 1 percent grew 31 percent while the rest of American incomes grew by less than 1 percent. But although it might appear that income disparities affect only the poor and have primarily an economic impact, dozens of studies now link extreme inequality with poor health and shorter lives, across the entire socioeconomic spectrum.

Overall, the United States has among the largest social and economic inequalities of any rich country. Japan and the Scandinavian countries have the smallest. The more equal countries also have the longest life expectancies — and the richest American men only have the life expectancy of an average Japanese man, which is 4.5 years longer than the U.S. average, according to Sir Michael Marmot, a leading researcher on inequality and professor of epidemiology at University College London. He notes that residents of affluent suburban Maryland live, on average, 17 years longer than people in inner city Washington, D.C.

Marmot’s own research focuses on the UK, where a national healthcare system provides all socioeconomic classes with quality care. He has compared low- and high- ranking British civil servants over the course of their lives on a variety of health measures, ranging from cancer to obesity to alcohol addiction. For virtually all conditions except breast and prostate cancer (it is not clear why these are exceptions), Marmot found that those at the bottom are at dramatically greater risk, with overall mortality up to three times higher, depending on the specific condition. Increased levels of unhealthy behavior among the less-affluent — like smoking — did not account for all of the differences. Also, even the lowest-ranked civil servants in Marmot’s research were employed, meaning that those on bottom rungs weren’t impoverished, simply less well-off.

Obama on King, but in a passive voice

It was a sermon — of sorts.

President Barack Obama’s address at the Lincoln Memorial on Wednesday only rarely echoed the cadence — the preacher’s rhythm — of the speech he was there to commemorate, and could not match its moral force. But this was a sermon all the same.

It was, to be precise, an exhortation against economic inequality — a fitting message on the 50th anniversary of the March on Washington for Jobs and Freedom, and certainly in keeping with Martin Luther King Jr.’s dream.

But the real measure of yesterday’s speech is not whether it was as powerful as King’s — will any speech ever be? — but whether it was the most effective speech Obama could have given on this stage, at this moment in time.

Trying to raise a family on a fast-food salary

Fast-food workers in more than 50 cities Thursday are striking for fair pay and the right to form a union — the biggest walkout to hit the industry. This latest round of labor unrest comes 50 years after hundreds of thousands of Americans, led by Martin Luther King Jr., joined the March on Washington for Jobs and Freedom, demanding not only civil rights, but also good jobs and economic equality.

One demand of the 1963 marchers was raising the federal minimum wage to $2 an hour. In today’s dollars, that’s roughly $15 an hour — what the striking fast-food workers are now calling for.

For all the progress made since 1963, the reality is that economic inequality persists and continues to grow. Income inequality is greater today in the U.S. than in any other OECD nation, except Chile, Mexico and Turkey, and exceeds that of many developing countries.

Fighting discrimination, as inequality grows

I grew up in the segregated South. I tell students the story of how, as a young boy, I went with my mother to Bloomberg’s Department Store on High Street in Portsmouth, Virginia. There was a stack of doilies on the ladies’ hat counter and I asked my mother what they were for. She explained that a black woman had to put a doily on her head before trying on a hat, because a white woman would not purchase a hat that had been on a black woman’s head.

My students think I am making all this up. They refuse to believe such things were true. It is too absurd, they insist.

In his “I Have a Dream” speech 50 years ago, Martin Luther King Jr. said, “The life of the Negro is still sadly crippled by the manacles of segregation and the chains of discrimination.” While the problem of discrimination has not been fully resolved, the country has made great progress since King spoke in 1963, which was before passage of the Civil Rights Act.

The Supreme Court ‘s Gilded Age redux

The Supreme Court belongs to the small club whose members seem to assume that saying something makes it so. It deals in precedents — not the same thing as dealing in history. It prefers obiter dicta to the messiness of the past.

In his Citizens United opinion, Justice Anthony Kennedy wrote, “By definition, an independent expenditure is political speech presented to the electorate that is not coordinated with a candidate.”

Really? The equation of money with speech has gotten a lot of well-deserved attention, but the inelegant “not coordinated with a candidate” seemed attached only to define “independent.” Does the phrase mean that if expenditure was coordinated with a candidate it was not political speech and thus not protected?  We are about to find out.

‘Democratic wing’ of Democratic Party takes on Wall Street

The chattering classes are fascinated by the Republicans’ internecine battle to redefine the party in the wake of the George W. Bush calamity and the Mitt Romney defeat — from Senator Rand Paul’s revolt against the neoconservative foreign policy, to intellectuals flirting with “libertarian populism.” Less attention has been paid, however, to the stirrings of what Senator Paul Wellstone dubbed “the Democratic wing of the Democratic Party” — now beginning to challenge the Wall Street wing of the party.

Perhaps the strongest demonstration of this was the barrage of “friendly fire” that greeted the White House’s trial balloon on nominating Lawrence Summers to head the Federal Reserve Bank. More than one-third of Democrats in the Senate signed a letter supporting Janet Yellen, now vice chairwoman of the Fed. More than half of the elected Democratic women in the House of Representatives signed a similar letter. Many were appalled at the notion of passing over the superbly qualified Yellen for Summers, with his notorious record of denigrating and dismissing women.

But, as Katrina vanden Heuvel, editor of the Nation wrote in the Washington Post, Summers also drew opposition because he was the “poster boy for the Wall Street wing of the party — literally.” (Summers joined then-Treasury Secretary Robert Rubin and then-Federal Reserve Chairman Alan Greenspan on the now risible 1999 Time magazine cover celebrating the “Committee to Save the World” — before the global financial collapse exposed the folly of their policies).

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