Obama's Economic Idea: Attack Republicans

1,276 days to go, he says (Photo/WWR)
By
Carmel Lobello
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President Obama returned to Knox College in Galesburg, Ill. yesterday to deliver what was billed as the first of several summer speeches about the U.S. economy. It's the same topic he chose eight years ago during a commencement address at the same college, when he was a young senator intent on bridging the gap between Red and Blue America.

But in the years since, a lot has changed. The president has presided over a brutal recession, the beginning of a fragile recovery, and, perhaps most importantly, historically bad partisan gridlock.

As a result, the hallmark of Obama's speech, nominally about the economy, was a decidedly political topic: The stubbornly uncooperative GOP.

"Stop taking meaningless repeal votes and share your concrete ideas with the country," Obama thundered. "Repealing ObamaCare and cutting spending is not an economic plan."

"Unfortunately, over the past couple of years in particular, Washington hasn’t just ignored the problem; too often, it’s made things worse," he added. "And I am here to say this needs to stop. This needs to stop."

He's not just whining. "Obama's anti-Congress tactic holds political potential," said Rebekah Metzler at U.S. News & World Report.

Both Republicans and Democrats are gearing up for a fight regarding government spending as the September deadline for raising the debt ceiling approaches. Some conservatives have even said they will only vote to increase the ceiling if funding for the health care law is cut off, an idea Obama says he's not entertaining. [U.S. News & World Report]

Obama also adopted a more populist take on economic growth, which could have political implications as well. "Nearly all the income gains of the past 10 years have continued to flow to the top 1 percent," he said.

"This growing inequality, it’s not just morally wrong, it’s bad economics," he continued. "Because when middle-class families have less to spend, guess what? Businesses have fewer consumers. When wealth concentrates at the very top, it can inflate unstable bubbles that threaten the economy. When the rungs on the ladder of opportunity grow farther and farther apart, it undermines the very essence of America, that idea that if you work hard, you can make it here."

And what about the underlying economic argument? Peter Coy at Bloomberg Businessweek says Obama might have stressed the middle class too much.

Going all in on the "middle out" meme is a risky strategy for Democrats. It leans on the Keynesian theory that the economy can suffer from shortfalls of consumption spending by the public, notes Luigi Zingales, a finance professor at the University of Chicago Booth School of Business. But even Keynes said that consumption isn’t always the problem; economies also need entrepreneurs with animal spirits. [Bloomberg Businessweek]

 

(Story continues in The Week)

 

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