The best moment for me in Obama’s Thursday night jobs speech was his description of the basic choice that will be put to the electorate in 14 months. On the one hand there is the Tea Party view.
In fact, this larger notion that the only thing we can do to restore prosperity is just dismantle government, refund everybody’s money, and let everyone write their own rules, and tell everyone they’re on their own — that’s not who we are. That’s not the story of America.
And then there is Obama’s view.
Yes, we are rugged individualists. Yes, we are strong and self-reliant. And it has been the drive and initiative of our workers and entrepreneurs that has made this economy the engine and the envy of the world.
But there’s always been another thread running throughout our history — a belief that we’re all connected, and that there are some things we can only do together, as a nation.
We all remember Abraham Lincoln as the leader who saved our Union. Founder of the Republican Party. But in the middle of a civil war, he was also a leader who looked to the future — a Republican President who mobilized government to build the Transcontinental Railroad — (applause) — launch the National Academy of Sciences, set up the first land grant colleges. (Applause.) And leaders of both parties have followed the example he set.
This is an essential truth. America has prospered because of our ability to provide the public goods that private enterprise could utilize to raise productivity. The airports, interstate highways and research universities created the greatest surge in middle class incomes in the history of the world during America’s Great Prosperity from 1947-1979.
But in 1980, Ronald Reagan was elected on the platform that “government is not the solution to our problems; government is the problem.” This was the beginning of our long slide into our present crisis. Why did productivity skyrocket while wages flatlined? Because every manufacturing job could be outsourced under Milton Friedman’s now dominant orthodoxy.
And so we moved from a society of makers to a business culture of traders as the FIRE segment (Finance,Insurance, Real Estate) came to dominate our economy. As finance came to dominate the economy, their political clout grew and so the orthodoxy of Reaganomics is with us today with only minor changes during the Clinton and Obama Administrations.
Now I will acknowledge to my Libertarian friends that I believe the provision of public goods is better administered at the state and city level than at the federal level. The problem with Federalism lies in the very issues that are plaguing Europe this fall—the vast breach between a currency union and a fiscal union. The big states (Germany/California) become financially responsible for the small states (Greece/Mississippi), without having any control over their fiscal policy.
I think Obama opened the Presidential Campaign season for real on Thursday. Whether he can sustain that tone and approach for 14 months is the big question.