Saturday, December 07, 2013

Word To Action Unlikely

Paul Krugman is a great economist.  He's also a great optimist.

In his regular New York Times column, on December 5 Krugman commented "Mr. Obama laid out a disturbing- and, unfortunately, all too accurate vision of an America losing touch with its own ideals, an erstwhile land of opportunity becoming a class-ridden society." He maintained "this isn't entirely new terrain for Mr. Obama" but "what struck me about this speech, however, was what he had to say about the sources of rising inequality."  The President, he noted addressed such critical factors as the minimum wage, labor's bargaining power, the safety net, and fixation on the fiscal deficit.

Citing improving health care implementation, Obama's second-term focus on his legacy (including shoring up the social safety net), and the President's apparent break with the "fiscal scolds" obsessed with debt and entitlements, Krugman argues Obama is

finally sounding like the progressive many of his supporters thought they were backing in 2008. This is going to change the discourse — and, eventually, I believe, actual policy.

So don’t believe the cynics. This was an important speech by a president who can still make a very big difference.

Can, but won't.   In his softball interview for his Hardball tour, on Thursday Chris Matthews asked the President to comment on "a moral responsibility to look out for people who haven`t made it in this country."   Obama responded in part

And, you know, I -- I think Pope Francis is showing himself to be just an extraordinarily thoughtful and soulful messenger of peace and justice. I haven`t had a chance to meet him yet, but everything that I have read, everything that I have seen from him indicates the degree to which he is trying to remind us of those core obligations.

It's far from bold to compliment a pope, particularly for being a "thoughtful and soulful messenger of peace and justice.  (Soulful? Perhaps like the video below.)  But it was only fair and generous; in what was hardly a coincidence of timing, the President gave his speech on December 4.  Pope Francis had issued his Apostolic Exhortation a mere eight days earlier on November 26, declaring "We can no longer trust in the unseen forces and the invisible hand of the market," observing "trickle-down... has never been confirmed by the facts, expresses a crude and naive trust in the goodness of those wielding economic power and in the sacra­lized workings of the prevailing economic system.”

But while there is every reason to assume the sincerity of Pope Francis, there is little reason to assume the sincerity of Barack Obama. Buzzfeed's McKay Coppins has observed (at approximately 5:50 of the 6:16 video way below) "it's fascinating that five years into Obama's presidency we're still arguing about what he really believes."  The Administration currently is deep into secret negotiations (citation from the Electronic Frontier Foundation via The Economic Populist) for the

Trans-Pacific Partnership (TPP) that could include more than a dozen nations in the Asia-Pacific region including Malaysia, Vietnam, Japan, and South Korea.  Recently, China said that it was studying the possibility of joining the TPP talks.  Many members of the proposed agreement have long histories of currency manipulation, dumping, and other unfair trade practices that have dramatically increased U.S. trade deficits and job losses, and the agreement could sharply curtail the ability of the United States to challenge these practices.  The TPP would significantly increase the threat that rapidly growing trade deficits and job losses in the United States would be locked in if the TPP is completed.

Completion and implementation of the treaty would continue a policy of the last several presidents in destroying good jobs.  The Economic Policy Institute found

U.S. trade with Mexico after the North American Free Trade Agreement (NAFTA) has cost the United States nearly 700,000 jobs through 2010. U.S. trade with China has certainly failed to deliver on the promised benefits of growing exports. Since that country entered the World Trade Organization (WTO) in 2001, the U.S. has lost 2.7 million jobs through 2011 due to growing trade deficits with China. And the Korea-U.S. Free Trade Agreement (KORUS) has also resulted in growing trade deficits with that country and the loss of more than 40,000 U.S. jobs. Most of the trade-related job losses are concentrated in manufacturing, and growing trade deficits are responsible for a large share of the decline in U.S. manufacturing employment over the past fifteen years.

It is fascinating and understandable that insightful, thoughtful individuals still are arguing over what Obama believes.  Probably, though, Obama's speech on economics this past week does reflect a major portion of the thinking of the first black president, community organizer, and law professor.  But as with real Wall Street reform- which has been elusive in this Administration- the President's policies generally reflect his reluctance to step on some very wealthy toes.  After Coppins' remark, host Steve Kornacki added, "that means he's a great politician."

Barack Obama is a great politician, but no Pope Francis.  Paul Krugman's optimism, while inspiring for this Chanukah/Christmas/New Year's ("holiday") season, likely will prove somewhat misplaced.

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