Sunday, May 2, 2010

Has Obama "spread the wealth"?

Looking back at this old post and the comments attached to it, I was reminded of the ruckus that Republicans made during the 2008 presidential campaign about Obama's alleged redistributionist beliefs. The then-candidate's remark to 'Joe the plumber' about "spreading the wealth" became a club that Republicans wielded mercilessly until election day.

Well, the Obama administration has been in office now for 15 months. Has it embarked on a concerted effort to redistribute wealth and income? Hardly. Rather, the administration's efforts on domestic policy have focused in large part on measures either to restore the status quo ante or to shore up safety nets in the face of the ongoing effects of the recession and the financial crisis. Health care reform as passed will, at some future point, raise tax rates a bit on upper-income taxpayers, and Congress I believe let the '01 Bush tax cuts, which primarily benefited the wealthy, expire. [Correction, 7/27/10: I was premature on this. They haven't expired yet.] But those are the only measures I can think of offhand which might be claimed to have some kind of redistributive effect. (Giving millions of more people access to health insurance, which the health care reform bill has as one of its main aims, is laudable but will not directly change the distribution of wealth or income much, if at all.)

In fact, it's the administration's relative lack of concern with redistribution, and its failure to move more aggressively to reduce unemployment and invest more heavily in public works, that has disturbed (to use a mild word) elements of the Left (or the progressive movement, if you prefer that terminology). For example, writing in the current issue of Democratic Left, Joseph M. Schwartz says:
"...the claim that the president's stimulus plan saved more than 2 million jobs...provides little solace to the some 25 million Americans either unemployed, underemployed, no longer searching for work or working far fewer hours than they need. Yet the administration is celebrating the creation of 140,000 (mostly temporary) jobs in March, when it would take job growth of 350,000 per month over the next 4 years (!) to replace the seven million jobs lost in the Great Recession (plus employ the 120,000 young persons who join the labor force each month)....

"President Obama fears that embracing the revenue-raising powers of progressive taxation opens him to charges of being a tax-and-spend, weak-on-defense and craven-on-terrorism Democrat.... Yet what good does the president's buffing his neoliberal credentials do when such policies won't lower unemployment rates? These rates virtually guarantee electoral defeat for his party in 2010 and for himself in 2012! Why not tell the truth: that amid a collapse in private investment and consumption, only massive counter-cyclical public investment in alternative energy, mass transit, and infrastructure can put Americans back to work and restore the consumer demand needed to spur private capital investment?"
So there you have it: far from Obama's having fulfilled right-wing fears that his "socialist" administration would embark on a massive redistribution of wealth, 15 months after Obama took office the leading theoretician of Democratic Socialists of America is complaining about insufficient "counter-cyclical public investment" in terms that he probably could have applied in the same way to every other president since FDR! Chances are that no president will ever favor measures that will satisfy Joe Schwartz and those (like me) who share his domestic-policy views, because structural forces constantly push presidents to the perceived middle of the political spectrum. In any case it was always clear that Obama, despite his remarks to Joe the Plumber, was not a committed redistributionist. The whole idea was preposterous, a right-wing fantasy cooked up in a desperate, futile effort to salvage McCain's presidential campaign.

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