Obama’s State of the Union Address

Obama11 The State of the Union 13.02.13

by

Howard Adelman

I promised to discuss Obama’s doctrine of virtue ethics today through an analysis of two of his favourite books, Toni Morrison’s, The Song of Solomon, and Julius Barnes’, The Sense of an Ending. However, it is taking me longer to re-read these two books than I thought. Further, as I watched Barack Obama’s State of the Union Address last night, I concluded that the Address would serve my purpose of bringing out Obama’s communal conservatism, demonstrating his tactics in dealing with the economic conservative Republicans and pointing out, which none of the commentator’s were, his appeal to social conservatives thereby reinforcing what I believe is his salami strategy of gradually cutting into what is misperceived as the rock solid support for Republicans among social conservatives.

Let me first begin with some preliminary comments on the following topics that have been raised in discussions with me:

1) The relationship between economic doctrine and communal values;

2) Romney’s versus Obama’s virtue ethics;

3) The relationship between personal virtues and cultural or communal values.

1. Economic doctrine and cultural values

In anticipation of the State of the Union address, David Brooks in the New York Times contrasted the America of the past as the nation of futurity to its present economic priorities that emphasize the present and mortgage the present to the future thereby leaving too little for investment in research and development. "Today, Americans have inverted this way of thinking. Instead of sacrificing the present for the sake of the future, Americans now sacrifice the future for the sake of the present." In contrast, America as a nation wedded to futurity invested heavily in long term infrastructure. Americans now have a consumer culture that prioritizes the present instead of a saving and sacrifice for the future. "Why have Americans lost their devotion to the future?… We’ve now had a few generations raised with this consumption mind-set. There’s less of a sense that life is a partnership among the dead, the living and the unborn, with obligations to those to come." The implication is that there is a dialectic that exists between cultural values and economic doctrine and that they should not be examined as if they belong in separate silos.

2. Romney versus Obama’s virtue ethics

There is no debate: Romney and Obama were on opposite sides in their economic ideologies. What about their commitments to values in the public realm? After his visit to Israel last year, Romney asserted that culture played a role in creating prosperity and suggested that the differences between the economic prosperity of the Israelis compared to the Palestinians could be explained by their different cultures – a comment that was met with a great deal of brouhaha. (See Mitt Romney "Culture Does Matter," 31 July 2012) "During my recent trip to Israel, I had suggested that the choices a society makes about its culture play a role in creating prosperity, and that the significant disparity between Israeli and Palestinian living standards was powerfully influenced by it." He then offered America as an example that put an emphasis on a work ethic, education, willingness to take risks (not very controversial) and then added some cultural conservative values – commitment to honor and oath, family orientation, devotion to a purpose greater than ourselves, patriotism and freedom – religious, economic, etc. "Israel is also a telling example. Like the United States, the state of Israel has a culture that is based upon individual freedom and the rule of law. It is a democracy that has embraced liberty, both political and economic."

Romney was alluding to David Landes’ well-known 1998 book The Wealth and Poverty of Nations in which Landes famously wrote that "culture can make all the difference". But he did say "can" and not "does". He also wrote that other factors were critical – and here he endorsed the Republican perspective on institutions, in particular, limits on government.

Daro Acemoglu and James Robinson charged Romney with confusing culture and institutions since political and economic freedoms are supported by institutions rather than culture as they documented in their book, Why Nations Fail. Fareed Zakaria added that Israel’s recent prosperity was a key proof since its explosion in economic growth came only after the huge weight of the state in the economy had been lifted as part of its economic market reforms. Further, there are numerous examples of huge economic growth without the benefits of valuing freedom.

Obama happens to adhere to all the same cultural values as Romney only adding the values of government regulation and investment as crucial ingredients to the economic doctrine. This was confirmed in his State of the Union Address last night as I will soon show. Obama differs from the economic Republicans on the role of government, on the debt issue, on raising taxes, on government regulation and initiative but shows no difference with social conservatives on core values, only on some particular issues.

3. Economic Doctrine and Cultural Values

After an initial nod to patriotism and respect for American troops abroad, then a personal story of family sacrifice and hardship of an Hispanic immigrant family, and finally praise offered for the bipartisan economic value of equal opportunity, Marco Rubio in his response to Obama’s State of the Union Address last night, hit all the economic conservative key notes, including emphasizing what institutional changes needed to be in place to ensure equality of opportunity. Rubio insisted that Obama had claimed that free enterprise was the cause of our problems whereas Obama went out of his way to praise free enterprise. "Our free enterprise economy is the source of our middle class prosperity." Rubio claimed that Obama believed that our problems result from government being too small and that more taxes are needed to support that government. Obama certainly offered a program that would have significantly expanded government initiatives and regulations. Further, as you will soon see, Obama was indeed advocating more taxes.

Rubio insisted that more government was the problem and that more government would not enhance economic opportunities or inspire new ideas because more government requires more taxes and breeds more regulations; more regulations breed more hurdles and inhibitions. Government should provide security, a fair playing field and a security net but cannot control the weather. Economic growth comes from getting the government off the back of entrepreneurs and not subsidizing clean energy initiatives. "What we need," he said "is an accountable, efficient and effective government that allows small and new businesses to create middle class jobs."

There were a few areas in which Rubio agreed with Obama: simplifying the tax code, and changing the immigration system to attract the best and the brightest. While Rubio supported Obama’s thrust to change the educational systems and even to ensure that students are trained for the jobs of tomorrow, he wanted to change the way we pay for education and to facilitate a significant improvement in educational productivity through the use of online courses. In contrast, Obama offered a program for monitoring and evaluating universities and colleges in terms of results related to costs. Further, Obama asked "Congress to change the Higher Education Act, so that affordability and value are included in determining which colleges receive certain types of federal aid." Monitoring, policing and incentives were Obama’s techniques of choice and not technical innovation to reverse the pattern in which educational costs rose faster than the rate of inflation.

Rubio insisted that Obama was playing politics when Obama claimed that Republicans wanted to reduce social security and Medicaid benefits. In fact, Obama proposed to reduce Medicaid. After accusing the Republicans of wanting to cut Medicaid and social security, which Rubio denied, Obama proposed cutting Medicaid, but not in terms of the benefits to citizens. Obama proposed savings based on the bi-partisan Simpson-Bowles proposals: by taking away the subsidies to Big Pharm and funding health care, not on services delivered, but on the quality of care needed and delivered.

However the major difference between the response and the president’s address came not in the expected stark divide over economic doctrine. Rubio barely mentioned cultural values. Those values that he did stress were economic ones tied to differences over which institutions needed to be changed in which way to foster economic growth. The economic values stressed were all economic ones consistent with the ideology of an economic conservative – economic liberty and a dream of a better life.

In contrast, Barack Obama ended his speech stressing cultural values as exemplified in the actions of individual citizens sitting in Congress and listening to the speech. They did not exemplify economic liberty but sacrifice – the nurse who ensured the babies in her ward were safe when Hurricane Sandy struck, the 102 year old who insisted on voting after waiting in line for over six hours in Florida, and the cop who took 12 bullets but still protected a Sikh temple until help arrived. American values were not based on Horatio Alger stories and the quest for money but on sacrifice, caring and sharing. That’s "the way we are made. It describes what we believe. It captures the enduring idea that this country only works when we accept certain obligations to one another and to future generations; that our rights are wrapped up in the rights of others; and that well into our third century as a nation, it remains the task of us all, as citizens of these United States, to be the authors of the next great chapter in our American story."

Obama ended his speech articulating and emphasizing core values of a community conservative. These were based in the end on a certain set of individual virtues.

4. The State of the Union Economic Doctrine

Other than the difference in the cultural values stressed and the substantive differences in economic doctrine, the two politicians had a different tone. Obama used the rhetoric of bipartisanship ("The American people…expect us to put the nation’s interest before party.") couched in patriotic terms while setting out a very partisan social democratic agenda. Rubio struck a tone of strong partisanship which made the fundamental error of overstating his claim and thereby undermining the points he tried to make.

Whereas Rubio depicted the state of the union as continuing in the doldrums and getting worse, Obama insisted that the state of the union was stronger (millions of jobs created, a rising stock market, stabilized house prices, record making corporate profits) and that the rubble left over from George W. Bush had largely been removed. The time was now propitious for bold new action. And in contrast with his rhetorical bipartisan tone, the most ambitious program of new initiatives since Lyndon Johnson was put before the American people. But he insisted that these were being put forth for precisely the same goals that Rubio would late stress, ones which differentiated Republicans from the economic values that Obama espoused – ensuring equality of opportunity, strengthening the middle class, ensuring that if you worked hard you could get ahead, encouraging free enterprise, and rewarding individual initiative. The two sides do not disagree on the core economic values, only on the mechanism to produce them.

"It is our generation’s task, then, to reignite the true engine of America’s economic growth – a rising, thriving middle class. It is our unfinished task to restore the basic bargain that built this country – the idea that if you work hard and meet your responsibilities, you can get ahead, no matter where you come from, what you look like, or who you love. It is our unfinished task to make sure that this government works on behalf of the many, and not just the few; that it encourages free enterprise, rewards individual initiative, and opens the doors of opportunity to every child across this great nation."

Whereas Rubio in response to Obama’s address would insist that Obama put down free enterprise, Obama not only endorsed it, he exalted it. Obama extolled individual initiative. The difference was whether government had certain special responsibilities to facilitate both. Whereas Rubio wanted to reduce the debt, Obama insisted that with the increased tax revenues on the wealthiest 1% and the reductions already agreed upon, the government was already half way towards the goal of $4 trillion in deficit reductions and stabilizing (not reducing) the debt. Obama suggested the rest could be accomplished by closing tax loopholes to pay down the rest through enhanced taxes whereas the Republicans favoured reducing government expenditures to reduce the debt and using any new taxes from closing tax loopholes to reduce taxes. Obama insisted that "we can’t just cut our way to prosperity." A balanced approach requires revenue on the basis of everyone doing their share plus spending cuts.

Everyone doing their share translated into further tax increases. Obama went beyond closing tax loopholes, and, clearly dissatisfied with the previous compromise on increasing taxes for the top 1%, wanted more tax reforms not only to simplify the process but to ensure the rich pay their fair share. Obama wanted to remove the incentives for corporations to move jobs overseas and, instead, provides lures to attract them to creating more domestic employment without increasing "our deficit by a single dime". How? By investing in infrastructure, by investing in job training, by investing in education in partnership with businesses, by accelerating the rate of creating manufacturing innovative institutes and hubs, by investing n research and development, by lowering the costs of energy and achieving full self-reliance freed from overseas dependence.

Obama did propose one new regulation which was not one that would appeal to most independents let alone Republican supporters – raising the minimum wage to $9. Nancy Pelosi, then Democratic leader of the House of Representatives, in the 2006 elections, promised to raise the minimum wage from $5.15 to $7.50 if the democrats were returned in sufficient numbers to control the House. They were not, In fact they were routed and the minimum wage stood at a rate that was effectively lower than the rate it had been in 1951. Most Americans, not just Republicans, believed that the minimum wage deterred the hiring of youth, raised the cost of doing business that had to be passed onto customers. For a president who had a prime platform of reducing unemployment, his minimum wage increase would, they believed, increase unemployment. But there was no evidence of this in Europe or in Canada where the median minimum wage was over $10 and the lowest rate in PEI was $9.50, higher than Obama’s proposed increase.

Economist studies generally show that in most cases raising minimum wages have little if any employment effect. As The Economist (27 November 2012), not exactly a social democratic or even a liberal journal, reported: "Arindrajit Dube at the University of Massachusetts-Amherst and Michael Reich of the University of California at Berkeley have generalised the case-study approach, comparing restaurant employment across all contiguous counties with different minimum-wage levels between 1990 and 2006. They found no adverse effects on employment from a higher minimum wage." Even David Neumark and William Wascher, two economists who had been a distinct minority opposing higher minimum wages, more recently concluded that higher minimum wages when combined with top-ups for workers earning a minimum wage boosted employment. However, empirical scientific data has very little impact on rock solid economic beliefs.

Obama did emphasize one issue that touched on social values, gun control. Gun control was not itself a conservative social value. His recommendations on checks on purchasers had general support, but his proposals to monitor re-sales, to control the sale of weapons of war and large ammunition clips were opposed by the National Rifle Association that urged prudence, more studies and not rushing into legislation that would not be proven to be effective. Obama’s virtual campaign stump speech at that point roused the audience with his repeated calls, referring to the victims’ families sitting in Congress, "They deserve a vote." Up or down, "They deserve a vote." Even if all the regulations were passed and even if they were 100% effective, they would only affect 400 of the 11,000 homicides per year, though perhaps many of the incidents of mass killing. In the majority of cases, hand guns were the weapons of choice. Was Obama spending considerable political capital to swat an enormous elephant with a fly swatter? He was. But Obama seemed to feel very strongly on the issue. It helped that it was an issue, if spun correctly, supported family values.

Finally, in offering new hope for the future, in envisioning that future in very bold terms based on social values of sacrifice, duty and obligations, Obama was clearly attempting an end run around the economic conservatives. It still has to be seen whether a set of virtue ethics along these lines fits in with the virtue ethics so dear to Obama’s heart.

Tomorrow: Obama12.Virtue.Ethics.American.Redemption14.02.13

[Tags Obama, State of the Union
Address, social conservatism, liberal versus conservative economic doctrine]

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