amnesty, auto bailout, college costs, Consumer Finance Protection Bureau, Dodd Frank, domestic content, education, healthcare, illegal immigration, Im-Politic, Immigration, immigration reform, manufacturing, middle class, minimum wage, Obama, Obamacare, progressives, taxes, TPP, Trade, Trans-Pacific Partnership, wages, Wall Street
In a recent Wall Street Journal interview and a recent speech to progressive activists, President Obama has made abundantly clear how irked he is by charges that his trade policy agenda is betraying the liberal ideals and middle and working class voters he says he’s staunchly championed. To me, it’s a case in point of the truth hurting. For there’s little legitimate doubt that Mr. Obama’s main achievements have left most hard-pressed everyday Americans largely unaffected – at best – and that his record is arguably even worse than many of his Democratic party critics realize.
As the president sees it, “I’ve got some of these folks who are friends of mine, allies of mine saying this trade deal [the Trans-Pacific Partnership] would destroy the American working families, despite the fact that I’ve done everything in my power to make sure that working families are empowered.” According to Mr. Obama, these efforts have included “strengthening middle-class homeownership, making sure that their 401(k)s have recovered, making sure that we’ve got much better education systems and job-training systems, fighting for the minimum wage, fighting for a vibrant auto industry” along with initiatives ranging “from Obamacare, to Wall Street reform, to student loan reform, to credit card reform, to fighting for a fairer tax code…to a smarter workplace.”
But by now it’s clear that the middle class (and I realize such labels are anything but precise) has few reasons to be especially grateful for these Obama priorities. Minimum wage hikes, for example, a centerpiece (rhetorically, anyway) of the president’s second term, affect lower-income Americans, not the middle. The same has been said – compellingly – about healthcare reform, which will also almost certainly require higher taxes for middle class Americans, most of whom were adequately insured, going forward if it’s not to explode budget.
The president has done better on tax reform, as the burden on the wealthy has risen. At the same time, the benefits to the middle class have been paltry – and in one case temporary – not to mention spread out over entire tax years.
As for the other items on Obama’s list – they’re even more problematic. The Consumer Finance Protection Bureau created by the Dodd-Frank financial reform bill seems off to a good start (though Republicans have expressed concerns about transparency) but Wall Street seems just as rigged against individual investors as ever. In addition, who on earth thinks that American schools and job-training systems have gotten “much better”? Who believes that higher education is becoming more affordable? Indeed, why would a middle class-oriented president have recommended taxing “529” college savings plans? Who on any rung of the economy has benefited from a “smarter workplace”? And whereas a booming stock market has restored many American retirement accounts, there’s no reason to believe the president, as opposed to unprecedented easy money from the Federal Reserve, deserves the credit.
Particularly troubling and revealing has been the auto bailout. The president’s actions (which were rooted in decisions made by his predecessor, George W. Bush) did prevent this critical manufacturing sector from collapsing, and since the recovery began, vehicles and parts production has lead an impressive industrial rebound (from a terrifying recessionary nosedive).
But largely because the bailout both failed to protect the Detroit automakers from predatory foreign competition and scarcely required them to use more domestic content, these companies have taken the low road back to competitiveness. And the big losers have been the industry’s middle class workers. Inflation-adjusted automotive wages are down 5.20 percent since the recovery technically began in mid-2009 – much more than the fall for overall real manufacturing wages during this period (0.75 percent), and a dreadful performance compared to the private sector in toto, where real wages are up 2.18 percent since the recession ended.
And don’t forget a middle class-threatening Obama policy that the president failed to mention: his push (abetted by many Republicans of course) to amnesty America’s illegal immigrant population and open the nation’s borders much wider to newcomers. As middle-class voters appear to sense, the huge influx of very low-income arrivals that’s sure to result will greatly increase the drain on public services, and since the rich are still so adept at tax avoidance, John and Jane Q. Public will be left holding much more than their share of the bag.
Where the president is on firmer ground is in reminding progressives that nearly all of them “have been with me“ on the above agenda – but now seem to be worried that “suddenly…I want to just destroy all of that.” He’s right to question that logic. But the real lesson isn’t that the left’s fears are unfounded. It’s that after more than six years in the White House, the president still doesn’t understand how trade policies that keep enabling business to play arbitrage games on not only the labor but the regulatory, tax, subsidy, and trade barrier fronts will inevitably sabotage even the soundest domestic reform agenda.