David Coates

We Need a Fighting State of the Union Address

Barack Obama delivers the State of the Union Address, January 2010

It took FDR two goes to establish the political architecture of the New Deal. We do well to remember that the Roosevelt administration triggered a second “hundred days” of radical reform as a conservative Supreme Court began to strike down the first wave of New Deal legislation. There is surely a lesson here for the Obama presidency. After a week in which the voters of Massachusetts removed the possibility of a super majority in the Senate and the Supreme Court gave corporations unlimited freedom to spend on political campaigns, this is surely the moment to follow the Roosevelt example. After a year of frustrated bipartisanship, it is surely the time, if not for a second coming, then at least for a complete retooling of the Obama program.

Indeed that retooling seems to be underway, and has started well. The Glass-Steagall type tightening of regulations on the financial system proposed by the President on Thursday took policy in exactly the right direction, and was delivered in exactly the right tone. Volker trumped Geitner, and not a moment too soon. The need now is for that momentum to spread, and spread quickly, across the domestic policy agenda as a whole. We need more trumping of the less radical by the more. We need the Biden/Bernstein voice louder and more influential, the Summer one quieter and further from the podium. We need a coherent progressive policy message in the State of the Union Address on which Obama can then campaign, and around which progressive enthusiasm can again rally.

We need a radical quartet

  • First of all on housing. The initial Obama plan – subsidizing banks to modify loan terms rates – was too little and too late, too determined not to reward speculation and to condemn financial fecklessness. That did not work. It did not even come close. Right now, one American family in four has negative equity. One in eight mortgages is in default or faces foreclosure; and moral hazard issues no longer loom so large since involuntary unemployment, and not sub-prime mortgage buying, is now the key driver of the foreclosure crisis. With Fannie Mae and Freddie Mac in public hands, it is time to tell the GSE’s to co-own houses with families in distress, time to share the burden of mortgage payments until jobs and incomes revive, time to guarantee to each and every American that loss of their employment will not be followed by bank-led loss of their home. It is time for the Democrats to stand with the people against the lenders. There are votes in that, and there is justice there.
  • Then jobs. Waiting for banks to start lending again, and for private companies to use easier bank credit to create employment, is like waiting for Godot. Bank lending actually fell in the third quarter of 2009, as Wall Street rallied and Goldman Sachs distributed their bonuses. Employers are adding to the length of their workers’ day rather than adding to the number of their workers. The moment to nationalize the banks has sadly passed; but not the moment to implement active job creation programs of the kind advocated all year long by progressive think tanks such as the EPI. The policy is there. It simply needs adopting. Adopting it is good politics as well as good sense: strengthening the safety net for those Americans who have already lost their jobs, giving fiscal relief to states to keep teachers and other employees in work, directly creating public service jobs to meet huge social needs, strengthening tax credits for small business job creation, and initiating large-scale shovel-ready infrastructure development. Lincoln won in 1862 telling people to “vote yourself a farm, vote yourself a tariff”. It is time perhaps for Obama in 2010 to tell people to “vote themselves a job, vote themselves a house”.
  • Not to forget immigration. There is a huge Latino vote at stake in November, and again in 2012. In a state like mine, North Carolina, that vote tipped the balance in 2008 – it brought Obama home – and it could tip again, the other way, if the moment for comprehensive immigration reform is allowed to slip away. The Republicans will claim immigrants take American jobs, but an administration that is actively creating American jobs can easily refute that: creating a route to legality for those already working here, easing the passage home of unemployed workers now trapped the wrong side of an unwanted wall, and in the process locking the Latino vote into the Democratic camp for a generation. It is the right thing to do. Too many Latino families live under the threat of fracture and deportation as the law now stands. It is also the politically sensible thing to do for a progressive party that will never win a single tea-party voter, no matter how tempted sections of it might be to outflank the Republicans on immigration on their right.
  • And only then health care: taking the spotlight off the big issue that has blocked progress on the others, but at the same time putting Republicans on the spot by reintroducing legislation for an effective public option to discipline the private insurance industry, regulations to prevent denial of coverage for pre-existing conditions, and subsidized access to a national health care exchange for the one in seven Americans currently unable to afford even basic health insurance. Republicans want market solutions to health care problems; but markets respond to money, and one American in three is currently living within one tranche of the poverty level. It is time to make clear who really will discipline insurance companies and Big Pharma, and who really believes in competition in health care provision. Let there be no backroom deals this time, just open politics and an open choice.

The Obama administration spent its first year backdoor dealing to get its policies round the veto of conservative Democrats and the opposition of the party of ‘No’. That didn’t work. Instead, it linked Obama to the worst of Washington, and left Democrats vulnerable to the Republican demand for transparency. Well, let’s go for full transparency this time round. Put every proposal to an up and down vote, and call the Republican bluff. Transparency is in our interest now. There is a huge constituency out there of troubled home-owners, workers without jobs or security, new immigrants and people too financially pressed to cover their own health needs – all waiting for the change which Obama the candidate promised but Obama the president has yet to deliver.

We are still all struggling to stay afloat downstream of a financial tsunami caused by deregulated financial and housing markets. Problems caused that way cannot be solved that way, and the American people need regularly to be reminded of that fact. Republicans in power made this mess, and if they come to power again they will not unmake it. Leaving people to sink or swim may be good conservative rhetoric, but if implemented a lot of people will drown. Progressive public policies are a lifeline, not a weight – a hand up, not a handout. We need to hear the President say that – say it loud, say it long, and say it consistently. He could do no better than say it first in next Wednesday’s State of the Union.

The feisty President who took on the banks on Friday is worth fighting for. Let’s hope he sticks around, and gets more feisty yet.

Watch the 2010 Address

[youtube=http://www.youtube.com/watch?v=L1PWQtCDaYY]

David Coates holds the Worrell Chair in Anglo-American Studies at Wake Forest University. He is the author of Answering Back: Liberal Responses to Conservative Arguments, New York: Continuum Books, 2010.

He writes here in a personal capacity.

5 Responses to “We Need a Fighting State of the Union Address”

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