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Reich writes: "The President should make it clear that any Republican effort to hold the nation hostage to the GOP's ideological fixation on the budget deficit and a smaller government will slow the economy."

Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)

The State of the Union's Economy

By Robert Reich, Robert Reich's Blog

10 February 13


f you're sitting in the well of the House when a president gives a State of the Union address (as I've had the privilege of doing five times), the hardest part is on the knees. You're required to stand and applaud every applause line, which means, if you're in the cabinet or an elected official of the president's party, an extraordinary amount of standing and sitting.

But for a president himself, the State of the Union provides a unique opportunity to focus the entire nation's attention on the central issue you want the nation to help you take action on.

President Obama has been focusing his (and therefore America's) attention on immigration, guns, and the environment. All are important. But in my view none of these should be the central theme of his address Tuesday evening.

His focus should be on the joblessness, falling real wages, economic insecurity, and widening inequality that continue to dog the nation. These are the overriding concerns of most Americans. All will grow worse if the deficit hawks, austerity mavens, trickle-down charlatans, and government-haters who have commanded center stage for too long continue to get their way.

In coming weeks the GOP will be using another fiscal cliff, a funding crisis, and another debt ceiling showdown to convince Americans of an outright lie: that the federal budget deficit is our most important problem, that it is responsible for the continuing anemic recovery, and that we must move now to reduce it.

The President should make it clear that any Republican effort to hold the nation hostage to the GOP's ideological fixation on the budget deficit and a smaller government will slow the economy, likely pushing us into another recession. And that those most imperiled are the middle class and the poor.

He should emphasize that the real job creators are not the rich but the vast majority of ordinary Americans whose purchases give businesses reason to add jobs. And that if most Americans still cannot afford to buy, the government must be the spender of last resort.

Perhaps it's too much to hope for, but I'd encourage the President to call for boosting the economy: Reversing the recent Social Security tax hike by exempting the first $20,000 of income from payroll taxes and lifting the ceiling on income subject to it, to make up the shortfall. Reviving the WPA and CCC, to put the long-term unemployed directly to work. Raising the minimum wage. Imposing a 2% annual tax surcharge on wealth in excess of $7 million to fund a world-class system of education, so all our kids can get ahead. Cutting corporate welfare and the military but not cutting public investments or safety nets the middle class and poor depend on. Giving tax credits to companies that create more new jobs in America. Helping states and locales rehire the teachers, fire fighters, police officers, and social workers they need.

This is the most fragile recovery in modern history, from the deepest downturn since World War II. Most Americans are not experiencing a recovery at all. As has been shown in Europe, austerity economics is a cruel hoax. President Obama must acknowledge this in his State of the Union, and commit to fighting those who would impose it on America. your social media marketing partner


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+34 # Walter J Smith 2013-02-10 11:33
Sounds like you got President Cave In's attention. But I will count upon it after he proves he can do something besides cave in to absurd, retarded GOP demands.
-42 # Jonathan Levy 2013-02-10 12:55
There goes Reich again, analyzing pro-wrestling, making suggestions to the 1919 Black Sox on how to win the world series. Why does RSN continue to feature this guy? I haven't problems with his economic ideas at all but his whole frame of reference is akin to believing in the tooth fairy. His speaking is so wormy weak: "Perhaps this is too much to hope for...". The man actually believes there is a real tug and pull debate between mainstream dems and GOP on the economy and that they both are not total pawns of the banks.
-17 # zornorff 2013-02-10 16:17
A four letter man...J E R K.
0 # zornorff 2013-10-31 13:13
Was referring to Jonathan Levy
-9 # cordleycoit 2013-02-10 13:13
Sorry but I do not expect common sense from either side of the isle.
+4 # WestWinds 2013-02-10 14:30
Correct you are. Both sides are decidedly devoid of common sense as reflected in the whole country that remains complacent to the atrocities being perpetrated in their name and on their taxpayer dollars. The complete lack of common sense is seen in their "accursed acceptance" of whatever rubbish is coming out of DC. And then they will put people back into office like Chuck Schumer and Hillary Clinton to keep the NeoCon ball rolling for another decade. How bad does it have to get before this country wakes up? This certainly isn't the country I was born into and this country certainly isn't the FDR country that prospered in peace for forty years. Nope, we have another Russia brewing here while common sense sleeps on.
-5 # Above God 2013-02-10 21:21
We do not have another Russia brewing but another fascist NAZI Germany. The killing of Americans w/o any due process, passage of the NDAA and suspension of writ of habeous corpus. Hitler would be proud of our new dictator Obama. Seig heil mein furher.
+9 # Dhimmi 2013-02-10 13:18
Dear Professor Reich:

President Obama does indeed have it wrong to focus on immigration, guns, and the environment. Endless deficit spending is also wrong, as is kicking the nuclear waste can down the road for our kids to take care of.

But his real failure of leadership is his feeble approach to the energy shortages predicted for later this century. There is a credible chance that, if we have not gone renewable by 2070, our grandchildren will find themselves in the midst of genocidal strife brought on by energy famine.

Fixing Energy will do wonders for the environment and give our descendants a decent chance for decent lives.
+7 # WestWinds 2013-02-10 14:33
Yes, Dhimmi, but you can't run war equipment (tanks/planes/d rones/jeeps,)on solar. We MUST have an OIL economy if we are going to keep making endless war which in turn makes endless profits (for some of us.)
+9 # Regina 2013-02-10 15:22
The President must know the range of all our problems, especially the economy AND the gun nightmare. He can't drop any of the balls he must juggle. Improving our energy situation (in the direction of renewables, NOT more fossil pollution, will also improve our economy through the jobs that the energy supply changes must create. To fix our fiscal problems, we must draw more revenue from those who have cheated the nation with their off-shore games. Beware the phony patriotism from those who actually cheat the nation they claim to serve.
+1 # soularddave 2013-02-10 22:17
The feeble approach to renewable energy is certainly surprising, given that the sources have gained such a strong start. It DOES fit in with "the economy", somewhere between tax credits or subsidies for startups, and the part about job training and education.\

I'm agreeing with you but it's still pie in the sky (or impossible0 to vast numbers of Americans whose consciousness has been hijacked by the petro-pharma-GM O-anticlimate-a ntiObama-lobbys t-AdMoney-influ ened Media cartel, and a Congress that's little different.
+33 # Vardoz 2013-02-10 13:37
The fabric of our nation s being torn apart in every way because of deep corruption on the part of our reps who are taking bribes from special interests.
+13 # reiverpacific 2013-02-10 14:27
Personally, I don't watch State of the Union addresses from whatever viewpoint, or who delivers it.
As Reich noted all that standing up and applauding after every point, painful though he might find it, smacks to me of the automated responses during a Catholic mass and the applauders like perfforming seals when they flap their front flippers together and go "oonk-oonk-oonk"!
It all goes along with the overt displays of faux-patriotism as US Citizens stand with hands on hearts whenever the star-Spangled Banner" is played.
To me, it's a bunch of less-than-since re, ersatz, stage-managed and predictable fluff like so much "Sound and fury signifying nothing" without the fury.
And a bunch of platitudes delivered in politically correct terms, addressing little of importance. Bet my kilted arse you won't hear ONE Word about Targeted Assassinations, a Universal Health Care Plan, Infrastructure a true, workable plan to fund it and get people back to work, Green Energy, the number of people in prison and domestic political prisoners, the CIA Black Budget or other issues of real importance.
Why? Y'all know as well as I do. 'Cause it makes for reality, takes toughness and character and the Corporate State doesn't want to even pretend that these ARE issues.
Give me the good ol' scrappy, contentious, fact-seeking and hard-hitting "Prime Minister's Question Time" in the UK House of Commons any day: now THAT"s real debate and speaking truth-to-power!
+4 # rtwx 2013-02-10 15:16
I agree with all his suggestions but one. The minimum wage is a cruel hoax that can never actually do what its proponents claim: namely increase buying power.
Instead, we desperately need as part of tax reform a negative income tax to replace the minimum wage. This should be part of a greater tax overhaul that vastly simplifies our tax law and treats all income of whatever type equally (not an eradication of tax brackets, but treating all income sources equally).
0 # Michael Lee Bugg 2013-02-11 15:47
rtwx, the "negative income tax" already exists in the form of the "earned income tax credit". The problem is that not enough people take advantage of it and it does not give enough to the worker who does apply. You are right in suggesting that raising the minimum wage probably does more harm than good because affected businesses raise their prices or reduce their workforce. Semi-skilled and skilled workers need better pay also! Don't count on Obama to take Reich's advice because Obama despises the Socialist and even Liberal labels he gets stuck with so he does everything possible in a vain effort to prove that he is neither! This is why he caves in so easily. Plus Obama wants, needs, the acceptance from the top 1%. He will never get it. He is no FDR or even LBJ! He often said in 2009, "That is a fight I want to have, " but the only people he has ever fought are the progressives and liberals who fell for his empty promises.
+9 # Corvette-Bob 2013-02-10 15:31
How can you work to help the economy when the party that controls congress will not negotiate in good faith. The Republicans goal on the right is to destroy the Federal government and they will do anything to accomplish this goal. When political leaders in the South talk about having assault rifles so that they can fight the government and some want to leave the union how can you even talk to them ?
+1 # ABen 2013-02-10 15:33
Fewer know-nothing, do nothing Baggers. Fewer spineless Dems. Things are looking up if only slightly. One must take silver lining where one can find them.
+6 # giraffee2012 2013-02-10 15:41
Start with the banksters - go to jail, do not pass go!

Scalia should resign - his ideological paid for rhetoric shows he cannot make decisions based on what is in his job description.

Government must stop side-stepping the issues with guns, drones, etc. and get rid of all the paths to our money corruption

Religious beliefs in government's decisions is stupid and should be criticized and stopped.

It's the jobs/economy and President should tell the USA citizens over and over - who is holding our jobs/economy hostage to the other topics!

Call ur congress people daily with the message about what IS IMPORTANT!!!!!! !!!!
-1 # Depressionborn 2013-02-10 16:36
I applaud you Vardoz.

But don't blame libs, corruption is their nature. Blame Rove Republicans for not stopping waste and corruption. They don't even know it is their job.

There seems quite enough to work on.
+2 # Polisage 2013-02-10 16:42
The rich are asking for a tax holiday for repatriation of fiscal assets outside the USA. Why not let them bring them back in a govt. administered escrow fund to pay special dividends to their shareholders OR build new factories in the USA?
+1 # Big Jake 2013-02-10 17:10
"He should emphasize that the real job creators are not the rich but the vast majority of ordinary Americans whose purchases give businesses reason to add jobs. And that if most Americans still cannot afford to buy, the government must be the spender of last resort.

Raising the minimum wage."

Thi is classic Reich/Kensysism . It had and has merit as Kenyes clearly stated, in emergencies and for a short time. We would feel some minimal and quick results if we chose this today.
Then,like now, we refuse to consider examining the cause. It is a shrinking personal income which translates into national income that is the root cause. We fail to grasp what creates income and have chosen a monetary system that is totally dependent on new debt creation to be the only way to put money into circulation. It has failed.
The alternative Austrian/Chicag o system would eventually wreck out nation but must faster. The pain of the transfer of wealth to the elite will likely be unbearable.
Curiously, Reich advocates an increase in minimum wage with no quantifiable number in mind. Todays minimum wage is merely a political number with not real relationship to anything. If Reich could understand just that, he could be useful. I doubt that will happen in academia.
There is a solution. It has been utilized before with amazing results. Since then, we seem to have lost our will and our ability to provide solution.
+5 # m... 2013-02-10 18:39
The 30 year long effort, umbrella talking point for all that is 'Republican' these days-'SMALLER GOVERNMENT'- has amounted to nothing less than the most devastating, widespread, massive swindle in American History.
It never had a damn thing to do with actual 'Smaller Government' After all, Government is bigger, more expensive and more in the lives of 99% of Americans than ever.
What WE the People did indeed get has been a whole lot LESS in just about every way imaginable in the way of access to the so-called American Dream.
Turns out its little more than a simple, greedy power grab by a few at the expense of EVERYONE else. Its been all about changing the flow of money and co-opting power away from WE THE PEOPLE and transferring it into the hands of a Few under an evolving, snowballing 'umbrella' scheme now knee-jerked into our lives by pseudo-ideologu es, cardboard intellectuals, corporate funded 'movements' and lobby-bought politicians who declare Smaller Government, an endless need for Less Government according to their vision, to be the yellow-brick road to greater Liberty, Freedom and Prosperity for ALL.
Its told like gospel and like gospel, its a sacrilege to dispute it.

After 30 years of it, a declining America on most fronts in its wake, a larger, colder, more imposing Business-Lobby Government running the show, and a nation severely divided-- who holds up the fundamental reality of it and questions it to the American People?
+1 # Cassandra2012 2013-02-11 14:20
Less government, except when it hypocritically sends them in to probe women's vaginas or control women's lives.
+1 # runcible 2013-02-10 18:48
The economy continues to grow at 3 per cent, and for the 22nd consecutive year. Unemployment remains at 5 per cent.
Where, you ask, is this economic paradise? Try Australia. GFC didn't happen there. Why? Quick and adequate economic stimulus.
Head on down the austerity road to Europe and economic oblivion.Defici t? Very funny.

Read more:
+5 # She Cee 2013-02-10 19:14
The President should make it clear that any Republican effort to hold the nation hostage to the GOP's ideological fixation on the budget deficit and a smaller government will slow the economy, likely pushing us into another recession. And that those most imperiled are the middle class and the poor.

Do you really think the GOP doesn't know what its policies will lead to? Are they that stupid that they need it spelled out? Yes, the most imperiled may be the middle class and the poor, but do these idiots think they and the super-rich will be unscathed by the devastation they are creating to the economy and the rest of the world's opinion of us? Where will they run when the drones begin falling from our skies?
+9 # angelfish 2013-02-10 19:56
Sadly, Mr. Reich, the ReTHUGlicans have their fingers firmly jammed into their ears so they can say, " ...but I can't hear you, Mr. President"...Th ey don't WANT to hear anything this President or ANY sane person has to say to them, be it on the Economy, or Gun Control or ANYTHING that needs some care and attention by the Congress! Their are "Johnny one notes", fixated on their OWN agenda and they don't give a DAMN about America or her people! They are too dumb to learn from History and are unable to learn ANYTHING new or innovative. "Lost in the 60's" just about sums them all up. The World has passed them by and they can't get off their tread mill. To HELL with them! Come the Mid-Term Elections WE have to bring back sanity and control, and get these Nut Jobs OUT!
0 # cafetomo 2013-02-11 13:20
Quite. "The Point" being other than the eternal issues of distraction happily supplied via prevalent media. Surely the C in C can eschew the speculative and arguable long enough to focus on economic rules that have been changed so clearly for the worst of us.

That more have died here from guns than in all the wars ever, is not a side issue. But those with even a passing familiarity with the hysterical history of racism must acknowledge Our Fearless Leader to be a suitably non-polarizing influence in this when pigs fly.

Nevertheless, I pray by all means, that he should make me a liar.

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