More than just another call to extend a payroll tax cut, today's speech from President Obama on the economy gave a broad idea of the kind of campaign he'll run during the general election, and what his policy priorities would be if he won a second term.
Obama invoked President Theodore Roosevelt, speaking in Osawatomie, Kansas, the same place where Roosevelt delivered his "New Nationalism" speech more than a century ago. That Obama used the model of a trust-busting, populist executive was no accident: Roosevelt's "Square Deal" was aimed at protecting middle class citizens from economic abuses of power by large financial institutions.
Obama hit on that theme over and over again during the almost hour-long speech. Here's what we learned.
He's taking a tougher tack on financial regulation
"Does anyone here think the problem that led to the financial crisis was too much oversight?" President Obama asked his audience. The answer was a resounding "no."
Obama promised a robust defense of reforms enacted by 2010's Dodd-Frank Act. In addition to calling on Congress to approve Richard Cordray as the new head of the Consumer Financial Protection Bureau, a government watchdog organization created by the legislation, the president said that he would ensure new rules laid out in Dodd-Frank would be implemented swiftly. "I will veto any effort to delay, dismantle, or defund the new rules we put in place," Obama said.
He isn't treating "investment" like a dirty word
Although fiscal austerity has been such a prominent theme throughout Obama's first term, and there's been significant popular backlash against government spending, Obama hasn't backed down from stressing the importance of making "investments" in education and infrastructure.
When putting forth his vision for economic recovery, Obama said that it starts with everyone getting a "fair shot at success."
"Businesses will create those jobs in countries with the highest-skilled, highest-educated workers; the most advanced transportation and communication; the strongest commitment to research and technology," the president said.
Obama argued that a smarter, more skilled American workforce would be more attractive to business owners and investors, and would spur growth more effectively, than would lower taxes or loosened regulation. "We’ll never be able to compete with other countries when it comes to who’s best at letting their businesses pay the lowest wages or pollute as much as they want," Obama said, "That’s a race to the bottom that we can’t win."
He's providing precedent for his tax policies
The money for such investment has to come from somewhere, the president said. To cover the revenue lost by keeping employees' payroll taxes low, while still spending money on education, Obama is looking to impose a higher tax rate on the wealthiest Americans.
Public support for higher taxes on the wealthiest Americans is strong, but the president battles a GOP-led Congress staunchly opposed to doing any such thing. More in this speech than in recent memory, Obama drew specific connections to past tax policy in an effort to show that what he's proposing isn't radical—it was done by Republican presidents, too—and that the policies in place simply haven't been working.
"We have the lowest taxes in over half a century," the president said. "This isn't like in the early '50s, when the top rate was over 90 percent, or the early '80s, when the top rate was about 70 percent. Under Clinton, the top rate was only about 39 percent." Today, it's 35 percent.
Obama pointed to the falling tax rates and loosening regulations over the last 30 years and said that the policies currently advocated by Republicans had been tried and tested, but were failures time and again.
"It didn't work when we tried it the decade before the Great Depression, it's not what led to the post-war booms of the '50s and '60s, and it didn't work when we tried it last decade."
He's starting to sound like Elizabeth Warren...
In calling for the rich to pay more taxes and for the government to invest more money in infrastructure and education, President Obama's speech was reminiscent of the one Massachusetts senatorial candidate Elizabeth Warren gave earlier this year.
"Nobody in this country got rich on his own," Warren said in the speech,"Keep a big hunk of it. But part of the underlying social contract is you take a big hunk of that and pay forward for the next kid who comes along."
Sounds a lot like what Obama was saying today: "Our success has never just been about survival of the fittest. We still have a stake in each others' success," and, "They say we're better off when everybody is left to fend for themselves and play by their own rules. I'm here to say they are wrong."
Warren got a lot of love from the Left for articulating her idea of the social contract that justifies higher taxes for higher earners in these terms. As Obama enters a general election campaign where he'll need to re-energize the voters who turned out in 2008, look from him to adopt the rhetoric of a rising Democratic star with even more force.
...and he's talking about the "one percent"
"[These] aren't Democratic or Republican values; one percent values or 99 percent values," President Obama said. "They're American values, and we have to reclaim them."
While far from an outright endorsement of Occupy Wall Street, the president's mention of the "one percent" shows the extent to which protests have drawn attention to income inequality, presaging how the issue might become a centerpiece of the president's re-election campaign. He mentioned that countries with less income inequality tended to have stronger economies in the long run. And he even cited a "one percent" statistic.
"In the last few decades, the average income of the top one percent has gone up by more than 250%, to $1.2 million per year," Obama said. "For the top one hundredth of onepercent, the average income is now $27 million per year. The typical CEO who used to earn about 30 times more than his or her workers now earns 110 times more. And yet, over the last decade, the incomes of most Americans have actually fallen by about six percent."