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The public policy blog of the American Enterprise Institute
Maybe President Obama should have given a heroin speech. Well, not exactly a speech on dangerous drug use. But maybe his State of the Union address should have been less a laundry list of stuff Congress won’t pass and more a thematic explainer. That’s what Vermont’s governor did recently when he devoted an entire State of the State message to heroin and opiate addiction.
Obama has called too much income inequality and too little upward mobility the “defining challenge” of our time. But while he certainly talked about those topics, he sort of skimmed over causality and fast forwarded to his small-bore policy ideas. Not that all those ideas are unwise. Raising the maximum Earned Income Tax Credit and making it available to more low-wage workers was one of the better ones. So was extending emergency unemployment insurance. And a business tax-infrastructure petite bargain continues to be a potentially intriguing swap. Still, while he was ticking off proposals, too bad Obama didn’t offer the sort of comprehensive, pro-work unemployment insurance reform that AEI’s Mike Strain has been developing.
More importantly, Americans could have used a more thorough briefing from the former University of Chicago instructor on the deep structural forces behind inequality and immobility, how they relate to each other, and how they might play out going forward. Checking out the recent blockbuster study from the Equality of Opportunity Project would have given the president and his speechwriters a lot to talk about, other than a bit of boilerplate about technology and globalization. The EOP study concluded, for instance, that the “fraction of children living in single-parent households is the strongest correlate of upward income mobility” among all the variables the research team explored. Not high-end income inequality. But Obama mentioned “family” in any context only twice during his speech, reflecting the liberal-left belief that there is no substantive remedy for family breakdown.
The EOP study also focuses on K-12 education. But this issue is a blind spot for may folks on the left. National Journal’s Josh Kraushaar: “Left unmentioned are the efforts on the supply side—expanding school choice, improving teacher quality, and strengthening curriculum. In most poor, city neighborhoods, students are locked into failing schools, with few options for parents to turn to. Unions are invested in protecting an educational monopoly, fearing that increased competition could drag down salaries and threaten employment for less-than-qualified teachers.” Would have liked to have heard that sort of thing from Obama. But, you know … .
Finally, Obama should have made clear that the impact of technology and globalization is an ongoing story. These macro forces, particularly, automation, will continue to alter and shape the US labor market, as outlined by economists such as Tyler Cowen and Erik Brynjolfsson. And even more so in the future than up until now. And this will require a rethink about what people should expect from a career and how to go about creating a fulfilling one when machines can do most of the routine work. With that understanding, what to do next about education, entrepreneurship, the safety becomes a bit clearer. And then Washington can really offer an agenda appropriate in scale to the defining economic challenges of our age.
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