Political economists who love talking about economics, and Republican reformers who want mainstream Americans to think like them, are complaining that Obama failed to use his State of the Union address to explain the true nature of America’s fiscal crisis and the hard choices that must be made to reduce the federal deficit.
Did Obama avoid a “teachable moment”? Could he have clarified the issues and left his audience of fellow politicians less divided and less nervous about public opinion? The eminent economist Robert Samuelson thought so:
“It was a teachable moment—and Barack Obama didn't teach. Unless public opinion changes, we won't end our budget deadlock. As is well-known, Americans want budget deficits curbed. In a Kaiser Family Foundation poll, 54 percent urge Congress and the president to "act quickly" and 57 percent prefer spending cuts to tax increases. But there's little support for cuts in Social Security (64 percent opposed), Medicare (56 percent) and Medicaid (47 percent), approaching half of federal spending. The State of the Union gave Obama the opportunity to confront the contradictions and educate Americans in the unpleasant realities of uncontrolled government. He declined.”
Eloquence persists in politics because people can be inspired to accept change and sacrifice. However, history and the nature of the budget problem argue that the pedagogical role of the presidency is extremely limited and—fortunately—not really necessary to resolve painful issues.
Sadly, the impact of White House pronouncements has had far more to do with the popularity of the speaker than the abiding truth of their utterances. FDR opined that Americans had only fear to fear. Really? Presidents Reagan and Clinton announced that government itself was “the problem” and that the era of “big government was over.” Yet the behemoth kept growing, and men and women still run for office promising to use public office to solve local and national problems. Jimmy Carter was probably closest to the truth in 1979 when he urged Americans to adapt to a new age of limits. The next year he was trounced and every successful president since then has been an optimist. Eisenhower’s most important utterance about the debilitating influence of the military-industrial complex was saved for his Farewell Address.
Samuelson sees the budget problem in bloodless academic terms: Americans harbour myths that can be set aside. But the term “myth” is often nothing more than what we say to diminish what others think. People would prefer not to pay higher taxes and would prefer that spending cuts hit somewhere else. In an election or on the doorstep with a pollster, the citizen simply plays his or her best card. We do not bind elected governments with those preferences. We merely want to make sure that government tries its very best to do as little harm as possible.
Obama is much closer to the truth—and to his mandate--when he merely calls for a “principled compromise.” He doesn’t suffer the illusion that the public can be made to drop their illusions or that the differences between Democrats and Republicans are born of ignorance of the facts.
Economic modeling will not write the budget and determine the ideal mix of tax increases, spending cuts, investments, and pork that will get a deal—a compromise that will be acceptable to the capital markets and not tear the country apart. Yes, in time, America’s politicians will appeal to the people’s better angels. And there will be numerous “teachable moments.” But first, they’ll have to sit down together and make some hard decisions.