President Obama wants to spend the next year talking about economic inequality. Republicans shouldn't take the bait.
In a speech last week in Kansas, the president presented rising economic inequality as the defining issue of our time. As is often true of political speeches, Obama didn't make anything resembling a tight logical case. Instead, he relied heavily on caricature and dubious assertion.
But even for a political speech, Obama's Kansas remarks were slippery. He never quite came out and said that rising inequality is the root cause of our economic troubles. He never said explicitly that we should raise taxes on the wealthy to combat inequality. Or that the Great Depression was caused by too much reliance on free markets. Or that the tax cuts and market liberalization begun under Jimmy Carter and continued through the Reagan, Clinton, and Bush years were mistakes. Instead, he strongly implied all these things.
So why not speak more clearly? Perhaps because these claims would be either obviously false or politically perilous.
Start with the history. Economists generally believe the Great Depression wasn't a cosmic punishment for the excesses of the 1920s, but the result of an inappropriately tight monetary policy. And nobody has offered an even slightly plausible argument that connects the financial crash of 2008 to George W. Bush's tax cuts - let alone to Ronald Reagan's tax cuts.
Obama didn't say deregulation and tax cuts were worthwhile ideas that eventually got taken too far. He said the philosophy underlying these policies was mistaken and that they have led to a ruinous level of inequality.
Center-left critics of the president's speech, like the Washington Post editorial board, underestimate Obama when they point out that the policies he recommends are inadequate to the scale of the inequality problem. His solutions are politically constrained. But his ambition - to reverse the last 31/2 decades of economic and political history - can't be faulted for timidity.
During his campaign for the Democratic nomination in 2008, Obama said he would favor raising the capital-gains tax even if it raised no revenue: It was a matter of fairness. That's the impulse at work in his recent speech and in the 2012 campaign it effectively started. It's one thing to favor higher taxes on the rich on the theory that the government needs money and they have it to spare. But to suggest that their high incomes are in themselves a problem that the government needs to address is something harder to defend.
Republicans haven't reached a consensus about how to respond to Obama's new focus on inequality. Some are highlighting statistics that minimize or deny the increase in inequality. A few are saying inequality is a good thing, the natural result of free markets. Rep. Paul Ryan of Wisconsin, the House Budget Committee chairman, points out that various government spending programs and tax breaks reward affluent citizens, and that reforming those policies is the right way to tackle inequality.
There's no need for Republicans to be defensive on this subject. Although inequality has long been a major concern of liberals, most voters don't seem to share it.
When the National Opinion Research Center asked people whether the government has a responsibility "to reduce the differences in income between people with high incomes and those with low incomes" in 2008, only 37 percent agreed. When pollsters ask people to name the top issue facing the country, almost nobody volunteers inequality, notes Karlyn Bowman, an opinion-research analyst at the American Enterprise Institute.
But if voters don't especially care how much money the rich are making, they do care how much they themselves are making. A return to robust economic growth and rising middle-income wages doesn't require reversing a decades-long trend toward higher inequality. It requires improving our monetary, tax, and health-care policies.
Instead of talking about inequality - even to rebut Obama's dubious claims - Republicans should talk about what voters care about, while pointing out that the president would rather chase ideological will-o'-the-wisps.