Inequality and the Bully Pulpit
A longstanding rap against Barack Obama, going back to his Senate years, is that he confuses making speeches with making change. Of course, though, moving the public is often a crucial pre-condition for moving a policy agenda. And speeches can help do that.
Inequality is a great example. President Obama has recently made several high-profile speeches, and gave a rare New York Times interview, where he raised the alarm about inequality. Research into the public's thinking on inequality suggests that such statements can make a real difference.
According to Leslie McCall's excellent new book, The Undeserving Rich, the public's concern about inequality tends to wax and wane. Americans don't always fret about inequality, but they do during periods when only the rich are doing well while everyone else in struggling.
If all boats are rising, Americans don't care that the yachts rise higher and faster. But if only the yachts are rising, the public wants to address the problem -- mainly through ensuring that the fruits of business are more widely shared. (As opposed to using tax policy to level things out.)
Of course, that is exactly the situation we find ourselves in now. It's not just that only the yachts have been rising, it's that ordinary boats are being swamped -- for instance, through the ongoing avalanche of foreclosures.
With the public already primed to back an attack on inequality, Obama's recent statements are well-timed and are likely to build support for policies to better share the wealth created by business. Given the obstacles that exist in Congress to real action, that may not ultimately count for much -- at least in Washington right now.
But the federal government is not the only entity that can combat inequality. State and local governments also have a role to play, and plenty are in the hands of Democrats. By putting inequality on the national agenda, Obama is fostering the conditions to attack this problem at all levels of government.
More importantly, he could change the thinking of corporations, which can reduce inequality any time they want by boosting worker pay and improving benefits.
Why would corporations voluntarily help reduce inequality? One reason would be to get ahead of the curve of current or future regulatory efforts to better spread the wealth.
If the President is talking about reducing inequality, it may only be a matter of time before Democrats ramp up efforts to achieve this goal through government policy -- maybe not in the next few years, with the House safely in GOP hands. But down the line. If I'm a far-sighted CEO, I may want to take the wind out of those sails with preemptive steps to improve worker earnings.
The growing movement of service sector workers pushing for higher wages is another reason for corporations to get ahead of the curve. And, with these workers striking in a number of cities this week, Obama's comments on inequality are well-timed indeed.
