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David Brodwin's blog

What Obama's Budget Is Really About

With the release of its annual budget last week, the Obama administration threw nearly $4 trillion worth of birdseed to an agitated and generally unappreciative flock of congressional pigeons.

The ritual brought forth the predictable mix of intense squabbling and complete boredom. Those directly affected by the budget strut and squawk to secure the crumbs they are used to getting in past budgets. Meanwhile, most of the public gets lost in the details and quickly loses interest (if they were ever interested at all). Within moments of the birdseed hitting the pavement, all the seed is spoken for, though the pigeons continue to posture for dramatic effect.

This year’s budget has even less chance of changing things than most. With Republicans controlling both the House and the Senate, the budget is sure to see extensive modification before it gets anywhere near a vote.

But Obama is not fighting for a budget so much as he is fighting for a vision. With the economy growing at its best pace in years, he reminds us of three things: First, economic growth alone is not enough to make a good society. Second, keeping inequality within reasonable limits is essential. And third, government can and should play a strong role in reducing inequality. From his vantage point, it is less important to win now than to force a change in the conversation that helps Democrats win the 2016 presidential election.

Obama recognizes that the forces that kept inequality in check in the past are largely played out. The 1970s were something of a golden age as far as economic inequality was concerned, at least for white males. Labor scarcity and union power kept wages high. No longer. Meanwhile, marginal tax rates for corporations and wealthy individuals were far higher than today. Even President Ronald Reagan’s tax policy would be considered communist by many in today’s Republican party. But these high marginal rates ensured that money from the rich would be available to support programs and more for the middle class.

With the forces that have historically restrained inequality now gone, Obama wants to reframe the debate over what government can do to limit inequality. He wants to force Republicans to accept the premise that inequality is damaging in both moral and practical terms, and focus the debate on how to reduce inequality. In other words, instead of 2016 being about the virtues of promoting growth versus promoting equity (a battle the Republicans generally win), he wants the debate to be over Republican solutions to inequality versus Democratic solutions to inequality (a battle that Democrats generally win). Forcing Republicans to talk about inequality as a real issue (and not just as the whining of disgruntled lazy people) is central to this strategy.

Without labor shortages to drive up wages, what can the government do to reduce the gap between the richest and the rest? The government can’t influence wages directly, except for the federal minimum wage. And stimulating the economy with cheap money, the way the Federal Reserve has been doing for several years, seems to boost corporate profits far more than it boosts median wages. Pretty much all the government can do to help the middle class and those below is to funnel a bit more cash to them (via tax cuts and the Earned Income Tax Credit) and drive down the cost of fundamental goods and services – for example, free community college tuition, lower health care costs, and family leave.

Obama is daring the squawkers in Congress to ignore inequality. He knows that many Americans these days feel the lash of inequality at a personal level and they want something done about it. If Obama can shift the public debate away from aggregate growth and towards questions of equity, he will have won major victory — even if a fractious Congress does not enact a single item in his budget.

David Brodwin is a Co-founder and board member of American Sustainable Business Council. This article appeared in U.S. News & World Report February 9, 2014.

Changing Attitudes on a Changing Climate

The public – even the Republican public – is getting more worried about climate change, but its growing concern may not be enough to prod Congress to act.

Americans swing like a pendulum when it comes to climate change. Between 2000 and 2007, about 60 percent of Americans believed that it was caused by people, according to Gallup’s polling. But the denial machine kicked in with full force, and the public, which struggles to understand complex data, began to back off. Belief that carbon pollution causes climate change fell, reaching a low of 50 percent in 2010.

But then the trend reversed. Americans shed their skepticism. Their belief in human causation moved back up from 50 percent to 57 percent between 2010 and 2014. And although opinion on climate change remains polarized along party lines, even Republicans shifted their views.

It’s hard to say what caused concern to rise, but there has been plenty of evidence to notice. Ordinary people are more likely to notice economically-damaging extremes of weather, such as Hurricane Sandy, or the fact that much of the West now faces record drought. Scientists point out the statistical evidence, for example that 2014 was the warmest year on record and all of the 10 hottest years in history have come after 1998.

Last week, an important new study was released that confirmed the shift in opinion and shows that concern over climate change continues to grow. The poll was conducted by the New York Times, along with Stanford University. It showed that a large majority (78 percent) of Americans now see climate change as a “very serious” or “somewhat serious” problem for the U.S. And half of Republicans now support action to limit global warming, a large and rapid jump from 41 percent who were concerned in 2014, according to Gallup.

The latest NYT/Stanford poll is entirely consistent with what American Sustainable Business Council found in polling small business owners about climate change last summer. Small business owners are a pragmatic bunch, resistant to partisan extremism. A plurality identify as Republicans, and few consider themselves to be environmentalists. Yet 53 percent of the business owners polled think extreme weather has, or will have, a negative effect on their businesses. 64 percent of owners believe government regulation is needed to reduce carbon emissions from power plants. This majority prevails across party lines, with Republicans supporting regulation by 55 percent.

At this point, voters want their elected leaders to accept the science of climate change and promote new forms of energy that don’t damage the environment: According to the NYT/Stanford poll, voters are much more likely to vote for candidates who accept the reality of climate change and propose practical solutions:

Data from NYT/Stanford poll.

Unfortunately, despite the strong voter sentiment for action on climate change, it’s hard to see how progress can be made. Just as this latest poll was released, the Koch brothers announced their plan to raise and spend $889 million on the 2016 election. This spending surpasses the totals recently spent by the entire Republican party ($682 million in 2012), and by Democrats as well ($648 million). It makes the Kochs a political party in all but name.

The Kochs are expected to use their war chest to punish Republican candidates who are not sufficiently conservative. They will make it all but impossible for a responsible candidate who wants to heed the voters on climate change to get on the November ballot. Sometimes the will of the voters just isn’t enough.

David Brodwin is a Co-founder and board member of American Sustainable Business Council. This article appeared in U.S. News & World Report February 2, 2014.