This item by John E. Schwarz is the opening and framing essay in an online forum cosponsored by Demos and TDS entitled: “Progressive Politics and the Meaning of American Freedom.” Responses to this essay, and other thoughts on the subject of progressivism and freedom, will be featured here over the next two weeks. John Schwarz is a Distinguished Senior Fellow at Demos, Professor Emeritus of Political Science at the University of Arizona, and the author, most recently, of Freedom Reclaimed: Rediscovering the American Vision.
Standing on the steps of the capitol, just before the House voted on its health-care reform bill last November, House Republican leader John A. Boehner proclaimed: “This bill is the greatest threat to freedom I’ve seen in the 19 years I’ve been here.” He used the very same terms four months earlier when he declared war on the Obama cap and trade bill: “The fight we have between the two (political parties),” he said, “boils down to one word—freedom: the freedom to allow the American people to live their lives without all these extra taxes and all this bureaucracy. I say to my colleagues… let’s trust the American people, let’s allow America to flourish, and, most importantly, let’s allow freedom to flourish.”
That is the core of the conservative message, and it has strong legs. Consider what happened to the single-payer plan in the health-care reform debate. President Obama and most progressives believed a comprehensive single-payer system provided the most effective foundation for reform, and they often said so. However, they also knew it was politically out of the question. So they settled for a “robust” but optional public plan instead. That already represented a substantial compromise for them, more than half a loaf. Yet, what they got in the House was far weaker still, a public option so eviscerated that a mere 2-3 percent of Americans would be eligible, most of them with such poor health conditions that insurance companies didn’t want to cover them anyway. They ended up with nothing in the Senate. An opposition asserting the cause of freedom and raising the specter of big government, as much as anything else, brought that result about. The cap and trade bill that Boehner attacked as an assault of coercive government on freedom is currently experiencing a similar fate.
Polls show that individual freedom is a highly potent value for Americans across the ideological spectrum, among strong partisans of both sides and independent swing voters as well. (Center for Policy Alternatives, “Findings From a Nationwide Survey,” Lake Research Partners, November 2006; p.31-32; Center for American Progress, “The State of American Political Ideology, 2009: A Study of Political Values and Beliefs,” p. 40 ) We see our country as the land of the free. We identify ourselves as the free and the brave. Freedom has been the battle cry behind the adamant reaction that has grown against raising taxes. It has been the clarion call in town halls and tea parties everywhere across the country. By rallying around the contrast between individual freedom and government oppression, the Republicans are advancing an emotional appeal with deep and powerful resonance.
The same message has worked with profound effects many times before. For decades, conservatives hit liberals over the head as uncaring about individual freedom and personal responsibility, given their repeated advocacy of big governmental programs and regulatory planning. The attacks succeeded with such thoroughness that not only were liberals put into a perpetually defensive position, but the word “liberal” itself actually became an unmentionable political pejorative—the “L” word. Unless President Obama and the Democrats learn how to counter the opposition’s call for freedom effectively, it will continue to delimit them and the country in advancing the nation’s agenda over the years to come no differently than it proved able to demonize liberalism, emasculate the public option in the health-care reform bill, and make increasing taxes to finance government practically prohibitive.
What is supremely ironic here is that President Obama and the Democratic majority actually are the real defenders of American freedom. It is they, not the Republicans, who represent the true ideal of American freedom. They need to make that case strongly, for all to see, both for their own success and for the nation’s ability to build the stronger foundation required to move forward effectively. They must defeat the opposition on what it has come to presume is its own home turf.
They do not have to look very far to find the alternative theme and narrative they need. It is already spread throughout the speeches and writings of the incumbent President. Though not yet fully employed, it is contained in hundreds of President Obama’s statements that align closely with his actions. Together they cohere into a remarkable vision, a paradigm. We might call it “the Obama Doctrine.” Its single overriding aim is the very goal that the opposition claims as its own: to enlarge and expand the freedom of Americans here at home.
In seeking that goal, however, the Obama Doctrine calls us back to an ideal of freedom that is more faithful to the Founders’ beliefs, and to Abraham Lincoln’s, than is the conservative way of thinking about freedom that currently prevails in our politics. Here is the crucial difference. Obama shares with the Founders and Lincoln an ideal of freedom that, building upon personal accountability, also embraces certain mutual responsibilities toward one another and shared sacrifice for others and the common good as crucial obligations of freedom. By contrast, except for the realm of national security and defense, such mutual obligations and shared sacrifice have had a far lesser place in the highly individualistic conservative notion of freedom that is politically supreme today.
Similarly, what distinguishes the Obama Doctrine from conservatism is its positive recognition of the need for governmental activism to effectuate the obligations we have toward one another that are imbedded in the Founders’ and Lincoln’s ideal of freedom. Because they are obligations of freedom, and not options, government is the proper arena to address them and assure that they are carried out. At the same time, in doing so, government must maintain discipline and carefully control itself so that it not exceed its own legitimate bounds. A government that fails this test will not retain public support.
In the eyes of the Founders and Lincoln, the prevailing conservative view of freedom is mistaken at its core. Nonetheless, it has dominated both our politics and public policy for much of the past three decades, with severely damaging results that the Founders might well have predicted. The grave economic consequences that a great majority of American families have experienced, and the urgent need for an alternative capable of reversing them, will become clearer in the pages to come. Ultimately, the Obama Doctrine not only advances the most fundamental political value that has inspired Americans through the ages, including its connection to shared sacrifice for others and the common good. It not only builds upon basic principles that Americans intuitively understand and accept. At the same time, it promotes the most deep-felt economic interests of everyday Americans—crucial to both Democratic and independent swing voters alike, and many Republicans too— that the flawed individualistic conception of freedom has so egregiously abused for nearly two generations now. It is an exceptional political combination.
The Bedrock Value
Closing his Inaugural Address in January 2009, President Obama proclaimed: “Let it be said by our children’s children that when we were tested, we refused to let this journey end, that we did not turn back nor did we falter; and with eyes fixed on the horizon and God’s grace upon us, we carried forth that great gift of freedom and delivered it safely to future generations.” A New Birth of Freedom was the Inauguration’s theme. Two years earlier, he had closed the speech declaring his candidacy for the presidency with the very same sentiment: “Together, starting today, let us finish the work that needs to be done, and usher in a new birth of freedom on this earth.”
What is this new birth of freedom that Obama urges and how is it relevant to America? Indeed, what does a rebirth of freedom in America even mean? How does America, of all places, require a rebirth of freedom? Those are the questions that the President raises. His answers open the possibility of a fundamentally different way of understanding our bedrock value of freedom that, in reconnecting us with the vision held by our forefathers, brings us home again to the vision of freedom that we hold down deep within ourselves.
For Barack Obama, the decisive words in the American heritage are the ones that heralded the nation’s birth: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness.” Those hallowed words represent the starting point for all Americans, himself included, Obama emphasized in The Audacity of Hope. (AOH, p.53) Everything springs from them; they comprise “the substance of our common creed.” (AOH, 53) In the 2004 Democratic Convention address that vaulted him to national attention, he opened directly on that point: “Our pride is based on a very simple premise, one summed up in a declaration made over two hundred years ago. That simple premise,” he said, “is the genius of America.”
The ultimate principle behind the American genius for liberty, he elaborated in The Audacity of Hope, is the notion that: “The very idea of these… rights presupposed the equal worth of every individual.” (AOH, 86) It is because of that equal worth— the innate dignity of every person— that all individuals have a right to be free and to determine their own ends. No one should ever be used as a mere means towards the ends of any other person. For Obama, as for most Americans, this proclamation of “equal freedom,” built upon the premise of the equal and inviolate dignity of every person, is what makes the Declaration of Independence transcendent.
Freedom, today, is often understood to convey a “me-first,“ “self-interest,” or “anything goes” kind of attitude, none of them a transcendent goal. Something morally crucial is missing in the prevailing view. What is lacking is the recognition of our duties and obligations to each other. The prevailing view fails to recognize that freedom, when rooted in the premise that each person has innate dignity and equal worth, carries with it profound moral responsibilities toward others precisely because we are all equals in our right to freedom. Those responsibilities require that we act towards all others with a level of concern that can demand more from us than even the Golden Rule does in asking us to treat others as we would like to be treated ourselves.
Instead, notwithstanding how we would like to be treated ourselves (say, for example, we believe that we made it on our own and, therefore, so should others), and notwithstanding our own immediate self-interest, freedom requires us to support others’ interests and needs whenever it comes to assuring the full worth of their equal freedom. Individuals cannot be truly free to secure a living, for example, if jobs are not available for all who are willing to work. If freedom genuinely is our aim, then we have a responsibility as a nation to ensure that a suitable choice of jobs and reasonable transitional assistance are available to those individuals.
That is what a community of equal freedom requires. For this reason, Obama reminds us, we need to see the Golden Rule “as something more demanding, [as] a call to stand in somebody else’s shoes and see through their eyes.” (AOH, 66) In the same spirit, Obama often invokes the biblical duty that “we are each our brother’s keeper, we are each our sister’s keeper.” As he stated in his Inaugural Address, our responsibility to share with other Americans as our “brother’s and sister’s keeper” means something very specific: What each of us owes to others is a commitment to meet the obligations necessary to ensure that they, too, can obtain the full worth of their equal freedom.
The Historical Roots
For most of his critics, the President’s ardent emphasis on the obligation to share and on collective action through government toward that end has nothing to do with freedom. To the contrary, they contend that this worldview disavows the nation’s most cherished principles of freedom. That’s what the angry tea-party protests have been about. That’s what John Boehner and virtually every Republican opponent have been saying. They regard the individualistic understanding of freedom as our nation’s founding ideal, and on that basis they hold it to be sacred.
Yet, their view reflects a basic misreading of both our history and the idea of freedom. There is nothing more characteristically American than the principle of sharing as a core obligation of freedom, and using government for that purpose, particularly if the purpose is to assure the availability of widespread economic opportunity and security for all. No precept in the American tradition, starting from the nation’s birth, has deeper roots.
Were he alive today, Thomas Jefferson, like Obama, might well be labeled a “socialist.” The author of the Declaration believed that every person, being equal and thus free, had a natural right to the conditions to attain “independence.” “Independence” meant the right of every person to be able to provide decently for himself by means under the individual’s own control. As Jefferson saw it, the earth was held in common at the start, in the state of nature. All individuals had access to it to secure a customary living through their labor and to reap the fruits of their own hard work. In forming civil society, Jefferson maintained, those twin opportunities of freedom had to remain open and available to all. The right under freedom to the unequal individual ownership of private property could not go so far as to violate this basic level of opportunity to which every individual had a prior and overriding claim.
Jefferson’s first draft of the Declaration proclaimed not just that “All men are created equal,” but that “All men are created equal and independent.” For Jefferson, the principle that every individual who is free and equal has the right to be independent held true by definition. Jefferson was echoing the same principle set forth by George Mason only weeks earlier in the path-breaking Virginian Bill of Rights, whose very first lines proclaimed that “All men are by nature free and independent.” Remaining faithful to that principle, Jefferson was a staunch advocate of dividing up public lands, proposing that all individuals who had never owned property be granted 50 acres of the public domain— enough land to support every family adequately and assure their independence.
John Adams’ prescription for instituting and protecting freedom was much the same: “Make the acquisition of land easy to every member of society,” he wrote, “so that the multitude may be possessed of landed estates.” James Madison wrote that freedom can survive only through some form of shared distribution resulting from “the silent operation of laws which, without violating the rights of property, reduce extreme wealth toward a state of mediocrity and raise extreme indigence toward a state of comfort.” None of the leading Founders thought in terms of free trade alone as freedom. They were crystal clear that the proper role of government was to provide opportunity to those who were poor.
The Founders, equally, were fervent advocates of government spending and investing in order to extend opportunity still further through the expansion of commerce and growth of the economy. Madison, for example, supported the creation of a national university and the building of the Erie Canal. Jefferson, too, proposed not only the public construction of schools, canals, roads, and many other projects, but also what was perhaps the largest public investment in American history, the Louisiana Purchase. The combination of those varied actions of government, Jefferson hoped and believed, would ensure sufficient economic opportunity for all Americans for “thousands upon thousands of generations” to come.
Indeed, had the Founders actually believed in a minimalist government, wouldn’t they have kept with the Articles of Confederation they first created? There, after all, was the pure definition of minimalist government. In writing the Constitution and forming the federal government in 1789, the Founders stood specifically against minimalist government and instead engaged in a substantial increase in both the strength and reach of government.
Abraham Lincoln came from the same lineage. A great admirer of Thomas Jefferson, Lincoln advocated a broad range of public interventions in order to widen opportunity and create the possibility of economic independence for all. During his second year in office, in 1862, he signed the Homestead Act that carried out Jefferson’s idea for ensuring the opportunity for independence. Opening up hundreds of millions of acres of public lands, it granted 160 acres, enough to secure independence, to every American willing to work the land. Similarly, from building railroads to creating land-grant universities, Lincoln promoted spending on a series of other government initiatives that were intended to further broaden commerce and opportunity.
In those times, the economy was predominantly agricultural. The ownership of land was the chief means for Americans to gain and maintain economic independence. That was soon to change, however. During the second half of the 19th century and the early 20th century, our economy became dominated by manufacturing and industry. The frontier and its available lands eventually closed. As that transformation took place, the ideal of freedom built upon owning landed property and farming became increasingly unrealistic for most Americans.
That development required a new practical approach, capable of translating the historic ideal of freedom held by the Founders and Lincoln into the realities of an industrial market economy grounded in wage-earning employment. Opportunities for satisfactory wage employment, supplemented when necessary with the assistance of public programs, had to replace land ownership as the means to sustain the independent living required for freedom.
That became the objective of the New Deal, adopted in the wake of the Great Depression. The New Deal set up a whole series of job-creation and job-training programs. It introduced the minimum wage and established pillars for the development of the middle class, such as collective bargaining rights, Social Security, unemployment insurance, and housing assistance.
All of those measures attempted to apply the ideal of freedom as understood by the Founders and Lincoln to the changed economic circumstances of a wage-earning majority. They were aimed at generating sufficient decent-paying jobs, combined with assistance and insurance programs tied to prior work, that together would make opportunities readily available for all to secure a dignified living based upon their own industry.
Franklin Delano Roosevelt made clear his thinking behind the New Deal when he proclaimed: “Liberty requires opportunity to make a decent living according to the standard of the day, a living which gives a man not only enough to live by, but also something to live for.” He went on to say, “True individual freedom cannot exist without economic security and independence.” Creating conditions to support that independence and security within an industrial economy was the professed purpose of the New Deal and its economic and social programs. That goal followed in the long legacy of freedom that had inspired the Founders at the birth of the nation and Abraham Lincoln at the time of the nation’s renewal.
The same rich legacy also defined the goal of the Civil Rights movement of the 1950s and 1960s, which reached a ringing crescendo with the “March for Freedom” on Washington DC in 1963 and Martin Luther King’s timeless declaration: “Free at last, free at last, thank God almighty we are free at last!”
Particularly over the decades thereafter, however, the Democratic Party has turned its focus away from emphasizing the value of freedom. Richard E. Burke, the longtime assistant to the late Senator Edward Kennedy, the nation’s leading contemporary liberal, capsulated the Senator’s thinking this way: “The crux of his [Kennedy’s] philosophy is that the fortunate should help the less fortunate to bring equality to all facets of society.” Michael Gerson, President George W. Bush’s chief speech writer, observed in his book Heroic Conservatism that: “Liberals today barely talk any more about liberty.”
It is true, mention of freedom has nearly disappeared from the speeches of most Democrats, except when the issue is civil liberties. Even so, despite two generations during which conservatives have emphasized their view of individual freedom while liberals have not, almost 60 percent of the American public still prefers the deeper and more expansive view of freedom that Obama sets forth. Imagine how Americans might come to feel were Democrats actually to focus on the value.
Freedom and the American Promise
For Jefferson, Lincoln, Roosevelt, and the struggle for civil rights, the idea of freedom never simply meant the absence of external restrictions in the lives of individuals. It was also tied inexorably to the positive availability of economic opportunity. That is the tradition Obama follows. “At its most elemental level,” Obama observed in The Audacity of Hope, “we understand our liberty in a negative sense. As a general rule, we believe we have the right to be left alone… But we understand our liberty in a more positive sense as well, in the idea of opportunity.” (AOH, 54) Without sufficient opportunity, individuals cannot be free and masters of their own fate. The same idea of freedom defines the promise at the heart of the American Dream: that satisfactory economic opportunity will be available to every person who is willing to work and act responsibly.
The Meaning of the American Promise: That promise, therefore, is a bottom line for Obama. We must “ensure opportunity,” he said in accepting his party’s nomination for president, and we must do so “not just for those with the most money and influence, but for every American who is willing to work. That’s the promise of America…That’s the promise we need to keep.” Note as well his emphasis on every American. For, if freedom is to extend to every person, opportunity must also be available to every person. “America is America,” Obama said before a NASDAQ audience on the campaign trail, “because we believe in creating a framework in which all can succeed.” (emphasis added).
What, however, does the idea that “all can succeed” really mean? At one level, surely, it means that any person in America, as Obama did himself, can rise from lowest to highest based upon performance, will power, and discipline. Obama has often cited the example of his own life story of success.
But the American Promise also conveys something fundamental that is more than the sheer ability of any person with unusual skill or drive to advance to the top. Crucially, it also means that a floor of opportunity exists that is accessible to every willing individual— the opportunity for every person both to provide a secure living through work and to get further ahead by improving on the job.
In conversations with voters during his successful campaign for the U.S. Senate, Obama learned that this belief in a floor of opportunity for every person lies deep in the American psyche. No matter where he was talking with folks, and whatever their race, religion, or class, Obama found that, “Most of them thought that anybody willing to work should be able to find a job that paid a living wage.” He said, “They figured that people shouldn’t have to file for bankruptcy because they got sick. They believed that every child should have a genuinely good education—that it should not just be a bunch of talk—and that those same children should be able to go to college even if their parents weren’t rich. They wanted to be safe, from criminals and from terrorists; they wanted clean air, clean water, and time with their kids. And when they got old, they wanted to be able to retire with some dignity and respect.” (AOH, 7) The promise is, as Obama summed it up in a speech at Cooper Union, “that if you work hard, you can support a family; that if you get sick, there will be health care that you can afford; that you can retire with security and dignity and respect that you’ve earned; and that your children can get a good education.”
The Huge Gap Between the Promise and Inherited Reality. This widely accepted principle that a minimum level of opportunity for success should be available to every willing person who plays by the rules and does his or her part would seem to be a nearly unobjectionable, almost obvious proposition. Nonetheless, it differs profoundly from the way our economy actually performs. That is so even when the economy is running at full steam, let alone during hard times. By the standards of this basic promise, as Obama often points out, the American economy and American families have been in a condition of serious recession for a very long time, not just over the past year.
A living wage is the pay it takes for workers, when employed full-time, to provide a standard of living within the boundaries of the American mainstream, that is, at the bottom level of the way ordinary Americans live. Studies checked against opinion polls place a living wage at least at about $11 per hour. That amount comes to approximately 55 percent of the current average hourly wage for American workers, which was $19.80 in 2008.
In 2006, when the economy was humming and running up record straight quarters of growth, more than 30 million employed Americans—nearly one-in-every-four—were paid below the level of a living wage. Of the millions of Americans working beneath a living wage, many of them had gained at least some college education beyond a high school degree.
On top of that, the median wage—the wage received by the average American worker adjusted for inflation—had remained essentially flat for the prior 30 years. The median wage stagnated despite a whopping 70 percent increase in the amount that workers produced per hour of work during those years. Notwithstanding their improved performance, workers on average were unable to get ahead. Except during the second Clinton term and a few years thereafter, the gap between faltering compensation (even including health benefits) and rising worker productivity widened continuously throughout the period. After 30 years, the gap had become a chasm that stands in sharp contrast with the prior three decades from 1949-1979. Then, the compensation level of the average worker had kept much in line with the growth of their productivity. From the late 1970s onwards, inversely, advances in compensation generally bypassed average Americans. Instead, increases so massive as to nearly match the size of the gap, totaling in the many hundreds of billions of dollars annually, went to those who were at the very top.
The average American, in effect, has been struggling for three decades in what can be called a “confiscatory market”—a market that confiscated virtually all compensation increases from the rising productivity of workers and delivered them up to the top. That occurred not through any fiat of government but simply through the operation of the market itself. In the past, workers’ compensation had generally amounted to about 60 percent of their overall productivity. Following the late 1970’s, total compensation paid to workers kept rising at about 60 percent of improved productivity. (Calculated from Frank Levy and Peter Temin, “Inequality and Institutions in 20th Century America,” 2007, pp. 3-5 and Lawrence Mishel et al., The State of Working America, 2008-2009, p. 161) However, save primarily during the second Clinton term, the average worker’s compensation increased hardly at all because nearly all compensation increases coming from the productivity growth went to the very top. Not even a college education provided much of an escape. The gains in compensation from productivity growth were shared so narrowly that median earnings even for workers with college degrees, as a group, were significantly abated. It stands as the most dismal performance for the wages of the average American worker ever recorded in U.S. history.
In addition to an economy containing large numbers of poorly paying jobs and stalled wages for average workers despite their improved performance, 45 million Americans (and rising) had no health insurance coverage, millions more were undercovered, and expenditures for health care became the leading cause of family bankruptcy, even for those families with insurance. On their part, American schools from grades K-12 suffered from continuously poor student results in international comparisons while the cost of a college education rose increasingly beyond the reach of average American families.
Compare those conditions to the American promise of the availability of opportunity for every person to make a decent living through work and get ahead through individual improvement. Whether during good economic times or recession, one thing is evident: the economic realities facing Americans have been far removed from the level of opportunity required to satisfy this basic promise of freedom. That has been the case for many years, indeed for thirty long years—a time, it must be said, of Republican and conservative ideological dominance. From 1979-2008, Republicans controlled the presidency for about two-thirds of the years and one or both houses of Congress for a similar length of time.
In turn, the political implications of the collapse in opportunity have been substantial. With barely any improvement in the real compensation of the average worker for three decades, to take one example, resentment has naturally grown among hard-pressed voters. They have become increasingly resistant to any hike in their taxes, understandably so. For Republicans and Tea Partiers, creating a vicious backlash against taxes has been like shooting fish in a barrel. In opposing tax increases and promoting tax cuts, they are appealing to tens of millions of working and middle-class Americans for whom the confiscatory market has already taken away virtually all of their real gains in compensation for almost two generations now.
Contrary to what many Republicans and conservatives proffer, the competitive free market contains no internal mechanism to realize the promise of sufficient opportunity. One needs to look no further than the disturbing record of the past 30 years to demonstrate that point. Competition is intended to bring about the economy’s efficiency, not a sufficient level of opportunity for every person.
That is why, as Obama reminds us, “the American experiment has worked in large part because we have guided the market’s invisible hand with a higher principle.” The economy needs guidance, he emphasized in his Inaugural Address, precisely “to extend opportunity to every willing heart.” That is the higher principle. And, it is in the name of that principle that Obama has called for public action to share prosperity and spread growth. Only through such action can the Promise of America, and the promise of opportunity for success that freedom calls for, be made real in the lives of all Americans, whether for low-wage workers or for the average worker, whether for the working class or the middle class. The private market cannot be counted upon to produce that result naturally or, indeed, anything even close to it.
A substantial part of Obama’s broad policy agenda is directed at leading the free market in order to widen prosperity as just described, not simply during recession but also in the normal operation of the economy. He had been advancing much of the agenda long before the economy’s meltdown in 2008. To extend opportunity to every willing heart, his agenda has called for lifting the federal minimum wage modestly and connecting it to inflation; raising and broadening the Earned Income Tax Credit; enacting universal health-care coverage and instituting controls to constrain rising medical inflation so that health-care costs facing families as well as government funding obligations remain within our means; protecting Social Security and tightening regulation to ensure private pension payouts; promoting the creation of new well-paying infrastructure, cutting-edge technology, and clean-energy manufacturing jobs; instituting workforce development and neighborhoods of opportunity initiatives; enacting small business tax and loan incentives to encourage new business start-ups and job creation; updating unemployment insurance and trade adjustment assistance; expanding family medical leave; raising the child and dependent-care tax credit; increasing the progressivity of taxes; instituting a set of plans to secure more effective education for all from pre-school through grade 12; expanding assistance for innovation in and access to higher education; supporting equal pay for equal work; and enacting labor-law reform to facilitate more effective bargaining.
An overriding goal attaches to all of those actions. Every one of them attempts to share prosperity delivered through the competitive free market in order to ensure that opportunities to make a decent living and to advance through individual improvement will extend to each and every American. Taken in combination, they amount to a broad employment program focused on restoring jobs and wages to working and middle-class Americans, as sufficient opportunity for freedom requires.
Thus, lifting and indexing the minimum wage and raising the Earned Income Tax Credit, together with subsidies for universal health insurance, will effectively set the minimum hourly wage for working families at close to a living wage while also including affordable health-care coverage. Workers well up the pay scale will feel positive income benefits. Facilitating more effective collective bargaining intends to raise the compensation of workers further to keep it more in line with improved productivity, while raising dependent-care support and medical leave assistance aims to relieve the growing burdens of work-related costs on families. Broadening college assistance will improve the families’ ability to pay the costs of higher education. Expanding aid and bringing innovation to the 5,000 public schools with the highest dropout rates seeks to optimize educational opportunity for the most deprived today. That, in turn, addresses the leading reason why the nation now does relatively poorly in international comparisons of students. Supplemental workforce development and neighborhoods of opportunity initiatives are intended to focus more employment and wage growth in central cities and other disadvantaged locales. The promotion of infrastructure renovation, climate control and energy efficiency, and cutting-edge technologies holds the promise of generating many millions of needed new good-paying jobs, just as government investments and innovations in jet aircraft development, computer and microchip technologies, the internet, optics, and satellite communications did in the past and still do today.
The Economy’s Collapse: An Explanation and a Solution
Obama regards the fundamental assurance of sufficient economic opportunity, first and foremost, as an absolute moral imperative for a nation that proclaims the ideal of equal freedom. Beyond that, it also follows from an economic theory about what a competitive free-market economy requires to generate sustainable growth that will endure in the future. Over the past three decades, the prosperity and productivity gains of the American economy were shared very narrowly. In the absence of wage gains over all those years, the only way left for most families to get ahead and improve their standard of living was to spend down savings they might have had and assume ever more debt.
The savings rate for the nation stood at about 9 percent of income in the 1970s. By 2008 it had dropped almost to zero. At the same time, family debt had doubled as a proportion of income. The drop in savings and the doubling of debt became, in effect, the engine of our economy, generating well over $1 trillion annually in new consumption. Consumption accounts for 70 percent of the economy. To keep consumer demand growing, the American economy had become tied not to rising wages that kept in line with improved worker performance, but instead to artificial demand coming from reduced family savings and rising consumer debt. In essence, the economy relied upon families increasingly living beyond their means.
That is a highly disturbing trend whose dire long-term consequences we are now beginning to understand. An economy whose foundation for continued prosperity rests upon depleting savings and ever expanding debt cannot last. Such a weak foundation will eventually collapse. In Obama’s words in an April 2009 speech at Georgetown: “It is not sustainable to have an economy…based on inflated home prices, maxed-out credit cards, overleveraged banks and overvalued assets. It’s not sustainable to have an economy where the income of the top 1 percent has skyrocketed while the typical working household has seen its income decline by nearly $2,000. That’s not a sustainable model for long-term prosperity.”
Rather, he argues, ours must be “a future where prosperity is fueled not by excessive debt, or reckless speculation, or fleeting profits, but is instead built by skilled, productive workers, by sound investments that will spread opportunity at home and allow the nation to lead the world in the technologies and innovations and discoveries that will shape the 21st century.” He is here describing the more solid foundation, “the house built upon a rock” in his words, that the nation and economy must have in order to be successful in the future— precisely what he intends the combination of proposals previouly outlined to accomplish.
Expansive borrowing, of course, required the willingness of lenders to take on increasingly riskier debt. The way had been paved for that crucial development by the prior three decades of financial deregulation, propped up by the housing bubble it had helped spawn. Starting in the Reagan presidency, and for two decades thereafter, New Deal restrictions on mortgage lending were eliminated, financial institutions were allowed vastly increased leveraging, consumer lending standards were relaxed, and newly invented financial instruments, such as credit default swaps, went unregulated. Deregulation allowed massive pools of money to engage in far riskier lending and borrowing than had existed before, leading ultimately to the collapse of financial houses and to economic havoc when the housing bubble burst.
Along with policies designed to enhance oportunity and share prosperity, therefore, healthy and sustainable growth in the economy also requires restrictions to guard against damaging economic behavior. “Our free market was never meant to be a free license to take whatever you can get, however you can get it,” Obama said to NASDAQ. “And so… we have to put in place certain rules of the road to make competition fair, open, and honest. We have done this not to stifle prosperity or liberty, but to foster those things and ensure they are spread as widely as possible.”
Here, again, Obama was not speaking simply about a theory of economic prosperity as something distinct from the larger goal of freedom. He was reminding us instead that the regulation of license never restricts liberty but instead fosters it. We are never at liberty, morally, to engage in license. As John Locke— the 17th century English philosopher and father of the moral idea of individual freedom as much as any thinker ever— wrote: “But though this be a state of liberty, yet it is not a state of licence… though man in that state have an uncontrollable liberty to dispose of his person or possessions…, no one ought to harm another in his life, health, liberty, or possessions.” Among equals, actions that amount to license are not freedom. Instead, they are a violation of others’ equal freedom, and as such become the proper subject of regulation. A community of freedom has an obligation to restrict or eliminate such violations.
Some actions that violate freedom come from individual perpetrators acting with malicious intent, such as outright theft or fraud by individual persons or by companies. Other harms have collective causes where there is no single perpetrator. The harms result instead from collections of individuals acting independently of each other, usually with no malice. Problems such as air pollutants from automobile exhaust that cumulate to threaten life or health emerge in that way.
A free market alone cannot effectively deal with the serious harms inflicted by such individual and collective actions. Addressing them requires external governmental intervention at some level—whether, for example, to discourage fraudulent actions by companies like Enron and the financial houses that deregulation helped foster or to deal with the problems of collective behavior, like the consumption of fossil fuels, that end up causing harmful pollution.
The distinction between freedom and what constitutes behavior harmful to others meriting regulation by government is crucial, yet conservatives fail to appreciate the distinction in quite a few areas. In health-care reform, for instance, most of the major reform bills obligate every individual to purchase health insurance on pain of being fined. In response, the Senate’s No. 2 Republican, John Kyl, asserted that the requirement for every individual to purchase insurance coverage represents “a stunning assault on liberty.” It is governmental paternalism of the worst kind, he claimed.
To the contrary, it is Senator Kyl who doesn’t understand what freedom means, at least so long as mandatory insurance is kept clearly affordable to individuals who are required to purchase it. Our idea of individual freedom never included allowing individuals the right to choose to go without insurance if the consequence is to leave hospitals and everyone else to pay their bills should they need major medical care. That is precisely what John Locke would classify as license, not freedom.
Individual Responsibility and the Role of Government
The Obaman approach calls for public action that deviates from the operation of the free-market solely for purposes germane to securing the conditions that are appropriate to freedom. Those conditions, as described above, involve three areas in particular: first, attaining sufficient economic opportunities for all that freedom calls for and guarding against the development of a confiscatory economy; second, protecting against the imposition of individual or collective harms antithetical to freedom that are beyond the individual’s and the market’s capacity to redress; and, third, producing public goods that cannot be supplied optimally by a free market operating on its own, such as military security and defense, the infrastructure, basic research and its resultant technology, and a stable economy.
Those are the areas that Obama has in mind when he says, referring to the proper role of government, “We can be guided throughout by Lincoln’s simple maxim: that we will do collectively, through our government, only those things that we cannot do as well or at all individually and privately.” (AOH, 159). The operating principle of such a government is not small government in its absolute sense. Active, engaged, energetic government will be a necessity, as Lincoln and the Founders well recognized. The correct measure, instead, is government that limits itself to pursuing the aims that are approproriate to freedom, which attends to the full requirements of the aims, and does so by employing the least costly and restrictive means capable of successfully reaching those aims.
Apart from the crucial areas of public action subsumed in Lincoln’s maxim, Obama is not kidding when he says: “I’m a pro-growth, free-market kind of guy. I love the market.” The Obaman approach venerates individual responsibility coupled with access to sufficient opportunity (Obama repeatedly criticized old-style welfare assistance because it too often encouraged dependency and the failure to take responsibility for one’s own mobility) (AOH, 180). His approach, indeed, insists upon individuals taking responsibility to make their own way within the context of sufficient opportunity for all. It extols hard work and respects the progress and level of affluence that only a competitive free market makes possible.
In line with this, the Obaman approach emphasizes the need for government itself to keep both costs and regulation at the lowest levels needed to attain the aims of freedom appropriate to government, that is, it accents disciplined and restrained government. Freedom suffers whenever government spends or regulates more than is required, even for ends otherwise legitimate to freedom. Regarding fiscal responsibility, similarly, taxes must be kept to the lowest level capable of meeting the costs and balancing the budget for actions necessary to reach the ends of freedom. The sole exceptions—important ones— when budget deficits become appropriate are when economic downturns call for budget imbalances to stabilize them, when productive investment for the future is the purpose, or when national security necessitates.
For this reason, just as Obama has been strongly criticized for promoting big government and socialist programs, he has been harshly attacked from the left—for example, on the size of the stimulus, the elements of health-care reform, regulations regarding financial institutions, and cap and trade— for not going nearly far enough. The steps the health-care reform initiative takes to pay its own way so as not to add to the budget deficit are themselves suggestive, standing in sharp contrast to the approach of the Republican opposition when they held power. Their reform of Medicare to cover prescription drugs, costing $700 billion over the coming decade, never made any mention of how it would be financed.
Calling for a new “Era of Responsibility” in his Inaugural Address, Obama was speaking not only of the responsibility individual Americans have to play their part and the responsibility of the collective society through government to implement public actions required for individuals to be able to assume responsibility effectively. He was also referring to the responsibility government continually has to discipline and control itself even while taking actions that are strong enough to do the job.
Achieving those two objectives is surely difficult, and Obama has not always gotten them right. That, in turn, has cost him and his Administration dearly in public support over the long term. For example, the economic stimulus was likely smaller than required to deliver a recovery able to produce serious new job creation with any reasonable speed. Similarly, TARP needed tougher regulations on how financial institutions could spend public money temporarily granted them that was necessary to avert their collapse and the collapse of the overall economy with them. Using taxpayer funds to make sound loans to Main Street, for instance, deserved strict mandatory priority over the handing out of bonuses. Yet, however difficult it may be to reach both objectives, attaining them together is the ultimate task. There has been a long history of debate among liberals regarding, broadly defined, government-centered or market-centered approaches to reform. Whether governmental activism should take the form of direct public control or instead programs that operate more indirectly through the market and private enterprise should depend upon the aim of freedom involved and the strength of action required in order to attain that aim successfully. Precautions necessary to guard against particular actions if they might have a compromising effect on governmental officials, or might lead government to overstep its bounds, must also be considered.
The Change Americans Need
Rooted in our nation’s paramount moral value, the historic vision of freedom offers a powerful governing philosophy. It clearly represents the President’s own perspective, the place where his heart lies. It remains something of a mystery, therefore, as to why Obama has failed to emphasize it and instead has left it sitting in the background. He has had many opportunities to make it more explicit and express it forcefully, yet he has declined to do so. That is true not only regarding economic matters but also in other areas to which Obama’s thinking about freedom and the historic American ideal applies equally forcefully, from foreign policy and national security all the way to immigration, social issues, including choice, and the need to reform the way our politics works here at home.
Possibly he fears that today’s “self-interested,” “me-first” interpretation of freedom has sufficiently captured our contemporary understanding that the more historic meaning, despite its deep roots and acceptance by a majority of Americans, would confuse more than help. Or, possibly he feels that, once making the philosophy explicit, he would be held too tightly to its principles or the perfection of its ideals. He might rather achieve what’s politically possible and avoid being held back if he is unable to meet each demanding stricture. He is perhaps trying to avert what he often derides as “letting the perfect become the enemy of the good.”
Whatever his motive, there is a terrific cost. For one, the philosophy is required to be able to win the crucial debate about the meaning of American freedom, ending the opponents’ control over this pre-eminent value.
Recall how his opponents’ rhetoric about freedom de-capitated the public option in health-care reform. During the debate on the House floor last November, virtually every Republican invoked the loss of freedom as the reason why they opposed the reform. By contrast, barely a single Democrat uttered the word. The one notable exception was when Henry Waxman, responding spontaneously to the litany of Republicans in a brief, angry reaction, said: “37 million Americans are without health insurance because they can’t afford it, their employers don’t offer it, or they have a pre-existing condition. We want the same coverage for them that Republicans speak of in such glowing terms. Don’t tell me they have freedom. Don’t tell me they are free, they are not free!”
Yes, they are not free. That’s the real issue in the health-care debate. Not just the freedom of those completely left out or badly undercovered, or who have preconditions, but of those whose coverage can be arbitrarily rescinded, those who will lose their insurance if they change jobs, and all the rest of us who soon won’t be able to find affordable insurance if skyrocketing costs are not contained. In every one of those cases, Americans’ freedom to secure an essential needed for a decent life is under threat. Whenever the private market is delivering choices that confine the ability of individual Americans to attain the essentials of a decent life even if they do their part, or restrict the ability of individuals to get ahead no matter their improvement, freedom is at stake.
That’s what the Obama agenda is about: the attempt to recover and protect the freedom of Americans which for years has been under serious direct threat. An agenda grounded in the historic ideal of freedom, with its obligation to share toward that common purpose, couples advancing the strongest moral value that Americans respond to together with asserting their most vital material concerns. Those concerns include the most deep-felt economic interests of Democratic Party base voters as well as independent and persuadable voters, and also large majorities of otherwise eroding Democratic constituencies in the blue-collar and middle working classes. It is a political combination with few peers.
The same applies with virtually all issues relating to the availability of sufficient economic opportunity, protection against the imposition of individual or collective harms that are beyond the market’s ability to address, the production of public goods, and securing revenues required to balance budgets for these proper aims. They are all areas where today’s extreme individualistic idea of freedom has been thwarting actions required to solve growing national problems, sometimes for decades, that a refashioned idea of freedom can begin to reverse.
The stakes are high. The individualistic view of freedom is entirely comfortable with the functioning of a confiscatory economy that takes compensation increases resulting from the productivity gains of workers, diverts them from everyday workers and their families, and channels nearly the whole of them up to the very top. As long as the flawed individualistic view of freedom continues to hold sway in our politics, there will be no fundamental change in the way the economy works. We have all been left diminished, as individual Americans and as a nation.
Defending the true idea of American freedom through government that is responsible and disciplined is where the focus should lie. It articulates the ultimate American narrative, one that reaches to the heart of the nation’s soul. To continue to win national elections and be able to govern capably thereafter, Democrats must have a mobilizing vision for the nation. That vision needs to include a compelling case for the role of government. It must be a case that Americans will positively embrace as essential to realizing their most cherished moral values and to attaining their most fundamental self-interests. The case must simultaneously place the opposition squarely on the defensive. It must effectively refute a principled conservative call for smaller government, lower taxes, and weaker regulation. It must persuasively repudiate both conservative economics (that the free market on its own will deliver widespread prosperity) and backlash conservative populism (that the activism of big government is the problem).
Those conditions have to be met in order for the Democratic Party to keep its 2008’s winning coalition, build upon it and expand it, and revitalize enthusiasm behind a stirring national purpose. That is what reclaiming the true American idea of freedom—progressive freedom—has the power to do.