Richard Epstein, "Obama's Middle Class Malaise"

Obama's Middle Class Malaise
Richard A. Epstein
Defining Ideas
July 30, 2013

This past week in Galesburg, Illinois, President Obama gave his first speech on his plans to reinvigorate a still stalled economy at Knox College. The speech itself received little press coverage—so little, in fact, that the Sunday New York Times ran a puff-piece on it to build interest in his next speech—on a similar topic—scheduled for Tuesday, July 30 in Chattanooga, Tennessee. In these speeches, the president is using the bully pulpit to argue for redistributive, pro-regulatory, pro-union policies that he claims will serve the middle class.

But his all-to familiar remarks are likely to continue to fall on deaf ears, as the public imagination turns its attention to real events, including the Securities and Exchange Commission’s indictment of SAC Capital Advisorsand the public fight over who will assume the chairmanship of the Federal Reserve at Ben Bernanke leaves. Will the President choose the oft-impolitic Lawrence Summers, who is suspicious of the stimulus, or the cautious Janet Yellen, who supports it?

Farewell to Supply and Demand

The President’s speech at Knox College needs some close deconstruction because it sheds harsh light on a problem that has dogged his domestic policy agenda from the beginning: intellectual rigidity. The President, who has never worked a day in the private sector, has no systematic view of the way in which businesses operate or economies grow. He never starts a discussion by asking how the basic laws of supply and demand operate, and shows no faith that markets are the best mechanism for bringing these two forces into equilibrium.