In its wholehearted embrace of economic populism, President Obama’s State of the Union provided a bookend to Newt Gingrich’s victory speech in South Carolina last weekend. The two addresses stand as almost textbook examples of the competing populisms of the Left and the Right. But in the end, the populist current that surges most powerfully through 2012 may not be the version that either side prefers.
Gingrich sought to mobilize average Americans against a cultural and governmental elite that he asserted has been “trying for a half-century to force us to quit being Americans and to become some kind of other system.” Obama in turn sought to rally average Americans against an economic elite that he argued was stacking the deck against them. “We can either settle for a country where a shrinking number of people do really well,” the president thundered, “or we can restore an economy where everyone gets a fair shot [and] everyone does their fair share.”
With such pronouncements, Obama deepened his commitment to the economic-fairness theme that the 2012 Republican candidates condemn as divisive class warfare. On that front, Obama not only sharpened his rhetoric but also put flesh on his flourishes with aggressive policy proposals. Among them were a minimum 30 percent tax rate for millionaires; the elimination of many tax breaks for those affluent earners; and a minimum tax on the worldwide profits of U.S. corporations. Each of those ideas guarantees a head-on collision with the eventual GOP nominee.
The president’s populist tone was one of several ways in which he used the speech to pick up gauntlets that his Republican opponents have hurled at his feet from along the campaign trail. In ways large and small, the speech represented not so much a soliloquy as a dialogue with the men pursuing his job.
Obama, for instance, aired a defense against the common Republican argument that the failure of Solyndra, a solar-energy company that the administration backed with more than $500 million in loan guarantees, shows the folly of government intervention in the marketplace. “Some companies fail,” he acknowledged. But he also pointedly noted that government-funded research helped to develop the fracking technology that is now enabling the natural-gas boom that Republicans cheer. “Government support is critical in helping businesses get new energy ideas off the ground,” Obama insisted.
That defiant declaration points toward another of the speech’s largest markers. The GOP’s White House contenders have criticized Obama’s record on spending, taxes, and regulation from two directions. From one angle, they argue that it has impeded economic recovery. From another, they insist that it is transforming the fundamental character of America from an “opportunity nation” to a “European-style … entitlement society,” as Mitt Romney often says.
This week, Obama showed that he does not intend to shrink from that fight. President Clinton used the State of the Union before his reelection to pursue a “third way” in the debate over Washington’s role. (Although, after he declared, “the era of Big Government is over,” few people heard his qualification: “We cannot go back to the time when our citizens were left to fend for themselves.”) Like Clinton, Obama talked about reform, most impressively when he offered some potentially pathbreaking proposals to demand greater results—both in terms of improving graduation rates and suppressing tuition increases—from college and universities.
But, as Obama’s comments about energy suggest, he was much more unrepentant than Clinton in defending an activist role for Washington in policing the marketplace and investing to expand opportunity. And he was equally unqualified in rebuking Republicans’ arguments that the best way to revive the economy is to cut taxes, spending, and regulation—what he described as “the very same policies that brought on this economic crisis in the first place.”
The philosophical debates developing between Obama and his opponents will be instructive, but probably not decisive, in the election. They stir great emotion and divide big voting blocs—for instance, blue-collar whites, who are generally skeptical about government, from minorities, who are more welcoming of it. But the sliver of less-ideological voters who usually tip presidential elections base their choices more on tangible results. And on that front, both parties face problems. The GOP contenders are largely proposing to return to policies that under George W. Bush produced the weakest decade of economic performance since the Great Depression. And Obama is looking to build on an agenda of government intervention that probably prevented another depression but, even with the recent uptick, hasn’t produced anything like the recovery he hoped for.
As Obama and his Republican opponents widen the distance between them, more Americans can be forgiven for questioning whether either path leads back to the economic opportunity and security that once seemed the country’s birthright. The populism that could most shape the United States in 2012 (and beyond) isn’t the economic or cultural variety that Obama or the Republicans offer but a more uncontainable and unpredictable backlash against the entire public and private leadership class.
This article appears in the Jan. 28, 2012, edition of National Journal.