A State of the Union address is always important. It’s the president’s opportunity to tell the nation what he or she plans to do in the coming year. But what the history books say about this year’s speech may also depend what we do in the weeks and months to come.

In other words, this time it really could be about you.

But first, the speech: Some heard a progressive clarion call. A more accurate description might be: Big Ideas, Small Proposals. Or Big Themes, Little Actions. In the end President Obama’s address was a progressive painting stretched to fit a conservative frame. It was still attractive, but the portrait’s subject was barely recognizable.

Although the speech got some rave reviews, not everyone was impressed. Politico’s Glenn Thrush called the speech “vintage” and “retro,” scorning what he called “Democrat Classic” as if it were a granny dress at a Debutante’s Ball. That’s Washington for you: statecraft as fashion mistake. And yet, based on the poll numbers, the president’s never been more in vogue. (There were more substantive critiques on the left.)

The speech’s poetry was beautiful but its prose, as defined by concrete proposals, never took flight. That’s the sort of thing that can uplift the progressive movement, while at the same time depriving it of the oxygen needed for action. And if there’s one thing we need right now, it’s action.

Pictures and Frames

Don’t get me wrong. It was as good a speech as we could possibly expect, once we accept the limits of “centrist” liberalism. But we shouldn’t accept those limits. The country deserves visions that are bigger, more imaginative, and at the same time more practical. The president seemed poised to do that a number of times.

At his best, Barack Obama can make the case for economic justice, education, and government’s role in society more effectively than any major politician in recent memory – even Bill Clinton. That’s a valuable service after so many years of anti-government extremism.

But the president once again wrapped his arguments in the faded newsprint of austerity economics. He embraced a milquetoast tax proposal whose rates are better than today’s, but are still not fair enough – or high enough at the upper end. (Billionaires shouldn’t “pay a lower rate than their secretaries”? That’s it?)

The president also told middle-class Americans who have endured decades of wage stagnation, years of crisis-level unemployment, and tax rates far higher than a hedge fund managers’ that the country needs “everybody doing their fair share” – and for what?

To reduce budget deficits.

Out of Time

Nothing in this speech will trouble the wealthy and powerful. It’s well within the Clintonian mold of progressive rhetoric and center/right policy, a pattern that’s turning the Democratic Party into the liberal wing of a corporate-dominated system. His occasional tone of pseudo-centrism was the president’s only real fashion mistake.  It’s as 1990′s as flannel shirts – and just as uncomfortable.

Pace Glenn Thrush, this two-decades-old Third Way-ism more “New Coke” than “Coke Classic.” It’s turning the Democratic Party away from its most popular ideas, and both the party and country are suffering the consequences.

Some of the president’s supporters say that’s the best he can do in his position. I don’t agree. But either way, it’s important to remember: We’re not in his position. That’s why independent movements are important.

Liberalism Lite

The day after the speech I got a phone call from a very smart friend in the media. He’d just heard a well-placed White House advisor say that senior administration officials are still committed to reducing Social Security benefits by implementing the “chained CPI” benefit cut.

“They genuinely believe it’s good policy,” he said with dismay. I knew that already, from off-the-record discussions of my own.

It’s important to remember that this administration, whatever its other virtues, appears to genuinely believe in economic ideas that would have made them moderate Republicans in the Eisenhower-Rockefeller-Lindsay mold at any other moment in modern history – and sometimes well to the right of that.

Those sincere beliefs were reflected in what the president did – and didn’t – say last night.

Moving the Goalposts

“We are more than halfway towards the goal of $4 trillion in deficit reduction that economists say we need to stabilize our finances,” said the president. “Now we need to finish the job.”

That’s wrong. Most top economists – the conservative ideologues excepted- think we need to invest immediately, to rescue our economy and then reduce the deficit more effectively.

Real Work, Real People

When the White House backed up the speech with charts, the first one showed private-sector job growth. It didn’t show job losses in the public sector. Those jobs – teachers, nurses, firefighters, cops, and the like – are just as real and valuable as corporate ones.

We shouldn’t treat the work of these everyday heroes like eccentric uncles to be hidden in the basement when company comes. We should celebrate both their labor and their contribution to the economy.

If They Come, We Will Build It

The president’s infrastructure proposals, while laudable, will probably still wind up being smaller than the $286 billion highway bill enacted under George W. Bush.

Bush’s bill was all spending – no tax cuts branded as “stimulus” – and was passed even without today’s urgent need for jobs and rebuilding.

Cogs in the Machine?

The president’s program for higher education was very limited, and included school ranking programs that could wind up being used to cut student aid. And his utilitarian endorsement of vocational/technical education was downright Romney-esque.

(Romney’s platform touted “local career and technical educational programs … supported by leaders in industry,” adding: “It is time to get back to basics and to higher education programs directly related to job opportunities.”)

Technical education can be a pathway out of poverty. It should be available for those who want it. But emphasizing only tech jobs, while implicitly dismissing liberal education? That’s unworthy of a progressive vision in which education makes us wiser human beings, not just more useful corporate resources.

Things Unsaid

The president didn’t say that:

Every dollar spent on a government program creates more than a dollar for the overall economy – especially in tough time like these. (Economists call it the “fiscal multiplier.”)

Investors are essentially paying our government to borrow money. There will be no better time to borrow.

The best way to reduce deficits in the long run is by investing in growth in the short run. Even the conservative International Monetary Fund thinks so.

The deficit is already well below what it was when the austerity hysteria began. (The president could have – and should have – declared victory over it last night.)

Those spending cuts the president boasted about last night have already hurt our economy. Enacting more of them will lead to more damage and more lost jobs.

The president said that “our retirement programs will crowd out the investments we need for our children.” But Social Security is forbidden by law from drawing on the general funds that would be used for those investments.

From American Banker: “Obama urged passage of a mortgage refinancing bill, but otherwise made no mention of banking or financial services, to the relief of some industry executives.” Exactly.

When the president said, “My administration will keep cutting red tape and speeding up new oil and gas permits,” he did not explain that most of that fuel will be sold to other nations, leaving us in the same mess we’re in today. And while he said he’d take executive action on climate change if necessary, he didn’t say when.

In a awkwardly-phrased portion of the speech, the president promised mortgage refinancing that would “give every responsible homeowner in America the chance to save $3,000 a year by refinancing at today’s rates.” (Every single one of them?) He did not propose that underwater homeowners receive a much-deserved reduction in the amount they owe – a move that would boost jobs and growth.

When he said “the biggest driver of our long-term debt is the rising cost of health care for an aging population,” the president didn’t explain that we’d have no deficit problem at all if we had publicly-financed health care and reined in runaway for-profit healthcare corporations. That’s what all other developed nations do – and they get better medical care.

And where was campaign finance reform? Without it we’ll never have a truly representative government again.

Defining Liberalism Down

You’d expect these kinds of omissions from a Republican, but not in a speech billed as “progressive.” The shadow of things unsaid fell across even its best moments. A minimum wage won’t mean quite as much, for example, for workers who can still lose their jobs, their homes, their health – even their lives – to under-regulated corporate predation. At this rate liberalism will continue to be defined down until it’s unrecognizable.

We can’t depend on anybody but ourselves to stop that. We can do it – but only if we organize, mobilize and tell Washington the country wants jobs, economic justice and growth.

The left should be defined by deeds, not words. And rhetoric shouldn’t inoculate progressives against action. Especially not now, with such great issues at stake.

State of Our Union

The battle over Social Security and Medicare will reshape our social contract. When we debate tax and education policies, or bank regulation, or corporate oversight, we’re deciding what kind of society we will leave for generations yet to come.

And let’s not forget: Activism works. To the extent that the president’s words and deeds have become more progressive, it’s because people took to the streets and spoke to our leaders with votes, emails and phone calls. But there’s more to be done. Much more.

It’s 2013 and the state of the progressive union is – well, that depends on us. The president said it well: “It remains the task of us all, as citizens of these United States, to be the authors of the next great chapter in our American story.”

Florida Senator Marco Rubio gave a “Republican Response” to the President’s State of the Union address. He said that taxes cause employers to reduce hours or lay people off. Others say that raising the minimum wage will mean layoffs. Let’s take a closer look at that.

In Wednesday’s post, What Do Republicans, Rubio And Rand Have If They Don’t Have Deficits? I focused on one line from Rubio’s speech,

One line of Rubio’s stands out: “Because more government raises taxes on employers who then pass the costs on to their employees through fewer hours, lower pay and even layoffs.”

With this Rubio is trying to scare people who are worried about jobs. Business taxes are on profits. Good businesses employ the right number of people, so a company that is making profits isn’t going to reduce staff or hours. That is simply preposterous to anyone who has ever run a business.

I was in a local CVS store today. There weren’t enough employees in the store, and there was a long line of people waiting to pay for items at the only checkout register. There was also a long line of people in line at the pharmacy. I saw a one person give up, leave their nearly-full carrier on a shelf, and just leave the store. I saw another person come in the door, take one look at the line and leave. I left without buying anything and went to a different store — not a CVS, for what I was looking for.

Was this CVS “saving money” by employing fewer people? Or were they being “penny-wise and pound-foolish” and costing themselves business today as well as in the future?

How many times have you seen this happen at a business that is not employing enough people to “save money?? You are at a business, they don’t have enough people working, and people give up and take their business somewhere else?

But there is more to it than that, because this misunderstands taxes. Taxes are not a “cost” as Rubio said. Taxes are on profits. A company pays taxes after all costs — including wages and salaries — are deducted from revenue. The fact of the company paying a tax at all means they have the right number of employees serving their customers and meeting demand so they make a profit.

It is the poorly-managed companies that employ too few people who are not going to do well enough to pay taxes. (I doubt very many companies are employing too many people. What are they doing, having them sit around reading the paper?)

Obviously being profitable — which means that they pay taxes — does not cause a business to lay people off or reduce hours. When Rubio says taxes make companies “pass the costs on to their employees through fewer hours, lower pay and even layoffs” he is just wrong.

Minimum Wage

The President’s proposal to increase the minimum age is also being discussed today, and the opponents are using a similar job-scare to fight it. They say that increasing the minimum wage will cause companies to lay people off or reduce hours.

On Marketplace today they were talking to people working in a diner about the impact that raising the minimum wage would have. From the segment, What the minimum wage means at work, (click through to listen to the whole segment)

At the Marmalade Café in El Segundo, Calif., employees like 32-year-old food runner Alejandro Serbin earn California’s $8 minimum wage, plus about $35 a day in shared tips.

Serbin, an immigrant from Mexico City, says a dollar raise would help. “It’s so much different for me. Because I have a family I have to support. The rent is high. I have to pay bills, insurance.”

Serbin and his wife, who works as a cook, have a 3-year-old and pay about $1,000 a month in rent, not unusual for Los Angeles. He’s hunting for a second job and says most of the minimum-wage workers he knows have two or even three jobs.

So for the minimum-wage employee an increase means an immediate increase in demand at all the places he shops. Millions of people with a bit more money to spend because of a minimum-wage boost would certainly mean more hiring, because more customers would be coming through the doors.

How about the diner’s owners?

Selwyn Yosslowitz is one of the Marmalade Café’s founders. The restaurant employs about 600 people in nine locations in southern California. Yosslowitz says a dollar increase in the federal minimum wage would likely force him to raise prices or cut labor costs.

“It wouldn’t be layoffs,” Yosslowitz says. “But maybe you make the hours more efficient. There’s lots of people who come in at 9 o’clock right now. I would make sure they come in at 9:30 and cut off half an hour across the board to be able to afford the increase.”

Think about this. Yosslowitz says he will reduce hours if the minimum wage is increased. In other words, he is saying that he currently is mismanaging his business by having people work longer hours than the business needs them to work. Either that, or he is going to lose a lot of business because customers are not being served or tables are not being cleared after he reduces worker hours.

A Well-Run Business Employs The Right Number Of People

A well-run business employs the right number of people, period. If a business has too few people to meet demand, they lose business and they also can get a bad reputation that costs them future business as well. It is for this reason that a minimum wage increase would not mean people would be laid off. Some businesses that are not doing very well might be pushed over the edge, but the increase in demand from millions of people with more to spend could well push those very businesses the other way.

Businesses hire when more customers are coming through the door, placing orders, etc. Businesses lay off when they don’t have enough customers, orders, etc. It has nothing to do with taxes.

Obviously the solution to employment problems is to do things that cause more customers to be coming through that door, like raising the minimum wage.

Update: See Demos’ Would Raising the Minimum Wage Kill Jobs? Ask the States That Have Done It. Hint: It doesn’t kill jobs, and raises pay for people way above the minimum wage as well.

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As I discussed yesterday, David Leonhardt of the New York Times counseled President Obama to drop using green jobs as a selling point for address climate change. Thankfully, last night Obama did not listen.

Obama made clear that tackling the climate crisis can be accomplished while growing the economy:

We have doubled the distance our cars will go on a gallon of gas, and the amount of renewable energy we generate from sources like wind and solar — with tens of thousands of good American jobs to show for it. We produce more natural gas than ever before — and nearly everyone’s energy bill is lower because of it. And over the last four years, our emissions of the dangerous carbon pollution that threatens our planet have actually fallen…

…we can make meaningful progress on this issue while driving strong economic growth. I urge this Congress to get together, pursue a bipartisan, market-based solution to climate change, like the one John McCain and Joe Lieberman worked on together a few years ago. But if Congress won’t act soon to protect future generations, I will…

…Four years ago, other countries dominated the clean energy market and the jobs that came with it. And we’ve begun to change that. Last year, wind energy added nearly half of all new power capacity in America. So let’s generate even more. Solar energy gets cheaper by the year — let’s drive down costs even further. As long as countries like China keep going all in on clean energy, so must we.

The President offered only two specific, relatively narrow proposals: 1) an “Energy Security Trust” which would take some revenue from oil and gas development in federal areas and funnel it into renewable fuels, and 2) a “Race to the Top” program where states compete for federal funding by implementing innovative energy efficiency strategies.

Left unspecified is what exactly he will direct the EPA to do, circumventing Congress, that will cut greenhouse gas emissions. EPA has the legal authority to issue regulations that cut emissions, it just can’t complement those regulations with subsidies that can help businesses and consumers manage the transition to a clean energy economy. You need Congress for that.

And left unknown is if Obama’s tweaking of McCain — along with the pressure from new EPA regs — will prod him or other Republicans to return to the negotiating table and pass legislation that will best address climate while also investing in the economy.

But we do know that Obama is not going to pursue a climate agenda and forget about jobs, which is both the right politics and the right policy.

Senate Majority Leader Harry Reid has ruled out Social Security cuts in any plan to replace the sequester. In the State of the Union address, President Obama can either stand with Harry Reid and Senate Democrats–or betray them.

Democrats’ disagreement over cutting Social Security is finally coming to a head. On Friday, Leader Reid and Senate Democrats drew their line in the sand against cuts to Social Security and cuts to Medicare beneficiaries (not providers). Senator Sherrod Brown told Greg Sargent of the Washington Post that Reid assured the Democratic Caucus that “there would be no cuts to entitlement benefits in the offer.” Lest the stance be viewed merely as a bargaining position, Brown insisted that a final deal would not include “benefits cuts.”

President Obama, on the other hand, remains willing to offer the chained CPI Social Security cut as part of a Grand Bargain with Republicans. President Obama’s spokesman Jay Carney confirmed the President’s openness to the chained CPI once again at a press conference on Monday.

Thus on the eve of the State of the Union address, the question is: Will the President take on Leader Reid and Senate Democrats to pass the chained CPI? It is hard to imagine that Senate Democrats will fold immediately after publicly announcing their firm opposition to Social Security cuts.

The State of the Union is a great opportunity to clear the air. If the President feels the need to feign openness to Social Security cuts to outmaneuver Republicans, he should still say the chained CPI is cruel, unfair and inaccurate. He should say how much he opposes it, and that the Republicans will have to force him to give it up if they really want it.

Like many progressives, however, I’m not holding my breath. The President has brought chained CPI back from the dead too many times for him to backpedal now. He is apparently really committed to it as part of a Grand Bargain.

It’s a shame though. A fight with Senate Democrats will mean spending a lot of political capital on a really bad policy. After all, the chained CPI is a benefit cut that cuts more every year a person receives benefits, hitting Social Security beneficiaries in late old age the hardest. According to 300 economists and social insurance experts, it is also a less accurate measure of inflation for seniors and people with disabilities who cannot substitute for cheaper goods as easily. Even the centrist Josh Barro of Bloomberg View, and the conservative Andrew Biggs of the American Enterprise Institute, have disavowed it.

Graph courtesy of Social Security Works.* In addition to my work at Take Action News, I am Policy Director of Social Security Works. Nothing here reflects that organization’s views)

Besides, to pass the chained CPI, the President wouldn’t just be taking on Senate Democrats and his base: He’d be facing down huge swaths of the American public. The public opposes the chained CPI by a margin of nearly 2-to-1. The interest groups opposing it include not only the AFL-CIO and the AARP, but veterans groups like the Iraq and Afghanistan Veterans of America and the Veterans of Foreign Wars.

Nor is the President likely to get much cover from Republicans once the ink is dry. Republicans have figured out how unpopular austerity is and have modified their messaging accordingly. The quintessential example is House Majority Leader Eric Cantor, who can barely speak publicly these days without saying “economic growth.” The most specific spending cuts Cantor proposed in his “Making Life Work” policy speech this past week were to social science research. Cantor didn’t mention Social Security at all, and his prescriptions for Medicare were extremely vague–a far cry from the Ryan budget.

It is not hard to see Republicans hanging the chained CPI around the President’s neck, or even attacking him for it disingenuously as they did with Medicare in 2010.

I will be happy for President Obama to prove me wrong and come out strongly against the chained CPI in the State of the Union address.

For now, though, our last best hope lies with Senate Democrats and Harry Reid. Reid has a populist streak and deep love of Social Security, which he once called the “greatest social program since the fishes and the loaves.” He threw a last-minute chained CPI offer into his fireplace during December’s fiscal cliff negotiations, and prior to that had signed a letter with 28 other members of the Senate Democratic Caucus insisting that Social Security be kept out of debt talks.

We need to show Senate Democrats we stand with them and will have their back if they stop the chained CPI–in whatever way they can.

Ironically, thanks to Reid, it is still very easy for one senator to stop a bill from coming to the Senate floor for a vote. Getting Democrats to filibuster a bill that included the chained CPI would be unusual, but for once, it might be appropriate.

Expectations are high for President Obama to get specific about his second-term plans to protect the climate, particularly regarding plans to bypass Congress and use the EPA’s authority to further reduce greenhouse gas pollution.

The appeal is obvious: no need to wrangle with the climate change deniers that currently run the House.

Still, there are plenty of other political risks with the executive action route. President Obama doesn’t have to run for office again, but other Democrats do. And massive backlash from overly crude regulation could lead to another Tea Party victory in 2014.

Which is why I found the counsel from David Leonhardt in Sunday’s New York Times so strange.

He glibly dismisses the importance of stressing the creation of “green jobs” and argues we should embrace the simple argument that we should stop climate change because we should stop climate change:

Green jobs have long had a whiff of exaggeration to them. The alternative-energy sector may ultimately employ millions of people. But raising the cost of the energy that households and businesses use every day — a necessary effect of helping the climate — is not exactly a recipe for an economic boom.

The stronger argument for a major government response to climate change is the more obvious argument: climate change. The continental United States endured its hottest year on record in 2012, and the planet’s 13 hottest years have all occurred since 1998.

This severely downplays the green jobs case, and is blind to the problem with focusing on climate alone.

If it were as simple as Leonhardt makes it, then President George W. Bush would have followed through on his 2000 campaign platform and enacted climate legislation before Barack Obama even came to Washington.

But there’s a big hurdle to clear for any clean energy legislation, let alone legislation as complex and far-reaching as climate change legislation: how will it affect jobs and the economy?

The fossil fuel posse will be out in full force warning of killed jobs and skyrocketing energy prices. The response from the environmental community can’t be: yeah, too bad.

Leonhardt briefly alludes to this reality at the end of his piece: “the strongest economic argument for an aggressive response to climate change is not the much trumpeted windfall of green jobs. It’s the fact that the economy won’t function very well in a world full of droughts, hurricanes and heat waves.”

Well, OK. But we have the facts to make a better case than: the economy will suck less if we avert a climate crisis.

We have the JOBS21 report from the Blue-Green Alliance which tabulates the potential job creation for all the various green jobs initiatives — a minimum of 7 million jobs in the next six years.

Investing the future of green jobs will pay off better than remaining dependent on fossil fuels while letting other nations seize dominance in the clean energy technology industry. The Political Economy Research Institute’s Robert Pollin finds that “The green economy will create about 17 jobs per $1 million of expenditure, the fossil fuel economy about five.”

Leonhardt realistically notes that just because you create green jobs doesn’t mean you don’t eliminate jobs somewhere else. But would a comprehensive strategy to cap carbon necessarily mean an economic loss? Absolutely not.

When the House passed in 2009 the landmark American Clean Energy and Security Act, the EPA found it would have a trivial impact on GDP. As the Wall Street Journal reported at the time, “It will take until 2030 for the national GDP to reach $22.6 trillion; if cap-and-trade is passed, that will just take three months longer.”

Furthermore, the Congressional Budget Office found the legislation would not significantly impact household costs and would cut the budget deficit. As I summarized back in 2009, the CBO said the bill would “slightly cut the budget deficit by $9 billion over 10 years, would only add minor costs to the average household of less than a postage stamp per day, and would result in a net benefit to low-income households.”

However, all that I cited above would not be directly achieved by EPA regulations alone. The EPA has the authority to issue regulations to curtail greenhouse gas pollution, and that will create incentives for a shift toward green energy and help create green jobs. But the EPA can’t create a broader system to collect revenue from polluters and use that revenue to invest in clean energy and provide rebates to consumers, accelerating the creation of jobs and protecting consumers from price shocks during the transition.

These economic impacts are still important issues to tackle. Following Leonhardt’s imbalanced advice to squelch the economic case for saving the climate — leaving advocates vulnerable to right-wing economic attacks — will likely stoke a backlash far more furious than the fictional “death panels”

The President is right to pursue EPA regulation so long as conservatives prevent Congress from acting, as it will not only help the climate but also may get affected corporations back to the negotiating table for comprehensive legislation.

But he can’t make a strong green jobs case with EPA regulations alone. He needs to keep up the push for more clean energy investment, which can be best achieved with the huge revenue stream that would come from comprehensive climate legislation that either sells companies pollution permits (in a cap-and-trade system) or institutes a carbon tax (perhaps as part of the broader tax reform both parties keep saying that they want.)

It not necessary for President to make a big push for a specific bill tonight. But it is important that he keep making the case that saving the climate can create jobs without increasing household costs or harming economic growth.

Otherwise, those EPA regulations won’t last very long.

Quick note about tonight’s State of the Union Address: I’m not expecting too much to be said about the budget, deficit or debt.

There are four reasons.

First, as much as a budget person likes me hates to admit it, all three of those topics are highly contentious, wonkish and almost certainly will darken the mood. In other words, they’ll do exactly what most president’s don’t want to do with a SOTU.

Second, the president will want to use the speech to talk about his vision, that is, about the “promised land” voters will find if they follow his lead. He will want to make it clear that budget problems will be solved, or at least diminished, as the country moves in that direction rather than the country will move in the right direction if it solves the budget problem.

Third, there will be plenty of time in the coming weeks for the White House to talk about these topics. In fact, as soon as the SOTU and the follow-up events the administration has planned around the country are over, that’s just about all it will be discussing through the end of March. The SOTU is almost the admnistration’s last chance not to focus on these things.

Fourth, since the 2012 election, the president has significantly changed his negotiating strategy when it comes to the budget and has refused to offer much in the initial meetings with the GOP. Making specific proposals in the SOTU about what he is willing to accept to reduce the deficit would violate that strategy.

This is not to say that the president won’t mention the budget, just that I expect he’ll do so in sweeping, grandiose terms rather than with specifics. He’ll likely call for a process that moves comprehensive tax and entitlement changes, for example. Stopping the constant warfare on the budget may also be an applause line.

Originally published on Capital Gains and Games.

President Obama demonstrated his gutsiness in recent months by speaking so many words that craven politicians contend cannot be spoken.

These are hot-button words like same sex-marriage, immigration reform, gun control and climate change. Fighting words. The president even specifically addressed three of these in his second inaugural speech – the civil rights of gay Americans, the threat of climate change and the need for immigration reform.

Taking on any one of these issues, let alone all of them at once, illustrates the audacity of the guy. That’s good because another inflammatory word must be placed on his to-say list: Union. Radical Republicans and the multi-national corporations that fill their moneybags are brazenly attacking labor unions, attempting to deny all workers the right to collectively bargain. President Obama must forcefully condemn this malicious campaign to undermine the American middle class. He must proclaim to the whole country, not just to labor union members, that he will protect the right of workers to use the power of collective action to secure equitable wages.

Obama has assured union members he has their back. Here’s what he said in his first Labor Day speech in 2009:

“So let us never forget: much of what we take for granted – the 40-hour work week, the minimum wage, health insurance, paid leave, pensions, Social Security, Medicare – they all bear the union label. It was the American worker – union men and women – who returned from World War II to make our economy the envy of the world. It was labor that helped build the largest middle class in history. So even if you’re not a union member, every American owes something to America’s labor movement.”

On Labor Day two years later, radicals in the Republican Party were pushing so-called Right to Work (RTW) legislation that denies companies and unions the right to bargain over requiring payments in lieu of dues from workers who decline to join the union. These laws weaken unions because they allow workers to shirk their responsibility to help pay the costs of the union services they benefit from. Here’s what President Obama said then:

“I know it’s not easy when there’s some folks who have their sights trained on you. . .And I want everybody here to know, as long as I’m in the White House I’m going to stand up for collective bargaining. And we’re going to keep at it. Because having a voice on the job and a chance to organize and a chance to negotiate for a fair day’s pay after a hard day’s work, that is the right of every man and woman in America – not just the CEO in the corner office, but also the janitor who cleans that office after the CEO goes home. Everybody has got the same right.”

As he ran for President in 2007, Obama walked a picket line with UNITE HERE Local 1 in Chicago, and he said this in a speech at Converse College in South Carolina:

Click here to view the video on YouTube.

“And understand this: If American workers are being denied their right to organize and collectively bargain when I’m in the White House, I’ll put on a comfortable pair of shoes myself, I’ll walk on that picket line with you as President of the United States of America. Because workers deserve to know that somebody is standing in their corner.”

When the radical Republican governor of Wisconsin stomped on the bargaining rights of public sector union workers, when the radical Republican governor of Ohio restricted the collective bargaining rights of 360,000 public workers, when the radical Republican governors of Indiana and Michigan signed legislation denying workers bargaining rights, some union members called for President Obama to put on those comfortable shoes. But he did not.

He did not put on those shoes when his Republican opponent Mitt Romney attacked 29,000 Chicago teachers striking in President Obama’s hometown of Chicago, or when Hostess Brands management bankrupted the company – again – and speciously blamed the loss of Twinkies on the company’s15,000 union workers, or when the American Crystal Sugar Co. locked out 1,300 union workers.

Now, the Bureau of Labor Statistics has reported that in 2012 the number of American workers in labor unions fell to a record low of 11.3 percent, down from 20.1 percent two decades earlier. Now, new legislation to limit bargaining rights has been introduced in Pennsylvania and Missouri, and even in the U.S. Congress by radical Kentucky Republican Sen. Rand Paul.

These Republicans intend to wipe out labor unions. In his 2011 Labor Day speech, President Obama described the consequence of killing unions:

“America cannot have a strong, growing economy without a strong, growing middle class and without a strong labor movement.”

The American labor movement knows President Obama supports it philosophically. He has said so repeatedly on Labor Day. But he never mentioned unions in his inaugural or State of the Union addresses, except once in passing. As extremists try to destroy the labor movement in this country, it’s essential for President Obama to formally and forcefully declare to the entire nation the merits of unions.

Last month, in his second inaugural address, the President said:

“preserving our individual freedoms ultimately requires collective action.”

His fifth State of the Union speech this week gives President Obama a perfect opportunity to proclaim to all of America that he will preserve the freedom to engage in collective action. It’s an important moment for him to say the word union loudly.

“Reviving his populist re-election message,” says the Washington Post about tonight’s State of the Union speech, “President Barack Obama will press a politically-divided Congress to approve more tax increases and fewer spending cuts.”

Messages like that are always welcome, although we think of them more as “common-sensical” than “populist.”

But messages only go so far in an economy where more than 35 million people stil live in underwater homes and millions of people are unemployed.

“The Homeowner Stimulus”

Fortunately there are immediate, concrete steps the President can announce in tonight’s speech which will help struggling homeowners while at the same time stimulating the economy and promoting job creation.

More than $1 trillion in homeowners’ money is underwater, much of it tied up in bank payments for housing value that has disappeared.  The right Presidential actions will free up billions of dollars in homeowner obligations, enabling them to spend that money in the equivalent of a  a new multi-billion-dollar stimulus to boost the economy and create jobs.

Here are nine steps the President can take todayto create the “homeowners’ stimulus.” They’re practical, they’re “populist,” and best of all they can be done right now.

1. Spend the rest of the HAMP money.

The Administration has only spent roughly $4 billion of the $29.9 billion Congress allocated for struggling homeowners.

Economists speak of a “fiscal multiplier,” which is the added economic benefit the economy receives from government spending. As even the traditionally conservative IMF has acknowledged, that figure is higher during difficult economic times like these — especially for programs targeted to cash-strapped populations like underwater homeowners.

The President should declare that these funds will be used by the end of the year as direct aid to struggling homeowners.

2. Clean up the HAMP scandals.

At the same time the President should announce an investigation into the terrible abuses associated with the HAMP program. He should announce that he will direct the Treasury Secretary to put an immediate stop to “dual-tracking,” a bank scam in which homeowners are told that they qualify for assistance while the bank secretly continues foreclosure proceedings against them.

That’s part of a cruel overall pattern known as “extend and pretend.” It’s allowed banks to squeeze thousands more from homeowners, take advantage of a government program meant to keep people in their homes — and then foreclose on them anyway.

Banks have also exploited the program to trap homeowners in loans under unfavorable terms for the borrower – but which are very favorable for them. They’ve turned a homeowner assistance program into yet another bank bailout.

As the National Consumer Law Center notes, “HAMP’s failure to reach its intended scale has one root cause: massive servicer noncompliance.” This underscores the need for national mortgage servicing standards, which the President should announce as a priority during the State of the Union.

If whistleblower reports are correct, banks like Bank of America hace also fraudulently abused the program. The President should announce that all such reports will be vigorously investigated.

3. Monitor and enforce the so-called “$26 billion settlement.”

From the start, the much-celebrated and misnamed “$26 billion settlement” for massive bank foreclosure fraud has proven to be a disaster – and worse, another Wall Street hoax.

Banks have falsely claimed to meet the settlement’s goals when they agree to a short sale on a home in lieu of foreclosure – even though they would have done the short sales anyway for financial reasons. Homeowners are still turned out of their homes, which makes a travesty of a policy that’s supposedly intended to keep them in those homes.

Banks have also claimed credit for mortgage relief paid for with other people’s money, declining to give borrowers relief on bank-owned loans and instead cutting deals on those they’ve already sold to investors.

They’re also allowed to keep defrauding customers, albeit at a slower rate. Attorney Abigail Field has documented the provisions of the settlement which set the standards for acceptable levels of ongoing fraud, which she’s summarized in “The Mortgage Settlement Allows Banks to Systematically Overcharge You and Wrongfully Take Your Home.”

These facts cast a doubtful light on reporting like this from CNN Money, which claimed last November that “More than 300,000 homeowners have received $26 billion in relief under the big foreclosure.”  And with 3.4 million homes foreclosed upon in the last four years, a figure like 300,000 only highlights the trivial nature of the exercise.

The President should announce that, starting immediately, these abuses will be ended and the program will be redirected back to its intended purpose: restitution for the banks’ millions of victims.

4. End the state-level hijacking of homeowners’ money.

$2.5 billion was given to the states for the purpose of helping distressed homeowners, but as of last report some of those states had diverted nearly a billion dollars of that money into the general fund. (ProPublica)

They’re hijacking money that was supposed to help homeowners and using it for their own purposes – especially to give more tax breaks to the wealthy.  That’s the net effect when you take money that was provided for a specific purpose and use it to offset the impact of those tax breaks for the already-prosperous.

The President should convene a meeting with governors – a public meeting – to discuss this abuse of funds at homeowners’ expense.  This is also an excellent opportunity to rebut the conservative canard that “states are better than the Federal government at administering these kinds of programs.”

5. Enforce and monitor the $8.5 billion settlement.

Then there’s the shocking mismanagement of an agreement made between a number of major banks and a regulator called the OCC. In 2011 the banks agreed to do a thorough review of their foreclosure records and help any homeowners who had been wronged. They pledged to that they would hire independent auditors and would not interfere with their work.

It now appears that they defrauded the government instead. Draft versions of a report from the Government Accountability Office reportedly show that the banks had paid billions to corporate consultants that were already depending on them for their revenue. They included accounting firms like PriceWaterhouseCoopers ,which behaved questionably – if not worse – during the worst of the AIG scandal and at other key times in the bank fraud crime wave.

So the banks and the regulators quickly cut a deal in which the banks would pay $8.5 billion to settle the charges.   (There’s more information here. And we highly recommend Yves Smith’s exhaustive series exploring whistleblower reports covering Bank of America’s extensive fraud in conducting the initial reviews).

The President should announce an immediate investigation into wrongdoing at the major banks, in this matter, and on any errors, mismanagement, and conflicts of interest at the OCC, with a public report to be delivered no later than the end of this quarter (March 31). He should appoint an independent overseer to monitor the OCC’s handling of the new deal.  And he should direct the Attorney General to investigate Bank of America, together with any other institutions where there may be compelling evidence of fraud or other criminal behavior regarding this settlement.

6. Direct all of Bank of America’s Fannie Mae settlement money to homeowners.

Speaking of Bank of America: Last month it agreed to settle charges of fraud by its subsidiary Countrywide. That settlement requires BofA to pay Fannie Mae $3.6 billion and buy back $6.75 billion in bad loans.

The President should announce that this money – roughly $10 billion – will be used to aid wronged homeowners, and for no other purpose.

Of course, to do that the President will have to fire Ed DeMarco, the recalcitrant bureaucrat who has managed to keep control of Fannie Mae and Freddie Mac, along with the regulatory agency called the FHFA, because Republicans in the Senate are filibustering his replacement.  While I don’t see DeMarco as the key player others make him out to be, it would be nice to see him go.

The President could announce that in his speech too.

7. Reduce interest rates – and direct the Treasury Secretary to establish guidelines for principal writedowns.

In its State of the Union preview, the Post reports that “Obama is weighing whether to use his executive authority to give more of the country’s nearly 11 million struggling homeowners a chance to refinance at today’s ultra-low interest rates, according to the Treasury Department and others in talks with the administration on the issue.”

On that issue, he can stop weighing and start doing. Removing DeMarco would help here, too. So would some very pointed face-to-face talk with leading bankers.

But even that wouldn’t go far enough. The Administration has consistently dragged its feet on the issue of principal writedowns — reducing that nearly one trillion dollars in loan amounts due for real estate value that has vanished. That needs to be part of the solution. The President should direct the Treasury Secretary to prepare a report on how to implement a principal writedown program, and to have it on his desk within 90 days.

8. Review past bank settlements for fraudulent behavior or other breaches.

The OCC experience shows that banks sought to defraud the government in their handling of the initial agreement. Banks have entered into many agreements with the SEC in which they promised to stop engaging in illegal and fraudulent behavior, only to repeat that behavior again and again. There’s evidence they’re doing the same thing with the (supposedly) $26 billion settlement.

Isn’t an agreement null and void once one of the parties has violated its terms?

The President should announce that he’s asked the appropriate attorneys to determine which bank agreements have been violated, and what other options might be open to the government as a result – up to and including criminal prosecution of the bankers involved.

9. Announce firm deadlines for action – and meet them.

Lastly, about that “weighing”: The Post also reports that the President is “considering a series of new executive actions” (emphasis ours), but that “one White House official said the moves to boost housing, retrofit buildings, offer same-sex protections or issue new environmental rules were not imminent.” Granted, the White House’s definition of the word “imminent” is not always the commonly-accepted one, but in this case we assume the anonymous source means “later.”

I’m not predicting a Presidential change of heart – or the absence of one. But he can and should take these steps immediately. If he doesn’t, the public should demand them.

As for the timing : Respectfully, Mr. President, it’s been four years since the banks ruined our economy. If not now, when?

(UPDATE: A spokesperson for the Government Accountability Office assures me that theGAO is working on its report and that the report will be issued in March as planned. Should be very interesting …)

The previews of President Obama’s State of the Union address on Tuesday promise that job creation will be a major focus – a welcome development in the face of Washington’s debilitating and wrong-headed obsession with deficit-cutting. But what’s really important is that the boldness of the president’s agenda match the severity of the jobs crisis.

The reality faced by 22 million people seeking full-time work in today’s economy demands that President Obama use his State of the Union address to push the limits of the debate, including the limits of his own past proposals.

In an article to be featured in Tuesday morning’s Progressive Breakfast, co-director Robert Borosage calls for a five-year jobs program to be included in the State of the Union address. He does not spell out the details of what should be in that plan, but those who have followed his writing can imagine the broad outlines. What should also be clear is the goal: a full-employment economy.

That would mean getting the unemployment rate at least a percentage-point lower than the recent Congressional Budget Office projection of 5.5 percent unemployment in 2017. Doing that would require taking actions that would enable the economy grow much faster than the projections assumed by the CBO.

But that goal is well within reach. If we returned to the growth rates we experienced during the latter portion of the Clinton administration – about 4 percent a year – we could make up for all of the jobs lost as a result of the Great Recession and its aftermath by 2016.

Here President Obama would do well to take a page from the House Progressive Caucus, which last week offered a set of proposals that would help boost the economy and put people back to work. One proposal is an immediate $150 billion infrastructure investment program, plus an additional $10 billion in an infrastructure bank that would be used to finance state and local government initiatives and collaborations with the private sector.

A recent Texas A&M Transportation Institute study found that in 2011 traffic congestion on the nation’s roads alone cost the nation $121 billion in lost productivity and wasted fuel. This is one of the silent costs of conservative congressional obstruction; the refusal to move forward on a plan to put people to work upgrading our transportation network and other assets is wasting billions of dollars and dragging down the economy.

In a similar vein, President Obama could once again call for a national school modernization program. A $25 billion program could modernize 35,000 public schools and would help keep thousands of teachers in the classroom that would otherwise be laid off by cash-strapped state and local governments. The president could add that while in the wake of the Newtown, Conn., shooting there have been serious discussions about spending more money on school security, this is not the time to cut back on spending on the teachers, equipment and facilities students need to learn. In order to grow the economy and ensure our global competitiveness, we should be doing the opposite.

Add to this President Obama’s previous commitments to increase the growth of the nation’s manufacturing sector – which to be meaningful would mean taking on corporate outsourcing and the mercantilist practices of countries such as China – and we begin to have an adequate framework for the policy debate that our economic conditions actually demand.

The most important thing that needs to be fixed right now is the jobs deficit. Let’s see if President Obama effectively gets that message across in his State of the Union address. In any event, it will be up to us to push Congress to stop listening to the demands of the handful of well-heeled deficit hawks spending millions to convince our lawmakers to make the lives of economically struggling Americans even less secure, and turn our full attention to the 22 million Americans who are looking for a full-time job.

Before the election President Obama set a goal of doubling exports and creating one million new manufacturing jobs by the end of 2016. What has to happen for these goals to be met?

In The State of the Union Stakes Bob Borosage points out the stakes and challenges that Obama must face,

At question is the basic American dream: the assumption that a decent life can be earned by hard work.

Consider where we are. For over three decades, the rich have gotten far richer, while working families have struggled to stay afloat. The reality is that the rising American electorate – the young, minorities, single women, union workers – are sinking together.

For decades giant American corporations have been enriching themselves at the expense of the rest of us by moving jobs, factories and industries out of the country to low-wage countries where workers have little or no say. They have pocketed the difference in cost of labor, environmental protections, worker safety protections and other costs imposed in a democracy. They have used the threat to export even more jobs to force workers here to shut up and do what they are told and take what they can get.

The result has been terrible for America’s middle class, and beyond tgerrible for those below that. Borosage again,

More than 20 million people are in need of full-time work. Corporate profits are at record highs; CEO salaries are soaring. But wages are at record lows in relation to the economy, and falling.

More than a fifth of our children live in poverty, the second worst of all advanced economies. College is being priced out of reach for more and more people, even as student debt exceeds credit card debt. Our broken health care system threatens to bankrupt a country, yet life expectancy for America’s 50-year-olds is the worst in the industrial world. We’re spending more on our military than at the height of the Cold War, while we can’t find the money even to rebuild our bridges.

In 2010, the richest 1 percent pocketed fully 93 percent of the nation’s income growth. A typical male worker earned less in 2011 than he would have in 1968.

President Obama has been working to bring back jobs and restore America’s ability to make a living. He said, “We can help big factories and small businesses double their exports, and if we choose this path, we can create a million new manufacturing jobs in the next four years.”

Blocked By Obstruction

Unfortunately many of his initiatives have been blocked by Republican obstruction. The American Jobs Act and The Bring Jobs Home Act, efforts to rebuild America’s infrastructure and stop the tax breaks that actually incentivize offshoring were both filibustered. May other efforts were also blocking by House and Senate Republicans. But the President has been able to move some things forward using the power of the Executive.

In October CAF’s Isaiah Poole pointed out that Conservative Obstruction Cost Us 2 Million Jobs So Far This Year, writing,

Since the beginning of the year I have been keeping a “jobs deficit” chart tracking our progress—or more accurately, our lack of progress—toward closing the unemployment chasm left by the 2008 financial crash. The target is 5 percent unemployment by the end of 2014, an aggressive but not unrealistic target if we had the political will to make the decisions needed to drive unemployment down quickly.

What Can Be Done?

Here is a look at some things the President can do to move further toward the goals of doubling exports and creating 1 million manufacturing jobs:

1) Declare China to be a currency manipulator, because China manipulates its currency to give itself a trade advantage.

Actually, other things that can be done are so far back, let’s focus on currency manipulation before continuing.

In last week’s post, Fix The Trade Deficit, Fix The Economy I cited a new report from the Economic Policy Institute (EPI), “Reducing U.S. trade deficit will generate a manufacturing-based recovery for the United States and Ohio,” showing that our trade deficit, the major component of which results from China’s currency manipulation, has cost us between 2.2 million and 4.7 million U.S. jobs, between 1 percent and 2.1 percent of the unemployment rate and a gross domestic product increase of between 1.4 percent and 3.1 percent.

These are real numbers that were carefully calculated. This is a real problem that is hurting people, hurting small and mid-sized companies, hurting communities, hurting our tax base and hurting our ability to make a living in the future. And there are real solutions available to fix the problem.

According to the EPI report, currency manipulation by China and as many as 20 countries is responsible for between $190 billion and $400 billion of our trade deficit, in a single year. That’s about half to two-thirds of the problem right there. So that’s half to two-thirds of the 4.7 million jobs taken by our trade deficit, well over the 1 million goal.

After Addressing Currency Manipulation

After addressing currency manipulation, there are several initiatives, in no particular order:

• National manufacturing strategy that targets key industries. A national strategy goes beyond tax incentives and other piecemeal efforts, it involves a comprehensive examination to determine the key industries and then putting in place all of the components of an ecosystem to support the industry. This means
  • the transportation, energy and internet infrastructure,
  • the entire supply chain,
  • the education and training of employees at all levels,
  • R&D facilities and researchers for innovation and design,
  • availability of materials,
  • the investment structure to finance building factories and obtaining inventory,
  • trade and tax policies to help these companies locate and export,
  • etc.

  In other words, use the resources of our government to encourage and develop the entire ecosystem and “chain of experience” located in an area, often around a “cluster” of businesses, required for an industry to develop and thrive. Other countries do this, and we do not.

• Strong enforcement of trade agreements. Many countries successfully engage in mercantilist practices, and our country has a very lax record of enforcing violations. China in particular engages in a whole range of subsidies, trade barriers and other violations that can be fought with trade complaints, sanctions and tariffs. Under President Bush there was no trade enforcement at all. Under Obama there has been a beginning with steel, tire and other trade complaints.
• Push Buy America policies in national, stale and local procurement. Our tax dollars should be spent here during a jobs emergency.
• Revive the American Jobs Act and The Bring Jobs Home Act to fight offshoring incentives, and rebuild our infrastructure to create jobs and create the fertile ground in which American businesses can thrive.

Tracking Jobs And Exports

The Alliance for American Manufacturing (AAM) has launched a “1 Million New Manufacturing Jobs” Tracker that they are calling the #AAMeter. The #AAMeter measures from the beginning of 2012.

According to today’s #AAMeter January’s employment nubers showed 4,000 manufacturing jobs were created, so we are 996,000 jobs from meeting the 1 million jobs goal. That means 21,191 manufacturing jobs must be created every month to meet the goal.

Tracking The Exports

The initiative to double exports is on track. But there are a couple of caveats:

1) It does us little good if imports also increase. If imports remain above exports we still have a trade deficit draining wealth out of our economy. While there is good news on exports, there is terrible news on the trade deficit — we just learned that 2012 had the highest trade deficit ever.

2) The economic value also depends on what exports you are talking about. Financial scams products? Raw materials? Petroleum and natural gas products? Movies?

here are some numbers:

NY Times a year ago: Obama Vow on Exports Is on Track, With Help,

Exports are running at about $180 billion a month, according to Commerce Department data, up from $140 billion a month two years ago. They are currently growing at an annual pace of about 16 percent — a percentage-point higher than necessary to double exports to $3.1 trillion by 2015.

The Wilson Center, July 2012, Obama’s Goal to Double Exports: A Midterm Analysis,

October, 2012, U.S. goal of doubling exports by 2015 now likely, survey of high-tech firms says,

Today’s report on the U.S. trade performance for May 2012 shows that the Obama Administration is roughly on track to achieve the President’s lofty goal of doubling U.S. exports over the five year period ending in 2014.

A survey of U.S. high-tech manufacturers said it is likely the United States will meet a goal set by President Obama two years ago to double export values by 2015. This finding from UPS Inc.’s annual “Change in the (Supply) Chain” survey conducted by IDC Manufacturing Insights is a far cry from a similar survey conducted in 2010 when less than half of that survey’s respondents said the objective was achievable.

According to BusinessWEEK in October 2012, “Through August, exports in 2012 were up 43 percent from the comparable period in 2009.”

See also:

Fix The Trade Deficit, Fix The Economy.

For 2012 Lets Restore Our Industrial Commons

The National Manufacturing Strategy Debate

Today’s Big Idea To Get America Working: Revive American Manufacturing

Reviving and Strengthening U.S. Manufacturing

Revive Manufacturing with Green Jobs

Quick Things To Bring Manufacturing Jobs Home
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