Growing from the middle out: the US economy in Obama’s second term

The US president needs to focus not just on employment per se but on creating good jobs.

The US economy has made a remarkable turnaround since 2008, moving from losing 800,000 jobs per month in the winter of 2009, to adding over 150,000 jobs per month over a two-year period. This shift from massive job losses to steady job gains occurred because of the decisive actions of policymakers who implemented a combination of monetary and fiscal policies in 2008 and 2009.

But while the economy has been in recovery since June 2009, the level of output continues to be significantly below potential, and as a result unemployment, especially long-term unemployment, remains unacceptably high. In his campaign, Obama made the case that the economy "grows from the middle out". Now, as president, he gets to work with Congress anew to realise that vision.

While the economics are fairly clear – and leading economists tend to be in broad agreement about this agenda – the politics are much more complex. The Democrats made significant victories in November’s election, keeping the presidency and increasing their seats in the Senate; however, the election also put Republicans in control of the US House of Representatives for the next two years.

It’s worth noting that while many of the policies implemented in response to the recession had a history of bipartisan support, Washington’s highly polarised political environment has meant that support for these efforts is now almost exclusively among Democrats. If he wants to see stronger improvements in the labour market, Obama will have to spend the next two years mitigating this gridlock and finding common ground.

Looking beyond the immediate problem of the fiscal cliff, Republican leaders in the House are unlikely to have any appetite for expansionary fiscal policy. Yet the president made the argument during the campaign that we ‘grow from the middle out’ – he now has to make this concept real, and lay out the specific policies that will accomplish this goal. He needs to focus not just on employment per se but on creating good jobs, with decent pay and benefits, and on the economic wellbeing of families, ensuring that every job is a good, pro-family job, and that families have the support they need.

Nearly half of all US workers do not have the right to take a sick day when they or a family member is ill, which creates enormous stress and anxiety for families. The typical US family paying for childcare spends about 13 per cent of their total family income on that care; families that need to pay for elderly care find that can be very expensive as well. Increasing funding for childcare and home health aids and other supports so that ageing Americans can live independently would not only help to support employment but would, in effect, boost the incomes of families who struggle to afford care. Similarly, focusing on policies that allow workers to balance work and family would show that the Obama administration truly understands what it means for families now that women are more typically than not also a family breadwinner.

While these issues are not currently at the top of the agenda, the president could begin to use the power of the bully pulpit to focus on increasing the net income of families, alongside policies to boost job creation and reduce unemployment, as this is the first step towards raising living standards more generally. These issues are ones that resonate especially strongly with women and Latino voters, although surveys show that the agenda around work and family resonates with conservative voters as well.

Another way to make real the idea of middle-out economics is to focus attention on America’s capacity to be a global leader in innovation and production. Over his first term, Obama put manufacturing and boosting exports at the top of his agenda, and the fact that he was unwilling to allow the US auto industry to die was a key component of his re-election campaign. Rebuilding US manufacturing should remain a key plank of our national investment strategy, and this includes making sure that any corporate tax reform follows the agenda that the president has already laid out, discouraging offshoring, encouraging domestic production, and stopping tax advantages for the use of debt over equity.

Critical to this strategy is tapping into the foundation laid by the American Recovery and Reinvestment Act in green technologies, such as through the production of components for solar and wind power generation as well as innovations in battery and other technologies. While there are certainly political hurdles, the president can make the compelling argument that these investments will improve US economic competitiveness and grow the economy over the long term, which resonates with the public. Furthermore, the administration could pursue a competitive dollar strategy, which would make US exports more affordable and would not necessarily require congressional action.

With President Obama winning a second term, he has a mandate to build on the successful policies of the first term. Putting the middle class at the core of what makes the economy grow, as he did during the campaign, would be a good place to start. Americans re-elected Obama because they believe he will do a better job bringing them a strong economy and – in no small part – because he recognises that a strong economy starts with them.

Heather Boushey is a visiting fellow at IPPR and senior economist at the Centre for American Progress in Washington DC. A longer version of this article appears in the latest edition of IPPR’s journal Juncture.

Barack Obama delivers a speech on the economy at the Daimler Detroit Diesel engine plant. Photograph: Getty Images.

Heather Boushey is a Visiting Fellow at IPPR and senior economist at the Centre for American Progress in Washington DC

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The internet dictionary: what is a Milkshake Duck?

Milkshake ducking is now more common than ever.

The whole internet loves Milkshake Duck, a lovely duck that drinks milkshakes! Oh, apologies. We regret to inform you that the duck is a racist.

This is the gist of a joke tweet that first went viral in June 2016. It parodies a common occurrence online – of someone becoming wildly popular before being exposed as capital-B Bad. Milkshake Ducks are internet stars who quickly fall out of favour because of their offensive actions. There is no actual milkshake-drinking duck, but there are plenty of Milkshake Ducks. Ken Bone was one, and so was the Chewbacca Mask Lady. You become a Milkshake Duck (noun) after you are milkshake ducked (verb) by the internet.

Bone, who went viral for asking a question in a 2016 US presidential debate, was shunned after five days of fame when sleuths discovered his old comments on the forum Reddit. In them, he seemed to express approval for the 2014 leak of the actress Jennifer Lawrence’s nude photos and suggested that the shooting of the unarmed black teenager Trayvon Martin in 2012 had been “justified”. The Chewbacca Mask Lady – a woman who went viral for a sweet video in which she laughingly wore a mask of the Star Wars character – was maligned after she began earning money for her fame while claiming God had made her go viral for “His glory”.

Milkshake ducking is now more common than ever. It embodies the ephemerality of internet fame and, like “fake news”, reveals our propensity to share things without scrutinising them first.

But the trend also exposes the internet’s inherent Schadenfreude. It is one thing for an online star to expose themselves as unworthy of attention because of their present-day actions and another for people to trawl through their online comments to find something they said in 2007, which they may no longer agree with in 2017.

For now, the whole internet loves milkshake ducking. We regret to inform you that it still doesn’t involve milkshakes. Or ducks.

Amelia Tait is a technology and digital culture writer at the New Statesman.

This article first appeared in the 17 August 2017 issue of the New Statesman, Trump goes nuclear