What Should Be in Obama's State of the Union
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One year and one week ago today, on a blustery winter’s day, Barack Obama was sworn in as the nation’s 44th president and the first African American to hold the highest office in the land.
As he walked to the podium and raised his hand to take the oath of office administered by Chief Justice John Roberts, Obama carried with him the hopes of not only the progressive community, but a new coalition unifying younger voters, people of color and the growing urban “creative class." What unified them was a hunger for change; after eight years of hard-right governance dressed up as “compassionate conservatism,” they had fought hard for a new direction for the country. Obama’s message of change and hope had resonated with millions of Americans from all walks of life.
Obama came into office inheriting two far-off occupations, a country deep in the red, a tanking economy and a deeply entrenched establishment with no desire to see any substantive change. The widespread hope that a Democratic president with Obama’s rhetorical gifts and political savvy, and huge majorities in Congress, would deliver on his promises of reform has not weathered the intervening year well. The Democratic base is, by all measures, demoralized. Most political analysts agree that Obama and the Democratic leadership have the next 10 months to demonstrate some progress or face a shellacking in the midterm elections this November.
AlterNet's editorial team weighed in on what they think are the top concerns Obama ought to highlight in his speech to Congress, from drug policy to the prisoners still housed at Guantanamo Bay to new regulations for our financial system.
The state of our union is affected most by the state of the parts that constitute it—and despite what our ill-distribution of wealth might tell you, no parts are more important than the 300 million American people.
No one, not even those who wholly bought into the hope-and-change mantra, believed regular folks' lives would be transformed by Obama's first year in office, but even the less naive did not expect to see the populist, progressive tone of the presidential campaign take a severe turn so quickly. In the first year of the Obama presidency, the Treasury, Federal Reserve and Congress have readily and efficiently swooped to the rescue of the too-big-to-fail banks that, through the avaricious disregard for the systemic effects of their gambling, brought about the greatest depression since the great one.
At the same time, everyday Americans have felt the crunch on a daily basis. Today, more than one in eight Americans are on food stamps. One in five said they had trouble feeding themselves last year. The richest country in the world cannot feed its own because there are no jobs. While unemployment may appear to be falling, it is just for a very specific demographic group -- white men. Unemployment rates for minorities are in the teens and could reach the 20s this year. In recent months, women are bearing the brunt of job losses. The hardest hit are unmarried women -- especially single moms.
Last week, the Supreme Court officially sold our democracy to the highest bidder. The ruling further weakens government's accountability and legalizes an established practice of corporatizing Americans' well-beings. We can no longer afford inaction.
We must send money to the states with the highest unemployment rates; recommit to affirmative action policies; stop foreclosures and help people stay in their homes; strengthen financial regulation and consumer protections; end the Bush tax cuts for the wealthy and reinstate the estate tax. The government must recommit itself to the people.
Busting the Bailout Barons
Contrary to what Republicans, Rubinite Democrats and corrupt bank lobbyists will tell you, fixing the U.S. banking system isn't really all that complicated. The two most critical reforms are utterly intuitive, but Obama will have to go to the mat for both of them if he wants to see them enacted.
We all know what "too-big-to-fail" means. If a bank is so bloated that its failure would wreak havoc on the entire economy, then it's too-big-to-fail. That status encourages banks to take crazy risks in the capital markets casinos, and allows them to build political power to gouge consumers on credit cards, mortgages and anything else they can get their hands on.
How do you fix something that's too big? Make it smaller. Before the really crazy deregulation hit in the 1990s, banks were able to fuel healthy economic growth without putting millions of jobs in jeopardy. That's why even technocratic centrists like former IMF Chief Economist Simon Johnson and Kansas City Federal Reserve President Thomas Hoenig have suggested going back to the kind of banking we did before merger mania took hold in 1994. Back then, the biggest banks had total assets of about 1 percent of GDP. Today, that's about $150 billion, a cap that would require breaking up all of the multi-trillion-dollar bailout barons.
As anybody who uses a credit card can attest, the existing federal bank regulators only care about protecting bank profits. If banks can make money by screwing you over, the regulators don't care. The solution is simple: We need a new Consumer Financial Protection Agency that answers only to consumers, not bank balance sheets.
The bank lobby has been fighting both of these tooth-and-nail. The State of the Union address is a perfect opportunity to push back.