Hannah Arendt Center for Politics and Humanities
22Jan/130

Reflections on an Inaugural Address

I watched President Obama’s second Inaugural Address with my seven-year-old daughter. She had just completed a letter to the President—something she had been composing all week. She was glued to the TV. I found myself tearing up at times, as I do and should do at all such events. “The Star Spangled Banner” by Beyonce was… well, my daughter stood up right there in the living room, so I followed suit. The Inaugural Poem by Richard Blanco began strong—I found the first two stanzas powerful and lyrical.

The invocation of “One sun rose on us today,” is Whitmanesque, as is: “My face, your face, millions of faces in morning’s mirrors.” That second verse really grabbed me:

My face, your face, millions of faces in morning’s mirrors,
each one yearning to life, crescendoing into our day,
pencil-yellow school buses, the rhythm of traffic lights,
fruit stands: apples, limes, and oranges arrayed like rainbows
begging our praise. Silver trucks heavy with oil or paper—
bricks or milk, teeming over highways alongside us,
on our way to clean tables, read ledgers, or save lives—
to teach geometry, or ring-up groceries as my mother did
for twenty years, so I could write this poem.

I was hooked here, with Blanco’s rendition of a motley American life guided by a rising sun. But the poem dragged for me. I lost the thread. Still, I am so grateful for the continued presence of poetry at inaugural events. They remind us that the Presidency and the country is more than policy and prose.

In the President’s speech itself, there was too much politics, some prose, and a bit of poetry. There were a few stirring lines affirming the grand dreams of the United States. His opening was pitch perfect:

 Each time we gather to inaugurate a President we bear witness to the enduring strength of our Constitution.  We affirm the promise of our democracy.  We recall that what binds this nation together is not the colors of our skin or the tenets of our faith or the origins of our names.  What makes us exceptional -- what makes us American -- is our allegiance to an idea articulated in a declaration made more than two centuries ago:

“We hold these truths to be self-evident, that all men are created equal; that they are endowed by their Creator with certain unalienable rights; that among these are life, liberty, and the pursuit of happiness.”

Storytelling, Hannah Arendt knew, was at the essence of politics. The President understands the importance and power of a story and the story of America is one of the dream of democracy and freedom. He tells it well. Some will balk at his full embrace of American exceptionalism. They are right to when such a stand leads to arrogance. But American exceptionalism is also, and more importantly, a tale of the dream of the Promised Land. It is an ever-receding dream, as all such dreams are. But that means only that the dream must be kept alive. That is one of the purposes of Presidential Inaugurations, and President Obama did that beautifully.

Another stirring section invoked the freedom struggles of the past struggles for equality.

We, the people, declare today that the most evident of truths –- that all of us are created equal –- is the star that guides us still; just as it guided our forebears through Seneca Falls, and Selma, and Stonewall; just as it guided all those men and women, sung and unsung, who left footprints along this great Mall, to hear a preacher say that we cannot walk alone; to hear a King proclaim that our individual freedom is inextricably bound to the freedom of every soul on Earth.

The President, our nation’s first black President now elected for a second term, sought to raise the aspiration for racial and sexual equality to the pantheon of our Constitutional truths. Including the struggles of gay Americans—he mentioned gay rights for the first time in an inaugural address—the President powerfully rooted the inclusivity of the American dream in the sacred words of the Declaration of Independence and set them in the hallowed grounds of constitutional ideals.

When later I saw the headlines and the blogs, it was as if I had watched a different speech. Supposedly the President offered an “aggressive” speech. And he came out as unabashedly liberal.  This is because he mentioned climate change (saying nothing about how he will approach it) and gay rights. Oh, and many saw it as unabashedly liberal when the President said:

For we, the people, understand that our country cannot succeed when a shrinking few do very well and a growing many barely make it. We believe that America’s prosperity must rest upon the broad shoulders of a rising middle class.  We know that America thrives when every person can find independence and pride in their work; when the wages of honest labor liberate families from the brink of hardship.  We are true to our creed when a little girl born into the bleakest poverty knows that she has the same chance to succeed as anybody else, because she is an American; she is free, and she is equal, not just in the eyes of God but also in our own.

How is it “liberal” to value the middle-class and pride in work? There was nearly nothing in this talk about the poor or welfare. It was about working Americans, the people whose labor builds the bridges and protects are people. And it was about the American dream of income and class mobility. How is that liberal? Is it liberal to insist on a progressive income tax? Granted, it is liberal to insist that we raise revenue without cutting expenses. But where was that said?

And then there are the swarm of comments and critiques about the President’s defense of entitlements.  Well here is what he said:

We understand that outworn programs are inadequate to the needs of our time.  So we must harness new ideas and technology to remake our government, revamp our tax code, reform our schools, and empower our citizens with the skills they need to work harder, learn more, reach higher.  But while the means will change, our purpose endures:  a nation that rewards the effort and determination of every single American.  That is what this moment requires.  That is what will give real meaning to our creed.   We, the people, still believe that every citizen deserves a basic measure of security and dignity.  We must make the hard choices to reduce the cost of health care and the size of our deficit.  But we reject the belief that America must choose between caring for the generation that built this country and investing in the generation that will build its future.  (Applause.)  For we remember the lessons of our past, when twilight years were spent in poverty and parents of a child with a disability had nowhere to turn.

If I read this correctly, the President is here saying: We spend too much on health care and we need to cut our deficit. Outworn programs must change and we need innovation and technology to improve our schools even as we reduce the cost of education. We must, he says, “make the hard choices to reduce the cost of health care and the size of our deficit.”  Yet we must do so without abandoning the nation’s creed: the every American has equal worth and dignity. This is a call for changing and rethinking entitlements while cutting their cost. It is pragmatic and yet sensible. How is it liberal? Is it now liberal to believe in social security and Medicare? Show me any nationally influential conservative who will do away with these programs? Reform them, yes. But abandon them?

More than a liberal, the President sounded like a constitutional law professor. He laid out broad principles. We must care for our fellow citizens. But he left open the way that we might do so.

Perhaps the most problematic section of the President’s speech is this one:

We do not believe that in this country freedom is reserved for the lucky, or happiness for the few.  We recognize that no matter how responsibly we live our lives, any one of us at any time may face a job loss, or a sudden illness, or a home swept away in a terrible storm.  The commitments we make to each other through Medicare and Medicaid and Social Security, these things do not sap our initiative, they strengthen us.  They do not make us a nation of takers; they free us to take the risks that make this country great.

Here the President might sound liberal. But what is he saying? He is raising the entitlement programs of the New Deal to Constitutional status, saying that these programs are part of the American way of life. He is not wrong. No Republican—not Reagan, not Romney, not Paul Ryan—proposes getting rid of these programs. They have become part of the American way of life.

That said, these programs are not unproblematic. The President might say that “these things do not sap our initiative, they strengthen us. They do not make us a nation of takers; they free us to take the risks that make this country great.” But saying it does not make it true. There are times when these programs care for the sick and unfortunate. And yet there are no doubt times and places where the social safety net leads to taking and weakness. It is also true that these programs are taking up ever more of our national budget, as this chart from the Government Accounting Office makes clear.

The President knows we need to cut entitlements. He has said so repeatedly. His greatest liability now is not that he can’t control opposition Republicans. It is that he doesn’t seem able or willing to exert leadership over the members of his own party in coming up with a meaningful approach to bring our entitlement spending—spending that is necessary and rightly part of our constitutional DNA—into the modern era. That is the President’s challenge.

The problem with President Obama’s speech was not that it was liberal. Rather, what the President failed to offer was a meaningful example of leadership in doing what he knows we must do: Rethinking, re-imagining, and re-forming our entitlement programs to bring them into the modern era.

-RB

28Mar/121

Pensions: The Unraveling Fiction

How big is the pension crisis in the United States? As I wrote last week, The Pew Charitable Trust has issued a report that there is a whopping $1 trillion dollar gap between the pensions promised to state public employees and the money that has been set aside to pay those pensions. But I also said that many people think that gap is actually much bigger.

The states' calculations assume a rosy 8% or even 10% return on their investments. The Pew report shows that even with those unrealistic assumptions, there will be a $1 trillion gap, since the states are underfunding their pension funds even based on optimistic returns.

Recently, Gillian Tett of the Financial Times talked to a few academics about the question and learned why the gap is actually $3-5 trillion dollars, and not simply $1 trillion. The basic problem is that low interest rates (now around 2%) mean that the investment on pension funds is not returning close to the hoped for amount. As Tett reports:

Thus academics, such as Joshua Rauh of Northwestern University, think that if a more realistic rate of return were used, this would reveal that state pension funds are now underfunded to the tune of $3tn-$4tn. Other observers are even gloomier. “This $4tn figure is a lower bound,” argues Robert Merton, economics professor at MIT. “Liabilities as reported by state and local governments seem to creep steadily up with each report due to ‘actuarial losses’ or overly generous assumptions about mortality and worker behaviour. In recent years, these have added growth of about 4-5 per cent per year to total liabilities.” And, of course, the longer that US interest rates – and bond yields – remain ultra low, the worse this underfunding gap becomes.

Tett's essay makes for a sobering read. As she rightly points out, this problem cannot be ducked forever. Remember, the 2009 bailout that President Obama pushed through was $900 billion, slightly under $1 trillion. We are talking about a shortfall in state budgets of $3-5 trillion in coming years. This is enormous and the effect on state governments and public services will be disastrous. But the very worst effect will be on all of those public employees who have been counting on contractually guaranteed pensions who will, I fear, learn what workers in Rhode Island and Alabama recently learned: such contractual guarantees don't mean much.

What does it mean to have a fact-based politics? This is a question that Hannah Arendt struggled with. First in her writings on totalitarianism, she saw that at the core of totalitarian regimes was the need to keep alive a coherent fantasy that motivated the mass movements supporting the regimes. When inconvenient facts appeared, they simply had to be eradicated.

Later, writing during the Vietnam war and in response to her book Eichmann in Jerusalem, Arendt argued that lies came to serve not totalitarian movements, but well-meaning idealists and technocrats who convinced not only others but even themselves that their lies were in the service of a winnable and noble cause.

Today we face the unraveling of a huge fiction. While the United States is still a wealthy country, we are not as wealthy as we have pretended to be over the last 15 years. But instead of addressing this self-deception, we are continuing to demand higher pensions and better medical care without actually asking who is going to pay for such services. It is a nice slogan to say that pensions and healthcare are human rights. But the current way we are achieving such human rights is by lying to ourselves, and, most pointedly, to the public employees who will see their promised pensions and healthcare evaporate during their retirement.

It would be nice if one of the Presidential candidates in either party would actually discuss the crisis in state pensions. But that would require courage and leadership, not to mention a willingness to have an honest conversation about the fact that this country continues to live beyond its means and promise benefits it cannot afford.

-RB