When Barack Obama was elected on a wave of euphoria three years ago this month, the US was in the grip of its deepest recession since the 1930’s.
Times were tough, but when the silver-tongued President-elect spoke of hope and change, of America as a place where all things were possible, he spoke to the American dream. People wanted to believe.
After three years of economic pain and political bickering, Americans are angry and frustrated. They have lost faith in their political class. For the first time in living memory the American dream itself is being called into question. People are no longer so sure that if they work hard and save hard, they will be able to provide a secure future for their children.
Far from income inequality being a concern, ‘getting ahead’ was part and parcel of that American dream. So long as the rising tide lifted most boats, it didn’t matter if those at the top got rich.
Things changed when the tide stopped rising. The largesse of the 1% is under more scrutiny now that more of the 99% are struggling.
Columbia Professor Joseph Stiglitz has noted that the top 1% take home a quarter of all income, and control fully 40% of the nation’s wealth. Billionaire Warren Buffet recently highlighted the absurdity that he pays a lower rate of tax than his secretary, because of the favorable treatment of capital gains.
Household incomes are in retreat for much of the 99%. Whereas the incomes of the 1% have risen by a fifth in the last decade, those of working and middle class Americans have fallen back to levels of 15 years ago. This is the first time since the Great Depression that median incomes have not risen in such a long time.
46.5m Americans now live below the poverty line, the most in 52 years. That means 1 in 7 live on less than E16,000 per year for a family of four. For Blacks and Hispanics, it’s more like 1 in 4.
Where previously, easy credit allowed people to convince themselves that they were better off than before, the financial crisis has shattered the illusion of shared prosperity. It is this deep social anxiety and economic insecurity that is at the heart of the Occupy Wall Street movement.
With job approval hovering below 40%, and unemployment above 9%, Barack Obama is searching desperately for a compelling re-election campaign narrative. Feeling the pain of middle America, he has tentatively sought to hitch his wagon to the spirit of Occupy Wall Street.
Re-election will be less about hope and change, and more about deflecting public anger towards his opponent. Not by coincidence, he expects that opponent to be Mitt Romney, the self-styled ‘CEO that America needs’ and epitome of the 1%.
President Obama faces a tricky balancing act, however, if he plans to harness OWS anger to ensure he can occupy the White House for four more years.
For a start, his own credibility is hardly beyond reproach. Many of Obama’s key staff have Wall Street links, as do many important donors. Despite lofty rhetoric, his financial reforms to date have been tame. He famously broke off campaigning in 2008 to lobby Congress to bail out the banks. It is precisely this cozy relationship that so disgusts those Occupying Wall Street.
The risk is not that they and their supporters will vote Republican, but that they won’t vote at all or, worse, that they will support an insurgent Ralph Nader-like candidate, handing the White House to the most rabidly right-wing Republican Party in living memory in the process.