President Obama on Thursday suggested American economic fears fanned by Donald Trump are motivated more by false threats put out by nativists than real factors impacting the nation’s economic health.
“Much of this discontent is driven by fears that are not fundamentally economic,” Obama wrote in a nearly three-page essay published in the Economist Thursday that doesn’t mention Trump by name, but clearly referenced and criticized some of his positions. “The anti-immigrant, anti-Mexican, anti-Muslim and anti-refugee sentiment expressed by some Americans today echoes nativist lurches of the past.”
The president specifically referred to the several moments in American history when protectionist fears shaped major U.S. policies, including the passage of the Alien and Sedition Acts, four bills signed into law by President John Adams in 1798. Those laws made it harder for an immigrant to become a citizen, allowed the president to imprison and deport-non-citizens deemed dangerous or hostile to the country, ad criminalized the act of making false statements critical of the federal government.
The new fears this election cycle are echoes of “any number of eras in which Americans were told they could restore past glory if they just got some group or idea that was threatening America under control,” Obama wrote. “We overcame those fears and we will again.”
Obama laid out four “crucial areas of unfinished business in economic policy” that his successors should tackle, including restoring faith in the American economy so that “hardworking Americans can get ahead.”
As part of this, he said the country needs to re-examine America’s “profit motive” in the private sector that he said “can be a powerful force for the common good,” but “by itself … will not lead to broadly shared prosperity and growth.”
“Economist have long recognized that markets, left to their own devices can fail,” he wrote. “A world in which 1 percent of humanity controls as much wealth as the other 99 percent will never be stable.”
He said “economic dynamism” is needed to fight economic inequality.
“Alongside slowing productivity, inequality has risen in most advanced economies, with that increase most pronounced in the United States,” Obama wrote. “In 1979, the top 1 percent of American families received 7 percent of all after-tax income. By 2007, that share had more than doubled to 17 percent.”
“This challenges the very essence of who Americans are as people,” he said. “We don’t begrudge success, we aspire to it and admire those who achieve it. In fact, we’ve accepted more inequality than many other nations because we are convinced that with hard work, we can improve our own station and watch our children do even better.”
He quoted Abraham Lincoln as saying, “While we do not propose any war upon capital, we do wish to allow the humblest man an equal chance to get rich with everybody else,” he said.
A major goal for the next president, he said, is to build a sturdier foundation for the U.S economy to withstand crises like it did when the housing sector collapsed in 2008. Obama said the post-crisis reforms to Wall Street have made the U.S. financial system more “stable and supportive of long-term growth.”
“Even with all the progress, segments of the shadow banking system still present vulnerabilities and the housing-finance system has not been reformed. That should be an argument for building on what we have already done, not undoing it,” he wrote.
Finally, he said, the American people are still looking for “a hope for the future,” something his own 2008 presidential campaign promised but many of his supporters believe he never delivered. Still, he argued, his administration has made progress over the past eight years in restoring jobs and preventing the U.S. auto industry from going bankrupt.
“The progress of the past eight years should also give the world some measure of hope,” he said. “Despite all manner of division and discord, a second Great Depression was prevented. The financial system was stabilized without costing taxpayers a dime [over the long run] and the auto industry rescued.”
The results of his administration’s efforts, he said, are a “more durable and growing economy, 15 million new private-sector jobs since early 2010; rising wages, falling poverty and the beginnings of a reversal in inequality.”
In addition, he said, 20 million Americans now have health insurance, while health care costs have grown at their slowest rate in 50 years.
“For all the work that remains, a new foundation is laid,” he concluded. “A new future is ours to write. It must be one of economic growth that’s not only sustainable but shared. To achieve it, America must stay committed to working with all nations to build stronger and more prosperous economies for all our citizens for generations.”
