The Great Society

Obama was “diplomatic” with Rajoy and did not show concern about unemployment.

Obama was diplomatic. According to reports, the president congratulated Spanish Prime Minister Mariano Rajoy on the “significant advances” his government has made in terms of economic stability, deficit reduction and bringing the Spanish financial markets under control. However, Obama also reminded the prime minister of the “enormous challenges” that remain, particularly growth and employment. But if the U.S. president had been more sincere, he could have given the same evaluation of his own country. He could have expressed concern for its anemic economy and unemployment rates comparable with those of the Great Depression, despite the fact that the country has made progress in dealing with some of its macroeconomic instabilities.

Why? Obama’s whole economic policy has been directed toward achieving economic growth and increasing employment, leaving the debts and the deficit for later. This is the opposite of the policy of making changes to encourage growth, which has been the strategy all over Europe, Spain included. The results are very different: The U.S. economy is expected to grow by 3 percentage points in 2014, and the country started the year with an unemployment rate of 6.7 percent. With average annual growth figures of 2.2 percent during the last five years, the U.S. has created almost 8 million jobs. Meanwhile, Spain is struggling to achieve 1 percentage point of GDP growth, and 25 percent of the Spanish working population is expected to be unemployed by the end of the year.

So how are the two countries similar? They are similar in that their strategies for managing the economic crisis have led to exponential increases in inequality, and both had high levels of inequality already. In the recent documentary “Inequality for All,” Robert Reich, the secretary of labor under Bill Clinton, is asked which country he thinks the U.S. should emulate to help reduce these social extremes (the 100 richest Americans now own more wealth than the 150 million in the poorer half of society). His reply was “the United States … in the decades after World War II.”

The U.S. has not always been an unequal society. In the three decades after World War II, President Roosevelt’s New Deal created the biggest middle class the world has ever seen. Reich calls this the age of “great prosperity” and says that it was only possible because of a tacit agreement, acknowledged by the federal government, that the well-being of workers and the well-being of businesses were mutually dependent. This deal was made official in the Treaty of Detroit.

The U.S. is currently commemorating the 50th anniversary of President Lyndon B. Johnson’s War on Poverty. As the successor to Kennedy after the latter’s assassination in 1963, Johnson is best remembered for sending thousands of young Americans to the killing fields of Vietnam. However, he also introduced social security for the elderly (Medicare) and for the poor (Medicaid), as well as providing federal assistance for education and low-cost housing. Johnson defended the creation of a “Great Society” in a nation where equality of opportunity and a high quality of life were the birthright of every citizen. It was Reaganism that brought an end to the vision of Johnson’s philosophy.