Economic Outlook: President Obama is looking for a progressive recovery -- and why not

By ANTHONY HALL, United Press International  |  Feb. 13, 2013 at 8:23 AM
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Can a U.S. economic recovery afford compassion? The president's contention is that it can.

The government's mission in the past two years has been prompting a faster U.S. recovery without spending a dime to do it.

That's a slick enough trick as it is, but especially so as lawmakers in Washington insist on battling out every decision on ideological fronts.

President Barack Obama Tuesday night sought to broaden that agenda. The economy still needs to recover and there still isn't any money to pay for that. But Obama's State of the Union speech outlined a social agenda to go side by side with his economic strategy.

The mission Obama outlined is to keep the recovery going and find a new balance of opportunity between the rich and the poor.

There are standard approaches for increasing opportunities for the disadvantaged, including jobs, taxes and wages, to name three that President Obama plans to employ.

Raise taxes on the rich, but leave them alone for the poor and middle class and some balance is restored. Raise the minimum wage and more balance is restored, provided the raises don't bankrupt the companies that are providing critical jobs. Toss in a $50 billion in infrastructure restoration program and jobs appear in construction, which has benefits for both company owners and blue-collar workers.

There are risks, of course. Raise taxes on the rich too far and jobs disappear, creating a net negative on opportunities for the middle class. There are simple enough equations at work here.

Opportunity can be measured. The Washington Post reported Wednesday a study at the University of California at Irvine and the University of Wisconsin at Madison found an additional $3,000 in earnings per year among poor families during the first five years of a child's life translated to nearly 20 percent more earnings in that child's adult years.

In another study, economists at the University of Michigan economists found the educational gap between the rich and the poor had widened from 1960 to 1980.

The study found that, among children born in 1960, 5 percent earned a collage degree while 36 percent of children born in the same year of wealthy parents graduated from college.

That left an educational opportunity gap of 31 percentage points.

Twenty years later, 9 percent of children from poor families graduated from college, a marked improvement. But 54 percent of children born in 1980 of wealthy parents graduated. The gap had grown to 45 percentage points.

Is there any reason shifting the focus from the economy to opportunity should impede the economic recovery? There is every reason in the world to believe so and ideology again kicks in.

"No longer can we measure compassion by how much we spend on poverty but how many people we help to lift out of poverty," Sen. Jeff Sessions, R-Ala., said.

It isn't easy to do that during good times. But tough times don't have to erase compassion entirely, either.

In international markets Wednesday, the Nikkei 225 index in Japan dropped 1.04 percent, while the Hang Seng index in Hong Kong rose 0.16 percent. The Sensex in India gained 0.24 percent, while the S&P/ASX 200 in Australia rose 0.9 percent.

In midday trading in Europe, the FTSE 100 index in Britain climbed marginally, up 0.06 percent, while the DAX 30 in Germany added 0.62 percent. The CAC 40 in France rose 0.19 percent while the Stoxx Europe 600 gained 0.12 percent.

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