Is Obama Getting Serious About Inequality?

If it had been an economics term paper, President Obama’s heavily trailed speech about inequality and social mobility on Wednesday would have received a high passing grade. He emphasized the increasingly lopsided nature of income distribution—about half of over-all income now goes to the top ten per cent of earners. He cited empirical studies that show that the chances of an American child born to family in the bottom income quintile making it to the top quintile during his or her life are less than one in twenty. (So much for Horatio Alger.) And he noted how, in recent decades, incomes have failed to keep up with productivity growth, which presents something of a puzzle to neoclassical economists.

This wasn’t a term paper, however. It was a political speech, and should be graded as such. But that raises the question of what the President was trying to achieve, beyond changing the subject from healthcare.gov, and how he intends to follow up his address.

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