The Audacity of Hope: Thoughts on Reclaiming the American Dream

by Barack Obama

He pushed for the construction of the first transcontinental railroad. He incorporated the National Academy of Sciences, to spur basic research and scientific discovery that could lead to new technology and commercial applications. He passed the landmark Homestead Act of 1862,

he created a system of land grant colleges to instruct farmers on the latest agricultural techniques, and to provide them the liberal education that would allow them to dream beyond the confines of life on the farm.

Hamilton’s and Lincoln’s basic insight—that the resources and power of the national government can facilitate, rather than supplant, a vibrant free market—has

The Hoover Dam, the Tennessee Valley Authority, the interstate highway system, the Internet, the Human Genome Project—time and again, government investment has helped pave the way for an explosion of private economic activity. And through the creation of a system of public schools and institutions of higher education, as well as programs like the GI Bill that made a college education available to millions, government has helped provide individuals the tools to adapt and innovate in a climate of constant technological change.

Aside from making needed investments that private enterprise can’t or won’t make on its own, an active national government has also been indispensable in dealing with market failures—those

Teddy Roosevelt recognized that monopoly power could restrict competition, and made “trust busting” a centerpiece of his administration.

Federal and state governments established the first consumer laws—the Pure Food and Drug Act, the Meat Inspection Act—to protect Americans from harmful products.

FDR engineered a series of government interventions that arrested further economic contraction. For the next eight years, the New Deal administration experimented with policies to restart the economy, and although not all of these interventions produced their intended results, they did leave behind a regulatory structure that helps limit the risk of economic crisis: a Securities and Exchange Commission

FDIC insurance to provide confidence to bank depositors; and countercyclical fiscal and monetary policies, whether in the form of tax cuts, increased liquidity, or direct government spending, to stimulate demand when business and consumers have pulled back from the market.

Workers had almost no protections from unsafe or inhumane working conditions, whether in sweatshops or meatpacking plants.

What safety net did exist came from the uneven and meager resources of private charity.

Again, it took the shock of the Great Depression, with a third of all people finding themselves out of work, ill housed, ill clothed, and ill fed, for government to correct this imbalance. Two years into office, FDR was able to push through Congress the Social Security Act of 1935, the centerpiece of the new welfare state, a safety net that would lift almost half of all senior citizens out of poverty, provide unemployment insurance for those who had lost their jobs, and provide modest welfare payments to the disabled and the elderly poor.

the forty-hour workweek, child labor laws, and minimum wage laws; and the National Labor Relations Act,

The forty-hour workweek, child labor laws, and minimum wage laws; and the National Labor Relations Act.

As he would explain in 1944, “People who are hungry, people who are out of a job are the stuff of which dictatorships are made.” For a while this seemed to be where the story would end—with FDR saving capitalism from itself through an activist federal government that invests in its people and infrastructure, regulates the marketplace, and protects labor from chronic deprivation.

the creation of the Great Society programs, including Medicare, Medicaid, and welfare, under Johnson; and the creation of the Environmental Protection Agency and Occupational Health and Safety Administration under Nixon.

U.S. companies began to experience competition from low-cost producers in Asia, and by the eighties a flood of cheap imports—in textiles, shoes, electronics, and even automobiles—had started grabbing big chunks of the domestic market.

With less ability to pass on higher costs or shoddy products to consumers, corporate profits and market share shrank, and corporate shareholders began demanding more value.

In his rhetoric, Reagan tended to exaggerate the degree to which the welfare state had grown over the previous twenty-five years. At its peak, the federal budget as a total share of the U.S. economy remained far below the comparable figures in Western Europe, even when you factored in the enormous U.S. defense budget. Still, the conservative revolution that Reagan helped usher in gained traction because Reagan’s central insight—that the liberal welfare state had grown complacent and overly bureaucratic, with Democratic policy makers more obsessed with slicing the economic pie than with growing the pie—contained a good deal of truth. Just as too many corporate managers, shielded from competition, had stopped delivering value, too many government bureaucracies had stopped asking whether their shareholders (the American taxpayer) and their consumers (the users of government services) were getting their money’s worth.

in some cases market-based incentives could achieve the same results as command-and-control-style regulations, at a lower cost and with greater flexibility.

And while welfare certainly provided relief for many impoverished Americans, it did create some perverse incentives when it came to the work ethic and family stability.

The middle-class tax revolt became a permanent fixture in national politics and placed a ceiling on how much government could expand. For many Republicans, noninterference with the marketplace became an article of faith.

Clinton signed welfare reform into law, pushed tax cuts for the middle class and working poor, and worked to reduce bureaucracy and red tape. And it was Clinton who would accomplish what Reagan never did, putting the nation’s fiscal house in order even while lessening poverty and making modest new investments in education and job training. By the time Clinton left office, it appeared as if some equilibrium had been achieved—a smaller government, but one that retained the social safety net FDR had first put into place.

Reagan and Clinton may have trimmed some of the fat of the liberal welfare state, but they couldn’t change the underlying realities of global competition and technological revolution.

Businesses continue to struggle with high health-care costs. America continues to import far more than it exports, to borrow far more than it lends.

Without any clear governing philosophy, the Bush Administration and its congressional allies have responded by pushing the conservative revolution to its logical conclusion—even lower taxes, even fewer regulations, and an even smaller safety net.

This may have also led to the rise of Trump, due to the anger of working-class whites. Trump mocked both parties and conviced many of these voters that he "alone could fix" their problems.

America can’t compete with China and India simply by cutting costs and shrinking government—unless we’re willing to tolerate a drastic decline in American living standards, with smog-choked cities and beggars lining the streets. Nor can America compete simply by erecting trade barriers and raising the minimum wage—unless we’re willing to confiscate all the world’s computers.

we don’t have to choose between an oppressive, government-run economy and a chaotic and unforgiving capitalism.

Lincoln’s simple maxim: that we will do collectively, through our government, only those things that we cannot do as well or at all individually and privately. In other words, we should be guided by what works.

Let’s start with those investments that can make America more competitive in the global economy: investments in education, science and technology, and energy independence.

America now has one of the highest high school dropout rates in the industrialized world. By their senior year, American high school students score lower on math and science tests than most of their foreign peers.

I don’t believe government alone can turn these statistics around. Parents have the primary responsibility for instilling an ethic of hard work and educational achievement in their children. But parents rightly expect their government, through the public schools, to serve as full partners in the educational process—just as it has for earlier generations of Americans.

Unfortunately, instead of innovation and bold reform of our schools—the reforms that would allow the kids at Thornton to compete for the jobs at Google—what we’ve seen from government for close to two decades has been tinkering around the edges and a tolerance for mediocrity.

Meanwhile, those on the left often find themselves defending an indefensible status quo, insisting that more spending alone will improve educational outcomes.

But there’s no denying that the way many public schools are managed poses at least as big a problem as how well they’re funded.

Our task, then, is to identify those reforms that have the highest impact on student achievement, fund them adequately, and eliminate those programs that don’t produce results. And in fact we already have hard evidence of reforms that work: a more challenging and rigorous curriculum with emphasis on math, science, and literacy skills; longer hours and more days to give children the time and sustained attention they need to learn; early childhood education for every child, so they’re not already behind on their first day of school; meaningful, performance-based assessments that can provide a fuller picture of how a student is doing; and the recruitment and training of transformative principals and more effective teachers.

This last point—the need for good teachers—deserves emphasis. Recent studies show that the single most important factor in determining a student’s achievement isn’t the color of his skin or where he comes from, but who the child’s teacher is. Unfortunately, too many of our schools depend on inexperienced teachers with little training in the subjects t...

we’re going to have to take the teaching profession seriously. This means changing the certification process to allow a chemistry major who wants to teach to avoid expensive additional course work; pairing up new recruits with master teachers to break their isolation; and giving proven teachers more control over what goes on in their classrooms. It also means paying teachers what they’re worth.

those willing to teach in the toughest urban schools—should be paid even more. There’s just one catch. In exchange for more money, teachers need to become more accountable for their performance—and school districts need to have greater ability to get rid of ineffective teachers.

The unions also argue—rightly, I think—that most school districts rely solely on test scores to measure teacher performance, and that test scores may be highly dependent on factors beyond any teacher’s control, like the number of low-income or special-needs students in their classroom.

Working with teacher’s unions, states and school districts can develop better measures of performance, ones that combine test data with a system of peer review (most teachers can tell you with amazing consistency which teachers in their schools are really good, and which are really bad).

In a knowledge-based economy where eight of the nine fastest-growing occupations this decade require scientific or technological skills, most workers are going to need some form of higher education to fill the jobs of the future.

our government has to help today’s workforce adjust to twenty-first-century realities.

Where Americans do need help, immediately, is in managing the rising cost of college—something

Over the last five years, the average tuition and fees at four-year public colleges, adjusted for inflation, have risen 40 percent.

States can limit annual tuition increases at public universities. For many nontraditional students, technical schools and online courses may provide a cost-effective option for retooling in a constantly changing economy. And students can insist that their institutions focus their fund-raising efforts more on improving the quality of instruction than on building new football stadiums.

It’s through these institutions that we’ve trained the innovators of the future, with the federal government providing critical support for the infrastructure—everything from chemistry labs to particle accelerators—and the dollars for research that may not have an immediate commercial application but that can ultimately lead to major scientific breakthroughs.

Langer told me, “but the real problem we’re seeing is significant cutbacks in federal grants.” He explained that fifteen years ago, 20 to 30 percent of all research proposals received significant federal support. That level is now closer to 10 percent.

It’s hard to overstate the degree to which our addiction to oil undermines our future.

A large portion of the $800 million we spend on foreign oil every day goes to some of the world’s most volatile regimes—Saudi Arabia, Nigeria, Venezuela, and, indirectly at least, Iran. It doesn’t matter whether they are despotic regimes with nuclear intentions or havens for madrassas that plant the seeds of terror in young minds—they get our money because we need their oil.

But regulation, if applied with flexibility and sensitivity to market forces, can actually spur private sector innovation and investment in the energy sector. Take the issue of fuel-efficiency standards. Had we steadily raised those standards over the past two decades, when gas was cheap, U.S. automakers might have invested in new, fuel-efficient models instead of gas-guzzling SUVs—making them more competitive as gas prices rose. Instead, we’re seeing Japanese competitors run circles around Detroit.