I’ve been inveighing against YOYO economics (“you’re on your own”) for a long time—here’s an excerpt with some background on the concept, but it’s pretty simple. I think the POTUS gets it just right here:
We simply cannot return to this brand of “you’re on your own” economics if we’re serious about rebuilding the middle class in this country. We know that it doesn’t result in a strong economy. It results in an economy that invests too little in its people and in its future. We know it doesn’t result in a prosperity that trickles down. It results in a prosperity that’s enjoyed by fewer and fewer of our citizens.
Here’s how I saw this back in the mid-2000s, in the heart of the GW Bush years, when the YOYOs were riding high (from my book, All Together Now: Common Sense for a Fair Economy):
… One central goal of the YOYO movement is to continue and even accelerate the trend toward shifting economic risks from the government and the nation’s corporations onto individuals and their families. You can see this intention beneath the surface of almost every recent conservative initiative: Social Security privatization, personal accounts for health care (the so-called Health Savings Accounts), attacks on labor market regulations, and the perpetual crusade to slash the government’s revenue through regressive tax cuts — a strategy explicitly tagged as “starving the beast” — and block the government from playing a useful role in our economic lives. …
While this fast-moving reassignment of economic risk would be bad news in any period, it’s particularly harmful today. As the new century unfolds, we face prodigious economic challenges, many of which have helped to generate both greater inequalities and a higher degree of economic insecurity in our lives. But the dominant vision has failed to develop a hopeful, positive narrative about how these challenges can be met in a way as to uplift the majority.
Instead, messages such as “It’s your money” (the mantra of the first George W. Bush campaign in 2000), and frames such as “the ownership society,” stress an ever shrinking role for government and much more individual risk taking. Yet global competition, rising health costs, longer life spans with weaker pensions, less secure employment, and unprecedented inequalities of opportunity and wealth are calling for a much broader, more inclusive approach to helping all of us meet these challenges, one that taps government as well as market solutions.
All of that YOYO stuff should have been discredited with the bursting of the housing bubble, the financial meltdown, and the deepest recession since the Great Depression. It wasn’t, for a lot of reasons, some of which I wrote about here.
You have to realize what we’re up against here. YOYO’ism is a brilliant, self-sustaining system. It lives in no small part due to 1) the concentration of wealth and power that it helps to create, and 2) the self-fulfilling prophecy of government failure. The YOYOs tell everyone government is a feckless waste of your hard-earned money and then when you elect them, they prove it to you.
As I’ve noted on these pages, I’ve been traversing this country lately underscoring all the issues the President hits on in this speech, highlighting the failure of YOYO’ism, its intimate role in our current dysfunctionality, and the urgency of getting this right, and soon.
[Unlike the President, I’ve been crammed in coach, squeezing my elbows together so I can bang stuff out of the laptop and savoring my tiny bag of pretzels (or “jetzels,” as my niece Lisa calls them)--sorry...pardon the rant, but really, if you're a human of any size, this travelling is really pretty physically intolerable...one simple idea would help: make it so that in coach, you can't push your seat back...ok, we're back live:]
And sure, there’s a selection bias in terms of who I’m speaking to, but they have by no means been exclusively liberal audiences. And I’m seeing heads nodding aggressively on these points (that is, nodding with agreement, not falling asleep).
So this is the right message, an essential message at a time when the dominant economic policy model has proven itself to be so wrong, yet not only remains dominant, but is still totally touted and supported by conservatives both in Congress and running for president on the R’s side.
The second half of the President’s speech introduced a new model, much more of a WITT (we’re in this together) approach, with the public sector targeting the deep market failures that rise up in force when YOYO economics is ascendant, a policy approach that in fact creates a much more congenial environment for businesses to flourish, as opposed to the “bubble, bust, repeat” cycle in which we’ve been stuck. More on that later—the YOYO frame is an effective critique of what’s gone wrong and how the opposition remains wedded to it, but you also need to clearly articulate the alternative vision.
For now, I think the President is speaking to the American people in a way that is extremely resonant to them. He’s right about this stuff, and people know it.