(AP Photo/Alex Brandon)The Democratic Party’s long-term prospects have dramatically improved since the November election. They will control the White House for another four years. The Republicans, who lost the total vote for the House of Representatives, remain captive of an unpopular reactionary right wing. The “Obama Coalition” of minorities and single women is growing faster than the GOP’s white male base. If demography is destiny, Democrats—and the progressive interests that they are supposed represent in the two-party system—are the wave of the future.

But the American dream is about upward mobility. Ultimately, “The economy, Stupid” trumps identity politics. If the Democrats are not the champions of expanding jobs and incomes for the majority of voters who work for a living—whatever their gender, color, or sexual orientation—their claim to being the natural majority party will amount to little.

So it made political sense that Barack Obama began his 2013 State of the Union with this economic challenge:

“Corporate profits have skyrocketed to all-time highs, but for more than a decade, wages and incomes have barely budged. It is our generation’s task, then, to reignite the true engine of America’s economic growth: a rising, thriving middle-class.”

He went on to outline a second-term agenda that most liberals welcomed as finally revealing the true, audacious Barack Obama. “Incredibly ambitious,” enthused Ezra Klein in The Washington Post. If Obama's plans were enacted, Klein wrote, “America would be a markedly different country."

Would it?  Even if Congress were to whisk the president’s entire economic agenda into law, the impact such an improbable feat would have on “our generation’s task” of reversing the decline of real wages and incomes is nearly nil.

The root causes of the long-term slide in real wages and incomes are: 1) inadequate demand both here and abroad for what American workers produce; 2) financial deregulation, which has diverted American capital away from domestic production and toward short-term speculation; 3) the 30-year corporate war against trade unions.

Barack Obama’s agenda will not change any of these conditions.

Presidents’ rhetorical reach often exceeds their realistic grasp. But the issue here is not that Washington politics might prevent this president from delivering on his agenda. It is that the agenda is not designed to deliver.

Obama’s No. 1 priority is to reach a ten-year deal with Republicans to reduce the federal deficit. Imagine that the president prevails completely; i.e., that by the end of this year Congress accepts his proposal for a deficit reduction of roughly $4 trillion (some of which has already been agreed to) with a roughly 55 percent to 45 percent split between spending cuts and taxes. Because the economy is operating below capacity, the net effect of the president’s proposal would be to reduce the domestic demand for jobs, certainly between now and the election of 2016 and probably throughout the next decade.

In February, the Congressional Budget Office forecast that on its current path the U.S. economy would reach full recovery, i.e., 5 percent unemployment, by 2017. It was, to say the least, optimistic, given that it assumed no budget sequestration and no further bipartisan deal cut budget deficits. Assuming the average rate of job growth since the recovery began, we will not reach 5-percent unemployment until 2022. The CBO’s projections rely on a leap of faith that somehow, from somewhere, the private sector will deliver a burst of new growth.

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