• With: Ray Kelly


    GIGOT: Thank you for being here.

    When we come back, President Obama pivots to the economy again. But is growth his goal or something else?



    PRESIDENT BARACK OBAMA: This growing inequality, it is not just morally wrong. It is bad economics. When the rungs on the ladder of opportunity grow farther and farther apart, it undermines the very essence of America, that idea that if you work hard, you can make it here. And that's why reversing these trends has to be Washington's highest priority.


    GIGOT: That was President Obama Wednesday in the first of a series of speeches the White House hopes will shift the spotlight back to the economy. This latest pivot comes as Washington prepares for another showdown over the budget and taxes. And a new Wall Street Journal poll finds more than half of Americans disapprove of the job the president is doing on the economy.

    Joining the panel this week, Wall Street Journal assistant editorial page editor, James Freeman; columnist, Mary Anastasia O'Grady; and senior economics writer, Steve Moore.

    Steve, you are our resident bull on the economy. Why is the president pivoting now if things if things are going to get better?

    STEVE MOORE, SENIOR ECONOMICS WRITER: You know, there is an old saying that a Puritan is someone who believes that somewhere someone may be having a good time. Now we learn that what a progressive is is the worry that somewhere someone is making money and getting rich.

    I think this emphasis, Paul, on income inequality was -- is a big mistake. The president should be focusing on growth. By the way, he used the term "inequality" more than he did "growth" in that speech.

    The problem is the middle class doesn't care if some people are getting rich. What they want to see is their incomes rising. And the big problem for this president, in my opinion, Paul, is that middle incomes have fallen by more than $2,500 since his policies went into action and the recession officially ended.

    GIGOT: That's from data from Sentier Research --

    MOORE: That's right.

    GIGOT: -- who looked at Census Bureau data.

    So, Mary, if growth is the -- should be the emphasis, why this stress on inequality.

    MARY ANASTASIA O'GRADY, COLUMNIST: Paul, I think that, you know, what we know about the president is his view -- his world view is that he wants government to have a larger and larger role. That's nothing -- no secret.

    GIGOT: But he thinks that promotes growth.

    O'GRADY: He thinks that promotes growth. And he's up against the Congress, which has an ideological -- it's directly opposed to that. What he is trying to do here is make his last run to get control of a Congress in 2014. That's to appeal to people who are down-and-out by saying to them government can do more for you. The reason why you are suffering is because government hasn't done enough. And the reason government hasn't done enough is those guys over there.

    GIGOT: So the start of the 2014 campaign --


    O'GRADY: Absolutely. I mean, he's known as -- for his permanent campaigning anyway. And he feels that he's going to reach this transformation of the transformation of the U.S. government, he needs to do it with control of the House.

    GIGOT: James, gun control going nowhere in Congress. Immigration may not pass, although it could still. Most of the rest --


    FREEMAN: -- out of the way.


    GIGOT: Most of the rest of his agenda -- by the way, that is Chuck Schumer, the Democrat, says stay out of the way, Mr. President --


    FREEMAN: You're not helping.

    GIGOT: -- you're not helping. His agenda, so far, not going anywhere. Is this -- is this an attempt to change the subject?

    FREEMAN: Well, it's the first -- the most recent of many attempts. every time the -- it becomes clear that the economic plan isn't working, the White House says, I've got it, we'll have the president give another speech. Or maybe it is Mr. Obama saying, I have to give another speech. The problem is the underlying policies here.

    Thinking about 2014, there are a lot people suffering in this economy. I don't think they want to wait for another political adventure. You look at labor participation rates. You have to go back to the 1970s to see them this low. Middle class incomes, stagnant. So --

    GIGOT: That's the share of people, American people, who are actually working.


    FREEMAN: The labor force frustration. That's right.

    GIGOT: -- by about two percentage points --

    FREEMAN: That's right.

    GIGOT: -- since the recovery began.

    FREEMAN: Right. And you know, we have seen the unemployment rate tick down. But it's happening or it is happened over the last few years largely because a lot of people are leaving the work force. And as we said, wages are declining as well. I think that the problem is that the inequality, if you think that's a problem -- I've always thought it was kind of a phony argument because I don't really care whether George Soros is worth $10 billion or $20 billion. It is all about, you know, am I progressing --