Occupy Wall Street activists march during a tour of foreclosed homes in the East New York neighborhood of the Brooklyn borough of New York Dec. 6. (Mary Altaffer/AP)

In 2004, Obama gave a keynote speech at the Democratic Convention. The speech didn't just launch his career as a national politician -- it foretold the message that would carry him through the 2008 election.

The theme was political division. "Even as we speak," Obama said, "there are those who are preparing to divide us." And then came Obama's famous formulation, the one that launched a thousand pastel-colored posters: "There is not a liberal America and a conservative America -- there is the United States of America. There is not a Black America and a White America and Latino America and Asian America -- there’s the United States of America." He even talked of the "audacity of hope."

Yesterday, in Kansas, Obama gave a speech foretelling his 2012 campaign. The theme this time is economic division — perhaps better known as inequality.

"For most Americans, the basic bargain that made this country great has eroded," Obama said. "Long before the recession hit, hard work stopped paying off for too many people. Fewer and fewer of the folks who contributed to the success of our economy actually benefited from that success. Those at the very top grew wealthier from their incomes and their investments -- wealthier than ever before. But everybody else struggled with costs that were growing and paychecks that weren’t -- and too many families found themselves racking up more and more debt just to keep up."

"There are some who seem to be suffering from a kind of collective amnesia. After all that’s happened, after the worst economic crisis, the worst financial crisis since the Great Depression, they want to return to the same practices that got us into this mess. In fact, they want to go back to the same policies that stacked the deck against middle-class Americans for way too many years. And their philosophy is simple: We are better off when everybody is left to fend for themselves and play by their own rules. I am here to say they are wrong."

And then he updated the formulation that won him the presidency in the first place: "These aren’t Democratic values or Republican values. These aren’t 1 percent values or 99 percent values. They’re American values." Actually, he updated it twice. "This isn’t about class warfare. This is about the nation’s welfare."

There's much to say about this speech. It is, for instance, Obama's clearest attempt to weave an economic narrative that can carry him through the campaign. But perhaps the most obvious thing to say about it is that this isn't Obama's narrative. It's Occupy Wall Street's narrative. The speech is substantially about inequality. Consider the facts and figures Obama chose to include:

- "The average income of the top 1 percent has gone up by more than 250 percent to $1.2 million per year...For the top one hundredth of 1 percent, the average income is now $27 million per year. The typical CEO who used to earn about 30 times more than his or her worker now earns 110 times more. And yet, over the last decade the incomes of most Americans have actually fallen by about 6 percent."

- "A few years after World War II, a child who was born into poverty had a slightly better than 50-50 chance of becoming middle class as an adult. By 1980, that chance had fallen to around 40 percent. And if the trend of rising inequality over the last few decades continues, it’s estimated that a child born today will only have a one-in-three chance of making it to the middle class -- 33 percent."

- "Today, the wealthiest Americans are paying the lowest taxes in over half a century. This isn’t like in the early ‘50s, when the top tax rate was over 90 percent. This isn’t even like the early ‘80s, when the top tax rate was about 70 percent. Under President Clinton, the top rate was only about 39 percent. Today, thanks to loopholes and shelters, a quarter of all millionaires now pay lower tax rates than millions of you, millions of middle-class families. Some billionaires have a tax rate as low as 1 percent. One percent."

Inequality has not been a major theme in Obama's economic addresses over the last year. But it looks like it will be the major theme in his reelection campaign. And it's hard to believe that's not in response to Occupy Wall Street's success in turning the national conversation towards inequality.

Which sets us up for an unusually populist election -- on both sides. Republicans have taken their message from the Tea Party. Democrats are borrowing their theme from Occupy Wall Street. In both cases, citizen-driven grassroots groups are setting the agenda. So all together now: Mic check!

Top stories

1) Obama delivered a speech on economic inequality, reports David Nakamura: "President Obama came to this tiny middle American town Tuesday to invoke the spirit of a long-ago Republican president...Obama called for a return to modest, middle-class values and said the recent rise in populist anger -- from the tea party movement to the Occupy Wall Street protests -- was evidence of the need to remedy the growing economic inequality in American life...Theodore Roosevelt...used the same location to call for a strong central government that would protect ordinary Americans from what he called the greed and recklessness of big business and special interests...Obama, in a 55-minute address, moved beyond the specifics of his recent jobs proposals to issue a searing indictment of Republican economic theory, framing the debate as one of right and wrong, fairness and unfairness."

Read the speech: http://1.usa.gov/ta6tX3

2) US officials are pushing Eurozone leaders behind the scenes, report Zachary Goldfarb and Neil Irwin: "Senior U.S. officials are playing a behind-the-scenes role in efforts to contain the European debt crisis, cajoling the region’s leaders to take more steps to calm markets and trying to mediate among European governments with competing interests. U.S. officials have served at times as a quiet intermediary between European political leaders and the powerful European Central Bank, which tries to stay out of the political fray. In particular, according to U.S. officials, Americans have passed along information about how much money European governments might be willing to contribute to a rescue fund, a crucial question for the central bank as it considers its actions. Since the European crisis began last year, Treasury Secretary Timothy F. Geithner has urged reluctant countries to create a large rescue fund."

3) The new ECB chief is being bolder than expected, reports Jack Ewing: "For someone with a reputation for caution, Mario Draghi is off to an audacious start as president of the European Central Bank. Since taking office a little more than a month ago, he has presided over an interest rate cut, signaled a greater willingness to deploy the bank’s resources to fight the European debt crisis and turned up the pressure on governments to remake the euro zone. More action is likely on Thursday when the bank’s policy council meets. Analysts predict another cut, perhaps a big one, in the bank’s benchmark interest rate, now at 1.25 percent. The central bank is also expected to start offering longer-term loans to commercial banks to compensate for a flight from European financial institutions by private lenders."

4) Republicans are split on extending the payroll tax break, reports Rosalind Helderman: "A Republican Party that has for decades benefited from a commitment to lower taxes is now finding itself on the defensive on the issue, as members face a deep split over a Democratic plan to extend a payroll tax reduction. What might normally be a no-brainer for most congressional Republicans is being resisted by many tea-party-conscious members who oppose what they consider a short-term gimmick that would worsen the federal deficit and siphon money from Social Security. Republican leaders fear that the party, which has spent the past year fighting Democrats’ proposals to raise taxes on the wealthy, cannot now allow the payroll tax to increase without handing Democrats a powerful election-year argument that the GOP supports lower taxes only for the rich. House Republicans will hold a closed-door meeting Wednesday to discuss what to do."

Top op-eds

1) Merkel and Sarkozy have failed, writes Martin Wolf: "The German faith is that fiscal malfeasance is the origin of the crisis. It has good reason to believe this. If it accepted the truth, it would have to admit that it played a large part in the unhappy outcome...If the most powerful country in the eurozone refuses to recognise the nature of the crisis, the eurozone has no chance of either remedying it or preventing a recurrence. Yes, the ECB might paper over the cracks. In the short run, such intervention is even indispensable, since time is needed for external adjustments. Ultimately, however, external adjustment is crucial. That is far more important than fiscal austerity...The failure to recognise that a currency union is vulnerable to balance of payments crises, in the absence of fiscal and financial integration, makes a recurrence almost certain."

2) Defined contribution plans are the future of health care, writes Peter Orszag: "If most employers do retain their health plans, the state insurance exchanges created under the new federal health-care law will make the basic idea of a defined-contribution health plan more prevalent, and thus may speed its adoption. The regulations written to carry out the new law will determine how things play out. If defined-contribution plans that are sufficiently generous count as employer-based coverage -- as is generally expected -- the trend toward such plans will probably accelerate. Whether this turns out to be a good thing will depend in no small part on whether the defined-contribution model helps to constrain overall health-care costs. There’s little point (and much potential harm in terms of risk-sharing) in having individuals, rather than businesses, take on the responsibility of paying for health care if there is no change in the total cost."

3) By this point, the shape of a Europe rescue package is clear, writes Raghuram Rajan: "Some vehicle - the IMF or the European Financial Stability Facility, with either entity funded directly by countries or the European Central Bank - has to stand ready to fund borrowing by Italy, Spain, and any other potentially distressed countries over the next year or two. But there is an important caveat, which has largely been ignored in public discussions: if this funding is senior to private debt (as IMF funding typically is), it will be harder for these countries to regain access to markets...That makes private lenders susceptible to larger haircuts if the country eventually defaults - and thus more hesitant to lend in the first place. In other words, private markets need to be convinced both that there is a low probability of default...and that...if there is a default, outstanding or rolled-over private debt does not have to bear the full brunt."

4) The Euro crisis is undermining European democracy, writes Harold Meyerson: "It’s Europe where democracy is in headlong retreat. There, the leaders of the continent’s largest nations -- German Chancellor Angela Merkel and French President Nicolas Sarkozy -- have asked their fellow European leaders to relinquish control of their national budgets to unelected European Union technocrats and judges. Any nation whose budget deficit exceeds 3 percent of its gross domestic product will face (as yet unspecified) financial sanctions, which can be suspended only by a supermajority of other E.U. member nations’ leaders. The economic consequences of this piece of misapplied fiscal puritanism are frightening enough. If the other E.U. nations agree to it, they will be consigning their citizens to years, maybe decades, of declining living standards."

Music video interlude: Tennis' "Deep in the Woods".

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Still to come: The Fed is disputing reports about its emergency aid to banks; a permanent doc fix isn't happening; one of Obama's court nominees has been filibustered; Jon Huntsman has flip-flopped on climate change science; and what the world looks like to a cheerleader being tossed around.


The Fed is disputing reports about its aid to banks, reports Neil Irwin: "The Federal Reserve has launched an unusual public rebuttal of media claims that the central bank massively sub­sidized big Wall Street banks during the financial crisis. Bloomberg News reported last week that emergency lending programs by the Fed gave major banks about $13 billion in extra profit by handing them money at below-market rates...A five-page document that the Fed published Wednesday with a cover letter by Chairman Ben S. Bernanke, while not naming Bloomberg specifically, attacks the article’s conclusions. Recent articles 'have made repeated claims that the Federal Reserve conducted 'secret' lending that was not disclosed either to the public or the Congress,' the Fed document says. 'No lending program was ever kept secret from Congress or the public.'"

California and Nevada are bucking the main mortgage settlement talks together, reports Brady Dennis: "In the latest sign that some attorneys general are no longer pinning their hopes on a broad state and federal settlement with big banks, two states battered by housing foreclosures announced a plan Tuesday to combine forces to investigate mortgage fraud and related misdeeds. California Attorney General Kamala Harris and Nevada Attorney General Catherine Cortez Masto said they intend to team up to look into a wide array of abuses, including mishandled documents, shoddy loan servicing, and the questionable ways in which mortgages were bundled and sold to investors. In September, Harris pulled out of settlement negotiations between state and federal officials and a handful of the nation’s largest banks that began last year after widespread foreclosure paperwork problems came to light."

Some House Republicans want to block US participation in a Europe bailout, reports Josh Boak: "Congressional Republicans are increasingly interjecting themselves into Europe’s financial morass, with some ready to revoke a $100 billion U.S. commitment that could help rescue the debt-ridden continent. Over the past week, 36 Republican House members have signed on to a bill that would stop taxpayers from participating in a possible European bailout through the International Monetary Fund. President Barack Obama and the then-Democratic-controlled Congress extended a $100 billion line of credit to the IMF in 2009...Republican lawmakers are considering slipping the measure into an appropriations bill as an amendment, a strategy that could put Europe center stage in the federal budget debate. Sen. Jim DeMint (R-S.C.) is sponsoring a similar bill in the Senate."

Jon Corzine has been subpoenaed by the Senate, reports John Bresnahan: "The Senate Agriculture Committee on Tuesday unanimously voted to subpoena former New Jersey Sen. Jon Corzine over his role in the collapse of brokerage firm MF Global, a rare move that will compel a onetime rising star in the Democratic Party to face tough questions about his role in the financial scandal. Several members of the Committee on Agriculture, Nutrition, and Forestry did not attend the session when the Corzine subpoena was approved, including Democratic Sens. Patrick Leahy of Vermont, Ben Nelson of Nebraska and Kirsten Gillibrand of New York...The House Agriculture Committee has also subpoenaed Corzine. That hearing is scheduled for Dec. 8, and Corzine is expected to appear at the session. It is unclear whether Corzine will actually testify or invoke his Fifth Amendment right not to incriminate himself."

Accounts of Fed bailouts have gotten overblown, writes David Wessel: "It sounds like a great story: The Federal Reserve lent the banks $7.7 trillion during the financial crisis. And Congress wasn't told. But it isn't true. Even if Jon Stewart says otherwise. The Fed and the taxpayers did bail out the banks, including some that occasionally pretend otherwise today. The Fed lent enormous sums: $1.6 trillion in emergency loans and individual bailouts at the December 2008 peak...But lending against collateral to solvent, but cash-short, banks during a panic isn't among the Fed's more controversial moves. That's what central banks have done since 19th-century England. And the Fed didn't lend anywhere near $7.7 trillion. Nor did it keep the size of its lending secret, though it did unsuccessfully try to keep the borrowers' identities secret."

Awesome rocketry interlude: Armadillo Aerospace's Stiga suborbital rocket's recent launch, as seen from outside and inside the rocket.

Health Care

Republicans have ruled out a permanent "doc fix", reports Julian Pecquet: "House Republicans on Tuesday dashed the physician lobby's hopes for a permanent 'fix' to the Medicare payment formula. The American Medical Association had pinned its hopes on the 21-member GOP Doctors Caucus, which the industry group hoped would sell leadership on a permanent 'doc fix' paid for with savings from winding down the wars in Iraq and Afghanistan. However, several of those lawmakers told The Hill that the pay-for is unacceptable and that a two-year fix is the most doctors can expect for the holidays...Without congressional action by year's end, physicians will see their Medicare payment rates cut nearly 30 percent on Jan. 1. Kicking the can down the road one year is expected to cost about $21 billion, while a two-year 'patch' would cost around $38 billion."

Congress' fight over military health care is calming down, reports Lisa Rein: "Now that the sweeping defense authorization bill for 2012 has passed the Senate and House, the fight over Tricare, the health insurance plan for the military, has reached a truce -- for the moment. House and Senate negotiators are working out differences in the defense authorization bill before it goes to President Obama, but Tricare is not among the contested issues. As of Oct. 1, retirees of working age' saw their annual health-care premiums jump to $520, up from $460 for families, and to $260, up from $230 for individuals. Pharmacy co-payments also rose between $2 and $3 each, bringing them closer to parity with federal employee health plans such as BlueCross BlueShield. (Those enrolled before Oct. 1 were grandfathered at the old rate for one year, while those enrolling after Oct. 1 pay the higher rate.)"

Domestic Policy

Republicans have filibustered an Obama appeals court nominee, reports Felicia Sonmez: "Senate Republicans on Tuesday filibustered the nomination of Caitlin Halligan to the U.S. Court of Appeals for the District of Columbia Circuit, blocking the nominee President Obama chose last year to serve on one of the nation’s most powerful courts. The final roll call vote on cutting off debate was 54 to 45. Sen. Lisa Murkowski (R-Alaska) joined all 53 members of the Democratic caucus in voting to move ahead with Halligan’s nomination, leaving the former New York state solicitor general six votes short of the 60 needed to end debate. Sen. Orrin G. Hatch (R-Utah), who has never voted to filibuster a judicial nomination, voted 'present.' Obama said in a statement that he was 'deeply disappointed' by the filibuster and argued that Halligan’s nomination 'fell victim to the Republican pattern of obstructionism that puts party ahead of country.'"

Infrastructure experts are finding it difficulty to convey the gravity of that crisis, reports Ashley Halsey: "Alaska’s bridge to nowhere is so seared in the minds of voters as the epitome of wasteful federal spending that experts say hardly anyone is willing to pay more to revitalize the nation’s aging highways, bridges and transit systems. Despite dire warnings that a cancer is eating away the networks that carry people from place to place and goods to market, there is little urgency among the American people or political will in tight times on Capitol Hill to address the issue...More than 80 transportation experts joined in the conclusion that the federal government needed to spend upward of $60 billion more a year just to maintain the current systems and at least $85 billion more annually on expansion to accommodate a population that has more than doubled since the interstate highway system was begun 60 years ago."

A House committee will vote on banning Congressional insider trading next week, reports Brody Mullins: "The chairman of the House Financial Services Committee on Tuesday said he is planning to hold a panel vote next week on legislation to ban insider trading by members of Congress. The announcement by Alabama Republican Rep. Spencer Bachus came as other lawmakers used a committee hearing to propose ways to prohibit lawmakers from using information they gather in the halls of Congress to trade stocks. A bill by Rep. Louise Slaughter (D., N.Y.) would prohibit lawmakers from trading on information they learn on Capitol Hill and require more frequent disclosure of stock transactions. Similar proposals are pending in the Senate."

POV interlude: What the world looks like to an LSU cheerleader who's been thrown up in the air.


Jon Huntsman has flip-flopped on climate change, reports Evan McMorris-Santoro: "Jon Huntsman used to believe climate change is real. Now he’s not so sure. In a move that’s sure to endear him to the conservatives who are starting to warm up to the former Utah governor, Huntsman said Tuesday under questioning from TPM that he now believes there’s 'more debate yet to play out' before we can be sure climate change is really happening. That’s certainly not the way Huntsman sounded waaay back in August, when he famously tweeted: 'To be clear, I believe in evolution and trust scientists on global warming. Call me crazy.'...'[T]here is -- there are questions about the validity of the science, evidenced by one university over in Scotland recently,' Huntsman said, referring to the East Anglia University conspiracy that continues to fuel climate change skepticism."

Coal-fired power plants were on the way out even before the EPA took action, reports Erica Martinson: "An unusual confluence of environmental, political and economic events are colliding to take down the coal-fired power plant, shifting American power generation from the country’s historically dominant fuel source. House Republicans and some in the industry have argued EPA’s steady stream of air permits could blow Old King Coal right off his perch at the helm of America’s power grid. But a closer look shows that the regulations are only an accelerant, and only in some cases, to the direction many power companies are already taking...There are multiple culprits: a lagging economy, the discovery of huge resources of domestic natural gas and an administration predisposed to push through more stringent environmental demands."

Wonkbook is compiled and produced with help from Dylan Matthews and Michelle Williams.