On Wednesday, President Obama struck back against a rising chorus of criticism in Congress and the media over his handling of a trio of scandals that have rocked Washington.

• He announced that Treasury Secretary Jack Lew has asked for and received the resignation of acting Internal Revenue Service commissioner Steven Miller amid an outcry over the IRS’s targeting of conservative and Tea Party groups for special scrutiny.
• His legislative aide asked Sen. Charles Schumer (D-N.Y.) to re-introduce a 2009 bill that would give reporters more protection from the government’s efforts to probe confidential sources, as occurred in the AP scandal.
• The White House released 100 pages of emails regarding the “talking points” given to UN Ambassador Susan Rice before she went on five Sunday morning talk shows immediately after the attack on a U.S. consulate in Benghazi, Libya that killed four Americans, including Amb. Chris Stevens.

Wednesday’s actions may represent a turning point in the scandals that have dominated the last week or so, because as of now, there’s no evidence that either the president or anyone in the White House or his re-election campaign had anything to do with any of the three scandals.

President Obama speaks at the White House Wednesday. Source: YouTube/whitehouse.gov

Consider:

1. The IRS actions, although they were discussed high in that agency’s ranks, likely didn’t even spill over into the Treasury Department, which oversees it. Congress will investigate this, as it should, and Attorney General Eric Holder has said the Justice Department will investigate it to see if criminal charges are warranted.  And there probably will be changes in criteria used to grant political groups not-for-profit status. But without more direct evidence linking the president  or his campaign to this shameful effort, he won’t be hurt by it.
2. Congress also will investigate the AP scandal, but I suspect they’ll get nowhere, because as I wrote here Wednesday, DOJ’s efforts were probably legal, part of the metastasis of the national security state. Chances for a new shield law have improved, which is a good thing.  But again, no direct link to the president.
3. Finally, on Benghazi, Wednesday’s document dump showed an even more confusing chain of events in the Rice “talking points” than we had seen before. The documents, which had been released to Congress several months ago, reveal intense in-fighting between the State Department and the CIA, which may have been trying to conceal clandestine operations there. But again, no evidence whatsoever of any White House or Obama campaign involvement.

With Wednesday’s actions, the president began to move beyond these scandals, even as Congress and the media will harp on them, for good and bad reasons.

He already has proposed reforms in the IRS and journalists’ confidentiality and on Thursday in the Rose Garden he called on Congress to “fully fund” his “budget request to improve [embassy] security around the world.” Talk about turning the tables!

The email dump also pretty much absolved UN Ambassador Rice, who just read talking points State and CIA couldn’t agree on. The president may even appoint her National Security Adviser, which doesn’t require Senate confirmation. He also will focus on implementing the recommendations made by the Pickering-Mullen group to improve embassy security.

Most of the Republicans’ questions on Benghazi now involve former Secretary of State Hillary Clinton. President Obama will let her fend for herself—the Clintons have a lot of experience dealing with scandals, don’t they?

Thus far, public opinion hasn’t wavered much. Even prominent conservatives like Charles Krauthammer and Bill O’Reilly have urged caution in linking the president to these scandals. They may sense that he’s going to come out of them unscathed.

So, now we have the third in what has become a perfect storm of scandals for the Obama Administration.

After Benghazi and the IRS’s political profiling of conservative groups for special scrutiny of their tax-exempt status, we now have the revelation that the Justice Department seized two months of telephone records of journalists at the Associated Press, one of the world’s leading news organizations.

The records covered more than 20 AP telephone lines in New York, Hartford, Conn., and Washington. D.C. Home- and cell-phone records of several AP journalists also were seized—all without prior notification.

The actions came in the wake of a May 7, 2012  AP report about how the government had foiled a terrorist plot by an Al Qaeda-linked group in Yemen to blow up an airplane.  The AP had held that story until the government cleared its release.

But when it came out, congressmen of both parties demanded to know how that information had leaked.  DOJ launched an investigation that included 550 interviews and a review of tens of thousands of documents.

Apparently they had no luck finding the source, so they continued their fishing expedition with this deep dive into AP phone records.  Attorney General Eric Holder, who had recused himself from the investigation and appointed a deputy to conduct it (was it an excess of ethics or just deniability on his part?), declared Tuesday that the information disclosed in the AP article was among “the top two or three most serious leaks that I’ve ever seen.”

Attorney General Eric Holder testifies before Congress. Source: CNBC.

In a letter to Holder, AP President  and CEO Gary Pruitt objected to DOJ’s “massive and unprecedented intrusion” into the AP’s news gathering operations. He continued:

The regulations require that, in all cases and without exception, a subpoena for a reporter’s telephone toll records must be “as narrowly drawn as possible.” This plainly did not happen.

We regard this action by the Department of Justice as a serious interference with AP’s constitutional rights to gather and report the news.

As much as I find DOJ’s conduct chilling and reprehensible, it may not be illegal. As Timothy Lee pointed out in an insightful Washington Post article Wednesday, a 1979 Supreme Court decision “allows the government to engage in this type of surveillance—on media organizations or anyone else without meaningful judicial oversight.” Lee explained:

Before an FBI agent can seek a journalist’s call records, they must get special approval from the attorney general. But that’s merely a Justice Department policy, not a constitutional requirement.

The real problem here is the inexorable rise of the national security state, which has given the federal government extensive new powers.

It started during World War II under FDR, grew rapidly during the Cold War and Vietnam and reached its apex in the criminal administration of Richard Nixon. Congress eliminated some abuses in the post-Watergate period, but then Ronald Reagan reversed that tide.

In the wake of 9/11, the Bush-Cheney administration did an end run on the Constitution with warrantless wiretapping, secret renditions to other countries, secret prisons for alleged terrorists abroad, and other practices blessed by Congress in the Patriot Act.

President Obama ran on a platform of transparency and closing the Guantanamo Bay prison. He has rolled back some of the war on terrorism’s abuses, but his administration is extremely secretive and has prosecuted six alleged “leakers”—twice the number of all previous presidents.

Bottom line: once a president gets executive powers, he’s reluctant to give them up, good intentions or not. That’s the real scandal here.

In a week full of media outrage—from the semi-scandal, at best, of Benghazi, to the truly frightening and dangerous Justice Department investigation of the Associated Press (which I’ll write about Wednesday), the IRS’s  targeting of conservative groups for special review of their tax-exempt status lies somewhere in the middle.

On the face of it, it is an outrage. The IRS is supposed to be above partisan politics, administering the tax laws in a fair, impartial way. As President Obama said at his joint news conference with UK Prime Minister David Cameron on Monday:

If in fact IRS personnel engaged in the kind of practices that have been reported on, and were intentionally targeting conservative groups, then that’s outrageous, and there’s no place for it. And they have to be held fully accountable.

On Tuesday The Washington Post reported that the practice was more widespread than had been believed. Rather than being confined to a local office in Cincinnati, it also was happening in California and at the IRS’s headquarters in Washington, DC, where officials “sent queries to conservative groups asking about their donors.”

Former IRS Commissioner Douglas Shulman (a George W. Bush appointee) and current acting commissioner, Steven T. Miller found out about the practices in May 2012, The Post reported.

The efforts, which occurred in 2011 and 2012, were aimed at evaluating applications for tax-exempt status by new political groups, which were multiplying mostly because of the rapid growth of the Tea Party movement.

Former Washington Post reporter Carl Bernstein speaks on “Morning Joe” Monday. Source: MSNBC.

The IRS has the legal right and responsibility to determine whether organizations are complying with the requirements of tax-exempt status (which is enormously beneficial). These 501(c)(4) groups—pardon the tax jargon—can engage in politics “so long as politics do not become their primary focus.” That requires some scrutiny and judgment calls.

Where the IRS went wrong was engaging in political profiling—i.e., singling out “Tea Party” or anti-tax or anti-government groups for more intense investigation. That, of course, is unacceptable and un-American. Congress should investigate fully and President Obama should set up an independent inquiry  to get to the bottom of it.

Yet despite some overwrought comparisons to Watergate, here’s the crucial difference, as Carl Bernstein, who along with Bob Woodward broke the original Watergate scandal wide open with The Post in the early 1970s, pointed out on Morning Joe Monday:

In the Nixon White House, we heard the president of the United States on tape saying use the IRS to get back at our enemies….We know a lot about President Obama, and I think the idea that he would want the IRS used for retribution, we have no evidence of such a thing…

Nixon’s White House was a criminal enterprise, as Woodward and Bernstein observed last year on the 40^th anniversary of the Watergate break-in. Obama’s White House can be sloppy and secretive, but I don’t believe he would order such investigations. Nor would his former Treasury Secretary Tim Geithner, in my view.

Right now, this appears to have been a badly wrongheaded effort by IRS bureaucrats that threatened the First Amendment rights of many citizens. Certainly some heads should roll.

But if there’s any indication anyone from Treasury, the White House, or the Obama reelection campaign encouraged IRA officers to snoop on conservative groups, then the smoking gun will become a prairie fire.

Last week’s hearings on Benghazi by the House Oversight Committee must have hit a nerve, because President Obama blasted his critics at a joint White House news conference with British Prime Minister David Cameron.

Labeling it a “political circus,” the president said “the whole issue of ‘talking points’ frankly… has been a sideshow…There’s no ‘there’ there.”

Apparently getting angrier by the minute, the president continued:

What happened was tragic…We don’t have time to be playing these political games in Washington. We have to focus on protecting [diplomats in harm’s way].

The president was responding to half the problem uncovered by Congressional investigators—his Administration’s confused or possibly misleading explanation of what happened in Benghazi in the days and weeks afterward, which happened to be the climactic part of the 2012 presidential campaign.

Over the weekend, others involved pushed back on the substance of what happened in Benghazi, where a terror attack killed four Americans, including Ambassador Chris Stevens, at a consulate which also may have been a CIA station.

President Obama speaks at a joint press conference with British Prime Minister David Cameron at the White House Monday. Source: WhiteHouse.gov.

Former Ambassador Thomas Pickering, who along with former Joint Chiefs of Staff chairman Michael Mullen led the State Department’s investigation of the tragedy, also took on critics of his report on the Sunday talk shows. Here’s what he said on CBS News’ “Face the Nation” when asked about the role of Secretary of State Hillary Clinton:

They’ve tried to point a finger at people more senior than where we found the decisions were made. The decisions were made and reviewed at the level that we fixed responsibility for failures of performance. Those people were named in the report. Two of the four that we felt failed in their performance were, under our recommendation, relieved of their jobs.

Asked about whether more military action could have been taken to protect the Americans, Pickering said:

The question of, could military aircraft have made a difference? Could they have gotten there in time? And the answer at that time…to Mr. Hicks was, “No.” Subsequently, Admiral Mullen looked at that very carefully. General Dempsey did. They both have testified that there was no military capacity to get there.

Former Secretary of Defense Robert Gates backed up Pickering on the same show, telling Bob Schieffer:

…To send some small number of special forces or other troops in without knowing what the environment is, without knowing what the threat is, without having any intelligence in terms of what is actually going on on the ground, I think, would have been very dangerous. And personally, I would not have approved that.

Pickering and Gates are highly credible people, having served with distinction in both Democratic and Republican administration. And both Pickering and Mullen will likely appear before Congress to answer questions.  Congress has the right and responsibility to uncover the truth about Benghazi, and they should investigate further.

But make no mistake—this is politically driven. As Politico revealed Monday, House Speaker John Boehner is trying to turn Benghazi into “a defining political fight with President Barack Obama”:

Starting last fall, Boehner has run a Capitol-wide campaign to keep turf-conscious committee chairs informed, at the same time using his sway to press the Obama administration to comply with congressional investigators trying to untangle what happened.

The speaker has privately strategized with high-profile GOP senators like John McCain of Arizona and Lindsey Graham of South Carolina…

“This is all Boehner,” said one senior Republican aide of the focus on Benghazi. “He’s obsessed with it. He brings it up all the time.”

Political circus indeed.

President Obama is going through one of the periodic rough patches of his presidency. From the collapse of his campaign against the automatic spending cuts in the “sequester” to the failure to pass universal background checks for gun purchases, the president seems to have lost the mojo that carried over from his election victory last year.

Now, he needs to get his juice back amid speculation he’s already a lame duck and mounting criticism of his handling of the civil war in Syria, plus renewed examination of the death of four Americans at the U.S. consulate in Benghazi last year.

I believe the president must do four things to delay his lame-duck status and cement his legacy.

Push again and maybe again to eliminate the gun show loophole. The compromise bill sponsored by Senators Pat Toomey (R-Pa.) and Joe Manchin (D-W.Va.) fell six votes short of the 60 votes needed to overcome a filibuster. One of those “no” votes came from Senate Majority Leader Harry Reid (D-Nev.), who voted against the bill to allow it to come to the floor again. (I don’t get it, either.)

Republican Senators Jeff Flake of Arizona and Kelly Ayotte of New Hampshire may change their votes, so there may now be 58 votes for Manchin-Toomey. The president and his supporters should beg, plead, or twist arms to secure the other two votes and get it through the Senate. (The House, of course, is another story.)

President Obama meets with top economic and legislative advisers. Official White House photo by Pete Souza.

Work behind the scenes to help Senators put together a passable compromise on immigration reform. Let senators like Marco Rubio take the lead but signal you’ll be open to tougher security provisions to help get a bill through a Senate filibuster and the House, where the nativists in the Republican Party are strongest. Again, this is a good place for the president to “lead from behind,” keeping his fingerprints off the final bill for tactical purposes. He’ll get credit for it, anyway,

Focus on implementing the Affordable Care Act and financial reform.  Obamacare and the Dodd-Frank financial reform act, passed in the two years the president had a Democratic Congress, are likely to be the cornerstones of his legacy, but successful implementation is critical. I’ve already pointed out some concerns about Obamacare’s rollout. And regulators are still writing rules that Congress dumped in their laps in the overly complex Dodd-Frank Act. Some of them are quite tough, which is why banks are mounting yet another big lobbying effort. The president should encourage his regulators to stand firm while sweating more of the details on health care reform.

Don’t let Syria disintegrate.  As I’ve written here, Syria is a big mess, and there are no good solutions. But I think the president’s bottom line (or red line, if you will) is to keep the country from falling apart or triggering a regional war. That will mean helping control the flow of refugees, probably arming some of the rebels, and perhaps getting NATO (not U.S.) troops into limited—and I mean limited– military action. President Obama doesn’t want to be known as the president who lost the Middle East on his watch, but he’ll have to take some steps to prevent that from happening.

I don’t think President Obama will be remembered as a great or near-great president. But to be considered a good one, he’ll have to successfully complete his big legislative initiatives and also make sure the things he’s already accomplished will last beyond his second term. Of such successes are presidential legacies made.

Now comes word from Bloomberg BusinessWeek that former vice-president Al Gore is “Romney –rich,” with a net worth upwards of $200 million.

The Democratic standard bearer who won the popular vote but lost the 2000 presidential election in the Electoral College and Supreme Court emerged from a quarter-century in public life with not much more than the value of two homes he owned with his then-wife, Tipper. (The two divorced after 40 years of marriage in 2010.)

Since then, Gore has amassed a fortune nearly equal to that of Mitt Romney, the 2012 Republican presidential candidate and co-founder of Bain Capital. But whereas Romney built his estimated $250 million wealth deal by deal, tax shelter by tax shelter, over more than two decades, Gore made his money virtually overnight.

As Bloomberg’s Ken Wells and Ari Levy reported:

In January, the Current TV network, which he helped to start in 2004, was sold to Qatari-owned Al Jazeera Satellite Network for about $500 million. After debt, [Gore] grossed an estimated $70 million for his 20 percent stake, according to people familiar with the transaction.

Two weeks later, Gore exercised options, at $7.48 a share, on 59,000 shares of Apple Inc. stock that he’d been granted for serving on the Cupertino, California-based company’s board since 2003. On paper, it was about a $30 million payday based on the company’s share price on the day he claimed the options.

He may have $15-20 million more in unexercised Apple stock options, along with an unspecified amount from advising Google before that tech behemoth went public.

Gore, the two BusinessWeek writers say, is beloved in Silicon Valley. The late Steve Jobs personally invited him to join Apple’s board. He is a partner at top venture capital firm Kleiner Perkins, and is known as a conscientious director who does his homework and “gets” technology.

Still, the windfall from the Apple options and his recent big Current score was, as Wells and Levy wrote, “as much about timing and luck as it is about business skills.”

Former Vice-President Al Gore speaks in 2009. Photo: Flickr/Skoll World Forum.

Like Romney, Gore made his money legally, but also like Romney, there’s a dark side to his wealth, which the sale of Current TV to Al Jazeera illustrates.

Current was a flailing also-ran best known for its disastrous hiring and firing of temperamental MSNBC host Keith Olbermann. Then along came Al Jazeera with a burning desire to reach the U.S. audience and buckets of money to pay for it.

But the government of Qatar, which backs Al Jazeera, gets much of its money from oil, the dirty fossil fuel responsible for a good chunk of climate change, against which Gore crusaded so effectively in an Academy Award-winning documentary, “An Inconvenient Truth.”

Faced with questions about hypocrisy (Questions? It is hypocrisy), Gore was barely able to come up with an excuse, telling Matt Lauer on Today that “its climate coverage has been far more extensive and high-quality.”

Also “extensive” on Al Jazeera has been an animus towards Israel, a nation Gore supported consistently throughout his political career:

“We see anti-Israel bias, at times crossing into anti-Semitism, across Al Jazeera’s platforms,” Michael Salberg, the Anti-Defamation League’s director of International Affairs, told POLITICO. “It’s not just the Arabic version; it seeps into the English language version…”

Through the Al Jazeera deal, Gore, who did so much to raise public awareness of environmental issues, has helped undermine his own cause and strengthened climate change deniers through his blatant hypocrisy.

To supporters and opponents alike, he looks like just another rich guy who cashed out while the getting was good.

How can you tell we’re three long years from the next presidential election? When you see a lot about the presidential prospects for fringe candidates like freshman Sen. Ted Cruz of Texas.

Lately Cruz has excited Republican voters with his aggressive style and red-meat conservatism.

In his first four months in the Senate, Cruz has vowed to oppose immigration reform and to filibuster against closing the gun show loophole; falsely accused Defense Secretary-designate Chuck Hagel of collecting speaking fees from North Korea, and alienated everyone from Dianne Feinstein to Lindsey Graham and the Wall Street Journal editorial board, who called him out by name.

These monumental achievements in such a short time qualify him to be president of the United States, in the views of cheering crowds that greeted him at the National Rifle Association’s meeting in Houston and at a Republican dinner in early-primary state South Carolina, where, according to Politico:

Every Drudge-linked, Fox-hyped, Rush-endorsed zinger a Republican county activist could want – Cruz delivered it here.

Cruz’s style plays well to the gun-toting, liberty-loving Republican “base.” Never was that word more apt, as Cruz has a knack for tapping directly into the reptilian brain, where fear and anger rule.

As Politico wrote:

Cruz figured out how to harness the power of ideological outside groups and conservative media, and deliver an uncompromising, slash-and-burn message to the base…Both he and his advisers recognize they’ve discovered a formula that works, at least among arch-conservative primary voters…

Tell a Republican activist that Cruz is disrupting the decorum of the Senate, and they will more than likely respond: Good!

After all, Cruz is the kind of candidate conservatives say Republicans should have run in 2008 and 2012, instead of squishy John McCain and Mitt Romney.

Ted Cruz speaks at the Values Voters Summit in 2011. Photo: Flickr/Gage Skidmore.

Problem is that since Ronald Reagan’s presidency, voters have shown they don’t want pure conservatism, especially not the extreme kind propounded by Cruz:

If recent history is any guide, the let’s-burn-it-all-down approach has a substantial downside. Conservative icons such as Sarah Palin and Newt Gingrich… ended up speaking to such a narrow portion of the country that they became completely ineffective — and even damaging — as national figures within the Republican Party.

Still, Democratic partisan warrior James Carville spoke glowingly of Cruz’s political skills, calling him the “most talented and fearless Republican I’ve seen in the last 30 years.”

The sly Cajun may be trying to promote Cruz to ease the path for his own favorite, Hillary Clinton, who would likely wipe the floor with him in a general election.

I saw Cruz at the Republican National Convention last year and was singularly unimpressed with his speech, a string of Tea Party clichés. He can’t hold a candle to squishy-on-immigration Marco Rubio.

But he’s a Princeton and Harvard Law School grad and was a champion debater. He’s also half-Hispanic, allowing Republicans to boast of their own party’s “diversity.”

Yet he’s singularly short of experience, which is OK for him but wasn’t for Barack Obama. Also, have you heard a peep about his “affirmative-action” Ivy League admission or his lack of “natural-born” U.S. citizenship, having been born in Canada to an American mother and a Cuban father?

I thought not, because his views make him “one of us,” so the rules are different.

I don’t think  Cruz can get past the Iowa caucuses and early South Carolina primary in 2016. Instead, his fate is to follow the path of his mentor, Sen. Jim DeMint, who didn’t introduce a single piece of major legislation.

In that vein, I’m already awarding him the Jim DeMint Award for Most Humorless, Least Productive Senator. I think Cruz will earn it more than President Obama did his Nobel Peace Prize.

Following his defeat over legislation that would close the “gun show” loophole; stalled immigration reform, and a setback over FAA funding in the automatic spending “sequester,” President Obama is facing a torrent of media criticism that he’s lost his “juice.”

And indeed the president has gone into one of his periodic funks, where he seems to retreat into a cocoon before emerging aggressively, as he did in September 2011, following the debt ceiling debacle.

This blog has repeatedly criticized this president’s leadership—the complaints about “detachment” and “aloofness” are justified. And so is his apparent lack of interest in follow-ups and “sweating the details.”

But now, he’s up against a stone wall of Republican intransigence. Just six months after his comfortable reelection, when the GOP was supposed to do some serious soul searching, congressional Republicans have dug in even deeper and appear determined to never let him get his way.

In a revealing piece last week in Politico, Jake Sherman wrote of a “House in Chaos”:

The House simply isn’t interested in the agendas being pushed by the president and Democratic Senate. Most Republicans aren’t looking for a big legislative push on gun control. GOP leaders are skeptical that they can arrive at a framework to negotiate a budget agreement with Senate Democrats. And tax reform and an immigration overhaul, while broadly supported, are still seen as long shots.

The biggest stumbling block, Sherman wrote, is the Tea Party faction, “stiff ideologues who didn’t extract any lesson from Mitt Romney’s loss and are only looking to slash spending and defund President Barack Obama’s health care law at every turn.”

Is it any wonder the president has stopped talking to House Speaker John Boehner?

House Republican leaders give press conference in April. Photo: Flickr Creative Commons/republicanconference.

And though the Senate looks more amenable to bipartisan compromise, leadership there is also playing hardball, as Paul Brandus reported in The Week:

…Senate Minority Leader Mitch McConnell — whose most fervent hope was that Obama would be a one-term president—now knows with absolute certainty that Obama will be gone in three-and-a-half years.

In fact, the Kentucky senator has less incentive to deal now than ever before, because there’s a good chance that Republicans will win the Senate next year.

McConnell, of course, is running for reelection in 2014 and doesn’t want to face a Tea Party primary challenge.

Then there are the Republican presidential hopefuls for 2016—Senators Rand Paul, Marco Rubio, and Ted Cruz. Rubio already has stuck his neck out for immigration reform, so he’ll have to shore up his base on everything else. And Cruz especially, but also Paul, have turned obstructionism into an art form.

Am I being unfair? Listen to what Sen. Pat Toomey (R-Pa.) said after his proposed expanded background checks bill failed to get 60 votes:

“In the end it didn’t pass because we’re so politicized. There were some on my side who did not want to be seen helping the president do something he wanted to get done, just because the president wanted to do it…”

Just because the president wanted to do it. Doesn’t that say it all? If President Obama supported Medicare vouchers, tax cuts for the top 1% and allowing prayer in school again, he might have trouble getting 60 votes in the Senate.

The truth must be told: A huge number of Republican voters simply hate this president with a passion and they would rather lose than give him any victory. You’re never going to win over people like this, no matter how many cocktail parties and make-nice dinners you throw. The president needs to accept that and act accordingly if he wants to salvage his second term.  

Nearly five years after the fall of Lehman Brothers, global free market capitalism is still struggling.

Europe is mired in recession and a debt crisis; some of its countries are in depression. The UK has entered a “triple-dip” recession. Once-hot emerging markets like Brazil are treading water, and even China’ growth is slowing dramatically.

The U.S. economy looks good only in comparison. But our economy has never really recovered from the housing boom and bust. Indeed, it’s never been the same since the dot.com crash of 2000. Consider:

• Nearly six million manufacturing jobs were lost in the 2000s.

• “From 2000 to 2010, median income in the U.S. declined 7% after adjusting for inflation,” The Wall Street Journal reported, calling it “the worst 10-year performance in records going back to 1967.” And the spread between the wealthiest Americans and the rest of us has widened considerably .

• As of March, the total number of unemployed, underemployed and those who had stopped seeking work was 22 million, 13.8% of the labor force, about twice the number of those officially unemployed.

Even more worrisome, the belief in upward mobility—the core of the American Dream—is eroding among the middle class, a recent National Journal survey indicated, as reported by MarketWatch:

“People are not really asking the Ronald Reagan question anymore — Are you better off than you were for years ago? — because they don’t expect to be,” said Ronald Brownstein, editorial director for National Journal…“Not falling through the floor is the new getting ahead.”

So, is the U.S. economy no longer able to “deliver the goods” for a growing number of Americans? Has free-market capitalism itself reached its limits?

I would say yes to the first question but no to the second.

Rembrandt’s masterpiece, “The Night Watch,” painted in 1642, the height of the Golden Age of Dutch capitalism. (Displayed in Rijksmuseum, Amsterdam). Source: Flickr/Ellis Art History.

Despite its many flaws, free-market capitalism is still the best path to prosperity and well-being the world has ever seen. It has brought hundreds of millions of people out of poverty, improved health and  raised living standards dramatically.

But capitalism, as Joseph Schumpeter observed, is a dynamic system given to wrenching changes. As its process of “creative destruction” unfolds, it supplants industries, regions, whole populations, while creating new opportunities for others. Unquestionably some people get left behind, but historically it has helped many, many more than it has destroyed.

In a recent book, the UCLA historian Joyce Appleby called capitalism “the relentless revolution.” Far from inevitable, capitalism was, Appleby wrote, “a startling departure from the norms that had prevailed for 4,000 years.”

Capitalism first took root among the Dutch merchant class and transformed the 17th Century Netherlands into a global trading and naval power. That wealth created Amsterdam’s Golden Age of art and tolerance for Jews and other refugees.

Photograph of a chemical plant in Widnes, England in the late 19th Century. Source: WikiMedia Commons.

Capitalism really picked up steam in England, whose industrial revolution upended the bucolic countryside and drove displaced farmers into England’s “dark satanic mills,” in William Blake’s memorable phrase. But it made Great Britain the dominant power for more than a century.

It has reached its apotheosis in America, whose individualist culture and Constitution were an ideal fit. The innovation and ingenuity of American capitalism let us surpass Britain, gave opportunities to millions of immigrants, and helped defeat imperial Japan, Nazi Germany, and Soviet communism.

But now, our production and job-creation engine has stalled. Why?

America enjoyed a monopoly from 1945 to 1973. Germany and Japan were destroyed, and France and the UK were on their backs. The Cold War military build-up and the construction of the interstate highway system created the greatest middle-class consumer society in history.

But foreign competition emerged in the 1970s, as Germany and Japan came back strongly. Computer technology gave companies new tools to measure and enhance efficiency. Meanwhile, the shareholder revolution of the 1980s made managements focus almost exclusively on profitability. That broke the “social compact” of previous generations.

Eventually, China became the manufacturing capital of the world (although higher costs there are now driving production elsewhere). In the past three decades, nearly 700 million Chinese have emerged from poverty and into the working and middle class, probably the greatest transformation of its kind in human history.  It’s also happening in other Asian nations and starting in Africa.

So, to some degree, Americans are paying the price for the prosperity that capitalism is bringing everyone else.

Many opportunities remain here, but not the kind that existed in “Leave it to Beaver” America. We all need to work harder, keep up with emerging technologies, and innovate in our careers as well as in business. 30-years-and-a-gold-watch is gone for good.

The new environment requires flexibility and entrepreneurship, plus a willingness to keep learning and growing. Smart public policy would help, too, but I can’t be optimistic about that, given the poisonous polarization in Washington.

 “Change or die” has been capitalism’s motto since it emerged from the Dutch herring trade four centuries ago. It’s a good motto for us all now. Welcome to the New Normal.

President Obama was on the defensive during much of Tuesday’s White House press conference, but he pushed back at NBC’s Chuck Todd’s question about worries over implementation of the Affordable Care Act.

…For the 85 to 90 percent of Americans who already have health insurance, they’re already experiencing most of the benefits of the Affordable Care Act even if they don’t know it.

So all the implementation issues that are coming up are implementation issues related to that small group of people, 10 to 15 percent of Americans,..who don’t have health insurance right now.

And what we’re doing is we’re setting up a pool so that they can all pool together and get a better deal from insurance companies…That’s it. I mean, that’s what’s left to implement, because the other stuff has been implemented and it’s working fine.

If only it were that easy.

A couple of weeks ago, retiring Sen. Max Baucus (D-Mont.), who was instrumental in drafting health care reform, warned Health and Human Services Secretary Kathleen Sebelius that implementation could be a “huge train wreck.” Proposed insurance exchanges are slated to open in October.

President Obama answers questions at an April 30th White House press conference. Source: YouTube/whitehouse.gov.

Politico reports that “Democrats are worried now — about the messaging and the mechanics of the rollout”:

“I’m concerned — because we did take substantial criticism for putting this plan in place — that it achieve its true purpose,” said Rep. Lloyd Doggett of Texas. “There’s so much work to do in such a short period of time.

And there’s good reason for concern, John Harwood reported in The New York Times:

Among the complex imperatives: pushing reluctant states to set up insurance marketplaces and expand Medicaid programs, keeping an eye on insurance companies as they issue new rate schedules, measuring the law’s effects on small-business hiring, and coaxing healthy young people to buy coverage so the system works economically for everyone else.

Only about half of the states have indicated that they will expand Medicaid under the law, a central ingredient for the goal of providing coverage to those now uninsured.

Of course, many states that haven’t expanded Medicare are run by Republican governors. The GOP sees little political advantage in helping make the law work.

And already some of the law’s quirks are actually driving premiums up, by 25-50% in some states.

Daniel Kessler of Stanford and the conservative Hoover Institution laid out a litany of possible woes for Obamacare in Tuesday’s Wall Street Journal:

The unpopular health-care law’s rollout is going to be rough. It will also administer several price (and other) shocks to tens of millions of Americans.

..Around six million of the 19 million people with individual health policies are going to have to pay more—and this even after accounting for the government subsidies offered under the law.

I estimate that another 10 million people, the approximately two-thirds of the market that is low- or average-risk, will see higher insurance bills for 2014.

 In total, it appears that there will be 30 million to 40 million people damaged in some fashion by the Affordable Care Act—more than one in 10 Americans.

On Tuesday, the president assured the nation that “we are pushing very hard to make sure that we’re hitting all the deadlines and the benchmarks.”

That’s hardly reassuring from a president whose follow-through often has fallen short of his lofty rhetoric. Given the difficulties in getting his second-term agenda through Congress, President Obama’s place in history may rest on the success or failure of health care reform.

That’s why this time he needs to sweat the details and be prepared to sell health care reform yet again.