“Efforts To Reposition Themselves”: Can Republicans Create Their Own Credible Economic Populism In Time For 2016?
When Republicans trooped to Iowa over the weekend for Steve King’s “Freedom Summit,” it was as much of a dash to the right as you would have expected from an event hosted by perhaps the most fervently anti-immigrant member of Congress, in a state whose presidential caucus was won by Rick Santorum in 2012 and Mike Huckabee in 2008.
But something else was going on, even there: the search for an economic populist message that might resonate with the general electorate.
Republicans haven’t yet figured out how to present this message, or exactly what policy proposals it ought to be based on. But they’re obviously trying. Here’s part of the New York Times’ report from the event:
A few candidates advanced a concern about income inequality that is percolating within the party, discussing wage stagnation, an issue that has largely belonged to Democrats. Mr. Christie spoke of the anxiety of the middle class. He said that any Republican coalition needed to include the “proud yet underserved and underrepresented working class in this country.”
“The rich are doing just fine,” Mr. Christie said.
Rick Santorum, the winner in the 2012 Iowa caucus, noted that for years Republicans had extolled entrepreneurs and business owners, adding that it made more sense politically to “be the party of the worker.”
“What percentage of American workers own their own businesses?” he asked. “Less than 10.”
Former Gov. Mike Huckabee of Arkansas, who won the 2008 caucus here, stressed that the falling unemployment rate did not represent an economic recovery for many people. “A lot of people who used to have one good-paying job with benefits now have to work two jobs,” he said.
You may notice that none of these critiques are about Barack Obama, unless you’re arguing that he failed to make things better. That’s because when you start to talk about persistent economic anxiety, you inevitably reach back beyond this administration to problems that developed over decades. Santorum’s message is perhaps the most bracing for Republicans to hear; after years of holding up business owners as the most virtuous and admirable among us, the ones for whose benefit all government policy should be made, it would be awfully difficult for Republicans to decide that bosses aren’t the ones they should be advocating for.
And of course, Democrats are going to do what they can to make any populist turn impossible for Republicans. President Obama and his congressional allies will be releasing a steady stream of executive actions and new proposals on things like paid sick leave, boosting overtime pay, and other measures, which Republicans will inevitably oppose, leaving them arguing against benefits for workers.
Which is why it’s important for Republicans to have their own policy proposals if they’re to convince voters that they’re the ones to trust on economics. Republican arguments used to always be about growth, as though that were all that mattered: cut taxes and regulations, the economy will grow, and we’ll all live happily ever after. But with the economy growing steadily and economic anxiety persisting, they have to argue that growth is not enough.
The current Republican efforts to reposition themselves on economic questions remind me a little of how Democrats used to talk about national security before the Iraq War went south and discredited Republican wisdom on the issue. Democrats were always defensive about it, and when they tried to come up with a new message for whatever campaign was looming, the point was never to win the argument over national security. They just wanted to minimize the damage the issue could do to them, or at best, fight to a draw so that the election would hinge on issues where they were stronger.
If Republicans are to do that now on economics, it isn’t a bad start to say their focus has to shift to what people who aren’t wealthy or business owners (or both) care about. Now they just have to come up with an answer to this question: Okay, so what are you going to do about it?
Many Republicans would probably prefer to stick to a populism without economics, one that uses issues like immigration or the latest culture war flare-up to convince voters that Democrats are part of a hostile “elite,” while the GOP is the party of the common man and woman. This has certainly worked before. But the problem for them is that they are now on the wrong side of majority opinion on many of those cultural issues. Which only means that, when it comes to their new-found economic populism, there will be, if anything, more pressure to get specific.
By: Paul Waldman, Senior Writer, The American Prospect; The Plum Line, The Washington Post, January 27, 2015
“Deliberate And Systemic”: Inequality Isn’t Inevitable, It’s Engineered. That’s How The 1% Have Taken Over
Who will look after the super-rich and think about their needs? It’s not easy for them: the 1% of the world’s population who by next year will own more global wealth than the 99%. Private security costs a fortune, and with the world becoming an increasingly unequal place a certain instability increases. It could be dangerous!
Very smartly, Oxfam International is raising such questions at the World Economic Forum at Davos, where the global elite gather to talk of big ideas and big money. Oxfam executive director, Winnie Byanyima, is arguing that this increasing concentration of wealth since the recession is “bad for growth and bad for governance”. What’s more, inequality is bad not just for the poor, but for the rich too. That’s why we have the likes of the IMF’s Christine Lagarde kicking off with warnings about rising inequality. Visceral inequality from foodbanks to empty luxury flats is still seen as somehow being in the eye of the beholder by the right – a narrative in which poverty is seen as an innate moral failure of the poor themselves has taken hold. This in turn sustains the idea that rich people deserve their incredible riches. Most wealth, though, is not earned: huge assets, often inherited, simply get bigger not because the individuals who own them are super talented, but because structures are in place to ensure this happens.
Most of us – I count myself – are economically inept. The economic climate is represented as a natural force, like uncontrollable weather. It’s a shame that the planet is getting hotter, just as it’s a shame that the rich are getting richer. But these things are man-made and not inevitable at all. In fact, there are deliberate and systemic reasons as to why this is happening.
The rich, via lobbyists and Byzantine tax arrangements, actively work to stop redistribution. Inequality is not inevitable, it’s engineered. Many mainstream economists do not question the degree of this engineering, even when it is highly dubious. This level of acceptance among economists of inequality as merely an unfortunate byproduct of growth, alongside their failure to predict the crash, has worryingly not affected their cult status among blinkered admirers.
Even the mild challenge of Thomas Piketty, with his heretical talk of public rather than private interest being essential to a functioning democracy, is revolutionary in a world which buys the conservative idea that the elixir of “growth” simply has to mean these huge extremes in income distribution.
That argument may now be collapsing. The contortions that certain pet economists make to defend the indefensible 1% are often to do with positing the super-rich as inherently talented and being self-made. The myth is that everyone is a cross between Steve Jobs and Bono; creative, entrepreneurial, unique. The reality is cloned inherited wealth and insane performance-related pay, eg the bankers who continue to reward themselves more than a million a year after overseeing the collapse of the industry.
There are always those who will side with the powerful against the powerless, and economists specialise in this. No wonder Prof Gregory Mankiw’s Harvard students walked out of his class following his ludicrous insistence that the system is not gamed for the rich. Such “theorists” flatter the rich by granting them some superpower, which is why they like rock star comparisons. In fact, international finance is peopled by interchangeable guys who are essentially just paying themselves double what they were 10 years ago. They may need to think of themselves as special. We don’t have to.
When we talk of neoliberalism, we are talking about something that has fuelled inequality and enabled the 1%. All it means is a stage of capitalism in which the financial markets were deregulated, public services privatised, welfare systems run down, laws to protect working people dismantled, and unions cast as the enemy.
Oxfam’s suggestions at Davos are attempts to claw back some basic rights, with talk of tax, redistribution, minimum wages and public services. But isn’t it rather incredible that a charity has to do this? The Occupy movement has dissipated, but we are seeing in Europe, primarily in Greece and Spain, a refusal to accept the austerity narrative that we appear to have wolfed down here in the UK.
Oxfam can appeal to the vanity of billionaires, but the truth is that’s not enough. The neoliberal project may fail not because of huge protest, but because reduced income means reduced demand. Never mind the angry proletariat, a disappointed middle-class is something all politicians fear. To stem inequality, it is imperative to stop seeing it as inevitable. It’s a choice. A choice very few of us have any say in. The poor are always with us. And now the deserving and undeserving super-rich are too? That’s just the way things are? No. This climate can also change.
By: Suzanne Moore, The Guardian, January 20, 2015
“Bold Moves”: Obama’s State Of The Union Address Offered An Ambitious Vision To Address Income Inequality
I don’t know what President Barack Obama is eating, drinking or smoking these days but someone should give some of it to every Democrat in Congress. Since the midterm election debacle, the president has unleashed enough bold policy initiatives to choke a horse. Some progressives wonder why it took so long for the president to push a populist agenda. My take is that late is better than never.
Last night in his State of the Union speech, the chief executive proposed a version of the “Robin Hood” tax which would provide tax credits and tax cuts to struggling middle-class families at the expense of the wealthy Americans who have reaped most of the benefits of the economic recovery. Previously the president signed a presidential memorandum that would provide federal employees access to paid sick leave to care for a new child and proposed a program that would allow students to attend two years of community college, tuition free.
In addition to his initiatives to combat income inequality, the president took executive action that eased deportation for undocumented immigrants and opened the door for diplomatic and economic relations with Cuba.
But Obama’s tax proposal is a turning point in recent American political history. He has boldly gone where no Democratic president of this generation has gone before. Since the days of Ronald Reagan, Democrats have been on the defensive on tax issues. Republican presidents have proposed tax cuts for wealthy Americans, and Democrats simply reacted and tried to mitigate the damage to working families. Last night the president played offense and proposed tax credits and tax cuts that will help hard-working, middle-class families finally get a piece of the economic recovery.
This is how the president framed the issue last night. “Will we accept an economy where only a few of us do spectacularly well? Or will we commit ourselves to an economy that generates rising incomes and chances for everyone who makes the effort?” Americans are concerned about income inequality. In a new Washington Post-ABC News poll, a majority of people said the income gap between rich and poor is a major problem.
Republicans predictably lambasted the president’s proposal. But the president’s initiative placed the burden on congressional Republicans to explain why they won’t cut taxes for middle-class families. Most congressional Democrats favor the idea of middle-class tax relief. But even some of those Democrats are not enthusiastic since they know the proposal will die a quick death on Capitol Hill. Nevertheless, Obama is looking at the big picture, which is the need to rise above the debate on the federal budget deficit and discuss taxes in terms favorable to working families and his party.
The best thing about the president’s activism is that his job rating has increased significantly while he has been laying it out on the line for the last two months. The Washington Post-ABC News poll also shows that for the first time in a long time, there are more Americans who approve (50 percent) of the president’s performance than there are who disapprove (44 percent).
Obama used his State of the Union address to create an environment for a serious national discussion of the pernicious effects of income inequality. Occupy Wall Street put the income equity problem on the table, and last night the president made it the main course. The president may have created his legacy last night.
By: Brad Bannon, U. S. News and World Report, January 21, 2015
“The Biggest, Most Important 2016 Debate”: Writing The Obituary Of Supply-Side Economics
It’s now shaping up that wages and the condition of the middle class are going to be the dominant issues as we enter this first phase of the 2016 slog. Don’t take it from me, or even from Elizabeth Warren. Speaker John Boehner said as much (well, almost) on the day he opened the new session of Congress.
This is a very big deal, and it’s about more than our usual, tug-of-war politics. Boehner’s mention of wage stagnation was clearly opportunistic, because it’s a current problem that can be hung around the President’s neck. But middle-class wage stagnation is much more than an Obama problem. It’s our main economic reality for 30-plus years now.
The first chart in this article tells the basic story. Since 1979, American workers’ productivity has increased by 80 percent. The income of the top 1 percent has increased 240 percent. And the average American wage, adjusted for inflation, has gone up just a few percentage points, maybe 8 percent. It wasn’t always this way, and it isn’t nearly this bad in other advanced countries. The median wage in the United States today is around $50,000. If wages had kept pace with productivity gains, the median wage would be more than $90,000.
But look: It’s highly serendipitous that the wage problem is something the Republicans can use against Obama (at least for now). That means they’ll talk about it. What they’ll come up with in terms of solutions beyond tax cuts and deregulation is another matter, but the mere fact that they’ll talk about it means that both parties will be talking about it, and when both parties are talking about an issue, that issue tends to rise to the top of the charts.
On paper at least, this is great for Democrats, because wage stagnation is basically a Democratic issue, one that most voters would probably trust the Democrats to do a better job on than Republicans. Although of course, if it comes to be October 2016 and wages are still as flat as they’ve been since the crash, that could be a problem for the Democrats. So what they need to do is frame wages not as a post-crash, Obama-era problem, but instead to make sure Americans know that this is a deep historical problem, and that the moment to address it is right now.
To that end, you should know that this past week was a really good one for progressive economics in Washington (and none of it had anything to do with Warren!). Two major proposals were floated to address these problems. They’re real and meaty. And if events go in the direction I hope they do, their release in mid-January 2015 will be remembered as the moment when the debate turned.
First, on Monday, Democratic Rep. Chris Van Hollen of Maryland put out a report by the Democratic staff of the House Budget Committee called “An Action Plan to Grow the Paychecks of All, Not Just the Wealthy Few.” All right, a bit cumbersome as a title. But give it credit anyway for getting to the point.
“I sat down with our team many months ago,” Van Hollen told me Thursday, “and we began to really tackle what would need to be done to deal with wage stagnation.” The plan is built around nine ideas. The one that’s gotten the most attention because of the obvious “class warfare” angle is the so-called Wall Street tax, a fee of .1 percent on financial market transactions.
But there are much more interesting ideas in the paper. The most notable may be a limit on the amount of deductions corporations can take for executive pay if those executives are keeping wages stagnant or laying off workers. “From 2007 to 2010,” Van Hollen says, “corporations took $66 billion in deductions on executive pay. That’s a huge amount of money. We say here that if you want to take a tax deduction, you’d better be giving your employees a raise.”
Van Hollen unveiled his proposals at the Center for American Progress on Monday. Then, two days later, CAP president Neera Tanden led a press conference unveiling a major new report on inclusive prosperity, under a panel co-chaired by Larry Summers and Ed Balls, the shadow chancellor of the exchequer for the British Labour Party. The CAP plan, which Tanden stressed is international in the scopes of its analyses and proposed fixes (hence Balls’s inclusion), is aimed at the same basic problem Van Hollen is shooting at—the need to raise the incomes of the middle class.
Summers, speaking at the press conference, emphasized an issue he’s been talking up for a long time, a “very substantial” increase in infrastructure investment. “When we can borrow at 1.8 percent in our own currency, and when construction unemployment approaches double digits,” as it is now, Summers said, “that’s the moment when Kennedy Airport should be fixed.”
No one is under the illusion that John Boehner and Mitch McConnell are going to rush out and pass these measures. That isn’t the point. The point is to influence the direction of the debate, especially the presidential campaign debate. And that, of course, raises the question of the extent to which a certain former senator and secretary of state will embrace these ideas. Tanden was a longtime Hillary Clinton staffer. The imprimatur of Summers on these progressive ideas should raise Clinton’s comfort level with them. If Clinton runs on half of these ideas, and she’s signaling that she might, she’ll be a more progressive candidate than she was in 2008.
It’s hard to believe that we’ve lived with this kind of wage picture, this kind of raging unfairness, for nearly 40 years. Of course, part of the reason that we have lived with it for 40 years is that the Democratic Party wasn’t always much good at articulating a theory of economic growth that could counter the Republicans’ trickle-down argument. They’re finally finding their voice on this. And so, the real importance of the next election is not the Supreme Court, not climate change, not foreign policy, crucial as all those things are. It’s that it could write the obituary of supply-side economics.
By: Michael Tomasky, The Daily Beast, January 17, 2015
“MLK’s Prophetic Call For Economic Justice”: This Country Has Socialism For The Rich, Rugged Individualism For The Poor
The Rev. Martin Luther King Jr.’s economic message was fiery and radical. To our society’s great shame, it has also proved timeless.
As we celebrate King’s great achievement and sacrifice, it is wrong to round off the sharp edges of his legacy. He saw inequality as a fundamental and tragic flaw in this society, and he made clear in the weeks leading up to his assassination that economic issues were becoming the central focus of his advocacy.
Nearly five decades later, King’s words on the subject still ring true. On March 10, 1968, just weeks before his death, he spoke to a union group in New York about what he called “the other America.” He was preparing to launch a Poor People’s Campaign whose premise was that issues of jobs and issues of justice were inextricably intertwined.
“One America is flowing with the milk of prosperity and the honey of equality,” King said. “That America is the habitat of millions of people who have food and material necessities for their bodies, culture and education for their minds, freedom and human dignity for their spirits. . . . But as we assemble here tonight, I’m sure that each of us is painfully aware of the fact that there is another America, and that other America has a daily ugliness about it that transforms the buoyancy of hope into the fatigue of despair.”
Those who lived in the other America, King said, were plagued by “inadequate, substandard and often dilapidated housing conditions,” by “substandard, inferior, quality-less schools,” by having to choose between unemployment and low-wage jobs that didn’t even pay enough to put food on the table.
The problem was structural, King said: “This country has socialism for the rich, rugged individualism for the poor.”
Eight days later, speaking in Memphis, King continued the theme. “Do you know that most of the poor people in our country are working every day?” he asked striking sanitation workers. “And they are making wages so low that they cannot begin to function in the mainstream of the economic life of our nation. These are facts which must be seen, and it is criminal to have people working on a full-time basis and a full-time job getting part-time income.”
King explained the shift in his focus: “Now our struggle is for genuine equality, which means economic equality. For we know that it isn’t enough to integrate lunch counters. What does it profit a man to be able to eat at an integrated lunch counter if he doesn’t earn enough money to buy a hamburger and a cup of coffee?”
Obviously, much has changed for African Americans since that time; anyone who says otherwise is plainly wrong. There is no longer any question of who gets served at lunch counters. Mississippi, where African Americans were once disenfranchised at the barrel of a gun, has more black elected officials than any other state. An African American family lives in the White House.
But what King saw in 1968 — and what we all should recognize today — is that it is useless to try to address race without also taking on the larger issue of inequality. He was planning a poor people’s march on Washington that would include not only African Americans but also Latinos, Native Americans and poor Appalachian whites. He envisioned a rainbow of the dispossessed, assembled to demand not just an end to discrimination but a change in the way the economy doles out its spoils.
King did not live to lead that demonstration, which ended up becoming the “Resurrection City” tent encampment on the Mall. Protesters never won passage of the “economic bill of rights” they had sought.
Today, our society is much more affluent overall — and much more unequal. Since King’s death, the share of total U.S. income earned by the top 1 percent has more than doubled. Studies indicate there is less economic mobility in the United States than in most other developed countries. The American dream is in danger of becoming a distant memory.
This column is not about policy prescriptions or partisan politics. King was a prophet. His role was to see clearly what others could not or would not recognize, and to challenge our consciences.
Paying homage to King as one of our nation’s greatest leaders means remembering not just his soaring oratory about racial justice but his pointed words about economic justice as well. Inequality, he told us, threatens the well-being of the nation. Extending a hand to those in need makes us stronger.
By: Eugene Robinson, Opinion Writer, The Washington Post, January 16, 2015
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