“Why Liberals Have To Be Radicals”: Going After The Grotesquely Concentrated Wealth And Power At The Top
Just about nothing being proposed in mainstream politics is radical enough to fix what ails the economy. Consider everything that is destroying the life chances of ordinary people:
- Young adults are staggered by $1.3 trillion in student debt. Yet even those with college degrees are losing ground in terms of incomes.
- The economy of regular payroll jobs and career paths has given way to a gig economy of short-term employment that will soon hit four workers in 10.
- The income distribution has become so extreme, with the one percent capturing such a large share of the pie, that even a $15/hour national minimum wage would not be sufficient to restore anything like the more equal economy of three decades ago. Even the mainstream press acknowledges these gaps.
The New York Times’s Noam Scheiber, using Bureau of Labor Statistics data, calculated that raising the minimum wage to $15 for the period 2009 to 2014 would have increased the total income for the 44 million Americans who earn less than $15 an hour by a total of $300 billion to $400 billion. But during the same period, Scheiber reported, the top 10 percent increased its income by almost twice that amount.
Scheiber concludes:
So even if we’d raised the minimum wage to $15 an hour, the top 10 percent would still have emerged from the 2009-2014 period with a substantially larger share of the increase in the nation’s income than the bottom 90 percent. Inequality would still have increased, just not by as much.
Restoring a more equal economy simply can’t be done by raising incomes at the bottom, even with a minimum wage high that seemed inconceivable just months ago. It requires going after the grotesquely concentrated wealth and power at the top.
Last week, another writer in the Times, Eduardo Porter, assessed Hillary Clinton’s eagerly anticipated speech on how to rescue the middle class.
Porter’s conclusion? Far from sufficient. He writes:
Mrs. Clinton’s collection of proposals is mostly sensible. The older ones — raising the minimum wage, guaranteeing child care to encourage women into the labor force, paying for early childhood education — have a solid track record of research on their side. The newer propositions, like encouraging profit-sharing, also push in the right direction.
But here’s the rub: This isn’t enough.
Nothing in mainstream politics takes seriously the catastrophe of global climate change. Few mainstream politicians have the nerve to call for a carbon tax.
The budget deadlock and the sequester mechanism, in which both major parties have conspired, makes it impossible to invest the kind of money needed both to modernize outmoded public infrastructure (with a shortfall now estimated at $3.4 trillion) or to finance a green transition.
The economy is so captive to financial engineers that even interest rates close to zero do not help mainstream businesses recover. There is still a vicious circle of inadequate purchasing power and insufficient domestic investment.
The rules of globalization and tax favoritism make it more attractive for companies to assemble products, export jobs and book profits overseas.
To remedy the problem of income inequality would require radical reform both of the rules of finance and of our tax code, as well as drastic changes in labor market regulation so that employees of hybrids such as Uber and TaskRabbit would have both decent earnings and the protections of regular payroll employees.
Congress would have to blow up the sequester deal that makes it impossible to invest money on the scale necessary to repair broken infrastructure and deal with the challenge of climate change.
Politicians would have to reform the debt-for-diploma system, not only going forward, as leaders like Bernie Sanders and Elizabeth Warren have proposed, but also to give a great deal of debt relief to those saddled with existing loans.
Unions would need to regain the effective right to organize and bargain collectively.
This is all as radical as, well, … Dwight Eisenhower. Somehow, in the postwar era, ordinary people enjoyed economic security and opportunity; and despite the economy of broad prosperity, there were plenty of incentives for business to make decent profits. There just weren’t today’s chasms of inequality.
But the reforms needed to restore that degree of shared prosperity are somewhere to the left of Bernie Sanders.
This is one of those moments when there is broad popular frustration, a moment when liberal goals require measures that seem radical by today’s standards. If progressives don’t articulate those frustrations and propose real solutions, rightwing populists will propose crackpot ones. Muddle-through and token gestures won’t fool anybody.
By: Robert Kuttner, Co-Founder and Co- Editor, The American Prospect, July 22, 2015
“How Do You Solve A Problem Like Donald Trump?”: All Media Is Political, Without Exception; Best To Be Honest About It
As Donald Trump has implausibly moved into a tie for first place in the GOP primary, there has been much discussion in media circles about how to treat his candidacy. Most media organizations (including The Week!) have published an inordinate amount of stories about Trump. The Huffington Post, on the other hand, recently announced it would move all coverage of Trump’s campaign to the entertainment section.
This sparked a backlash from some reporters, such as The Daily Beast‘s Olivia Nuzzi, who argued that such a move is an improper delegitimization of the tens of thousands of Trump supporters out there. “[P]olling competitively and being a registered candidate makes him legitimate. End of story,” she wrote on Twitter.
It’s certainly true that The Huffington Post‘s action is a swipe against Trump’s many supporters. But it is also simply impossible for reporters — who are human beings, after all — to avoid some sort of judgment on the legitimacy of a presidential candidate.
As I’ve argued before, normative judgments are inherent to the practice of all but the very simplest journalism. To demand that Trump be covered like any other “legitimate” presidential candidate is to demand that journalists implicitly legitimize his ideas. On the contrary, it is right and proper for publications to decide how they view a candidate’s policy platform and overall persona; signaling that he will be treated like a trashy celebrity is one way of doing that.
I respect The Huffington Post‘s right to make coverage choices as it sees fit. I’m also not sure I agree with the decision to move Trump into the entertainment section. As Matt Yglesias argues, Trump’s highly unexpected success — especially given that it came immediately after he started up with bilious racist rants against Mexican immigrants — suggests there is a fairly wide constituency for gutter nativism. That is an important truth of our politics and our nation that should not just be shrugged off as some carnival sideshow.
Instead of banishing Trump to the land of Kardashians and superheroes, the media would probably be better off simply reporting on Trump with open contempt. His ideas are disgusting and he’s a vicious, racist bully. But it’s not wise to write him — or the ideas that he champions — off as a self-aggrandizing joke. There are a great many people who would eagerly sign on to an immigration-restriction agenda, and Trump would definitely not be the first colossal buffoon elected to the head of a major state.
And that brings me to Bernie Sanders, who has been the subject of multiple comparisons to Trump (including one from my colleague Damon Linker) as representing the two “extremes” of American politics. This, too, is a mistake by the media.
We’re all grasping for ways to deal with this brainless, hate-spewing hurricane who has somehow managed to attract the support of tens of thousands of Americans in spite of — actually, let’s be honest: because of — his hateful racism. Just as The Huffington Post‘s decision to write Trump off as “entertainment” is understandable, so too is the media’s search to find Trump’s polar opposite on the left in order to give some context to this flagrantly foolish carnival barker.
But to compare Sanders, a serious person with serious ideas, to a clown who rants about how Mexicans are mostly criminals and rapists, is inherently delegitimizing. Putting Trump in the entertainment section makes The Huffington Post‘s perspective clear. So does grafting Trump to Sanders — but in a backhanded and cheap way that’s unfair to the socialist senator from Vermont.
Trump’s racist views do have the support of a substantial minority. But Sanders’ agenda is far more popular. About three-quarters of Americans support raising the minimum wage to $10.10. Social Security is likely the most popular government program of all time — and 82 percent would raise the payroll tax across the board to keep it solvent. Sixty-eight percent support increasing taxes on the rich.
Now, that is not to rule out all positive coverage of Trump, or negative coverage of Sanders. Conservative publications will do both, no doubt, as is their right. The point is that coverage should be grounded in a clear normative view, not some faux-omniscient view from nowhere. All media is political, without exception. Best to be honest about it.
By: Ryan Cooper, The Week, July 20, 2015
“Thoughtful And Forward-Looking Policymaking”: Why The 2016 Candidates Ignore The Sharing Economy At Their Own Peril
Before Hillary Clinton gave her big economic speech on Monday, a rumor spread through the tech journalism world: Clinton was about to attack Uber! Based on a passing mention in a Politico article previewing the speech, tech sites played up the rhetorical blitzkrieg to come. “Presidential candidate Hillary Clinton will blast contractor-fueled companies for repressing middle-class wage growth,” said Techcruch. Even after she delivered the speech and there was no actual attack on Uber, articles continued to describe her anodyne remarks about the rise of the sharing economy as a “blast,” a “diss,” and even a declaration of war.
As it happens, Clinton raises an issue that more presidential candidates ought to talk about. We don’t yet have much idea of what she would actually do about the transformations in the economy that are taking place, but we ought to press her and the other presidential candidates, Democratic and Republican, for more specifics.
For the record, here’s what Clinton actually said on this topic, in its entirety:
Meanwhile, many Americans are making extra money renting out a small room, designing websites, selling products they design themselves at home, or even driving their own car. This on-demand, or so-called gig economy is creating exciting economies and unleashing innovation. But it is also raising hard questions about workplace protections and what a good job will look like in the future.
Seldom have I witnessed a political attack of such merciless cruelty.
But here’s the point: In many ways, public policy on the workplace is organized around the way things used to be, when people hoped that they could stay with one employer for their entire career, and that employer would provide them a panoply of benefits including health insurance, paid vacations, and a pension. Today, more and more Americans are cobbling together a living from multiple sources. And even many who aren’t working for a technology-based company like Uber are doing hourly work that makes scheduling their lives exceedingly difficult and doesn’t come with any benefits at all.
Depending on what sort of situation you can put together, it’s possible for that kind of work to offer more rewards than the traditional 9-to-5 job. But for millions, the contemporary American workplace is characterized by insecurity: insecurity that they’ll have enough work this month to pay their bills, insecurity that they’ll be able to put anything away for retirement, insecurity that an illness or family crisis won’t send them into a financial tailspin from which they can’t recover.
So what can government do? Up until now, Democrats have been offering piecemeal proposals that try to ameliorate that insecurity from one angle or another, trying to get people better wages and treatment. All Democrats want to increase the minimum wage. The Obama administration is updating the rules on overtime so more workers can be paid adequately for the extra hours they work. The Affordable Care Act finally made health insurance at least somewhat portable, so that “job lock” — in which you can’t leave your job for fear that you won’t be able to get covered — is a thing of the past. They’re now pushing for mandatory paid sick leave. But most measures like these concern how traditional workers relate to traditional employers.
Republicans, on the other hand, generally look at the state of the workplace today and say, “What’s the problem?” They oppose raising the minimum wage, objected to updating the overtime rules, don’t want employers to have to offer paid sick leave, and of course find the ACA to be a Stalinist nightmare of oppression. They love to fetishize Uber because it fights with entrenched taxi unions (and because they hope it will make them seem young and hip), but don’t have any particular ideas to help workers adapt to the new world.
There are ideas out there; for instance, Nick Hanauer and David Rolf recently proposed that the government create a Shared Security Account that would work something like Social Security, but provide a means to pay for things like vacations and sick leave. Critically, it wouldn’t be at the whim (or under the control) of anyone’s employer, but would travel with workers whether they worked for General Motors, waited tables at the local diner, or did odd jobs for TaskRabbit (I interviewed Hanauer about it here).
That’s just one idea, and hopefully people will come up with others. But we deserve a debate on how as a country we can adapt to the evolution of work in ways that both maximize the benefits of the changes that are taking place and minimize the number of people getting steamrolled by them. The economy needs innovation and disruption, but it also needs thoughtful and forward-looking policymaking. That may be a lot to expect from presidential candidates. But it doesn’t hurt for us to ask.
By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Week, July 15, 2015
“Hey, Middle Class; Hillary Gets It”: Linking The Concepts Of Fairness And Growth
Here’s one thing I’m sure of about the economic speech Hillary Clinton gave Monday morning at the New School: If a relatively unknown Democratic governor of Illinois or Michigan were running for president, and he gave the speech Hillary Clinton gave Monday morning at the New School, rank-and-file liberals would be turning rapturous cartwheels. She correctly identified the central economic problem of our time; she talked very clearly about the kinds of solutions she’d pursue to address it; she even tossed a few threats in Wall Street’s direction.
The problem is the wages of middle-class workers. The solutions are varied but boil down to a range of policies that would do two things: one, give corporations incentives to share profits and think less about short-term profit-maximization; two, help middle-class families meet the life expenses (college tuition, day care, etc.) that have increased greatly over the last 20 years while wages have remained stagnant. And as to Wall Streeters who gamble with middle-class people’s money, she said, “We will prosecute individuals and firms” who do so. She used the word “criminal” in this context more than once.
My hypothetical governor giving exactly this speech would be showered with liberal praise. But Clinton says it, and it’s like so what. She faces too much distrust from liberals over her past centrism; and for the moment everybody’s all Bernie Bernie Bernie. And that’s all fine. Sanders is fun and sometimes exhilarating, and a primary contest needs a candidate who can speak the unvarnished truth.
But it’s the speakers of varnished truth who usually win presidential nominations, and Clinton is at least 90 percent likely to win this one. And as varnished truths go in Democratic presidential politics, Clinton’s are about as liberal as any liberal could reasonably hope for. There’s an art to taking it right up to line, but not an inch past, and she’s doing that.
One way of testing whether proposals have any ideological bite to them is to imagine whether anyone from the other party could put them forward. Everyone can and will say they want to help the middle class. But how? Jeb Bush says with 4 percent growth into infinity. First of all this is a big fat lie of a promise, and he’s surely smart enough to know he’s lying. From 1975 to 2014 (for 40 years), annual GDP growth in the United States averaged 2.79 percent, according to World Bank data (the stuff I used came in the form of an Excel spreadsheet, so there’s no URL, but Google something like “Real Historical Gross Domestic Product” and you’ll find it). So it doesn’t happen. The best years of sustained GDP growth we’ve ever had were under—yep—Bill Clinton, but even in the late 1990s, we had only four straight years of plus-4-percent growth, and that’s a modern record (there was a three-year run under Ronald Reagan from 1983-1985).
So it’s a lie, number one, but more importantly, it means nothing as a measure. No, actually, it means something, and what it means is toxic: It means that if we actually do experience growth at 4 percent but without taking any of the ameliorative measures Clinton is talking about, the main impact of that growth will be to give us more inequality, more wage stagnation, more corporate profit-hoarding, more stock buybacks, and more roulette-wheel banking. Bush’s is a flawed way of looking at the economy, and this is a very old point of contention between right and left; As Robert Kennedy once said, GDP “measures everything, in short, except that which makes life worthwhile.”
Clinton is talking about growth too, but she’s emphasizing equitable growth. And she puts forward numerous proposals that no Republican would touch, from raising the minimum wage—remember, Bush wants no federal minimum wage—to strengthening unions to offering paid family leave to cracking down on employers who misclassify workers as contractors to expanding on Dodd-Frank to endorsing the Buffett Rule, which applies a minimum effective tax rate of 30 percent on earners north of $1 million.
She left a lot of the details for later, and she was fuzzy here and there—she was noncommittal on trade, and it will be interesting to hear what “defending and enhancing” Social Security actually means.
But for now, it’s enough that she’s linking the concepts of fairness and growth and that she’s making that link the centerpiece of her economic agenda. This is important because until very recently, the economics profession hasn’t regarded fairness as anything it should care about. But that has begun to change. This was the big question in my mind last year as I contemplated Clinton’s candidacy last year. Believe me, I had no small amount of doubt about how aggressively she’d embrace the equitable growth proposition. I’d say she’s answered my questions. Last year, on her book tour, she pooh-poohed paid family leave. Now it’s a centerpiece of her platform.
It’s still going to take time for liberals to believe this, and of course some never will. This is where Clinton still has some work to do. When it comes to economics, liberals don’t really want to hear policy proposals. They want to hear FDR-style attacks on the economic royalists. This is not something Clinton is known for, to put it mildly. I don’t think anyone expects her to be Elizabeth Warren, but in her own way, she has to go there, especially when you consider that she might become the wealthiest president in modern times.
This, from the speech, started moving in that direction, and it’s the first time I recall her talking like this: “And while institutions have paid large fines and in some cases admitted guilt, too often it has seemed that the human beings responsible get off with limited consequences—or none at all, even when they’ve already pocketed the gains. This is wrong and, on my watch, it will change.”
Maybe if she keeps this up and the royalists start attacking her, and she stands her ground, the Warrenites will finally come around. In the meantime, liberals ought at least to recognize that the old cautious Hillary they have in their minds would never have gone this far this fast.
By: Michael Tomasky, The Daily Beast, July 14, 2015
“Scott Walker Gets Schooled By His Neighbor”: Minnesota Governor Walloping Walker’s Wisconsin In Terms Of Economic Growth
Wisconsin and Minnesota share a common cultural heritage that until recently included a healthy Midwestern strain of progressive politics. Elected in 2010, Governor Scott Walker upended a hundred years of liberal populism, charting a conservative path for Wisconsin that made him a darling of the Republican Right, but left his state with a serious budget shortfall and disappointing job growth.
Meanwhile, across the border in neighboring Minnesota, Governor Mark Dayton has relentlessly pursued liberal policies, embodying the tax-and-spend Democrat that Republicans love to caricature. The result, surprising to many, is that the Minnesota economy is going gangbusters while Wisconsin’s job growth has fallen to 44th among the 50 states.
Dayton’s success steering his state’s progressive course has been a surprise. He was a middling senator at best, serving a single term from 2001 to 2007 before returning to Minnesota disillusioned with the way Washington operated. Time named him one of America’s “Five Worst Senators” in 2006, and he was known mainly for his inherited fortune as the great-grandson of the founder of Dayton’s department store, which became Target. As senator, he donated his salary to underwrite bus trips to Canada for senior citizens buying low-cost prescription drugs.
“Minnesota’s gains are not because Mark Dayton has overpowered the state with his political acumen,” says Lawrence Jacobs, a political science professor at the University of Minnesota. He describes the low-key Dayton as the “anti-politician,” someone the voters trust because he’s not smooth enough to fool them. “His skill is he has a clear agenda, and he’s unyielding. This is not pie-in-the-sky Great Society adventurism.”
Dayton has a majority Democratic legislature just as Walker has a Republican controlled legislature, bolstering the ongoing policy experiment in their states. The two governors have pursued agendas that mirror their respective party’s core beliefs, and the results so far suggest that the starve-the-government, tax-cutting credo of conservative orthodoxy has run its course.
Dayton has raised the minimum wage, and he’s significantly increased taxes on the top 2 percent of wage earners to close a budget shortfall and to raise money for investments in infrastructure and education. In the legislative session that just ended, some Democrats joined with Republicans to block his goal of expanding universal preschool. But he did get more scholarship money to educate 4-year-olds.
“This is the largest tax increase we’ve seen in Minnesota, over $2 billion,” says Jacobs. More than three-quarters of the new spending is on education, compared to Wisconsin, where education is on the chopping block, and Walker is at odds with professors and administrators alike at his state’s flagship university system.
Minnesota has also passed the state’s version of the Affordable Care Act (MNsure), and while its implementation has been rocky, it is in place and serving tens of thousands of people.
Dayton ran for governor in 2010 on an unapologetically liberal agenda, and won narrowly after a recount. He was reelected comfortably in 2014, and his approval rating in the latest Minneapolis Star Tribune poll is 54 percent. Contrast that with Walker’s 41 percent, and you’ve got a clear picture of how each is faring in the eyes of voters.
Dayton’s idiosyncratic style is in tune with the times, and at 68, he has no ambition for national office. Walker is running for president and touting hard-right policies that play well with Iowa caucusgoers. He opposed raising the minimum wage, has significantly weakened unions, reduced spending for education, cut taxes on the wealthy, and increased taxes on the middle class in part to pay for the tax cut. According to the nonpartisan Wisconsin Budget Project, Walker gave tax breaks that disproportionally favored upper-income earners while cutting $56 million in tax credits for working families.
Faced with a budget shortfall and no way to plug it without additional revenue, Republicans in the Wisconsin legislature are rebelling against additional spending cuts. But Walker shows no sign of softening his stance against raising taxes or fees. Other Republican governors, notably Louisiana’s Bobby Jindal, are in the same quandary.
“It seems like they’ve been backed into a corner and are just going forward with pure ideology and discounting any contradictory evidence,” says David Madland, author of Hollowed Out: Why the Economy Doesn’t Work without a Strong Middle Class.
As the director of the American Worker Project at the Center for American Progress, a liberal think tank, Madland in his book takes on the premise that inequality is good in the sense that helping the rich get richer is going to help everybody else, that a rising tide lifts all boats. Trickle-down economics has gotten a bad rap and is rarely invoked as a phrase anymore, but the belief that tax cuts are the engine of economic growth remains the core of GOP ideology.
That Minnesota’s economy rallied under progressive policies while Wisconsin’s has struggled is “one more data point proving that trickle down is wrong,” says Madland. While it’s tricky to attribute the well-being of a state’s economy solely to its political leadership, Minnesota is experiencing much stronger growth than its neighbor. Dayton has also proved responsive to the business community, easing early fears that his liberalism might go unchecked.
Walker, on the other hand, has doubled down to the detriment of his state on policies that are backfiring. And if voters in his home state aren’t buying what he’s selling anymore, that doesn’t bode well for his presidential campaign.
By: Eleanor Clift, The Daily Beast, July 19, 2015
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