by Scott Winship
Longtime readers of TDS–by which I mean those of you who read it last fall–remember the, um, spirited debate we hosted over an essay by Third Way, “Missing the Middle“. Authors Anne Kim, Adam Solomon, and Jim Kessler argued that Democrats’ economic message to the middle class failed to resonate with voters because it was unduly pessimistic and focused on security rather than opportunity. Their critics responded that economic insecurity is prevalent–often with good reason. Secondarily, discussants asked, “Where’s the Beef?”, noting the absence of a coherent policy agenda that flowed from their analysis.
Today Third Way rolled out its initial effort to respond to these criticisms–“The New Rules Economy: A Policy Framework for the 21st Century“. The report begins by debunking “myths” of neopopulism and conservatism. It then takes the next step of presenting nine “new rules” of today’s economy, as well as proposals to address the gaps between our old-rules policy framework and the new rules. You could think of it as a “third path”, no, a “middle way”, or….what’s the phrase I’m looking for?…….
Hil-larious kidding aside, progressives will recognize that there is nothing mushily centrist about Third Way’s policy agenda, though because it rejects the neopopulist critique of the new economy it is not as expansive as many progressives would like. Still, there’s no denying the progressivity of an agenda that advocates wealth-promoting and inequality-reducing “worth at birth accounts”, making college more affordable, greater funding for continuing education, training for workers in industries vulnerable to foreign competition to prepare for better employment in high-growth industries, expanded portability of fringe benefits, expanded child care funding, and having the federal government take over responsibility for some of the health care costs that businesses currently bear (among other laundry-list items). To be sure, it’s a framework viewed from 10,000 feet, but Third Way has a permanent project dedicated to fleshing out the details of these and other ideas.
Seems like an agenda even neopopulists could embrace. Give it a look-see. How does it compare with other progressive policy agendas you’ve seen?
I agree completely with Neuhauser and Hapin. I would add two points. 1)Since many social and environmental needs are being neglected and even under the so-called “full employment” of the Clinton years, there weren’t enough jobs available, we need greatly increased federal funding for public-service jobs. 2) We need to reverse Clinton’s negation of federal responsibility for basic economic welfare.
The Third-Way’s new report is a far slicker coverage of their thesis than reviewed last summer. But it basically contains the fatal flaws pointed out by John Halpin in Truth-Telling, Populism and Inspirational Politics.
I think Third Way overstates and mischaracterizes what they call the neo-populist position when they make the case for its desrire to “recapture a bygone era” with outmoded solutions. However, that is to be expected since in order to the a “third” way, there must be two other, opposing camps to place yourself in opposition to. (Sort of a tiresome, academic literalness to it all, but not as badly done as the DLC which often resorts to distorted right-wing attacks on the left in order to create a “center” for itself.)
But the fundamental hook they hang their hat on for “de-bunking” the concerns of the “neopopulists” is the graph of the distribution of income by age class. While it does illuminate the age-diversity of income distribution hidden behind a single number of “All Households”, they assert that this very existence proves their point.
But that same distribution would have been true in the past as well.
The question is not just: Is there a spread in 2005? but it is rather: Is that curve significantly different than it was in the past? The curve has always been there, and prime-age earners have presumably always been better off than the average. Duh.
So, does this really tell us anything about their claim that “the middle class is just doing just fine, thanks!”? No.
The other argument they make is that, “Neopopulism feeds off of broad economic dissatisfaction and pessimism, but public opinion polls consistently show Americans to be optimistic about their personal finances.” Then they just ignore the “broad economic dissatisfaction and pessimism” because of the “personal optimism”. Futhermore, they ignore studies showing a much greater concern for whether people think their kids will be better off or not — and from personal anecdotes I can tell that concern has reached surprisingly high levels of the middle class.
I think they miss an important issue here — this is the same phenomenon with Congress (they’re terrible, but mine is ok) and schools (the system is bad, but mine is ok). According to Third Way’s methodology, Congress is doing great! Schools are doing great! The middle class is doing great! I’ve got a life jacket, so I don’t know what the dissatisfaction is with the Titanic — cruises are fun!
I don’t buy it and I think they do a disservice to ignore the broad dissatisfaction. There are important things underlying it.
What this Third Way sanguinity leads to is a set of policies that feel extremely incremental as it doesn’t recognize that we are in the midst of a great upheaval as important as the turn of the last century. There are three great global issues impacting everyone in America:
– globalized terrrorism
– global warming
– globalization’s commoditization of work
To be concerned about these issues as a concern for the future well-being of their children and grandchildren is not necessarily to be a Chicken Little. Nor does it require you to assume that the entire system must be chucked for some wild-eyed notion. Nor does it mean that “neopopulists” have no hope or optimism about the future — just that they think there is more to work on and bolder plans to lay.
When I looked at Third Ways solutions, they are basically:
More education
Retrain obsoleted workers
Tweak savings incentives
Give newborns a savings account
Tweak savings incentives some more
Be nicer to families with kids
Be nicer to families caring for their parents
Do more R&D
Have a more efficient healthcare industry
(One of the troubling aspect of the “nicer to family” solutions is that they are purely about more availability of services and tax (money), one the big issues are around time — it can take so much time to care for an older parent that you can’t work as much and so are earning less when your costs go up.)
All of these assume that people can afford to buy all the insurance and education and retraining and other things Third Way thinks they should and furthermore that they already pay enough in taxes to get back some meaningful amount in tax breaks to pay for them.
Which goes back to the core assumption of the Third Way: people make enough money, we just need to incentivize them to spend it more wisely.
But the reason 40M Americans don’t have healthcare isn’t because they they feel they aren’t getting a big enough tax break to justify buying healthcare insurance! The reason is they don’t have a spare $15,000/year to buy it on the open market themselves, no matter what tax incentives you give.
(I would note that this approach is the same thinking behind Bush’s health insurance “reform” pitched at the 2007 State of the Union.)
The reason this “agenda” sounds so paltry is that … it is!. And the reason for it goes back to the beginning — they think the status quo is basically fine, so clearly what is needed is an era of tweaking a few things to make them a little better.
Happy Days are already here!