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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

False Choices on the Economy

In the Editorial Philosophy section of this web site, The Democratic Strategist pledges to “actively seek to be a meeting ground for both centrists and populists, readers of The Nation and The New Republic, professional political consultants, grassroots activists and every significant candidate and perspective within the Democratic Party.”
So it was with a sense of foreboding that I read yesterday’s front-page New York Times article by Robin Toner on Democratic economic policy and message. Though her tone is mild and it takes her a while to get to the main point, Toner suggests a state of irrepressible conflict between “populists” and “centrists” based on rejection or championship of Bill Clinton’s legacy, with “populists” currently in the ascendancy.
It’s certainly no surprise that all Democrats are highly critical of the current administration’s stewardship of the economy, which ranges from indifference to an aggressive promotion of concentrations of wealth and privilege. But by implicitly conflating the (Bill) Clinton and Bush economic strategies, Toner creates a false choice between robust attacks on Bushonomics and use of the Clinton legacy to demonstrate the superiority of Democratic approaches to the economy. And in doing so, she exaggerates Democratic disagreements on economic policy on virtually every issue other than trade.
Two particular issues stand out in this distorted picture of Democrats: the role of investments in education and training, and of fiscal discipline, in creating long-term economic growth and economic security.
Toner quotes Barack Obama as mocking the idea that training in high-skill fields will enable Americans to cope with global competition, given the outsourcing of tech and services jobs. But I don’t know of any Democrats who (a) think education and training alone will make individual Americans or the economy as a whole competitive, or (b) oppose strong efforts to create better schools or provide genuine access to lifelong learning. Since Republicans do, by and large, reject major new public investments in education and training as an illegitimate expansion of government, the differences between Democrats and Republicans on this topic are much larger than those between Democrats.
As for fiscal discipline, Toner twice cites Robert Rubin’s focus on deficit reduction and its impact on interest rates as part of the Clinton legacy that’s come under fire from Democrats. But think about this: when John Edwards, in launching his health care plan, announced that a balanced budget was not his highest priority, it made news. Why? Because Democrats, including Edwards, have become the unquestioned party of fiscal discipline, and will continue to make that a point of differentiation with Republicans with or without the economically trivial commitment to an actually balanced budget. Indeed, that’s one, though not the only, reason that virtually all Democrats favor a rollback in the Bush tax cuts, leaving Republicans with the politically perilous choice of continuing to ignore deficit spending, advocating drastic scalebacks in popular government programs, or resuscitating discredited supply-side theories about the self-financing nature of tax cuts.
There is, of course, one issue where divisions among Democrats are real: trade policy. But even there, the divisions are not as stark as is often assumed. For one thing, Democratic “free traders” have long conceded that labor and environmental standards are a desirable element of trade agreements, where they can actually be negotiated; that the U.S. government has a responsibility to deal with trade scofflaws like China; and that we are morally obligated to provide more than training vouchers to workers whose jobs are displaced by trade. Moreover, many pro-trade Democrats have vociferously opposed Bush’s trade agenda, most notably when a large majority of the House New Democratic Coalition voted against CAFTA.
Meanwhile, it’s simply not accurate to typecast Democrats as pro- or anti-trade. Yes, there are some highly visible “populists” who believe trade agreements are the single largest factor creating economic inequality and insecurity, and advocate repeal of past agreements along with systemic opposition to new ones. But as Will Marshall and Ed Gresser usefully pointed out in these pages recently, another Democratic faction, which they call “social democratic,” favors an aggressive international economic strategy focused on emulating the high-wage, high-benefit policies of European nations, instead of reflexive opposition to trade and globalization. And in practice, many Democratic politicians and voters combine elements of all three of the “pro-trade,” “populist,” and “social democratic” philosophies.
There are obviously very large omissions in Toner’s picture of Democratic economic policy preferences. Democrats are united as never before in making universal access to health care; universal access to college; and a serious assault on global climate change, major goals for the party and for the country. They are equally committed to a broad and progressive income tax (not unimportant at a time when Republicans continue to flirt not only with regressive tax cuts, but with “flat tax” and national sales tax schemes); to reductions in corporate subsides and measure to insure corporate accountability; to a strengthening the social safety net; and to a restoration of the endangered right of workers to organize unions. On all these issues, most Republicans, and most Republican leaders, are far on the other side of the battle-lines.
And that leads me to what may be the mother of all false choices for Democrats on the economy: “optimism” versus “pessimism.” There’s plenty of room for empirical debate among progressives about the exact extent of income inequality, or the current economic condition of the middle class, with all its political implications, including the advisability of “class warfare” rhetoric. But at a time when two-thirds of voters consistently say the country is on “the wrong track,” I hope no Democrats would counsel a sunny, positive feeling about the current trajectory of the U.S. economy. And I hope no Democrats would fail to understand the importance of conveying confidence in the country’s economic prospects under a future Democratic administration, with the success of the last Democratic administration being a significant if not dispositive talking point.
Indeed, while maintaining an open atmosphere of intraparty debate, Democrats need to remember two fundamental facts that transcend factions: we are all “populists” now in opposing and seeking to reverse Republican policies aimed at entrenching wealth and privilege in every aspect of economic policy. And we are all “centrists” now in seeking to explain to the American people that their interests and the national interest have been subordinated to an ideological and partisan-power-building agenda which is far out of the mainstream of economic thought and practice.

4 comments on “False Choices on the Economy

  1. Mike Spindell on

    Mr.Kilgore misses the point of the article he critiques. The Clinton/Rubin wing of the party believes in a global marketplace, regulated by the exigencies of the “Market.” Bill R feels that he is a “grown up” and definitely uses the “socialist bogeyman” as an argument ender. In both instances “timeless truths”
    are alluded to.
    Try these “grown up timeless truths” for those whose own self interest or lack of insight has led them down this path.
    No “market driven” economy, in the sense that economists like to bandy about has ever existed. It is a theoretical construct that has little to do with reality. The only purpose of a corporation is to make a profit, by definition. Increasing market share, or sustaining profit levels is the only goal. From a corporate perspective any means to drive down costs (wages) is legitimate.
    People like Rubin, Friedman and the Clinton’s (and many centrists) are not bad, they are just acting in concert with the economic marketplace mythology. Blinded by this and by the myth of a self-regulating global economy, which has allowed them to support stupid (from the US population’s perspective)trade agreements like NAFTA, CAFTA, etc.
    The Centrist Democratic ideology and the Republican “class warfare” ideology dovetail, to make the lives of most Americans poorer and more powerless. The purpose of Government, as I see it, is to ensure for the common good. Corporations by their nature are uninterested in this and cannot be allowed to control the society, or in the end we will return to the Feudal era. Anyone who can’t see this trend is either naive, or on the payroll.

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  2. travelingtarget on

    In the truth in labeling section, I must admit that I am not a registered Democrat and acknowledge that your acceptance of my posting to your site is one of courtesy that I appreciate. As a political independent, I would like to offer some observations that I hope are helpful to you. I believe that my views are shared by many in the center of the political spectrum who are disgusted with the politics as usual on the part of both parties.
    Currently, I see more solutions to our Country’s problems coming from the Democrats than from the Republicans. Your task is to develop and nominate statesmen and women who will lead the Nation in a manner consistent with the Constitution and in a manner that allows the people “life, liberty, and the pursuit of happiness.” In the past, the Democrats have indulged in what I call “Lightning Rod Politics.” Single issues on which Democrats and Republicans place a high value have become more important than the overall health and prosperity of our country. A good example of that is that of the Republican religious fundamentalists imposing their religious beliefs on all of the rest of us, including imposing on young women a lifetime sentence that comes with bearing an unplanned and often unwanted child. In addition, they have no qualms about decisions affecting the health or even the death of the young lady. They perfectly willing to require the rest of us to tax ourselves for the subsequent real and social costs of their religious viewpoints. Neither party is exempt from Lightning Rod Politics. To those of us in the political arena, while it is important, it serves as entertainment. The remaining voters however, are turned off by the lack of consensus and the noise of such exchanges. More importantly, the focusing on single issues distracts both the politicians and the people from important and broader issues. Many now regard the impasse between our highly partisan politicians to be more positive than negative, in that a government that is motionless is better than the direction it might take otherwise. What a sad commentary.
    In response to the last post, I didn’t see much in the previous posts that supported socialism. I think most of us recognize that there will always be an income disparity. On the other hand, society benefits from the overall good health of its people, including economic health.
    As an analogy, anyone from the mob should be able to tell you that it is much more productive to shake down a person who has income and assets than it is to shake down a street person. Those in government and business should reach a similar conclusion. You can’t sell to or tax the very poor, and the way the system is headed, most of us are likely to be poor. If you want to see Capitalism at its best(or worst), look to South America and much of the Middle East. There, the pendulum has reached the extremity of its swing. We don’t want to go there and that is where we are headed.
    A good definition of “fascism” is a marriage of convenience between big government and big business for the purpose of eliminating competing interests. Under this definition, we definitely live in a fascist state and we are faced with the monumental task of taking back our government. I regard raw Capitalism to be just as dangerous to the people as raw Socialism. Both philosophies are dominated by those who are obsessed with power, greed, and so on. Each represents the extreme of the economic pendulum. The issue is that of free enterprise versus free and fair enterprise. Fair enterprise entails fairness to employees, consumers, and investors alike, while free enterprise entails winning at any cost. It is my opinion that one of the most legitimate functions of government is to keep the pendulum from swinging too far in either direction and to keep the “fair” in free and fair enterprise.
    I see your task as representing the people and insuring that they can live in a free and productive manner. In the past, the Democratic Party has had a big umbrella under which many splinter groups are welcomed. When you embrace splinter groups, you’re going to be dealing with a lot of slivers. The voters are not in the mood to be distracted by splinters. Right now, there is a lot of emphasis on special rights for special groups of people. Take hate crimes for instance; the physical and emotional beatings and murders of victims of any race, any religion, of any sexual orientation are felt equally by each and every victim and those around them. To give special status to one group deprives all of equal justice under the law and says that one person’s pain is less important than another person’s. The result is resentment and division from the remainder of us, and in my view probably unconstitutional because of those inequalities. I believe that the solution lies more in better direction and education at very young levels, prevention of emotional and physical abuse in the family and in the schools, consistent and speedy punishment, especially for violent crimes, and creating an economic system that allows one person in the family to earn enough income in a 50 hour workweek to provide for their family. I believe that the financial industry is draining us of our resources through college loans, home loans, car loans, and most importantly credit card loans. You need to address those issues. At the time the country decided that the children should receive a public education, a high school diploma enabled young people to enter the workforce to earn a livable wage. Many did very well with an eighth grade education. Now, it takes a minimum of two years of post-secondary education in many fields, a graduate degree in many fields, and a graduate degree for some. We should totally eliminate the costs of higher education for two years of post-secondary education for all young people and further for those who seriously apply themselves. Our children should not have to enter the workforce with onerous debt. It is immoral and counterproductive. Yes, it will cost in the form of taxes; but to do otherwise will cost even more. As a political party, you need to develop a system of consequences for all elected or appointed Democrats who sell out to the special interests. Get them out of office! Stand for free and fair enterprise, being sure to focus on the fair part. Protect us from those who believe that our sovereignty as a nation is outmoded. The rest of the world does not offer the protections and opportunities that our Constitution guarantees. That is why immigrants continue to stream into this country. It is also why the rest of the world’s leaders consider the United States to be an embarrassment to themselves and a loose canon on their deck. They would love to place us under their domination. That will require political backbone but if the rest of us perceive the Democratic Party to have the best interests of all and the self-discipline that will be required, you will build consensus and support from the rest of us. If you continue to focus on the single issues, you will never build consensus and will continue to be ineffective as political leaders.
    The next election is yours to lose. You may find kinship and personal entertainment in the lightning rods of the party, but you risk rejection and losing the election because of the lack of support from those toward the center of the political spectrum. At the moment, I think Obama, Edwards, and Richardson are your front runners. I understand that you have other Democratic leaders who represent all that you value but I question whether they would receive the support of the swing voters that you need to carry the election. Should you win the Presidency, there are other very appropriate and effective ways in which they can serve.
    Thank you for the privilege of sharing my thoughts as an independent with you.

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  3. Bill R on

    For how long will “left-of-center” types pine away for the moribund ideology of socialism and economic equality? Those ideas died with the last century, having bankrupt and starved every country that flirted with them. Even Europe is turning in the neo-liberal direction for which the elections of Angela Merkel and Nicolas Sorkozy serve only as small hallmarks for the tide of history entering the age of globalization.
    Here are some timeless inductive truths… (1) liberal markets are better for ALL income classes than central planning, and (2) income equality (as apposed to equality before the law) is inconsistent with a progressive modern economy. It should be obvious to all who are rational that any economy requires both labor and capital, and that the necessary outcome of this is income inequality. Governments, bureaucracy, politicians can’t change this– but they can help, along with a free people, create a system governed by the rule of law that allows each individual to realize their natural potential.
    The empirical data is undeniable. Who still clings to the notion that workers in North Korea are doing better than in Ireland? Or laborers in France are better off (with 10% unemployment) than in England or Poland? Who desperately deludes themselves (besides the obvious fanatic Michael Moore) into thinking that there is a “workers paradise” in Cuba while India and China haven’t created what is likely the greatest economic recovery (after liberalizing their economies) since the Renaissance? Yes, these countries allow concentrations of wealth, and they have also finally realized the reductions in poverty and rising living standards that socialists had promised as far back as the middle of the 19th century. Socialism is dead and the market has won. It’s time “grown-ups” get on with the business of modernity and progress and give up on the false consciousness of income distribution and central planning.

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  4. Keith Roberts on

    I don’t believe it’s necessary for Dems to have economic policies, except as illustrations of our principles and standards. I believe ALL Democrats share such principles and standards. We are wholeheartedly in favor of wealth and its fair distribution, as well as the prevention and punishment of economic crime. We don’t have to specify how we would implement these goals, except for purposes of illustration. What distinguishes us from the Republicans is the direction we face: forward, not backwards; toward all the people, not just the privileged.

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