The Future of the Economy Will Be Decided on Election Day

May 4, 2012Jeff Madrick

The future of the recovery is still in doubt, and it all depends on which economic doctrine comes out on top on November 6th.

The future of the recovery is still in doubt, and it all depends on which economic doctrine comes out on top on November 6th.

Today’s jobs data from the Labor Department were disappointing but not a disaster — at least not yet. The creation of 115,000 jobs is not adequate to bring the unemployment rate down consistently. The drop in that rate to 8.1 percent had to do with people leaving the workforce, not the creation of an adequate number of jobs. Contrary to what is widely written, however, the numbers do not necessarily mean the economy is slowing down. There is probably now a problem with the seasonal adjustments. Something has changed, and the most likely culprit is the warmer-than-usual weather.

The seasonal adjustments probably inflated the data on growth earlier in the year and are probably deflating it some now. We are likely growing at a pretty even pace, not slowing down significantly. Let’s not forget that recoveries do have a momentum of their own, and manufacturing is making something of a comeback. There is also some notable rundown in consumer leverage.

This is good news, but not good enough. The pace is still too slow. By now we all know about the headwind of consumer debt and lack of adequate mortgage relief. That leverage is not being diminished fast enough, and it is likely as the Obama stimulus fully peters out that there will be ongoing government contraction — especially as state and local governments continue to cut back.

It would be nice to see Washington pay some attention to this potentially serious weakness — along with two other factors. The first is continued recession in Europe, which in turn will weaken its finances further. Austerity has been the disaster we long warned about. The U.S. sells to Europe and it owes us money, not least our money market funds.

Second, a bunch of significant contractionary policy matters come to a head at the end of the year. The Bush tax cuts end, as do emergency unemployment benefits, the payroll tax cut expires, and Congress is supposed to implement $1.2 trillion in spending cuts because the Super Committee failed to agree on its own cuts.

Many have written about this “cliff” and understand nothing will be done until after the election, which leaves less than two months to do anything. Most think there will be some kind of postponement of the issues by Congress because there won’t be enough time to do anything substantive. But then what? Much will depend on the election outcome.

So much attention has been given to deficit reduction in the U.S., and by the Obama administration until only last fall, that we are now in a dangerous rut. We need fiscal stimulus and we are not going to get it. The economy is hardly strong and can be easily toppled into a new recession. Then deficit projections get still worse. It's hard to be optimistic in this environment. I believe the Obama administration took its eye off the ball since the start. The focus should have been jobs, and I don’t think the attention paid to health care legislation was a sufficient excuse. They would have missed the ball anyway.

But given the nation’s current straits, this November’s election is one of the most important elections of our lifetime. If it goes well, jobs and growth have to be at the top of the agenda, not deficit issues. An Obama loss means austerity and recession again. Budget cuts will be demanded at the expense of the elderly, the poor, and the new health care bill. If Obama wins but Democrats lose the Senate, it will be significantly better but not a panacea. Muddling through, which is what we’d get, may also mean recession.

A Democratic victory in the House and a filibuster-proof Senate would be too grand to bank on, but not impossible. Even then, it would all depend on aggressive leadership by Obama that favors growth. Fiscal responsibility can come later.

Roosevelt Institute Senior Fellow Jeff Madrick is the Director of the Roosevelt Institute’s Rediscovering Government initiative and author of Age of Greed.

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The EEOC Stands Up for Transgendered Workers While Congress Stalls

Apr 30, 2012Tyler S. Bugg

genderless-icon-144The EEOC's decision to extend protections against discrimination to transgender workers is an important step toward social justice and a stronger economy.

genderless-icon-144The EEOC's decision to extend protections against discrimination to transgender workers is an important step toward social justice and a stronger economy.

Two months ago, I wrote that our country should pass the Employment Non-Discrimination Act (ENDA) and expedite the process of ending discrimination based on sexual orientation and gender identity in the workplace. This month, we’re one step closer. A groundbreaking ruling handed down from the Equal Employment Opportunity Commission (EEOC) on April 20 dictates that protections against gender identity discrimination are covered by Title VII of the 1964 Civil Rights Act and can be called upon in gender and sex discrimination complaints to the bureau and in subsequent lawsuits. This is a major leap forward for transgender Americans and for their job security.

The landmark change came as a response to the case of Mia Macy, a transgender woman and former Phoenix police officer who applied for and was tentatively accepted for a ballistics job -- until the employer conducted a background check. After obtaining information about Macy’s transition from a man to a woman, the employer allegedly (and untruthfully) informed Macy the offer was eliminated due to budget cuts and then promptly filled the position with another (not transgender) applicant. EEOC policy has been vague on exactly the types of cases are covered under its statutes, and are therefore under its legal jurisdiction, and detrimentally so. But under the new ruling, Macy’s filing of a complaint of gender discrimination with the EEOC can move forward to the next investigative steps.

The new ruling, however, has ramifications much larger than Macy’s case alone. It clarifies existing national policy and makes stronger what’s often been a too slowly evolving area of employment law. It sets into motion protections for potential employees from workplace discrimination regardless of their gender identification, expression, or status. The policy holds obvious significance for cutting away unnecessary pressures within the workplace environment, pressures that are both bad social policy and bad business policy.

Human Rights Watch’s “Corporate Equality Index” has striking evidence in support of the last point. Not only are employees who usually face discrimination finding more inclusive employment laws beneficial, so are employers. While employees experience higher confidence in their job searches and eventual careers, employers can access improved applicant pools. Benefits like more inclusive health plans and policies, gender-minority support and focus groups, and diversity councils are all additional assets that strengthen the commitment to productive and respectful employer-employee relations, guided by principles of fairness and equity. The economic outlook, in the long run, is the real winner.

The EEOC ruling will also have profound effects in curbing some disturbing trends. Data from the National Center for Transgender Equality (NCTE) shows that mistreatment at work is widespread. A disturbingly high 90 percent of transgender individuals reported feeling harassed or mistreated at work, and 47 percent reported being fired, not hired, or denied a promotion or salary increase as a result of their non-conforming gender status.

On top of this, the lack of protection against discrimination in the workplace has long had alarmingly adverse effects on gender-minority individuals elsewhere. The NCTE further reports that as transgender employees face workplace discrimination, their personal lives suffer as well. As a result of negative workplace environments, transgender individuals are four times more likely to be homeless, 70 percent more likely to abuse drugs and/or alcohol, and 85 percent more likely to be incarcerated.

The EEOC ruling is a vital first step with the potential to be a game changer in the job market. Its potential for setting a precedent for the passage of laws like the ENDA, one of the most stagnant pieces of legislation of the past two decades, is also promising. But it’s not the whole solution. While it's certainly a strong deterrent for employers with histories or ongoing incidents of gender discrimination, it’s only a mechanism as strong as we make it. It shouldn’t only be a reactive method that penalizes discrimination by threatening lawsuits, legal fees, and unwanted government intervention. Rather, it should foster a culture of prevention aimed at normalizing acceptance of all workers.

Tyler S. Bugg is a member of the Roosevelt Institute | Campus Network and an Organizing Fellow with Obama for America studying international affairs and human geography at the University of Georgia.

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Andrew McAfee on the Quickly Encroaching (Economic) Dominance of Our Robot Overlords

Apr 26, 2012

Last week, Roosevelt Institute Senior Fellow Bo Cutter’s latest installment of the Next American Economy breakfast series featured Andrew McAfee, principal research scientist at MIT’s Center for Digital Business, discussing his book The Race Against the Machine.

Last week, Roosevelt Institute Senior Fellow Bo Cutter’s latest installment of the Next American Economy breakfast series featured Andrew McAfee, principal research scientist at MIT’s Center for Digital Business, discussing his book The Race Against the Machine. A self-proclaimed technology optimist, McAfee lays out in stark and sobering terms the workforce displacement that has already taken place and will continue as the speed of technological innovation only increases. Watch here as McAfee relates how chess, rice, and, an Indian emperor help explain why computers keep getting twice as fast every year:

While computers are able to take on increasingly complicated tasks (like becoming a Jeopardy champion), McAfee notes that there are still a few places where humans can hold their own against their soon-to-be cyber overlords, namely complex communication, advanced pattern recognition, and entrepreneurship. However, examples of “science fiction becoming reality,” like the Google Car and nearly pitch-perfect language translation software, make clear that computers “are eating away at those advantages very quickly.” Bottom line: As a result of this “unprecedented digital encroachment,” the bundle of skills that the typical American worker has to offer potential employers is dwindling.

On the upside, McAfee makes clear that technological progress will continue to make us a more productive and rich society. But with the way things are wired right now, not everyone will get to enjoy the party. McAfee points out that while GDP and even mean income is generally increasing, median income has actually declined.

So what can we do about all this? McAfee offers up three places to start. First, invest in America’s infrastructure. Second, use appropriate policy tools (read: taxes) to deal with what we know will be increasing distance between haves and have-nots. Finally, increase innovation in our education system at all levels. McAfee believes our fate is in our own hands and that “the choices that we make as a society and an economy over the next generation are really going to strongly determine whether it’s a utopian or dystopian future that we head into.” 

For more, watch the full roundtable discussion below:

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Our Brave New Service Economy

Apr 23, 2012Bryce Covert

More low-wage, dead-end jobs might sound good to business owners, but is that what we want for our country?

More low-wage, dead-end jobs might sound good to business owners, but is that what we want for our country?

One of Romney’s big selling points is that he knows the “real economy” (much like some conservatives know “real America,” I guess) because he has experience as a businessman. Conservatives have started substituting business acumen for political acumen, making the mistake of comparing what’s required to run a country to what’s required to run a company. At first blush it almost makes sense: both oversee groups of people, both deal with budgets, both make decisions. But not only does that experience not necessarily translate to the White House, it also belies a deeper problem about the kind of economy we’re trying to recreate in the aftermath of the Great Recession. Viewing the country, and its economy, as a private business isn’t likely to create solid middle-class jobs.

“This American Life” had a recent episode called “What Kind of Country” that explored what kind of country Americans want this to be, but parts of it had more to do with what kind of economy we want. Take the example they give in act three: Colorado Springs. With a stretched city budget, local businessman Steve Bartolin, CEO of the Broadmoor Hotel, decided to look and compare it to running his hotel. After all, he tells the reporter on the story, “We have the same number of employees as the city… I look at us as a service delivery organization,” just like the city, apparently. They are both concerned with “how do you deliver the highest quality of service in the most efficient, cost effective manner.”

His main focus became how much both entities spend on their employees. “They’re running a 70 percent labor cost and we’ll run a 35 percent labor cost,” he says. “Any business person can look at that and say, ‘Jesus, we’re going to be out of business by 2014 at this pace.’” He writes a manifesto to the city council that ends up being circulated all over town: the city should lower starting wages for its employees, require them to pay more for their health insurance, and start contracting out anything it can to private businesses.

A city councilwoman explains that payrolls for the city government are higher than the hotel’s because it doesn’t control its own pension costs, which are mandated by the state. But she also makes a very important point: it has to hire people with more training and experience. City engineers and police officers can’t be hired on the cheap like the service industry workers at the Broadmoor.

And herein lies a big problem. What Bartolin proposed, basically, is to make government employees more like service employees. This is highly problematic, particularly for the black Americans and women who have long relied on public employment because it paid decently, offered good benefits and stability, and enabled them to move up the economic ladder. Public employment has been credited with helping to create the black middle class. If we make these jobs as unstable and low-benefit as service jobs, we’ll be taking away a huge boon from groups who have historically benefitted from it.

But we’re not just dragging public employees down to the level of service workers. In fact, the jobs our economy is best at producing these days are service jobs. As Harper’s recently tweeted, the chances that an employed American works in the service industry are six in seven. Those jobs have been growing very quickly: from 2010 to 2011, occupations like salespersons, cashiers, and food preparation workers grew by 3.2 percent. As Nona Willis Aronowitz recently reported, one in 10 employed Americans works in food service, making up 9.6 million people. And young people are taking a lot of those jobs: a quarter of people ages 16 to 29 who have a job work in hospitality, meaning travel, leisure, and food service. “A study of 4 million Facebook profiles found that, after the military, the top four employers listed by twentysomethings were Walmart, Starbucks, Target, and Best Buy,” she writes.

These are low-wage, low-benefit jobs that rarely pay much more than minimum wage (if even that) and offer schedules that can change on a whim. A report from the Retail Action Project in New York found that over half of retail workers made under $10 an hour – and 12 percent earn the minimum wage. Less than a third get health benefits through their employer. The Restaurant Opportunity Centers United reported that the average yearly income for restaurant workers in 2009 was $15,092, and less than a third make a livable wage. And what about those hotel workers who might be under the employ of Batolin? Non-managers make less than $12 an hour on average.

And unlike government work, these jobs offer little training and room for advancement. The sector relies on employee churn to keep labor costs lower. (Just ask Barbara Ehrenreich.) Service careers aren’t designed to advance much farther than flipping burgers.

Is this what we want our economy to look like? Do we want most jobs to offer wages that don’t cover basic expenses and to deny workers the benefits they need to stay healthy? Businesspeople would call this cost effective. I call this unsustainable.

Bryce Covert is Editor of Next New Deal.

 

http://www.shutterstock.com/Image courtesy of Shutterstock.com.

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Even Six-Figure Salaries Don’t Attract Men to Care Work

Apr 18, 2012Suzanne Kahn

Until these jobs are given the respect they deserve, they will continue to turn men off and be paid less than they're worth.

Adam Davidson’s recent New York Times Magazine article “The Best Nanny Money Can Buy” introduced readers to the “bizarre microeconomy” of New York’s highly paid nannies. The first nanny Davidson introduces earns $180,000 a year, plus a Christmas bonus and an apartment on Central Park West.

Until these jobs are given the respect they deserve, they will continue to turn men off and be paid less than they're worth.

Adam Davidson’s recent New York Times Magazine article “The Best Nanny Money Can Buy” introduced readers to the “bizarre microeconomy” of New York’s highly paid nannies. The first nanny Davidson introduces earns $180,000 a year, plus a Christmas bonus and an apartment on Central Park West.

Davidson’s economy is indeed bizarre. As Bryce Covert pointed out in Forbes recently, the average New York nanny makes $37,076 a year. Childcare providers, home health care aids, and others are paid far too little for the incredibly important work they do. In the U.S., median pay for a childcare worker in 2010 was about $9 an hour.

Care work jobs have historically been paid poorly. Jobs associated with the work women traditionally did as wives and mothers have not been conceptualized as real work and have generally paid far less than traditionally male work. This was partially a result of the way laws were written. Until the 1970s, domestic workers were not included in the Fair Labor Standards Act that mandated a federal minimum wage, among other things.

When jobs pay well, however, they tend to attract men. Yet this does not seem to be the case among New York’s elite nannies. Interestingly, even in the microeconomy of highly paid nannies, they are all women. Davidson himself points this out, and a glance at the job listings on the website of the Pavilion Agency, the firm that connected Davidson with the high-end nanny he spoke to, confirms this. Why aren’t men attracted to these high-end jobs?

The answer seems to lie with the respect we give care workers. Most nannies not only earn very low pay for very long hours but also gain little social capital from their jobs. This lack of respect seems to extend even to highly paid nannies. It is unmistakable in the language used in the Pavillion Agency job listings. “This is the nanny who will be a ‘wife’ to a fortunate family,” reads one posting. Others describe the candidates as a “lovely lady” or “cuddly.” This sounds like the way the ad execs on Mad Men talk about their secretaries and not the way we talk about candidates for professional careers in the 21st century.

These are also notably gendered advertisements. Employers are clearly looking for women to fill these jobs because they imagine them to be a woman’s or a “wife’s” work. This sort of language very likely not only keeps men out of these jobs, but it also keeps pay very low for most care workers. As long the job of nanny is not respected, it will be paid less than jobs that are. 

Davidson may have described a strange niche economy, but his rare, highly paid nannies actually tell us quite a bit about the problems most care workers face. If even six-figure salaries fail to attract men to the market, there’s a problem with care work that goes far beyond poor pay. It’s a job that society tells men, and many women, that it isn’t respectable to do. Until these jobs earn social capital as well as cash, care work will probably remain a sex-segregated, and therefore underappreciated, sector of the economy. Outside the upper echelons of Manhattan society, that means care work is likely to remain poorly paid.

Suzanne Kahn is a Roosevelt Institute | Pipeline Fellow and a Ph.D. student in history at Columbia University.

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How States Can Get Serious About Offshore Wind Development

Apr 10, 2012Stewart Boss

earth-150As part of the 10 Ideas: Generating a Green Future series, a call for policies that level the playing field for wind power, which would in turn create jobs and revenues for the states.

earth-150As part of the 10 Ideas: Generating a Green Future series, a call for policies that level the playing field for wind power, which would in turn create jobs and revenues for the states.

North Carolina has 140 gigawatts (GW) of potential offshore wind energy capacity -- the largest resource of any state on the East Coast -- in part because its shallow-water coastline is ideally suited for offshore wind development. But while North Carolina may be number one in potential offshore wind energy, it's hardly alone. The National Renewable Energy Laboratory (NREL) estimates that the U.S. has 4,150 GW of total potential wind turbine nameplate capacity from resources around the country. (For some perspective, the nation's total electric generating capacity from all energy sources was 1,010 GW in 2008). The U.S. Department of Energy reports that North Carolina alone could conceivably install 10 GW of offshore wind capacity by 2030.

Offshore wind farms have existed in Europe for more than 20 years. States like Massachusetts and Rhode Island are advancing offshore wind energy projects, and Maryland's state legislature is currently considering a bill that would create wind industry incentives. But despite all the benefits, there are still no installed offshore wind projects in the U.S. And there are none currently even planned here in North Carolina.

Yet the economic and environmental benefits of turning to this cleaner energy source are substantial. Building just one GW of offshore wind energy in North Carolina would create an economic ripple effect over the next two decades that could pump an estimated $1.1 billion into the state's economy. The more than 8,000 component parts of offshore wind turbines are often too large to transport long distances, so development in North Carolina would mean new manufacturing facilities and thousands of manufacturing jobs in the state. That same DOE study showed that installing one GW of offshore wind power would create 1,628 new jobs and bring $188.5 million into local economies in the construction phase alone. This is not surprising; investing in clean energy projects typically creates three times more jobs than the same level of spending on fossil fuels.

Developing that one GW of wind power in North Carolina would also deliver tangible environmental gains: 2.9 million tons in annual carbon dioxide reductions and 1,558 million gallons in annual water savings. The environmental, climate, and public health benefits of shifting from coal to cleaner forms of energy like wind are well documented. A recent Harvard study found that "the life cycle effects of coal... are costing the U.S. public a third to over one-half of a trillion dollars annually." These externalized costs add roughly 17 cents per kWh of electricity generated from coal. And as one of the most coal-dependent states in the country, North Carolina is spending almost $2.2 billion every year to import coal from other states. That's money that could be invested in developing energy and creating jobs in North Carolina.

Join the conversation about the Roosevelt Institute’s new initiative, Rediscovering Government, led by Senior Fellow Jeff Madrick.

In an event co-sponsored by the Roosevelt Institute | Campus Network at the University of North Carolina, Chapel Hill this past fall discussing the opportunities and obstacles for offshore wind development in North Carolina, we brought together state leaders from government, industry, coastal law, and scientific research. The consensus among the speakers was clear: what's missing in North Carolina is a policy framework for getting turbines installed. Investors and utilities need regulatory certainty to commit to trying something new. As Congress squabbles over what to do about extending the critically important federal production tax credit for wind energy, there's also no state legislation pertaining to offshore wind on the books in North Carolina.

So what can we do? A bill in North Carolina might have an answer. North Carolina's Senate Bill 747, the Offshore Wind Jobs and Economic Development Act, proposed a state-managed competitive request for proposals (RFP) process to develop 2.5 GW of offshore wind energy starting in 2017. If the state determines that a bid has a positive net economic impact, then investor-owned utilities would be required to sign 20-year contracts to purchase power. Incremental costs or savings for ratepayers would appear on customers' utility bills, with limits on the impact of rate increases to large consumers. If the state fails to determine that 2.5 GW of offshore wind energy would result in a net economic benefit, then there would be no obligation to grant a contract.

In an effort to enhance industry support, SB 747 also gives utility companies the option to co-invest or purchase an ownership interest of up to 50 percent in the projects. While the bill does not require any direct government spending, it also extends an existing manufacturing tax credit for wind through 2020 to help attract manufacturing jobs. State agencies (in this case, the Department of Commerce) would review RFPs under a wide variety of criteria, including, but not limited to, the impacts on ratepayers, jobs and economic activity, tax revenue, system reliability, climate change, public health, export opportunities, system reliability, and existing industries.

This policy could create a practical path forward for offshore wind energy. The emphasis on ensuring that any offshore wind project would have a net positive economic impact on the state should make the policy more politically attractive to state legislators concerned about consumer groups opposed to rate hikes, electric utilities eager to avoid anything resembling regulation, and coastal industries that may conflict with proposed turbine locations. This kind of bill also levels the playing field for clean energy in a way that prioritizes economic considerations. Adopting this policy will effectively eliminate cost disadvantages for offshore wind by requiring the government agencies reviewing industry proposals to fully account for the massive and externalized environmental and public health costs associated with continuing to rely on coal and other artificially cheap fossil fuels for electricity.

On a national level, the public strongly supports developing clean energy technologies like wind. A recent nationwide survey conducted by the Civil Society Institute showed that roughly 71 percent of Americans support shifting federal "support for energy away from nuclear and towards clean renewable energy such as wind and solar." The sooner we start implementing policies that lead to more wind development, the better.

Stewart Boss is the co-director of the Roosevelt Institute| Campus Network's center on energy and environmental policy at the University of North Carolina, Chapel Hill.

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Bryce Covert: Women Have Changed, but the Workplace Hasn't

Apr 3, 2012Tim Price

In the latest episode of the Roosevelt Institute's Bloggingheads series, "Fireside Chats," ND2.0 Editor Bryce Covert talks to The Atlantic's Derek Thompson about the ongoing challenges for women in the workplace. In particular, they ask why women are still struggling to close the wage gap despite earning more degrees than men and participating in equal numbers. In the clip below, Bryce says the problem is that legal support for working women and men isn't there. She argues that "the workplace still looks as if someone is taking care of the children, but they're not," and "we don't have the policies in place to deal with the way our workforce looks now."

In the latest episode of the Roosevelt Institute's Bloggingheads series, "Fireside Chats," ND2.0 Editor Bryce Covert talks to The Atlantic's Derek Thompson about the ongoing challenges for women in the workplace. In particular, they ask why women are still struggling to close the wage gap despite earning more degrees than men and participating in equal numbers. In the clip below, Bryce says the problem is that legal support for working women and men isn't there. She argues that "the workplace still looks as if someone is taking care of the children, but they're not," and "we don't have the policies in place to deal with the way our workforce looks now."

Bryce notes that while explicit legal barriers to women attaining parity in the workplace have been removed, the U.S. has failed to institute work-family policies like flex time, paternity leave, and day care that have put men and women on more equal footing in Europe. In other words, the problem isn't that women need to change, but that "I don't think the workforce has changed enough to accommodate them." She adds that while "there's a lot to celebrate and the change has been so dramatic and so fast," she is wary of "assuming that this is just a trajectory we're on" and "if we just sort of let things play out then equality will be reached."

Join the conversation about the Roosevelt Institute’s new initiative, Rediscovering Government, led by Senior Fellow Jeff Madrick.

In addition to these long-term trends, Bryce and Derek discuss the fallout from the gendered recession and recovery, with Bryce noting that "it's been a pretty slow, painful recovery" for everyone, "but women started backsliding. Their unemployment rate is now higher than it was the beginning of the recovery." And while the fact that women dominate many growth sectors would seem to work in their favor, Bryce says they're still stuck in "service sector jobs which tend to be low pay, low benefits, unstable," and "if that's where the growth is I'm not sure if that's a good sign for them or anyone." Even the fact that they're attaining more college degrees doesn't necessarily give them the upper hand, since "even when women are earning these degrees, at every educational level, they're still earning less than men."

For more, watch the full video below and check out Bryce's recent article at The Nation on where women stand in the post-"mancession" economy.

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The Economic Story Progressives Need to Tell

Apr 3, 2012Richard Kirsch

As part of the How We Value Government series, a simple narrative with clear heroes and villains that progressives too often fail to tell.

As part of the How We Value Government series, a simple narrative with clear heroes and villains that progressives too often fail to tell.

In his 2003 State of the Union address, President George W. Bush vowed to protect Medicare two sentences after he trashed "nationalized health care." The fact that Medicare is our national health care system was apparently as lost on the president -- and most of the listening American public -- as it was on the senior citizens who went to town hall meetings to protest the government takeover of health care after seeing their doctor earlier in the day on government health insurance.

When was the last time you heard someone define Medicare as "our national health care system for seniors?" Imagine if that was a regular description that Democratic elected officials and Medicare advocates used. Maybe the concept might begin to take hold.

People filter the experiences of their own lives and the world at large through stories and narratives. The greatest hole in progressive communication about government is not the absence of myriad good examples of how government meaningfully improves people's lives and drives a more prosperous economy or a host of recent examples of how stripping government protections is disastrous. What is missing is the consistent telling of our story about the role of government in creating broader shared prosperity, opportunity, security, and freedom.

One mistake that progressive advocates of government make is to make government the subject. People don't wake up in the morning wondering about government; they wake up thinking about getting their kids to school and themselves to work. They don't worry about the size of government; they fret about keeping their jobs, how they are going to pay for their kids' college and have enough left over to retire. The story we tell has to be focused on the core anxieties of ordinary people and how government can address those concerns.

Like any yarn, our story has to include heroes and villains. And since this is a narrative about how the world works, we need to explain what the villains did wrong to get us into this mess and what the heroes will do to rescue us, or better yet, themselves.

For the past year I have been working with a group of progressive leaders and communicators on the development of a "progressive economic narrative," a way of telling our story about the role of the individual, business, and government in creating shared prosperity. The goal of the group is "to develop and promote a common economic narrative that is used across the progressive movement, a powerful story that we are telling consistently through words and actions, in our communications and organizing."

Join the conversation about the Roosevelt Institute’s new initiative, Rediscovering Government, led by Senior Fellow Jeff Madrick.

The progressive economic narrative we've drafted has five conceptual pillars, which describe what went wrong with the economy, define a powerful economy and how we get there, outline the political challenge, and conclude with a call to action. It has villains -- Wall Street speculators, CEO campaign contributors, and the super-rich -- who did bad things: cut our wages and benefits, shipped our jobs overseas, got rich quickly at the expense of American workers and families. These evildoers bribed politicians to rig the rules in their favor, and in doing so, crashed the economy, crushed and closed the middle class, and wrecked our democracy.

The hero in our tale is the great American middle class, the engine of our economy. At the heart of our story is the notion that, as Senator Paul Wellstone used to say, "We all do better when we all do better." This is a statement of economic truth and of our values. We believe that the true measure of our economic success is the well-being of our families and the productivity of our nation, not the stock market and corporate profits. And that economic progress is driven by innovating and investing in the future so that all Americans have good jobs and can educate their kids, support their families, and retire with security. We all do better when we all do better.

To get there, our hero -- the middle class, working families, the 99% -- has to fight to free the government from the grip of the rich and powerful and put our democracy back in the hands of ordinary Americans. That matters because the great American middle class does not happen by accident; it is built by decisions we make together. Decisions made when the government works for all of us -- decisions to invest in our people, to expand opportunity and security to pave the way for business to innovate and meet the future, and to write rules that boost businesses that do the right thing, like creating good jobs in America or safeguarding the environment.

You will recognize that this is a very different story from that told by the right, in which economic success depends on rugged individuals in a market free from government. Our story is that people, business, and government drive the economy by working together to create broadly shared prosperity, opportunity, and security.

If this seems simplistic, that's a strength. It is also misleading, because so much of communication on our side fails to talk about our view of what makes the economy a success and how the main actors -- people, business, and government -- each play a role. Simplicity is a powerful asset if we begin to tell the story consistently in all our communications, which means our words and our actions. The "we" here needs to be broad, including progressive organizers, activists, pundits, journalists, and academics.

If we are to help Americans rediscover government, we need to keep telling a powerful story about how a government that works for all of us will allow each of us to prosper and believe again in an America in which our children will prosper.

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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Stiglitz: The Invisible Hand is Invisible Because It Isn't There

Apr 2, 2012Elena Callahan

Americans have had it drilled into them that government is bad, but a new narrative is surfacing.

Americans have had it drilled into them that government is bad, but a new narrative is surfacing. Last Thursday, Roosevelt Institute Senior Fellow Jeff Madrick kicked off the Roosevelt Institute's new flagship initiative, Rediscovering Government, at an event in New York City, declaring, "There is no economy without government. There is no America without government. Government doesn't have a role; it is integral." In a keynote address, Roosevelt Institute Senior Fellow Joseph Stiglitz also argued that healthy societies have strong governments and that his research has shown that "the reason the invisible hand often was invisible was that it wasn’t there." Watch the full video of the opening remarks and keynote below:

 

Stiglitz says that "most Americans don’t realize that we are no longer the country of opportunity that we think of ourselves, that America today has less equality of opportunity than any of the other advanced industrial countries." He points out how many like to say that our economy is doing well because GDP is growing, but that "if you’re going to be judging how well an economy is doing, clearly I think the key metric that one wants to focus on is what is happening to the living standards of most citizens.” He says that most Americans don't realize how bad we're doing, including the fact that "the median income of a full-time male worker today is the same as it was in 1968," and "if you look at median household income it is the same today as it was a decade and a half ago."

Join the conversation about the Roosevelt Institute’s new initiative, Rediscovering Government, led by Senior Fellow Jeff Madrick.

How did our society get to a place where government has taken a back seat and where people are wary of government control? Stiglitz thanks the conservatives who have successfully touted false ideology about markets over the past 40 years. While they like to blame the government for inequality, Stiglitz notes that not even Adam Smith thought markets were anything beyond efficient. "Nobody ever said that they were fair, that they would lead to a distribution of income that was socially acceptable." Furthermore, he says, "many of the aspects of our inequality are a result of market failure. People who don’t have health insurance when they get sick wind up in extreme poverty and they can’t get health insurance because of a whole set of market failures." He says it's "striking that in spite of the fact that there is no intellectual basis for what you might call a 'Smithian' view that unfettered markets lead to efficiency," conservatives have marched ahead with this idea.

So why was there so much economic growth after World War II? Stiglitz says one reason is "the legacy of the Roosevelts, the legacy that government made a difference.” In making the case for government he also points out that "government has played an important catalytic role in a whole variety of other areas. If you think about our modern economy, you think about Internet, you think about biotech, you think about telecommunications and all of these things rest on government-funded basic research." He recalls a conversation with a Scandinavian finance minister who, when asked how his economy was so successful, answered "high taxes." Stiglitz took away that "if you’re going to have a well-functioning economy... you have to pay for what you get. You need to have a well-functioning government that provides education, infrastructure, research, technology, all these things, and we have to pay for it." Given that markets are not predictable nor interested in social problems, our government should stop bailing the financial institutions out and start investing in its people and the institutions that benefit them.

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Mark Schmitt on How to Move Past the Myth of the Job Creator

Mar 19, 2012Mark Schmitt

In last week's episode of "Fireside Chats" on Bloggingheads, Roosevelt Institute Senior Fellow Mark Schmitt chatted with Eric Liu, co-author of the new book The Gardens of Democracy. In the clip below, the two discuss the tired meme of the job creators and that "the economy should revolve around a tiny number of rich people," as Eric puts it. That's not why people go into business, Mark points out, paraphrasing a lapsed job creator. "If they're successful they may create jobs, but that's not what they're setting out to do," he says.

In last week's episode of "Fireside Chats" on Bloggingheads, Roosevelt Institute Senior Fellow Mark Schmitt chatted with Eric Liu, co-author of the new book The Gardens of Democracy. In the clip below, the two discuss the tired meme of the job creators and that "the economy should revolve around a tiny number of rich people," as Eric puts it. That's not why people go into business, Mark points out, paraphrasing a lapsed job creator. "If they're successful they may create jobs, but that's not what they're setting out to do," he says.

Even after the lessons of the Great Recession, Eric points out, we still seem to believe that "it is from [rich people] that wealth and jobs and employment and prosperity spring," so we have to do what it takes to protect them. In reality, job creators should realize "we succeed because theere's demand for our products" from the middle class, Mark says. Yet they both agree that this trope is alive and well.

Buy a copy of The Unfinished Revolution: Voices from the Global Fight for Women’s Rights, featuring a chapter by Roosevelt Institute Senior Fellow Ellen Chesler.

How do we get past it? "We have to think about a way of working beyond anger," Mark says. "I think anger burns out." If we can get to a calmer place, we can "bring it back to solutions."

Watch the full video below, in which they discuss the complex system that is our economy, the dangers of inequality, and how to reinvigorate citizenship:

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