A Dem Who Can Explain that Fairness is Prosperity Will Sweep in 2016

Nov 19, 2014Richard Kirsch

The policies that will deliver economic growth also center fairness, and that's what Democrats need to emphasize to keep the presidency in 2016.

The policies that will deliver economic growth also center fairness, and that's what Democrats need to emphasize to keep the presidency in 2016.

The familiar debate within the Democratic Party – move left or right – is on. In a memo to a “limited number of Democratic leaders,” Third Way, the leading organization for corporate Democrats, lays down the gauntlet: “Democrats are offering economic fairness, but voters want economic growth and prosperity.” And for good measure, Third Way declares, “And it has to be meaningful; Democrats can’t simply stick a 'growth' label on the old bottle of 'fairness' policies.”

The folks at Third Way are right about one thing; voters do want economic growth and prosperity. Where they are wrong is in their assumption that fairness can't be a part of that growth. The policies that do the most to bolster fairness are in fact the most powerful policies to move the economy forward and create broadly shared prosperity.

Progressives and Democrats don’t always make that clear. Most of the time they talk about fairness as separate from broadly-shared prosperity. The Democrat who bases his or her campaign on that crucial link will sweep into the presidency in 2016.

Policies that increase fairness are key to driving the economy forward.

Raising the minimum wage is not just about basic fairness for low-wage workers. Raising wages is about creating economy boosting jobs, not economy busting jobs. When wages are raised, workers have more money to spend, essential when 70 percent of the economy is made up of consumer spending.

An economy boosting job pays enough to cover the basics, which is why the fight for a $15 per hour minimum wage mobilizes people to action. It is about working at that wage for enough hours, with predictable schedules, so that the wages add up to a decent paycheck. It is about getting paid when you are out sick and having paid family leave, so you can care for and support your family. It is about women getting paid as much as men. It is about being able to afford your health care, so you have money to spend on other essentials and don’t end up bankrupt because of a high-cost illness. It is about increasing Social Security benefits and bolstering retirement savings, so you can keep supporting yourself and keep the economy moving well into your retirement.

These measures reward people fairly for work and are essential to rebuilding the middle class engine of the economy, as shown by the evidence collected in the Center for American Progress’s middle-out economics project.

The flip side of creating economy boosting jobs is reversing the soaring concentration of wealth. It’s not just unfair that the rich are grabbing more and more of the wealth we all create, it’s a big reason that the economy remains sluggish. When the top 1 percent capture virtually all of the economic progress, it's impossible for them to spend much of it. When corporations sit on trillions of dollars of cash because there aren’t markets for their goods, that money doesn’t go to higher wages or investment in creating jobs or other things that would boost productivity throughout the economy.

Even Wall Street is beginning to get it. In a report that is stunning only for its source, Standard & Poor's found this summer that “Our review of the data, as well as a wealth of research on this matter, leads us to conclude that the current level of income inequality in the U.S. is dampening GDP growth, at a time when the world's biggest economy is struggling to recover from the Great Recession and the government is in need of funds to support an aging population.”

A big goal of Third Way’s memo is to justify policies that they admit “may not be the most politically popular.” While some of the Third Way proposals are worthwhile, like millions of teachers for pre-K, much of their agenda is that of corporate America and in some cases would actually be bad for the economic growth they claim to seek.

Using coded language in an attempt to dilute the political poison, Third Way pushes for cutting Social Security benefits, lowering corporate tax rates rather than stopping corporate tax evasion, and agreeing to new trade deals which would drive the race to the bottom and allow corporations to challenge environmental and health and safety laws, instead of bolstering American workers' already hard-pressed incomes.

Instead, what the country needs and what Democrats should push are bold policies which drive the economy forward and create broadly shared prosperity: fairness.

We can start by putting Americans to work with a massive investment in core productive infrastructure in three areas: transportation, from roads and bridges to high speed rail; clean, renewable energy, which will simultaneously tackle climate disruption; and high-speed Internet for every home and business in America. Everyone who does this work should be paid enough, with good benefits, to support and care for their families, and be given the flexibility needed to care for those families.  In doing so, we doubly boost the economy: through the investment in infrastructure and through the good jobs.

It is both fair and essential for our economic future to ensure that every child has a quality education and the opportunity to succeed in school, career, and life. We need to modernize and replace dilapidated schools and assure that every child has a well-prepared and supported teacher in a small enough class to learn. We need to transform schools, particularly those that teach children in low-income neighborhoods, into community centers. We should make high-quality child care and pre-K universal, employing millions more providers and teachers.

We need to provide career training for the high-skilled jobs that don’t require traditional college. We need to make college affordable, by dramatically lowering the cost of public colleges and universities, providing much more tuition assistance, and tying the payment of student loans to earnings.

And as in infrastructure, all these jobs – from day-care providers to teachers to college professors (no more adjuncts) – should be good jobs, with good pay, benefits, and the flexibility to care and support families.

The only reason that Democrats would consider an agenda that Third Way admits is politically unpopular is to please corporate campaign donors and elites. But with President Obama pushing for new trade deals, advocating revenue-neutral corporate tax reform and having supported cuts in Social Security benefits, that agenda is as alive as the billions in campaign contributions that pour into both political parties.

Americans are right about two things. One, the system is rigged to favor the wealthy and powerful. Two, unless we change course, the future will not be better for our children. Those are the core reasons we saw historically low voter turn out this month and why minimum wage hikes passed at the same time voters decided to give Republicans their turn in the continuing roller-coaster of Congressional control over the past decade.

The Democrat who champions bold policies to build an America that works for all of us, not just the wealthy, and policies that create broadly shared, sustainable prosperity, will triumph in 2016.

The key, as Franklin Delano Roosevelt did (and as great organizers do), is to tap into anger and lift up hope. FDR railed against the “economic royalists” and experimented with bold policies that reigned in financial speculation and put Americans to work building the foundations for the 20th Century economy. 

The next FDR will name the villains who are rigging the system: Wall Street speculators and corporations that cut wages and benefits and ship jobs overseas. The next FDR will reveal the truth that “we all do better when we all do better.” That when we all earn enough to care and support our families, when we can shop in our neighborhoods, give our kids a great education, afford our health care, retire with security, we drive the economy forward.

Mamby-pamby won’t cut it. Americans are crying for bold leadership, a way out of a narrowing world towards a better world for our children.

The Democrat who leads a political party that stands up against the rich and powerful and stands up for working families and the middle class, who declares that Americans have done this before and that together we can do it again, will triumph in 2016. A Democratic party that relentlessly presses that agenda into action will meet the great challenge of our time. 

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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The UNC Coup and the Second Limit of Economic Liberalism

Nov 13, 2014Mike Konczal

There was a quiet revolution in the University of North Carolina higher education system in August, one that shows an important limit of current liberal thought. In the aftermath of the 2014 election, there’s been a significant amount of discussion over whether liberals have an economic agenda designed for the working and middle classes. This discussion has primarily been about wages in the middle of the income distribution, which are the first major limit of liberal thought; however, it is also tied to a second limit, which is the way that liberals want to provide public goods and services.

So what happened? The UNC System Board of Governors voted unanimously to cap the amount of tuition that may be used for financial aid for need-based students at no more than 15 percent. With tuition going up rapidly at public universities as the result of public disinvestment, administrators have recently begun using general tuition to supplement their ability to provide aid. This cross-subsidization has been heralded as a solution to the problem of high college costs. Sticker price is high, but the net price for poorer students will be low.

This system works as long as there is sufficient middle-class buy-in, but it’s now capped at UNC. As a board member told the local press, the burden of providing need-based aid “has become unfairly apportioned to working North Carolinians,” and this new policy helps prevent that. Iowa implemented a similar approach back in 2013. And as Kevin Kiley has reported for IHE, similar proposals have been floated in Arizona and Virginia. This trend is likely to gain strength as states continue to disinvest.

The problem for liberals isn’t just that there’s no way for them to win this argument with middle-class wages stagnating, though that is a problem. The far bigger issue for liberals is that this is a false choice, a real class antagonism that has been created entirely by the process of state disinvestment, privatization, cost-shifting of tuitions away from general revenues to individuals, and the subsequent explosion in student debt. As long as liberals continue to play this game, they’ll be undermining their chances.

First Limit: Middle-Class Wages

There’s been a wave of commentary about how the Democrats don’t have a middle-class wage agenda. David Leonhardt wrote the core essay, “The Great Wage Slowdown, Looming Over Politics,” with its opening line: “How does the Democratic Party plan to lift stagnant middle-class incomes?” Josh Marshall made the same argument as well. The Democrats have many smart ideas on the essential agenda of reducing poverty, most of which derive from pegging the low-end wage at a higher level and then adding cash or cash-like transfers to fill in the rest. But what about the middle class?

One obvious answer is “full employment.” Running the economy at full steam is the most straightforward way of boosting overall wages and perhaps reversing the growth in the capital-share of income. However, that approach hasn’t been adopted by the President, strategically or even rhetorically. Part of it might be that if the economy is terrible because of vague forces, technological changes and necessary pain following a financial crisis, then the Democrats can’t really be blamed for stagnation. That strategy will not work out for them.

The Democrats (and even many liberals in general) also haven’t developed a story about why inequality matters so much for the middle class. There are such stories, of course: the collapse of high progressive taxation creates incentives to rent seek, financialization makes the economy focused less on innovation and more on disgorging the cash, and new platform monopolies are deploying forms of market power that are increasingly worrisome.

Second Limit: Public Provisioning

A similar dynamic is in play with social goods. The liberal strategy is increasingly to leave the provisioning of social goods to the market, while providing coupons for the poorest to afford those goods. By definition, means-testing this way puts high implicit taxes on poorer people in a way that decommodification does not. But beyond that simple point, this leaves middle-class people in a bind, as the ability of the state to provide access and contain costs efficiently through its scale doesn’t benefit them, and stagnating incomes put even more pressure on them.

As noted, antagonisms between the middle class and the poor in higher education are entirely a function of public disinvestment. The moment higher education is designed to put massive costs onto individual students, suddenly individuals are forced to look out only for themselves. If college tuition was largely free, paid for by all people and income sources, then there’d be no need for a working-class or middle-class student to view poorer student as a direct threat to their economic stability. And there's no better way to prematurely destroy a broader liberal agenda by designing a system that creates these conflicts.

These worries are real. The incomes of recent graduates are stagnating as well. The average length of time people are taking to pay off their student loans is up 80 percent, to over 13 years. Meanwhile, as Janet Yellen recently showed in the graphic below, student debt is rising as a percentage of income for everyone below the bottom 5 percent. It’s not surprising that studies find student debt impacting family formation and small business creation, and that people are increasingly looking out for just themselves.

You could imagine committing to lowering costs broadly across the system, say through the proposal by Sara Goldrick-Rab and Nancy Kendall to make the first two years free. But Democrats aren't doing this. Instead, President Obama’s solution is to try and make students better consumers on the front-end with more disclosures and outcome surveys for schools, and to make the lowest-income graduates better debtors on the back-end with caps on how burdensome student debt can be. These solutions by the President are not designed to contain the costs of higher education in a substantial way and, crucially, they don’t increase the public buy-in and interest in public higher education.

The Relevance for the ACA

I brought up higher education because I think it’s relevant, but I think it also can help explain the lack of political payout for the Affordable Care Act. It’s here! The ACA is not only meeting expectations, it’s even exceeding them in major ways. Yet it still remains unpopular, even as millions of people are using the exchanges. There is no political payout for the Democrats.

Liberals chalk this up to the right-wing noise machine, and no doubt that hurts. But part of the problem is that middle-class individuals still end up facing an individual product they are purchasing in a market, except without any subsidies. Though the insurance is better regulated, serious cost controls so far have not been part of the discussion. Polling shows half of the users of the exchange are unsure if they can make their payments and are worried about being able to afford getting sick. This, in turn, blocks the formation of a broad-based coalition capable of defending, sustaining, and expanding the ACA in the same way those have formed for Social Security and Medicare.

Any serious populist agenda will have to have a broader agenda for wages, with full employment as the central idea. But it will also need to include social programs that are broader based and focused on cost controls; here, luckily, the public option is a perfect organizing metaphor.

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There was a quiet revolution in the University of North Carolina higher education system in August, one that shows an important limit of current liberal thought. In the aftermath of the 2014 election, there’s been a significant amount of discussion over whether liberals have an economic agenda designed for the working and middle classes. This discussion has primarily been about wages in the middle of the income distribution, which are the first major limit of liberal thought; however, it is also tied to a second limit, which is the way that liberals want to provide public goods and services.

So what happened? The UNC System Board of Governors voted unanimously to cap the amount of tuition that may be used for financial aid for need-based students at no more than 15 percent. With tuition going up rapidly at public universities as the result of public disinvestment, administrators have recently begun using general tuition to supplement their ability to provide aid. This cross-subsidization has been heralded as a solution to the problem of high college costs. Sticker price is high, but the net price for poorer students will be low.

This system works as long as there is sufficient middle-class buy-in, but it’s now capped at UNC. As a board member told the local press, the burden of providing need-based aid “has become unfairly apportioned to working North Carolinians,” and this new policy helps prevent that. Iowa implemented a similar approach back in 2013. And as Kevin Kiley has reported for IHE, similar proposals have been floated in Arizona and Virginia. This trend is likely to gain strength as states continue to disinvest.

The problem for liberals isn’t just that there’s no way for them to win this argument with middle-class wages stagnating, though that is a problem. The far bigger issue for liberals is that this is a false choice, a real class antagonism that has been created entirely by the process of state disinvestment, privatization, cost-shifting of tuitions away from general revenues to individuals, and the subsequent explosion in student debt. As long as liberals continue to play this game, they’ll be undermining their chances.

First Limit: Middle-Class Wages

There’s been a wave of commentary about how the Democrats don’t have a middle-class wage agenda. David Leonhardt wrote the core essay, “The Great Wage Slowdown, Looming Over Politics,” with its opening line: “How does the Democratic Party plan to lift stagnant middle-class incomes?” Josh Marshall made the same argument as well. The Democrats have many smart ideas on the essential agenda of reducing poverty, most of which derive from pegging the low-end wage at a higher level and then adding cash or cash-like transfers to fill in the rest. But what about the middle class?

One obvious answer is “full employment.” Running the economy at full steam is the most straightforward way of boosting overall wages and perhaps reversing the growth in the capital-share of income. However, that approach hasn’t been adopted by the President, strategically or even rhetorically. Part of it might be that if the economy is terrible because of vague forces, technological changes and necessary pain following a financial crisis, then the Democrats can’t really be blamed for stagnation. That strategy will not work out for them.

The Democrats (and even many liberals in general) also haven’t developed a story about why inequality matters so much for the middle class. There are such stories, of course: the collapse of high progressive taxation creates incentives to rent seek, financialization makes the economy focused less on innovation and more on disgorging the cash, and new platform monopolies are deploying forms of market power that are increasingly worrisome.

Second Limit: Public Provisioning

A similar dynamic is in play with social goods. The liberal strategy is increasingly to leave the provisioning of social goods to the market, while providing coupons for the poorest to afford those goods. By definition, means-testing this way puts high implicit taxes on poorer people in a way that decommodification does not. But beyond that simple point, this leaves middle-class people in a bind, as the ability of the state to provide access and contain costs efficiently through its scale doesn’t benefit them, and stagnating incomes put even more pressure on them.

As noted, antagonisms between the middle class and the poor in higher education are entirely a function of public disinvestment. The moment higher education is designed to put massive costs onto individual students, suddenly individuals are forced to look out only for themselves. If college tuition was largely free, paid for by all people and income sources, then there’d be no need for a working-class or middle-class student to view poorer student as a direct threat to their economic stability. And there's no better way to prematurely destroy a broader liberal agenda by designing a system that creates these conflicts.

These worries are real. The incomes of recent graduates are stagnating as well. The average length of time people are taking to pay off their student loans is up 80 percent, to over 13 years. Meanwhile, as Janet Yellen recently showed in the graphic below, student debt is rising as a percentage of income for everyone below the bottom 5 percent. It’s not surprising that studies find student debt impacting family formation and small business creation, and that people are increasingly looking out for just themselves.

You could imagine committing to lowering costs broadly across the system, say through the proposal by Sara Goldrick-Rab and Nancy Kendall to make the first two years free. But Democrats aren't doing this. Instead, President Obama’s solution is to try and make students better consumers on the front-end with more disclosures and outcome surveys for schools, and to make the lowest-income graduates better debtors on the back-end with caps on how burdensome student debt can be. These solutions by the President are not designed to contain the costs of higher education in a substantial way and, crucially, they don’t increase the public buy-in and interest in public higher education.

The Relevance for the ACA

I brought up higher education because I think it’s relevant, but I think it also can help explain the lack of political payout for the Affordable Care Act. It’s here! The ACA is not only meeting expectations, it’s even exceeding them in major ways. Yet it still remains unpopular, even as millions of people are using the exchanges. There is no political payout for the Democrats.

Liberals chalk this up to the right-wing noise machine, and no doubt that hurts. But part of the problem is that middle-class individuals still end up facing an individual product they are purchasing in a market, except without any subsidies. Though the insurance is better regulated, serious cost controls so far have not been part of the discussion. Polling shows half of the users of the exchange are unsure if they can make their payments and are worried about being able to afford getting sick. This, in turn, blocks the formation of a broad-based coalition capable of defending, sustaining, and expanding the ACA in the same way those have formed for Social Security and Medicare.

Any serious populist agenda will have to have a broader agenda for wages, with full employment as the central idea. But it will also need to include social programs that are broader based and focused on cost controls; here, luckily, the public option is a perfect organizing metaphor.

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On Public and Profits at Boston Review

Nov 12, 2014Mike Konczal

Did you know that prosecutors were paid based on how many cases they tried in the 19th century? Or that Adam Smith argued for judges running on the profit motive in the Wealth of Nations? I have a new piece discussion the rise and fall of disinterested public service as a response to the abuses of the profit motive in government service, or how we got away from that system and how we are now going back to it, at Boston Review. It's called Selling Fast: Public Goods, Profits, and State Legitimacy.

It's a review of Against the Profit Motive: The Salary Revolution in American Government, 1780–1940 by Yale legal historian Nicholas R. Parrillo, The Teacher Wars by Dana Goldstein, and Rise of the Warrior Cop by Radley Balko. There's a lot of interesting threads through all three, and I really enjoyed working on this review. I hope you check it out.

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Did you know that prosecutors were paid based on how many cases they tried in the 19th century? Or that Adam Smith argued for judges running on the profit motive in the Wealth of Nations? I have a new piece discussion the rise and fall of disinterested public service as a response to the abuses of the profit motive in government service, or how we got away from that system and how we are now going back to it, at Boston Review. It's called Selling Fast: Public Goods, Profits, and State Legitimacy.

It's a review of Against the Profit Motive: The Salary Revolution in American Government, 1780–1940 by Yale legal historian Nicholas R. Parrillo, The Teacher Wars by Dana Goldstein, and Rise of the Warrior Cop by Radley Balko. There's a lot of interesting threads through all three, and I really enjoyed working on this review. I hope you check it out.

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News Flash: Progressives Have a Winning Economic Narrative -- and Democrats Who Used It Won

Nov 11, 2014Richard Kirsch

Democrats can connect with voters by telling a story about how they'll make the economy work for all of us.

The big post-election consensus is that Democrats believe, as The New York Times put it, they were missing “a broad economic message to enthuse supporters and convert some independents.”

Democrats can connect with voters by telling a story about how they'll make the economy work for all of us.

The big post-election consensus is that Democrats believe, as The New York Times put it, they were missing “a broad economic message to enthuse supporters and convert some independents.”

So what would that missing narrative be? The point of a narrative is to give people an explanation of what they are experiencing that includes what is wrong, who is responsible, and what we can do about it.

Take a look at two explanations of what’s happening that are very similar but different in important ways.

The first, from Republican message guru Frank Luntz, writing in The New York Times: “[F]rom the reddest rural towns to the bluest big cities, the sentiment is the same. People say Washington is broken and on the decline, that government no longer works for them — only for the rich and powerful.”

The second, from Democratic message advisors James Carville and Stan Greenberg, along with Page Gardner: “People believe that the rich are using their influence to rig the system so the economy works for them but not the middle class.”

The big difference here is how the common sentiment among Americans – that the rich call the shots – is framed to suggest a solution. By focusing on the government, Luntz sets up the Republican push for limited government. Or as successful Iowa Republican Senate candidate Joni Ernst said in a debate, “When Washington is picking… winners and losers, it’s almost always our Iowa middle-class families that lose.”

For Carville, Greenberg, and Gardner, the focus is on the economy being rigged. Or as one ad for Oregon’s Democratic Senator Jeff Merkley said, “It is Jeff leading the fight to hold Wall Street and big banks accountable when they prey on working families and small businesses. ”

Merkley won and so did Ernst. The explanation, according to progressive pundits, is that Democrats like Merkley who used a populist message – which means they connected people’s economic concerns to the rich and powerful who are responsible – were successful while Dems who ran away from that message lost. As someone who has been leading the Progressive Economic Narrative (PEN) project, I really wanted to believe that. But as it seemed too easy, I decided to look at some campaigns and see whether it was spin or the truth. It turns out to be the truth.

The first case I looked at was Minnesota Democrat Al Franken’s campaign. After eking out a victory in the great Democratic year of 2008, Franken won handily this year, even as Republicans took over the Minnesota House of Representatives. Imagine my smile when I quickly found Franken ads based on the key value statement in our Progressive Economic Narrative, “We all do better when we all do better.” This was also a key theme of Minnesota’s great progressive senator, Paul Wellstone.

Franken’s progressive populism makes a key distinction when he uses the key word in that values phrase, “all.” As he says in another ad,  “I work for all Minnesotans. Wall Street wasn’t happy about that. But I don’t work for Wall Street. I work for you.”

The name of our Progressive Economic Narrative is “An America that works for all of us,” which is central to the aspirational power of our story. However, what is needed for that message to win is to make it clear who is not included in “all of us” (i.e., the wealthy). A poll of voters last spring found that voters preferred “growing the economy” over “an economy that works for all of us” by 10 percentage points. By contrast, voters chose “an economy that works for all of us, not just the wealthy” over “growing the economy” by 22 points!

Merkley was also sure to name the villains of the economic story throughout his campaign, as in the Wall Street ad mentioned above.

So what about those Democrats who lost in purple states? I would have thought Iowa Democratic Rep. Bruce Braley, who founded the populist caucus when he got to Congress in 2007, would have run a populist campaign. Instead, Braley ran on working across the aisle to get things done in Iowa and not “letting the extremists from either party get in the way.” Because voters are skeptical about anything getting done for them in Washington, his message fell flat.

Braley listed progressive issues, but without a narrative to link them together. His only villains were the “Koch brothers and their extreme agenda,” but he didn’t say what made their agenda extreme. Contrast that with how Merkley described “the billionaire Koch brothers,” who want to give “more tax breaks to millionaires and reward companies that ship jobs overseas.”

What about Mark Udall in Colorado, another Democrat who lost in a purple state that Obama carried? Udall built his campaign narrative around a war on women by his opponent Rep. Corey Gardner. He, like Braley, ticked off a list of progressive issues – from minimum wage to pay equity to protecting Social Security – without providing any framing story to link them together. He left out who the villains are in the story.

Udall also committed the ultimate narrative sin: delivering your opponent’s story. Here’s the closing line of a Udall ad: “I’m Mark Udall. No one – not government, not Washington – should have the power to take those rights and freedoms away.” Voters who wanted the anti-government candidate chose the real thing!

Udall would have had a much broader audience for his “war on women” message if he framed it as part of a broader war on American families by the rich and powerful. It is easy to make opposition to pay equity or a woman’s right to make her own decisions part of this broader story, which speaks to Americans’ deep concerns about their families.

One part of the story I didn’t see in the candidate ads was how Democrats should address Luntz’s “blame government” narrative. The answer, as Hart Research pollster Guy Molyneaux explains in The New York Times, quoting almost verbatim from the Progressive Economic Narrative, is that “the important question facing America today is not how big government should be so much as who government should work for: corporations and the wealthy, or all Americans?”

As Molyneaux points out, “That is a debate Democrats can and will win.”

What even progressive Democrats need to do better is tell a story about how to create that economy that works for everyone, not just the wealthy. This is a matter of both clear narrative and bold policy.

The core of our economic theory is, as we say in the Progressive Economic Narrative, “working people and the middle class are the engines of the economy.” Another version of this, popularized by the Center for American Progress, is “we build the economy from the middle-out, not trickle-down.”

The story we are telling is that people are the job creators, not businesses. That raising the minimum wage is not just about fairness, but about creating economy-boosting jobs that put money in people’s pockets to spend in their communities. “We all do better when we all do better” is not just a statement of values; it’s the progressive belief about how the economy works.

Our narrative connects to policy with the phrase “we build a strong middle class by decisions we make together.” Democrats need to step up with bold policies, many of which are already out there, waiting to be championed. Here are just three:

1.     A massive public investment to dramatically increase the use of clean energy  – which would at the same time tackle the challenge of climate disruption – with a requirement that all the jobs created pay wages that can support a family.

2.     A $15/hr minimum wage that grows with productivity, so that workers get their fare share of the wealth they create. 

3.     A robust system of public financing that would allow candidates to win office without taking big campaign contributions from anyone, addressing the public’s belief that the rich call the shots.

One thing Democrats had better not say is “Oh, what’s the narrative? What do we say about the economy?” Progressives have a powerful narrative and bold solutions to create an America and an economy that works for all of us, not just the wealthy. Candidates who run on this have won and will win. And an America that runs on these policies will do to what too many Americans no longer believe is possible: provide a better life for our children. 

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.

2014 election results map courtesy of Politico.

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With This Political Scene, Millennial Turnout Isn't a Surprise

Nov 6, 2014Alan Smith

Millennials aren't engaged in the current model of partisan politics, but true networks of engagement would bring far more young people into the political fold.

Millennials aren't engaged in the current model of partisan politics, but true networks of engagement would bring far more young people into the political fold.

As pundits predicted (Nate Silver really has taken the drama out of election returns) the Republicans swept to a classic 6th year victory, winning senate and gubernatorial majorities on the backs of disillusionment with Obama and low turnout across the board. Also as predicted, young voters’ share of the electorate dropped: from 19 percent in 2012 to 13 percent this year. This pretty much mirrors the turnout in the last two midterm elections, and we can safely call this a trend in Millennial political engagement.

I'm not going to spend time trying to debunk the notion of Millennials as lazy or disengaged. I don't buy those narratives, either anecdotally or statistically, but what's important today is that we've seen the confirmation of a very dangerous trend: this moment of low turnout is perfectly in line with an all-time low in people's faith in our institutions of government.  If what we want from voting is for people to engage more with the rules that govern their lives, we need to make the process of engaging much more meaningful that what currently passes as voting.

I can't blame us, either. The connection between voting and positive change has never been so tenuous. The elimination of section 5 of the Voting Rights Act has opened the door for disenfranchisement movements around the country, and there will be more felons prevented from voting in Georgia then the entire Alaskan electorate (who, by the way, still got to pick a senator). Money, as the Daily Show observed, pretty roundly trumped ideas in this election. Even worse, zooming further out reveals a federal government that seems pathologically incapable of doing anything at all. Why should we care that the senate swung red, or a congressional seat remained blue? We have passionate debates about global warming, about immigration, and about how to fix a healthcare system and an economy that both leave out large numbers of Americans, but when we get to the ballot box those debates seem very removed. How do you know if your vote is a vote for a carbon cap-and-trade program, or against gun control? You don't, and you can't, because the systems that govern our democracy are simply not that responsive.

While I've heard plenty of arguments that yes, this is how representative democracy is supposed to work, it seems to me that we risk a generation of voters systemically having their worst fears and cynicism (and thus disengagement) re-enforced by real results.

It's a real problem. So what? 

My title at the Roosevelt Institute is “Associate Director of Networked Initiatives.” I often end up trying to explain to people what, exactly, that means. Sometimes I'm not sure myself. But if we know that traditional institutions - from Beltway politics to social structures - are crumbling, then how can we take that knowledge and make something positive from it?  So the challenge of my position at Roosevelt is to figure out how organizations that already exist, and those that are starting every day, can work independently while being a part of a network.

In this, there is a vision for how we think about political parties. Not as top down institutions, but as networks of people who support and push each other toward social change, and then are moved to vote as a part of the process they are already engaged in.  

We know that Millennials are civically minded from extensive polling. We are interested in starting our own organizations, and are passionate about many issues. This is not, simply put, a generation that has checked out on change. We're running divestment campaigns, we're starting non-profits, and we're throwing ourselves into the breach as teachers. But with so much re-inventing of the wheel, the Millennial generation's activism is not reaching the scale that we need.

For our Federal government to work at all, we need people to buy in as voters. We need people to show up, to use voting as a starting point, and to assist on projects for the greater good. What if, instead of looking for people to joining the organizations that already exist to build to federal levels of power, we were looking instead for an affiliation of organizations? We are, at this point in our technological history, capable of communications structures and consensus building that is far more complex and more nuanced than it has ever been. And we're also at a point where simply repeating the same tired political process is not just not working, it's actively driving people away.

I am not suggesting creating a loose coalition of organizations, where people sign off on national legislation, or add their votes to other people's petitions. Roosevelt is a network in the sense of communicating between different nodes: active sharing of ideas and information and resources, as well as shared problem solving, to go along with the combined sense of purpose, and shared values. Imagine with me, a party that recruited organizations that already existed, without trying to change their mission. Education organizations, environmental groups, crowdfunding platforms, and better business bureaus with a shared set of values, sharing their work and collaborating with each other. Imagine a network, in the truest sense, that takes what is the same about local problems and elevates the core issues to a national platform, while giving each local group the agency to tackle things the way they need to be tackled. Instead of making voting the core part of how we engage as active citizens, let's make it an end product for engaged people who realize that they've reached the logical end of what they can do locally, and thus need to pass some power up the chain to a Federal government that is ready and waiting. 

There was a glimmer of this process in last night, with organizations that were able to move important issues like minimum wage hikes in Nebraska and South Dakota and soda taxes in Berkeley. A network of organizations that supports local groups, finds candidates that share similar values, and passes on best practices? That sounds like a network that Millennials are already engaged in.

Today, America is angry at Millennials for not voting. Instead, I would suggest that we should be angry at an American government that has passed on actual democratic principles in exchange for the consolidation of power. I think Millennials are smart enough to see this, and that we're building different civic infrastructures, some of which will eventually grow to scale. 

Could political parties be one of these things? Maybe. But they would need to embrace the grassroots, and stop worrying so much if that means getting some grass stains on their message. 

Alan Smith is the Roosevelt Institute's Associate Director of Networked Initiatives.

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Rortybomb on the March: Special Washington Monthly Inequality Issue and The Nation

Nov 4, 2014Mike Konczal

Hey everyone, I have two new pieces out there I hope you check out.

The first is a piece about the financialization of the economy in the latest Washington Monthly. I'm heading up a new project at Roosevelt, more details to come soon, about the financialization of the economy, and this essay is the first product. And I'm happy to have it as part of a special issue on inequality and the economy headed up by the fine people at the Washington Center for Equitable Growth. There's a ton of great stuff in there, including an intro by Heather Boushey, Ann O'Leary on early childhood programs, Alan Blinder on boosting wages, and a conclusion by Joe Stiglitz. It's all really great stuff, and I hope it shows a deeper and wider understanding of an inequality agenda.

The second is the latest The Score column at The Nation, which is a focus on the effect of high tax rates on inequality and structuring markets. It's a writeup of the excellent Saez, Piketty, and Stantcheva Three Elasticies paper, and a continuation of a post here at this blog.

Follow or contact the Rortybomb blog:
 
  

 

Hey everyone, I have two new pieces out there I hope you check out.

The first is a piece about the financialization of the economy in the latest Washington Monthly. I'm heading up a new project at Roosevelt, more details to come soon, about the financialization of the economy, and this essay is the first product. And I'm happy to have it as part of a special issue on inequality and the economy headed up by the fine people at the Washington Center for Equitable Growth. There's a ton of great stuff in there, including an intro by Heather Boushey, Ann O'Leary on early childhood programs, Alan Blinder on boosting wages, and a conclusion by Joe Stiglitz. It's all really great stuff, and I hope it shows a deeper and wider understanding of an inequality agenda.

The second is the latest The Score column at The Nation, which is a focus on the effect of high tax rates on inequality and structuring markets. It's a writeup of the excellent Saez, Piketty, and Stantcheva Three Elasticies paper, and a continuation of a post here at this blog.

Follow or contact the Rortybomb blog:
 
  

 

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The Federal Reserve Won't Save the Economy for All

Oct 9, 2014Joelle Gamble

Deepening political participation in and beyond voting is key to achieving policies that raise outcomes for the working class.

Deepening political participation in and beyond voting is key to achieving policies that raise outcomes for the working class.

Inflation hawks have been the talk of the town in elite economic circles in recent weeks. More liberal-leaning minds critique their (frankly) unsubstantiated concerns that the Federal Reserve is driving the U.S. economy toward high levels of inflation. Hawks are concerned that high levels of inflation due to expansionary monetary policy will lead to negative economic outcomes for major firms and, in turn, the rest of the American public.

Instead of worrying about inflation, which has remained at or below 1.5 percent for a year and a half, many prominent economists argue that we should focus on wage growth and jobs. We have seen profits for corporations rise to nearly pre-recession rates, while the poverty rate is not declining as fast as it should be. It’s clear there are some big policies that need changing: the minimum wage, the corporate tax structure, federal budget priorities, and regulations ranging across industries. So why is there so much focus on the Fed and the inflation hawks that circle it? Is there some policy lever we can pull here that would raise outcomes for the working class?

Let’s lay it out on the table: Current economic debates have focused on U.S. and global monetary policy because our fiscal policy problems appear to be inoperable. A Congressional stagnation, of sorts, has led to a fixation on a different institution, the Federal Reserve. But, overall, can this fixation actually translate into outcomes for the middle class?

With a gridlocked federal system, where can we push for substantial changes in wages and investment infrastructure that support the working class? Executive orders have their limits, of course. Advancements in cities like Seattle and New York City or states like Maryland have started to take effect. But at some point, a deeper, sustainable change must take place. This is a change in who leads in governance and who leads on policy change.

Elections are our general go-to on these matters. If political representation fails, we can just vote them out! Elections matter, but, there are some facts to consider. Currently, the average U.S. voter has an income higher than the median. This is due to lack of access, as well as the privilege of being able to make time to vote. Thus, we should open up opportunities, such as early voting, to more people. But even still, with faith in government falling, access reforms only go so far.

Beyond the act of voting itself, we have to question the responsiveness of the federal government, in particular, to voters. The growing influence of interest groups and coalitions of the wealthy make the ability to change political outcomes from the ballot box less and less secure.

We need to grow the bench. Deepening political participation in and beyond voting is key to achieving policies that raise outcomes for the working class. It is not enough to vote; government must be responsive. As Roosevelt Institute Fellow Sabeel Rahman notes, historic movements of substantial political reform have popular sovereignty and grassroots movements at their core.

Sabeel's words ring especially true in our current political climate. With congressional ineptitude and an unwillingness of the elites to take responsibility for the current state of our democracy, we must return to local movements and communities to build the foundations needed to create tangible economic change. That’s why members of the Campus Network are piloting the Rethinking Communities initiative. We recognize that democracy starts not in Washington but at home, in our own classrooms, our own cities, and our own communities.

There is no silver bullet or hero in this fight for economic justice. Not one public official, nor one economist, nor one President will solve our mess. A return to democratic principles and a deepening of participatory process is what it will take to uplift the working class.

Joelle Gamble is the National Director of the Roosevelt Institute | Campus Network.

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At NextGen IL Conference, Young People Set the Agenda for Their State

Oct 7, 2014Julius Goldberg-LewisDominic RusselRachel Riemenschneider

At the NextGen Illinois conference, Campus Network leaders found a policy space shaped entirely by young people.

At the NextGen Illinois conference, Campus Network leaders found a policy space shaped entirely by young people.

Last Saturday, the Midwest Regional Team of the Roosevelt Institute | Campus Network met in Chicago to attend the NextGen Illinois conference, the culmination of months of discussion, caucuses, and ideas from around Illinois. NextGen IL, an initiative led by the Campus Network and Young Invicibles, is working to bring young adults in Illinois together to shape a youth policy agenda for Illinois. What set NextGen apart from so many other conferences was that its content, agenda, and execution were a direct outcome of power and coalition building among Millennials. NextGen’s attendees included high school students, college students, and graduates; they were organizers, activists, and policy wonks of every kind. Throughout the day, attendees were able to vote on a slate of statewide policy proposals that were the product of the dozens of caucuses that took place over the previous few months. Young people had the opportunity to shape the outcome of the conference and take ownership of their ideas.

One common theme that resounded through the day at the NextGen IL conference was that young people are capable of making a difference in their communities. We all have the knowledge, ability, and passion to make real change. This was thoroughly underscored by the number of young people and students that were panelists throughout the day. Each breakout session featured professionals working in the field, as well as Millennials already working to change the landscape. Whether discussing environmental policy or restorative justice, the young panelists were just as able to engage their audience in a variety of statewide policy issues.

The breakout sessions gave the audience a picture of the issues being addressed on the front lines of the progressive political fight, but the plenary sessions gave us a chance to hear from the elected officials who have the power to turn our ideas into action. Will Guzzardi, a 27-year-old candidate for the Illinois House of Representatives, and Amara Enyia, a 31-year-old running for Mayor of Chicago, both spoke about how young people need to step up to make a difference. They both referenced a common realization many young adults have about growing up. When you’re young, you are told to defer to those in charge, trust your elders, and wait your turn. These candidates stressed that in order to be taken seriously and have our issues adequately addressed, our generation must step up and realize that while our parents and grandparents have a lot to teach us, they don’t have all the solutions. This realization may be scary, but it is also empowering: if no one actually has all the answers, young people have the opportunity to create just as much of an impact as older generations. We have the opportunity to think creatively, and see our age as a benefit, and not a burden to creating and realizing innovative policies that better our communities.

If there was one message that we as participants and attendees took away from the NextGen IL conference, it was an echo of Franklin Delano Roosevelt’s 1936 address to the Democratic National Convention: “There is a mysterious cycle in human events. To some generations much is given. Of other generations much is expected. This generation of Americans has a rendezvous with destiny.” Our generation faces seemingly insurmountable problems, but if the NextGen space was any indication, we can expect bold solutions.

Julius Goldberg-Lewis is the Midwestern Regional Coordinator for the Roosevelt Institute | Campus Network and a senior at the University of Michigan. Dominic Russel is the Midwestern Policy Coordinator and a sophomore at the University of Michigan. Rachel Riemenschneider is the Midwestern New Chapters Coordinator and a junior at Northwestern University.

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Democracy, Economic Crisis, and “Rethinking Communities”

Sep 29, 2014Sabeel Rahman

The Roosevelt Institute | Campus Network's Rethinking Communities initiative is emblematic of the model for democratic and economic reform needed in this New Gilded Age.

The Roosevelt Institute | Campus Network's Rethinking Communities initiative is emblematic of the model for democratic and economic reform needed in this New Gilded Age.

As the latest Census report highlights, economic inequality continues to worsen. With a sluggish economic recovery, continued economic insecurity for many Americans, and ongoing political gridlock, it is increasingly clear that we live in a New Gilded Age. To successfully challenge this status quo, we must look to the lessons of past democratic reform movements as well as the innovative work that is being done on the ground even now in our communities.

Over a hundred years ago, the first Gilded Age witnessed a similar confluence of economic and political crises. It was the era of the rise of mega-corporations and trusts like Standard Oil. Not coincidentally, it was also an era of economic upheaval, recurring financial crises, and a growing anxiety about the ways in which economic inequality and concentrated private power would contaminate and corrupt politics, making it serve special and elite interests rather than the public good.

These crises provoked what became some of the most transformative reform movements in American history: the labor movement, the anti-trust movement, the Populist movement, and the Progressive movement. The common thread throughout these reform efforts was the desire to reclaim some form of popular sovereignty, whether through the creation of local-level policymaking powers for municipalities, the direct election of senators, the creation of national regulatory bodies to check corporate power, or the spread of direct democratic referenda procedures.

The ferment of these decades created the intellectual inheritance of the New Deal. When FDR came into office in the midst of the Great Depression, the members of his administration turned to policies initially pioneered by their Populist and Progressive precursors, especially when it came to banking, financial, and social safety net reforms.

But where the New Deal had decades of Populist and Progressive experimentation to build on, our current context is quite different. The present moment is similar to the early twentieth century in that our fundamental problem is one of dysfunctional democracy. To address economic inequality, we must first reform our democracy to make it more accountable and responsive. But this is not so easily done now that decades of political attacks have dismantled both the public’s faith in and the actual efficacy of democratic governance and the social safety net. The challenge of our generation is three-fold: address our ongoing economic crisis, rebuild the viability of and faith in democratic governance, and do so in a way that develops innovative models of democratic economic policymaking that we can spread and build on.

Cities represent a key frontline in this effort. There is a growing interest in the city as a unit of governance, and cities are unique economic engines whose population density and diversity make them critical drivers of innovation and economic growth. They are at the forefront of economic and policy innovation. They also represent one of the best hopes for reviving a genuine, grassroots democracy. Already participatory budgeting is starting to gain traction in U.S. cities as a way to create more robust grassroots participation while also improving the allocation of resources to underserved groups.

The Roosevelt Institute | Campus Network’s Rethinking Communities initiative represents an exciting effort to drive this movement forward. By focusing on their own universities, Campus Network chapters can help reinvest in their local communities by pressing administrations to direct their investment or procurement policies to local businesses, or by broadening access to universities and community colleges by accepting public assistance, such as food stamps, on campus.

There are two particularly innovative dimensions to the Rethinking Communities initiative:

First, it represents a grassroots, democratic effort. The initiative itself was devised through a participatory strategy process within the Campus Network, through a series of bottom-up meetings and discussions in campus chapters and through a nation-wide convening at the FDR Library in Hyde Park. Campus Network chapters working with local stakeholders in their advocacy efforts further accentuate this democratic ethos.

Second, the initiative also reflects a growing push in economic development circles to reorient local economic development in a more community-oriented direction.

One conventional view of local economic development is that it is a competitive process in which the city is a product to be sold on the international marketplace. Residents and businesses alike, in this view, will choose to settle in the city that offers their preferred “bundle” of goods, services, opportunities, and tax policies. But this view tends to overstate both the degree of policy flexibility that cities have to tailor their “pitch” to outsiders, as well as the degree to which a city’s lifeblood depends purely on attracting an influx of outside dollars, talent, and investment. An opposing view is that local economic development is fundamentally parochial and redistributive, and its purpose is to meet the needs of the residents and businesses that are already part of the fabric of the city. This view has its own limits, underemphasizing the ways in which a locality’s prosperity and well-being are interrelated with regional and even global trends and flows.

More recently, however, a third view of economic development has emerged, which combines aspects of these two accounts. As Richard Schragger argues, we should view cities not as products to be sold on a competitive marketplace, nor as purely closed systems in which to pursue redistributive policies, but rather as path-dependent processes. In other words, cities evolve dynamically, through an interplay between already-existing local conditions and inheritances, and regional or global forces. The task of economic development policy, then, is to find a way to tap into the rooted, existing features of a city, and leverage those local resources.

Anchor institutions like universities are the quintessential lever for economic development in this process-oriented view. These institutions are fundamentally rooted in their communities; they cannot simply leave town the way other kinds of businesses can. They also have large ripple effects on their local communities based on who they hire, who they contract with, and how they employ their own resources. Anchor institutions thus represent valuable engines for local economic development—engines that, if redirected strategically, can help lift up the larger communities in which they are based.

These two features of Rethinking Communities – its democratic and participatory origins, and its focus on leveraging anchor institutions to accelerate local economic development – make it one of many contemporary heirs to the kind of innovation that came out of the first Gilded Age. Now, as then, there is an effort to take a more purposeful and directed approach to economic policy to help create the conditions for collective well-being. Now, as then, there is a desire to approach this task in a self-consciously democratic and participatory manner. And now, as then, it is likely that the lessons learned from (and the activists inspired by) this effort can contribute to a longer-term and larger movement for democratic and economic reform – which is precisely what we need to navigate our way out of the challenges of this New Gilded Age.

Sabeel Rahman is a Fellow at the Roosevelt Institute.

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Daily Digest - September 24: Students on Food Stamps Need Somewhere to Spend Them

Sep 24, 2014Rachel Goldfarb

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

On Campus (HuffPost Live)

Click here to subscribe to Roosevelt First, our weekday morning email featuring the Daily Digest.

On Campus (HuffPost Live)

Caitlyn Becker speaks to Yvonne Montoya, President of the Santa Monica College chapter of the Campus Network, about her chapter's work to get food stamps accepted on campus. Her segment begins at 19:20.

New Deal Liberalism Lives On (WaPo)

Katrina vanden Heuvel, a member of the Roosevelt Institute's Board of Directors, says FDR-style liberalism is alive and well, pointing to leaders like Senator Elizabeth Warren and NYC's Mayor Bill de Blasio.

CEOs Get Paid Too Much, According to Pretty Much Everyone in the World (HBR)

Gretchen Gavett looks at new research on what people think the CEO pay gap should ideally be. Whether respondents felt strongly about CEO pay or not, their ideal ratios were very similar.

Fed Said to Warn Banks on Capital Charges on Leveraged Loans (Bloomberg News)

Craig Torres and Christine Idzelis report on increased Federal Reserve scrutiny of loans that lack stricter requirements that protect lenders. Earlier guidance hasn't slowed lending.

America Out of Whack (NYT)

Thomas Edsall asks a number of economists why, when the U.S. economy is growing so well, we haven't managed to ensure that some of the wealth is distributed to the lower and middle classes.

The Recovery That Left Out Almost Everybody (WSJ)

William Galston says the U.S. economy hasn't actually worked to improve the lives of average families since the end of the Clinton administration.

Now It’s Explicit: Fighting Inflation Is a War to Ensure That Real Wages for the Vast Majority Never Grow (Working Economics)

Josh Bivens looks at the discussion of a yet-unpublished paper from the Dallas Federal Reserve and points out that it essentially advises stopping progress on unemployment to limit inflation.

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