The Democratic National Convention and “Equitable Growth”

As we promised you in our last blog, we will now report the exciting turn-about-tale that has just occurred in the Democratic political platform. The Activist has thus far attempted to steer clear of political involvement because of how it obscures the truth. However, as the candidates become more and more specific in their platform proposals, it seems unavoidable not to refer to them specifically.

 Through most of the nominating procedure, only one contestant seemed to stay on course with regard to actual “plank” proposals—Bernie Sanders, who remained consistent from beginning to end as to what he was proposing. All the other candidates seemed more intent on establishing their reputations, for what they were worth. When they did make specific proposals, either they were too ridiculous or too tentative to be taken seriously.

 Hillary Clinton was the other exception but, through most of the contest, she appeared to be adjusting her program so as, either, not to be outdone by Sanders, or, to appear more sensible than he.

 However, just before the opening of the convention, in a great rush, plank-after-plank, the Democratic platform appeared and, behold! to our delight and surprise, it incorporated almost all of  what Sanders had been proposing right along. Delight, because it was his, Bernie Sanders, proposals that rang the truest, that most closely approximated the analysis of and cures for the Great Recession that we had read, that seemed most aware of the dangers of the enormous inequalities of wealth that Piketty, Atkinson and Stiglitz had taught us.

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The extracts reproduced below are from an article we discovered in the July 24 Wall Street Journal.

Equitable Growth 

. . . Now the Democratic Party’s platform, reflecting the influence of Mr. Sanders and the clear leanings of its voters, goes further. It endorses:

  • Extending Mrs. Clinton’s original college plan to include free tuition at public four-year universities;
  • Expanding, not trimming, Social Security;
  • Raising the federal minimum wage to $15 an hour;
  • Implementing carbon pricing and a tax on financial transactions;
  • Passing a 21st-century version of the repealed Glass-Steagall Act regulating the financial sector;
  • Taking aggressive action on criminal-justice reform;
  • And much more. . .

. . .How did this happen? How did Democrats arrive so far to the left when in the 1990s it didn’t seem strange for their party’s standard-bearer, President Bill Clinton, to proclaim that “the era of big governments over”? . .

. . . It no longer seems plausible that American capitalism only needs some slight nudging to perform well, that leaving markets mostly alone will produce riches to benefit all. The first part of the 21st century, culminating in the Great Recession of 2007-09 and its aftermath, has undermined that story.

What America faces instead is what we might describe as capitalism’s “Piketty problem,” after the French economist, Thomas Piketty, known for his magisterial Capital in the 21st Century. This problem can be summarized by four propositions:

  1. The basic dynamic of the system tends toward higher inequality.
  2. This tendency makes economic growth less effective at raising living standards.
  3. Faster overall economic growth, even if unequally distributed, could potentially solve the problem.
  4. Except that rising inequality slows down economic growth, rather than speeds it up.
  5. Result: a vicious cycle of rising inequality, stagnating living standards and slowing economic growth.

That’s the Piketty problem. And American capitalism, left to its own devices, appears highly unlikely to solve it, which is why a solidly left program of spending and regulation seems eminently sensible under the circumstances. . .

 

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. . . the left-leaning programs proposed by Mrs. Clinton are solidly popular with the American public, not hard-core Democrats alone. . .

. . . High inequality would be viewed as not only unfair and injurious to those who come out on the short end of the stick but also as an active obstacle to a stronger economy. .

. . . This “equitable growth” approach is . . . intended . . . to rev the economic engine. In this, she differs from here erstwhile rival, Bernie Sanders. The Vermonter was far less focused on the need for growth, concentrating instead on the need for “political revolution” to overturn the power of the “billionaire class.” But Mrs. Clinton understands, correctly in my view, that much that the Democrats want to deliver—say, free college tuition and universal pre-K—will not be possible without a stronger economy. . .

. . . Expect Mrs. Clinton to move aggressively to strike bargains that advance key parts of her program, especially those that would directly boost growth in the short run. Reflecting this priority, Mrs. Clinton has repeatedly said that during her first 100 days she would call upon Congress to dramatically increase spending on roads, bridges and other public works, including to provide universal broadband and build a clean energy grid. Her $275 billion program, if implemented, would represent the greatest investment in American infrastructure since the development of the interstate highway system in the 1950s.

Mrs. Clinton would probably also prioritize measures that directly benefit the economically squeezed, like raising the minimum wage and mandating paid family leave. Those ideas were massively popular with the public (including many in the GOP). . .

. . . we can be sure that the Democrats, regardless of any initial stumbles, will press their left-leaning agenda and seek the equitable growth that has been sadly lacking in the 21st century so far.

Ruy Texeira, who wrote the above article, is a senior fellow at the Century Foundation and the Center for American Progress

Two more blogs on the outcome of the Democratic Convention Platform will follow this one.

 

 

 

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