“Pieces of Silver”

Paul Krugman Writes for the New York Times:

Paul Krugman, professor of international trade and economics at Princeton University and Nobel Prize-winning economist, speaks during an interview in New York, U.S., on Monday, Jan. 28, 2013. Photographer: Scott Eells/Bloomberg *** Local Caption *** Paul Krugman

Paul Krugman, professor of international trade and economics at Princeton University and Nobel Prize-winning economist, speaks during an interview in New York, U.S., on Monday, Jan. 28, 2013. Photographer: Scott Eells/Bloomberg *** Local Caption *** Paul Krugman. . .

But there’s a third answer, which can be summarized in one number: 34. . . , the average federal tax rate for the top 1 percent in 2013. . . And it’s up from just 28.2 in 2008, because President Obama allowed the high-end Bush tax cuts to expire and imposed new taxes to pay for a dramatic expansion of health coverage. . . Taxes on the really, really rich have gone up even more.

If Hillary Clinton wins, taxes on the elite will at minimum stay at this level, and may even go up significantly if Democrats do well enough … to enable her to pass new legislation. …

But if “populist” Donald Trump wins, taxes on the wealthy will go way down…

So if you’re wealthy, or you’re someone who has built a career by reliably serving the interests of the wealthy, the choice is clear — as long as you don’t care too much about stuff like shunning racism, preserving democracy and freedom of religion, or for that matter avoiding nuclear war, Mr. Trump is your guy…, it’s just an extension of the devil’s bargain the economic right has been making for decades, going all the way back to Nixon’s “Southern strategy.” …

If this election goes the way it probably will, a few months from now those leading Republicans will be trying to pretend that they never really supported their party’s nominee, that in their hearts they always knew he was the wrong man.

. . . But whatever doubts they may be feeling don’t excuse their actions, and in fact may make them even less forgivable. For the fact is that right now, when it matters, they have decided that lower tax rates on the rich are sufficient payment for betraying American ideals and putting the republic as we know it in danger.

Nancy Pelosi responds from Washington:

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Paul Krugman is right on the money (“Pieces of Silver,” column, Aug. 12). Whether one accepts or rejects Donald Trump, embracing the conduct of congressional Republicans is just as costly to America.

Limiting taxes on the wealthy and special interests has been the central aim of Republicans in Congress for decades.

Many in the business community claim to support immigration reform, gun violence prevention, scientific research, women’s right to choose, L.G.B.T. equality and environmental protections. Yet the tax issue “trumps” all, as their support of congressional Republicans proves.

There’s not a dime’s worth of difference between Donald Trump and what Republicans in Congress have been advancing for years. Mr. Trump’s candidacy has exposed the same moral compromise that the G.O.P. establishment and business community have always made to protect special interests and the wealthy.

They have spent more money on lawyers, lobbyists and political contributions on this issue than any other. Tax expenditures add greatly to the debt and do little for job creation. Eliminating them will reduce the deficit — another so-called priority trumped by tax cuts for the wealthy.

NANCY PELOSI

Washington

How Elites Forsake Their Countrymen

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Look what turned up in today’s Wall Street Journal: a shocking article about how today’s moneyed class, the famous 1 percent, the new oligarchs, are keen to push globalism, immigration, internationalism, whatever you care to call it that matches workers’ salaries world-wide against each other, and take full credit for their humanitarianism, as long as they themselves don’t come in contact with or suffer unpleasant consequences from their generosity. That they leave to the working-class people, from whom they have long ago dissociated themselves, to work out: how to get on with foreigners with totally different cultural and religious backgrounds, willing to work for much less pay.

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The article points out this international elite is truly that–international–and  has no sense of loyalty to the fellow countrymen from whom they emerged. This has long been evident. It is only surprising that it should appear in the Wall Street Journal and not the New York Times. Bravo to Peggy Noonan, who wrote this piece for the journal,  for bringing it to our attention. We have abbreviated the original.

. . . I close with a story that I haven’t seen in the mainstream press. This week the Daily Caller’s Peter Hasson reported that recent Syrian refugees being resettled in Virginia, were sent to the state’s poorest communities. Data from the State Department showed that almost all Virginia’s refugees since October “have been placed in towns with lower incomes and higher poverty rates, hours away from the wealthy suburbs outside of Washington, DC” Of 121 refugees, 112 were placed in communities at least 100 miles from the nation’s capital. The suburban counties of Fairfax, Loudoun and Arlington—among the wealthiest in the nation, and home to high concentrations of those who create, and populate, government and the media—have received only nine refugees.

Some of the detachment isn’t unconscious. Some of it is sheer and clever self-protection. At least on some level they can take care of their own. Nothing in their lives will get worse. The challenge of integrating different cultures, negotiating daily tensions, dealing with crime and extremism and fearfulness on the street—that was put on those with comparatively little, whom I’ve called the unprotected. They were left to struggle, not gradually and over the years but suddenly and in an air of ongoing crisis that shows no signs of ending—because nobody cares about them enough to stop it.

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The powerful show no particular sign of worrying about any of this. When the working and middle class pushed back in shocked indignation, the people on top called them “xenophobic,” “narrow-minded,” “racist.” The detached, who made the decisions and bore none of the costs, got to be called “humanist,” “compassionate,” and “hero of human rights.”

The larger point is that this is something we are seeing all over, the top detaching itself from the bottom, feeling little loyalty to it or affiliation with it. It is a theme I see working its way throughout the West’s power centers. At its heart it is not only a detachment from, but a lack of interest in, the lives of your countrymen, of those who are not at the table, and who understand that they’ve been abandoned by their leaders’ selfishness and mad virtue-signaling.

On Wall Street, where they used to make statesmen, they now barely make citizens. CEOs are consumed with short-term thinking, stock prices, quarterly profits. They don’t really believe that they have to be involved with “America” now; they see their job as thinking globally and meeting shareholder expectations.

In Silicon Valley the idea of “the national interest” is not much discussed. They adhere to higher, more abstract, more global values. They’re not about America, they’re about . . . well, I suppose they’d say the future.

In Hollywood the wealthy protect their own children from cultural decay, from the sick images they create for all the screens, but they don’t mind if poor, unparented children from broken-up families get those messages and, in the way of things, act on them down the road.

From what I’ve seen of those in power throughout business and politics now, the people of your country are not your countrymen, they’re aliens whose bizarre emotions you must attempt occasionally to anticipate and manage.

In Manhattan, my little island off the continent, I see the children of the global business elite marry each other and settle in London or New York or Mumbai. They send their children to the same schools and are alert to all class markers. And those elites, of Mumbai and Manhattan, do not often identify with, or see a connection to or an obligation toward, the rough, struggling people who live at the bottom in their countries. In fact, they fear them, and often devise ways, when home, of not having their wealth and worldly success fully noticed.

                                        His “Home away from Home”Unknown-2Music mogul David Geffen purchased “Pelorus” from Russian oligarch Roman Abramovich in May 2011. Since one helicopter pad just isn’t enough, this superyacht has two, in addition to two swimming pools and a collection of smaller boats on the tender deck. One guest suite has a wall that lowers to transform into an ultra-private veranda. Cost: $300 million

Affluence detaches, power adds distance to experience. I don’t have it fully right in my mind but something big is happening here with this division between the leaders and the led. It is very much a feature of our age. But it is odd that our elites have abandoned or are abandoning the idea that they belong to a country, that they have ties that bring responsibilities, that they should feel loyalty to their people or, at the very least, a grounded respect.

Hillary’s Summer of Love?

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Last Sunday we reported a most encouraging article in the magazine section of the New York Times that speculated that the Democratic nominee for president might very well be prepared to champion the cause of the 99 percent and to right the inequality that currently exists between rich and poor (our cause) and is undermining the economy (and, consequently, our democracy), at least in the view of The Roosevelt Institute. Yipee!

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 This Sunday we may have to report the pendulum of the New York Times may be swinging in the opposite direction. In an article by Frank Bruni titled “Hillary’s Summer of Love” the author writes:

 Dozens of prominent Republicans have come out and said that they’ll vote for her (Hillary) or consider it, including, just last week the Silicon Valley titan Meg Whitman, the Jeb Bush confidante Sally Bradshaw, and Maria Comella, a former spokeswoman for two of Trump’s most pugnacious promoters, Chris Christie and Rudy Giuliani.

You can expect the list to grow. . .

I envision a box of cigars to Collin Powell, long-stemmed roses for Condoleezza Rice, a brand-new smartphone for Senator Lindsay Graham. . .

For many months now, she has been sending signals that a second Clinton administration would differ from President Obama’s in the earnestness and aggressiveness of its bid for bipartisan cooperation. . .

What hasn’t happened, though, is the construction of a substantive, policy-based bridge across the aisle. She moved leftward during the primaries to deal with Bernie Sanders’s challenge, and many of her positions are anathema even to those who prefer her to Trump.

Does she change that over the next months or, if elected, upon taking office?  Does she have to? There are some fascinating forks in the road ahead—some big decisions—all created by the singular mess of Trumps candidacy and the possibility, suggested in the latest polls, including one that showed her ahead in Georgia, that he’ll lose the election by a devastating margin.

It was a matter of principle when we first created this blog to deal strictly with economics and not to get involved with current politics which are ephemeral at best and can rarely look beyond the next election, candidate or poll. We apologize therefore for this lapse. It was the great hope raised in us by the Roosevelt Institute and its stalwarts, Felicia Wong, Joseph Stiglitz and Robert Reich that caused us to deviate. Let’s pray that their guess is right.

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Meanwhile we must report more bad news from this Sunday’s Times. In an article entitled “A Low-Growth World” Neil Irwin of the Times staff writes:

One central fact about the global economy lurks just beneath the year’s remarkable headlines: Economic growth in advanced nations has been weaker for longer than it has been in the lifetime of most people on earth. . .

This trend helps to explain why incomes have risen so slowly since the turn of the century, especially for those who are not top earners (the 99 percent).

The first step in reversing the slowdown is to understand why it is happening. One way to do this is to examine the predictions from smart economists. . .

So who does he go to as his authority? Just the man who had been invalidated for the inaccuracy of his economic vision in last Sunday’s Times article.

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Larry Summers, the Harvard economist and former top official in the Obama and Clinton administrations. . .

[who, in November 2013,] combined those observations into a much-discussed speech at an I.M.F. conference, arguing that the global economy had, just maybe, settled into a state of “secular stagnation” in which there was insufficient demand, and resulting slow growth, low inflation and low interest rates. . .

Mr. Summers, in an interview, frames it as an inversion of Say’s Law, the notion that supply creates its own demand: Economy-wide, people doing the work to create goods and services results in their having the income to then buy those goods and services.

In this case, rather, as he has often put it, “Lack of demand creates lack of supply.”

In refutation, we quote from that earlier article on Hillary Clinton by Gideon Lewis-Kraus:

. . . there were two distinct factions in the Clinton White House: the free-market, centrist, “neo-liberal” wing with such figures as Larry Summers and Robert Rubin . . . and then people like Stiglitz. . . and Robert Reich. The Summers/Rubin wing largely prevailed.

 But later on, referring to the recent rival Democratic presidential candidates, we read:

 The fight between Clinton and Sanders often seemed like a choice between a repudiation of the long 1990s entirely (Robert Reich has been an outspoken Sanders supporter) or an avowal that this time the the party will choose the vision of Stiglitz. . . On the left, Stiglitz. . . is viewed, like Sanders, to have landed consistently on the right side of history.

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 Let us remind Mr. Summers and Neil Irwin, author of “A Low-Growth World,” of what Stiglitz said:

 “Inequality isn’t the trade-off for economic growth; rather, it’s both the cause and the symptom of slower growth.”        

 

 

 

  

Could Hillary Clinton Become the Champion of the 99 Percent? (concluded)

This, part three of an article from the New York Times by Gideon Lewis-Kraus about the Roosevelt Institute, a progressive think-tank with a radically different vision of America’s economic and political future, speculates on where the Democratic presidential nominee stands with regard to these issues.

Rewriting the Rules does call for an increase in top individual marginal tax rates to perhaps 45 percent, a substantial increase by today’s Republican standards but well in line with contemporary Europe or 20th-century America. What was novel was that . . . [t]heir demands were vaulting, but they held that an agenda offering freedom from exploitation (rather than freedom from regulation), and insisting that greater fairness would benefit everyone, would resonate with all Americans. . .

images-5Larry Summer              Robert Reich                                                               Robert_Reich_at_the_UT_Liz_Carpenter_Lecture_2015

                                                                                                                                                                    

                                            

                                                            

Everywhere it has been pointed out that this election feels like a prolonged rehash of 1990s enmities. Wong has a Faulknerian view: “It’s not just the same fights,” she told me, “but the exact same people.” The story goes that there were two distinct factions in the Clinton White House: the free-market, centrist, “neoliberal” wing that we now associate with such figures as Larry Summers and Robert Rubin and such institutions as the Democratic Leadership Council; and then people like Stiglitz — who was head of the Council of Economic Advisers for two years — and Robert Reich. The Summers/Rubin wing largely prevailed. . . It was this legacy that had, throughout the primaries, prevented so many people from taking the former first lady — especially as she tied herself to Obama’s tenure — as a credible voice for the economic reforms of Rewriting the Rules. . .

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. . . The fight between Clinton and Sanders often seemed like a choice between a repudiation of the long 1990s entirely (Robert Reich has been an outspoken Sanders supporter) or an avowal that this time the party will choose the vision of Stiglitz. The obvious mystery then becomes: Where does Hillary Clinton herself stand?. . .To pretend the battles are the same as they were in 1994 ignores the fact that the economic realities have changed, economic thinking has changed, the party has changed and — perhaps more than anything — the electorate has changed.

On the left, Stiglitz — with his resignation in protest from the World Bank, in 2000; the 2002 publication of the bridge-burning anti-neoliberalism classic “Globalization and Its Discontents”; and the 2011 publication, in Vanity Fair, of an article titled Of the 1 Percent, By the 1 Percent, For the 1 PercentRobert Reich is viewed, like Sanders, to have landed consistently on the right side of history. . .

Now, though, there’s no excuse. “Between 1990 and 2015 we’ve had the financial crisis, growth of inequality to unbounded levels, slow growth over all for a third of a century,” Stiglitz said. “We’ve had a third of a century as an experiment, and if you don’t see the results of that experiment now, that’s willful neglect.”

Wong was a White House fellow in the Clinton administration in 1998 and had her own objections to the positions of that White House . . . For Wong, too, this election has proved not that the disputes of the 1990s must be fought anew but that they have already been won, decisively and across the board.

 . . . Since the 1970s, movement conservatism has consistently outperformed progressives in laying a talent conduit. Heritage identifies young candidates and grooms them for a smooth climb through the system . . .

. . . Roosevelt’s project, likewise, is about finding people with the economic, legal and regulatory experience to change the country’s balance of power. . . This goes for top positions, like cabinet secretaries or the heads of agencies, but also down to the deputy under secretaries and staff members, whom they could introduce to the system.

Alexander Hamilton                                                      Thomas Jefferson  

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Wong thinks it’s no longer accurate to even think of these issues in terms of left versus right. Instead, she holds, real political realignment means a long-term cultural change in the perception of government and its relationship to consolidated power. . . most people. . . have a much easier time recognizing — as Elizabeth Warren put it in a speech at the New America Foundation last month — that four airlines control 80 percent of American airline seats, three chains own 99 percent of drugstores and four companies sell 85 percent of the beef.

In June 2016, a little more than a year after the Roosevelt Island speech, Clinton gave her first major economic address as the presumed nominee, in Raleigh. She called for wage increases through stronger unions; portable benefits; an expansion of Social Security; the closing of the carried-interest loophole and an exit tax for corporate inversions; and policies to address the racial employment and racial wealth gaps. Most important for everyone at Roosevelt, she said that she planned an administration that would “rewrite the rules so more companies share profits with their employees and fewer ship profits and jobs overseas.”

1396816_630x354Hillary Clinton makes a major economic address at Raleigh, NC

Wong . . . promptly emailed me an entire roster of the Clinton intimates who favored real reform, including Heather Boushey of the Washington Center for Equitable Growth; Maya Harris, one of Clinton’s senior policy advisers; and Gary Gensler, the campaign’s chief financial officer.

[I]n Wong’s view, the question of who a politician is — and above all who this particular presidential candidate is — is irrelevant. Her strategy is to proceed in public as if the candidate is certain to rise to the occasion. . . “After all,” Wong said to me more than once, “she is unknowable. Nobody can know her. I certainly can’t know her. All I can go by is what is on the public record, and who she’s got around her. I’m sure I’ll be disappointed again. Over the next few months, we’ll all be disappointed again. But I’m only optimistic because there’s evidence for me to be that way.”

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Article concluded

Could Hillary Clinton Become the Champion of the 99 Percent? (continued)

“Inequality isn’t the trade-off for economic growth; rather, it’s both the cause and the symptom of slower growth.”

a motto of the Roosevelt Institute

Roosevelt was designed to be a place, independent of the party establishment, to unite all of these factions under the banner of long-term, coherent economic thinking. Had such a movement existed in 2008, it might have seized on the financial crisis as an opportunity for structural economic reform. . . the system went right back to doing exactly what it did before: allowing the extraordinary concentration of power in the hands of the few to dominate the prospects of the many.

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Roosevelt and its allies believe that the crisis could have been an occasion — unseen since the New Deal — for the diffusion of authority, large-scale infrastructural investment, attention to low-wage growth and relief for the plight of overextended homeowners rather than banks. But that opportunity passed by because, in the absence of a strong, organized countervailing force, responsibility for the bailout simply defaulted to the claque of Citigroup veterans and sympathizers that had administered Democratic economic policy for what was now a full generation. . .

With all this resentment of bankers, a news consumer might have thought the enthusiasm in this milieu — that is, all the groups that resisted the legacy of deregulated, race-neutral, free-market bipartisanship — would accrue to Bernie Sanders. But Sanders in fact came up only rarely in my conversations with them, usually in praise of the sincerity of his message. The common view of the Democratic contest was that Sanders did a great service in pushing Clinton to the left. . .

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The Roosevelt coalition agreed by and large with the direction of Sanders’s economic program, but they regretted the crudeness of his exposition. They understood, for example, the appeal of a call to break up the banks but found greater sophistication in Clinton’s proposals to regulate “shadow banking.” They wished his advisers had been more careful with the numbers. And the personal iconoclasm and moral purity of the Sanders campaign didn’t lend themselves to governance. . .

. . . The central preoccupation for Wong, and for Silvers and for Warren, was to demonstrate that it was the courageous thing, not the cautious one, that would capture the preponderance of the electorate.

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. . .    the most significant liberal think tank in recent years has been the Center for American Progress, founded in 2003 by the former Bill Clinton chief of staff (and current Hillary Clinton campaign chair) John Podesta as his party’s answer to the conservative Heritage Foundation. . . When Obama was elected, roughly a third of CAP’s staff went into his administration. CAP was founded in an era when few liberals were of the opinion that the system itself was broken: If you just found slightly better Democrats, elected them to office and put smarter policies in their hands, they believed, the country would return to the prosperity of the 1990s. Liberal Washington was not equipped, when the financial crisis broke, to tender a holistic analysis of what was ailing the economy. . .

In 2009, a political scientist named Andrew Rich, known for writing about the “war of ideas,” was drafted to reinvent the Roosevelt Institute as a place for the radical thinking that postcrisis politics seemed to require. . . Rich believed that if you weren’t in Washington, and you weren’t beholden to the party apparatus, and if you got the right people — people who were too idiosyncratic or rough-hewn for academia, or academics who wanted to be politically relevant but needed help with finding an audience for their work — you could create a new kind of institution on a looser, livelier model. . .

Joseph_E._Stiglitz_-_cropped    Joseph Stiglitz

. . . Rich brought on Stiglitz and Mike Konczal, whose pseudonymous financial-crisis blog had a cult following among progressives. In 2010, the organization held a conference that prominently featured Elizabeth Warren, then early in her career as a public figure. . .

Rewriting the Rules got funding from the Ford Foundation, whose decision last year to refocus around the issue of inequality was influenced by Roosevelt, and whose president, Darren Walker [see April 10, 2016 blog: Why Giving Back Isn’t Enough] effused to me about Wong as an “incandescent leader” for the progressive movement. While written by Stiglitz, the paper was worked out in consultation with labor officials, academics, congressional staff members and — unusually for a think tank — advocates from places like Color of Change, Naral and the Black Civic Engagement Fund.

BPo4un0O_400x400   ColorOfChange.org

The report lays out a stark narrative about the American economy as it exists today. Inequality, it maintains, is a function not of economic laws but of the preferences awarded to the powerful to extract rents — to exploit people who have little choice — especially on necessary goods like housing and health care. . . Roosevelt stressed that this vision was about the way that power and prejudice created not only distorted markets but also nonfunctional ones. The economy has stalled because too much wealth is being generated in nonproductive activity, hoarded to preserve for the rich all the things government no longer provides. The long-run situation, as Wong put it to me once, is America as “a fear-catalyzed gated community for a privileged few, and a violent, racially hostile, ‘Lord of the Flies’ race to the bottom for the rest of us.”. . .

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To be continued

 

 

 

 

 

 

 

 

 

Could Hillary Clinton Become the Champion of the 99 Percent?

A coalition of progressives has been quietly building a plan to bring Occupy-style ideas into the political establishment. Will the Democratic nominee get on board?  In this fascinating July 23 article from the Sunday New York Times magazine by Times-writer Gideon Lewis-Kraus, the author explores the possibility of the future of the Democratic Party and the future of America becoming concurrent as they did in the New Deal Era under F.D.R. For the full article (we are presenting an abbreviated version in three parts for convenience to the readers of this blog) go to http://www.nytimes.com/2016/07/24/magazine/could-hillary-clinton-become-the-champion-of-the-99-percent.html

 24mag-24roosevelt-t_CA1-blog427 Felicia Wong, president and C.E.O. of the Roosevelt Institute.

In June of 2015, Felicia Joy Wong was in her car, awaiting with some apprehension the economic address that would officially open Hillary Clinton’s presidential campaign. . .  Wong runs the Roosevelt Institute, a small think tank (for lack of a better term) that originated in trusts established to promote the legacies of Franklin and Eleanor. Its chief economist, the Nobel laureate Joseph Stiglitz, indirectly coined the Occupy movement’s enduring slogan (“We are the 99 percent”), and Stiglitz and Wong each saw the election as an opportunity to channel Occupy energy into national politics. . .

In the car, Wong heard the candidate say: “The middle class needs more growth and more fairness. Growth and fairness go together. For lasting prosperity, you can’t have one without the other.”. . .

“Prosperity can’t be just for C.E.O.s and hedge-fund managers,” the candidate continued. “Democracy can’t just be for the billionaires and corporations.”. . .

. . . “Republicans,” the candidate went on, “pledge to wipe out tough rules on Wall Street, rather than rein in the banks that are still too risky, courting future failures.”

Wong stopped the car to check her phone. Exultant emails were streaming in. “This is our plan!” one Roosevelt board member wrote. “This is your plan!”. . .

14CLINTONss-slide-XJPF-master1050-v2Hillary Clinton opens her presidential campaign at the F.D.R. memorial on Roosevelt Island, NYC

“Our plan” was Rewriting the Rules of the American Economy, an inventive combination of narrative history and policy platform that Roosevelt published the month before. The report billed itself as a comprehensive agenda to ameliorate inequality. First, it said, inequality is a choice, not an inevitable byproduct of technology, globalization and the uneven distribution of personal virtue. Second, it held that the longstanding notion of an economic trade-off between growth and equality is a fiction. . .

Now Roosevelt and other progressive groups are wagering that a mandate for economic overhaul might already exist, and that it might even be carried out by the woman who always was the party’s near-certain nominee. . . 2016 might well mark the early commotion of a genuine political realignment.

As the party heads into its convention in Philadelphia, this coalition sees encouraging signals — perhaps most notably the role that Elizabeth Warren, a key Roosevelt ally, has come to play in the campaign — that Hillary Clinton’s economic sympathies might ultimately lie further to the left than skeptics supposed. . . Roosevelt in turn has redoubled its efforts not only on advancing the ideas in “Rewriting the Rules” but also in recruiting the personnel necessary to carry them out, in the form of a methodical effort to find suitable candidates for economic positions in a future presidential administration. . .

703987_131561210339714_1664492668_o   Senator Elizabeth Warren

Rob Stein, the liberal operative . . . of the Democracy Alliance in 2005 . . . told me: “Like no other progressive institution, Roosevelt is bringing strategically relevant insight to the deeper structural problems of our economy.”. . . They believe that this candidate, of all candidates, is unlikely to respond to public hectoring or ultimatums. The greatest incentive they can offer is a demonstration that Clinton may well already be the candidate that progressives — and the electorate — have been waiting for. . .

One cold, dreary spring day I accompanied [Wong] to the A.F.L.-C.I.O. building on 16th Street NW. . . Damon Silvers, the organization’s policy director, greeted us . . . “There have been a few years over the last 30 with broad-based wage growth,” he noted, “but those are the outliers, the exceptions — a few years under Reagan, some under Clinton, but stagnation has been the regime since 1980.”. . .

. . . “Well, you’ve been saying this,” [Wong] replied, “and Elizabeth Warren says it, and Stiglitz has been saying it for 30 years, but now it’s almost common knowledge.” Wong was more concerned about how they planned to put that common knowledge into action before the looming convention.

“Despite President Obama’s efforts, the rules of the economy continue to drive runaway inequality,” Silvers went on. “The power dynamics that were in place in 2008 are still in place now, and we don’t have all the time in the world to fix this.”

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. . one lesson they drew from [Obama’s] time in office was that liberals had long been overly fixated on legislative success. (Johnson had a Congress he could work with; Obama mostly did not, and the next president probably won’t, either.) The right has set the agenda for the past 35 years because they built their economic movement deductively (from the first principle of the unregulated market) and took their victories where they could find them. The left, by comparison, tended to moralize, and spoke in the language of justice instead of growth. . .

To be continued

 

 

 

How the Democratic Presidential Candidate Can Make Wages Grow Again

This article from the Wall Street Journal of August 2 describes how Hillary Clinton, in keeping with our last two blogs about the planks in her platform and the potential youth movement she could lead if she cared to, is now in a position to raise the U.S. economy from the bottom up.

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What follows are extracts from this article:

. . . The real problem American workers face today is getting decent pay for their labor: They need a raise. Or, more precisely, the bottom 99% of workers do. . .

. . . Real wages did better higher up the wage ladder. But even at the lofty 95th percentile, the cumulative gain was only 45% over 42 years, or about 0.9% a year. Meantime, wages for the top 1% rose about 180% over the same period. The next president’s top goal should be to raise wages for the other 99% of Americans. But how? . . .

. . .  Hillary Clinton has presented an extensive list of policies that would raise wages, starting with a higher minimum wage. While raising it would affect directly only the very lowest wage earners, evidence suggests that raising the wage floor pushes up other low wages as well.

Mrs. Clinton also advocates widespread profit-sharing as a way to put more money into workers’ pockets. She would promote that goal both by using the presidential bully pulpit and by providing tax incentives for businesses that share profits. Since the scholarly evidence suggests that profit-sharing raises productivity, such tax breaks will partly pay for themselves.

Increased vocational training and apprenticeships for the non-college-bound are also major Clinton policies. . . not everyone is a good candidate for a college degree, and many well-paying jobs don’t require one. The U.S. can increase its productivity and reduce inequality by ensuring that the right people get vocational training and apprenticeships.

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And then there is what may be the surest way to raise wages over the long run: providing pre-K education for all American children. Mrs. Clinton has promoted this idea for decades. By now, an extensive body of research shows that children who receive high-quality pre-K education perform better in school, are less likely to be incarcerated later in life, and generally go on to earn higher wages. Only shortsightedness has prevented the policy from being adopted: It takes 15-20 years to realize the payoff from educating a 3-year-old.

Finally, let me add one policy that President Obama and House Speaker Paul Ryan already agree on: increasing the now-paltry Earned Income Tax Credit for childless workers. This tax credit is a wage subsidy, but it is tiny for those without children. Only wage-earners are eligible, so even those concerned about “takers” mooching off “makers” should like the idea. The EITC has enjoyed bipartisan support since it was started during the Ford administration.

Add it all up—a higher minimum wage, profit-sharing, vocational education, apprenticeships, pre-K for all, and a more generous EITC—and you have a policy package that, while no miracle, is almost guaranteed to give American workers a raise. . .

 Alan S. Blinder, who wrote this article, is a professor of economics and public affairs at Princeton University and former vice chairman of the Federal Reserve. He is also an informal policy adviser to the Hillary Clinton campaign.

 

 

 

The New Socialism

In an article in the Wall Street Journal entitled “Clinton Won the Battle, Sanders the War” the author sees the Democratic Party, today and for the near future, being led no longer by its former solid, middle-class, middle-aged centrist constituents, but by its young people who are not fearful of government participation in private business, who in fact welcome it, and to whom “socialism” is not a dirty word.

 Juan Williams, the author, is a political analyst for Fox News and columnist for the Hill. What follows are extracts from the full article, characterizing the whole.

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. . .The energy rests instead with a rising generation of Democrats excited to use activist government to protect them in anxious economic times. . .

. . . Older Democrats and minority voters provided a “firewall” that allowed Mrs. Clinton to defeat her rival in the primaries . . . But among the quarter of Democrats who see themselves as “very liberal,” she ran even with [Bernie] the socialist. . .

. . . Almost 60% of Democratic voters agree that “socialism has a positive” impact on society.

. . . This month she wrapped her arms around one of Mr. Sanders’s biggest causes by backing tuition-free college at instate public universities for families making under $125,000 a year. . .

. . . It is clear that in this new liberal order of Democratic politics, the union would be the enforcers. Mrs. Clinton is now even backing a “public option”—a Medicare-style government program to compete against private insurance companies. . .

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. . . With the implicit support of Mrs. Clinton and her allies, the Sanders coalition added language to the Democratic platform calling to raise to raise the minimum wage to $15 an hour, put a price on climate-altering emissions like carbon, and abolish the death penalty.                                                                                                                 The party also stripped out language supporting the Trans-Pacific Partnership trade deal, . . .

. . . A final factor is the GOP’s strategy of unrelenting obstructionism against President Obama, which sparked a low-grade fury among the left wing. . .

. . . The result is that the bare knuckle, activist-driven take-to-the-streets politics of Occupy Wall Street and Black Lives Matter is becoming the rule among Democrats. . .

. . . History will record this week’s convention as a coming-of-age for a new era of liberal Democratic politics. This is now Bernie Sanders’s party.

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Us: Is the promised revolution, in effect, in effect?