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