Monday, June 15, 2015

Hillary's short history of inequality is too short

A few weeks ago, I contrasted Elizabeth Warren's critique of income inequality in America with Obama's. The critiques are substantively similar, laying primary responsibility for the widening wealth and income gaps on Republican tax, labor and regulatory policy and citing similar stats showing that virtually all productivity and output gains over the last several decades have gone to the wealthiest. But Warren is more laser-focused on Republican and Wall Street malfeasance: Obama acknowledges contributing causes as diverse as global competition and domestic racism. And interestingly, where Obama cites four stats to illustrate the growing gap, Warren concentrates her fire with one pair:
Since 1980, how much did the 90% get of income growth in this economy -- from 1980 to 2012, the 90% got zero. None. Nothing.
Zero. None. Nothing. You could hang a campaign on that, no?

Now what about Hillary Clinton, who officially kicked her campaign off with a speech on Roosevelt Island yesterday?

Molly Ball points out quite rightly that Clinton is being credited with a more full-throated populism than she voiced:

Here are some things Clinton didn’t say: She didn’t directly call for higher taxes on the rich. She didn’t directly blame Wall Street or financial deregulation for the economic crisis. She didn’t say, as Warren frequently does, that “the game is rigged” against ordinary Americans. She didn’t mention the gap between rich and poor at all, and her two mentions of inequality (both quoted above) were indirect. CEO benefits and hedge-fund salaries weren’t directly attacked, but used as a point of contrast. Rather than rage against the perfidy and greed of the rich and powerful, as Warren routinely does, or insist that economic villains must be punished, Clinton posited that a better economy could lift all boats—that under her policies, “everybody will have a better time.”

This may seem like a subtle distinction, but it’s at the crux of the economic debate on the left. Economic liberals like Warren, New York Mayor Bill de Blasio, and economist Joseph Stiglitz believe inequality is structural, the result of rules and policies that benefit those at the top. The other side—centrist Democrats like New York Governor Andrew Cuomo, Delaware Governor Jack Markell, and John Delaney, a Democratic congressman and former financier—prefers to blame the wealth gap on globalization and technological advances.
I think that's right, though I experienced the absence somewhat differently. What I missed was a basic historical narrative: we made a wrong turn in 1980 with Reagan's election, at which point we ripped the lid off corporate rapine. Warren is crystal clear about this. In her telling, Republicans starting with Reagan knocked down three pillars of the postwar economic paradise lost: tax fairness, labor protections, and effective bank regulation.  Her story is too simple: Obama's is both more diffuse and more nuanced.  But Hillary's lacked historical heft.

Elements of the narrative were salted throughout the speech. There was this:
We’re still working our way back from a crisis that happened because time-tested values were replaced by false promises.

Instead of an economy built by every American, for every American, we were told that if we let those at the top pay lower taxes and bend the rules, their success would trickle down to everyone else.
What happened?

Well, instead of a balanced budget with surpluses that could have eventually paid off our national debt, the Republicans twice cut taxes for the wealthiest, borrowed money from other countries to pay for two wars, and family incomes dropped. You know where we ended up.
And this:
So we’re standing again. But, we all know we’re not yet running the way America should.
You see corporations making record profits, with CEOs making record pay, but your paychecks have barely budged.

While many of you are working multiple jobs to make ends meet, you see the top 25 hedge fund managers making more than all of America’s kindergarten teachers combined. And, often paying a lower tax rate.    
Prosperity can’t be just for CEOs and hedge fund managers. Democracy can’t be just for billionaires and corporations.
The financial industry and many multinational corporations have created huge wealth for a few by focusing too much on short-term profit and too little on long-term value—too much on complex trading schemes and stock buybacks, too little on investments in new businesses, jobs, and fair compensation.

Republicans trip over themselves promising lower taxes for the wealthy and fewer rules for the biggest corporations without regard for how that will make income inequality even worse... They pledge to wipe out tough rules on Wall Street, rather than rein in the banks that are still too risky.
What's missing is the timeline and hence narrative shape. To the extent that history is brought in, it begins in the runup to the financial crisis rather than with Reagan. There is not a strong enough argument that we gave up an economy that was sharing its gains reasonably well for a bottle of supply-side snake oil.

Clinton of course proposed a laundry list of measures to attack inequality. Some of them are matters of labor law, where I believe the primary focus should be. These include: some kind of reward or incentive for companies to pay good wages; paid sick leave; paid family leave; and adequate notice of work schedules. She mentioned minimum wage only indirectly, name-checking it as part of a list of "family issues" subordinated to closing the gender wage gap.

Clinton's other measures to renew wage growth were current Democratic standards: infrastructure spending, college debt relief, early childhood education, displaced worker training (TAA, anyone?). But her unifying theme was more strengthening families than strengthening wages.

Democrats have a long list of proposals to address inequality. The crux is where you locate the nub of the problem, which is a matter of history. Clinton hasn't chosen where to lay her emphasis.  We are promised a series of speeches that lay out specific proposals in more detail. Let's see what takes shape.

1 comment:

  1. Not really sure why you're expecting Hillary CLINTON to indict the 90s in any historical reminiscience?

    She and her husband have been atypically prepared to apologize and disown all sorts of their policies from that era, but you're not going to hear her say that the malefactors of wealth were raping and pillaging when they were in the WH. She's going to refer back to 24 million jobs, no deficits and 4% nationwide unemployment without caveats or asterisks.