Sunday, November 4, 2018

In the End, It's Always the Economy

Michael Tomasky had an excellent article today in the New York Times Sunday Review on the main task facing Democrats after the election. Tomasky's point is a broad and global one how Democrats must define themselves, a point that has been lost in the endless debate about identity politics and the exact package of policy reforms Democrats should endorse. Tomasky argues that Democrats must "construct a story about how the economy works and grows and spreads prosperity, a story that competes with — and defeats — the Republicans’ own narrative." Without that, Democrats cannot win and dominate over the long-term.
I agree. Both the need for, and the feasibility of, such an economic story was a main focus of my book, The Optimistic Leftist. As was the puzzling failure of the left to concentrate on getting that story right.
Tomasky puts it like this:
"For 40 years, with a few exceptions, Democrats have utterly failed to do [construct such a story]. Until they fix this, they will lose economic arguments to the Republicans — even though majorities disagree with the Republicans on many questions — because every economic debate will proceed from Republican assumptions that make it all but impossible for Democrats to argue their case forcefully.
Republicans have a theory and a story about how the economy grows. You know it as supply-side economics: Cutting taxes, especially on the rich, and decreasing regulation will unleash so much innovation and economic activity that tax revenues will actually increase and the entire economy will benefit.
This has been the conservative story, which the right has elevated to veritable religion, for 30 or 40 years now. And the Democrats’ alternative story is … what? If you’re not recalling it, that’s because there isn’t one....
It seems to me that the Democrats’ story has to be built around the simple idea of investing in middle- and working-class people. Not “spending,” but “investing.” Spending sounds profligate; investing sounds prudent.
This is not to be done for reasons of “fairness.” That’s an absolutely vital point. Liberals reflexively want to make economic arguments about fairness. But this persuades only liberals. People who aren’t liberals — three-quarters of the country — don’t especially care about fairness. They do, however, care about growth. So Democrats need to argue that these investments, not tax cuts for the rich, are the way to spur growth.
Such an argument stands in direct contrast to the right’s story. Republicans say the rich, with millions returned to them in the form of tax cuts, know best what to do with their money and the market can make the best decisions about investments and society’s needs....
Giving more money to working people and investing in their needs is how an economy grows. That’s a direct counterargument to supply-side economics. If enough Democrats say it and say it and say it, they can drive a stake through supply-side’s heart.
Once Democrats can make that case, they’ll be able to turn the tables on the supply-siders. Republicans will argue that government investments and wage increases are “job killers.” But Democrats, rather than merely appealing to people’s consciences, will be able to respond that government investments and wage increases are growth producers that will spread benefits well beyond the top 5 percent or 10 percent.
The story could use a name. The venture capitalist Nick Hanauer and Eric Liu, a former Bill Clinton domestic policy adviser, coined “middle-out economics” five years ago. President Obama even used the phrase a few times.
The important thing is the idea. Democrats must persuade America that there’s a better way to expand the economy than the way Republicans have been advocating for decades. Just as inflation and other ills opened the door for critiques of Keynesianism in the 1970s, so have inequality and disinvestment done the same for critiques of supply-side today. Someone just has to make them."
Amen. Until the Democrats have a theory of growth that can beat the Republican theory of growth, even a good election like Tuesday's should be or even beating Donald Trump in 2020 won't be enough.
About this website
Voters don’t like Republican policies, but conservatives win by spinning a good story about economics. Liberals need to do the same.

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