Democrats- we put the fun back in funding!

August 20, 2016 10:23 PM

Instead of inevitable forces, the New Liberal Economics argues that these changes are the result of the changing rules of the economy. The way that markets are structured and enforced, what the Roosevelt Institute calls the “rules” of the economy, are powerful determinants of who the economy works for.
posted by LuckyMonkey21 (18 comments total)

I think Konczal is conflating two things, which hurt the clarity of the argument he is making. The key issue he is raising is is that the time for progressive economic policies has come, which you can either believe or not, but which we have heard a lot about since the rise of Bernie.

The second issue is that there is some sort of fundamental "New Economics" that is doing things the old economics has not, and here he cites as old economics supply-side views, inevitable inequality, and the belief that all regulation is bad. The problem is that there is no "New Economics" here, no new discoveries or economic consensus that previously said supply side and inequality were good, and now they are bad. Instead, again, this is a list of policy choices, mostly conservative, that have dominated a lot of economic decision-making.

There are alternatives to current economic policies, but they aren't the result of new ideas in economics.
posted by blahblahblah at 10:55 PM on August 20, 2016 [4 favorites]

If Democrats can become the party of optimism, they can broaden their appeal

Optimism sounds nice but it probably won't do a lot to change the economics of working-class Americans, or convince them to vote for a candidate whose SO played a role in their stagnant or worsening situation, by embracing centrist corporatism as a "Third Way" in the late 90s. Sanders wouldn't have otherwise garnered 40% of left-wing voter interest, and certainly Trump wouldn't have as much of the populist appeal he has from his own side.

The DNC can probably broaden its party's appeal by doing what the public has been polled about what they want, which is to confront the problem of corporate influence on policy that ends up screwing over regular people. Stop pushing TPP through on the sly. Stop opposing universal healthcare with slimy word games anyone can see through as pandering to insurance companies. Make high-quality education a basic right for all Americans and not a gift to the well-to-do. Weaken corporate influence peddling by using all means necessary to overturn Citizens United. Etc. Etc.

There's a lot that could be done to broaden appeal, but that starts by actually dealing with what the public wants, and not what Third Way politicos are comfortable with doing in the background, which has created a pool of disaffected voters who now unfortunately see people like Trump as, perhaps, a last chance option to do something, anything, to stop centrist corporatism and its representatives in the Democratic Party.
posted by a lungful of dragon at 12:05 AM on August 21, 2016 [21 favorites]

From this morning's Observer:

The wave of populism marks the return of class as a central agency in politics, both in the UK and the US. This is particularly remarkable in the US. For many decades, the idea of the “working class” was marginal to American political discourse. Most Americans described themselves as middle class, a reflection of the aspirational pulse at the heart of American society. According to a Gallup poll, in 2000 only 33% of Americans called themselves working class; by 2015 the figure was 48%, almost half the population.

Brexit, too, was primarily a working-class revolt. Hitherto, on both sides of the Atlantic, the agency of class has been in retreat in the face of the emergence of a new range of identities and issues from gender and race to sexual orientation and the environment. The return of class, because of its sheer reach, has the potential, like no other issue, to redefine the political landscape.

Martin Jacques, The death of neoliberalism and the crisis in western politics, The Observer (21 August 2016).
posted by Sonny Jim at 12:34 AM on August 21, 2016 [4 favorites]

Trumpism has symptoms related to economic inequality but the ultimate cause is still xenophobia, racism, and just societal change happening over time.

Banning Muslims has nothing to do with economics. And stuff like trade and deporting undocumented immigrants may on the surface be about economics, but it's more about punishing those people rather than helping Americans.

This doesn't mean we shouldn't support policies to reduce income inequality, but I think we would still be grappling with Donald Trump even if the Third Way never happened.
posted by FJT at 12:34 AM on August 21, 2016 [1 favorite]

The second issue is that there is some sort of fundamental "New Economics" that is doing things the old economics has not, and here he cites as old economics supply-side views, inevitable inequality, and the belief that all regulation is bad. The problem is that there is no "New Economics" here, no new discoveries or economic consensus that previously said supply side and inequality were good, and now they are bad. Instead, again, this is a list of policy choices, mostly conservative, that have dominated a lot of economic decision-making.

Perhaps calling it "the New Political Economy" would be more accurate.
posted by kewb at 4:23 AM on August 21, 2016 [1 favorite]

There are alternatives to current economic policies, but they aren't the result of new ideas in economics.

That's because academic economists and their research is radically different than the popular portrayal and from the few popularizers in the economic profession who advocated right-wing ideas.

One example off the top of my head:

"Trade typically offers cheaper goods, with more choice for consumers and the greatest economic output for society as a whole. But at the same time, it is also very disruptive to individuals’ lives, tying their incomes to the vagaries of international markets."

That's Alt and Gilligan writing in 1994.
posted by MisantropicPainforest at 5:58 AM on August 21, 2016

Academic econ is not what people expect but pointing at two political science people trained in political science writing in a political science journal is not the best example
posted by ROU_Xenophobe at 6:58 AM on August 21, 2016 [3 favorites]

I got into economics 10+ years ago after discovering Eschaton and then Calculated Risk and Brad Delong.

The first two were pretty Economics-lite (even more so now) but got me thinking about the bigger picture (ah yes, Ritholz's blog was also educational last decade).

Konczal:

"Starting in the late 1970s, these rules were rewritten or allowed to drift away from their original purpose. This has led to rising inequality, with no rapid growth to show for it."

FRED graph:

https://fred.stlouisfed.org/graph/?g=6HBV

blue is real per-worker GDP, 1948=100, green is real per-worker wages, same scale

Clinton gets a bad rap from Konczal, but the late 90s were pretty good for labor, the boomers and Gen X found themselves in a nice & tight labor market (the oldest millenials in 1999 were still in high school).

Missing wages are here:

https://fred.stlouisfed.org/graph/?g=6HCh

real corporate profits / # workers

but IMV the real elephant in the room is simply real estate. It is the the primary wealth-tap the parasitical wealthy have on the working people.

Wages go up, rents go up.

https://fred.stlouisfed.org/graph/?g=6HCp
posted by Heywood Mogroot III at 7:42 AM on August 21, 2016 [5 favorites]

Economics without numbers is like astronomy without telescopes.

https://fred.stlouisfed.org/graph/?g=6HD0

Something happened in the Volcker period and again at the tail end of the Greenspan era that few people can see.

blue is consumer debt loading, consumer debt / wages
red is unemployment rate, green is prime rate, right axis

AFAICT the Volcker Fed was fighting to keep consumers from "over-borrowing", i.e. what happened in the 1985-90 period as the "30 Something" baby boomers started settling down buying cars & homes on credit.

This induced 10% unemployment by 1982, but the 1970's wage-price spiral was broken.

I don't understand how the blue line (consumer debt / wage) moved so far up 2001-2006.

This was the housing boom/bubble era of course, but it's as if someone in the GWB admin pushed a button in 1Q01 and off we went.

https://fred.stlouisfed.org/graph/?g=6HE5

is a simpler view of the heavens, gov't + consumer debt / GDP
posted by Heywood Mogroot III at 8:03 AM on August 21, 2016 [2 favorites]

The second issue is that there is some sort of fundamental "New Economics" that is doing things the old economics has not [ . . . ] The problem is that there is no "New Economics" here, no new discoveries or economic consensus that previously said supply side and inequality were good, and now they are bad

I think this misses the mark. The "New Liberal Economics" Konczal is talking about is rather explicitly not a theoretical change driven by academic consensus but a change in perspective and policy responses by Democrats to the country's problems.

Democrats are picking up pieces of theory that have been around a long time and deciding they are relevant. Worrying about monopoly power and minimum wages are ideas that go back a long time. The "discoveries" that drives embracing them is the real world observations of what has happened in the last 30 years and the belief that you can win an election with this new set of policies.
posted by mark k at 8:05 AM on August 21, 2016

Trumpism has symptoms related to economic inequality but the ultimate cause is still xenophobia, racism, and just societal change happening over time.

Personally I think this is backwards; I think xenophobia and racism and fear of societal change are all sharpened and heightened by economic misery. All of that fear of the other has roots in tribalism, which in turn is rooted in competition for resources. The more scarce resources feel, or seem, the more the "need" for tribalism seems heightened. Conversely it's much easier to pitch the idea of expanding the tribe to include X or Y group if the tribe has more than enough resources. For every unrepentant, unrelenting racist Trump supporter I would bet you that there are three more Trump supporters that feel, even if they can't precisely articulate it, that there are not enough resources available for everybody, so "we" need to get rid of "them" so there's enough for "us". Values of "us" and "them" may be outrageously racist and may not reflect reality in any meaningful way, but that doesn't mean that better economic policies couldn't address those fears anyways and in doing so, blunt the support of Trump or whatever demagogue comes next.
posted by mstokes650 at 11:17 AM on August 21, 2016 [11 favorites]

Putting this here instead of the current election2016 thread, since the importance of third party movements is not in quixotic presidential runs, but in how they articulate underrepresented sentiments in the electorate:

The Anxious Bench @ Patheos: Could the U.S. Finally Get a Significant Christian Democratic Party?

There’s a more radical realignment that has intrigued some corners of the blogosphere: the emergence of an American analogue to the Christian democratic parties that have played such important roles in countries like Germany, Italy, France, Belgium, Chile, and Venezuela. “In any other election season such a thing might seem outlandish,” admitted Susannah Black yesterday at Front Porch Republic, “but our national outlandishness scale has been fairly significantly shifted over the past several months.”

So let’s be outlandish for a few minutes. What might such a party look like?

French Catholic intellectual Pascal-Emmanuel Gobry imagines a “Party of Life.” He borrows the name from conservative publisher Ben Domenech, who had in mind a single-issue group (e.g., an anti-abortion updating of the old Prohibitionist Party). But Gobry instead describes a full-fledged centrist movement whose religious underpinnings would tilt it towards the right on social issues and the left on fiscal ones. While he doesn’t call it a “Christian democratic” party, Gobry invokes Catholicism in order to argue that “a truly ‘pro-life’ society and culture would be different from our own in many more ways than simply having laws against abortion.” (As some have put it, pro-life, not simply pro-birth.)

Like the Christian democratic parties of post-WWII Europe, Gobry accepts the need for government intervention in the economy. But he believes that “a consistent pro-life ethic would involve a profound reshaping of the welfare state to support mothers and families, with specific subsidies to enhance and protect human life. Think of everything from a massive child tax credit and child savings accounts to tax credits for companies that implement pro-family policies.” This kind of pro-life party, he proposes, would detach white voters from the Republican Party and African Americans and Latinos from the Democrats. [...]

Even if we start with something like a Kasich faction breaking off from a defunct or diminished GOP, our grand new party would make little headway if it did not draw a significant number of the nation’s 20+ million pro-life Democrats, at least some of whom are nervous about their party platform’s newly revised language on abortion. In particular, it would have to reach out to African Americans and Latinos, who may tend to be more socially conservative than most white Democrats but would expect a party using the language of human dignity and flourishing to associate “pro-life” with reform on issues like immigration, incarceration and policing, and education.

But if we look for proto-Christian democrats in the history of American politics, we’re as likely to find them on the left (e.g., William Jennings Bryan, Jimmy Carter) as on the right. While most of the commentary so far on American Christian democracy has come from #NeverTrump conservatives, it’s not a stretch to envision religious progressives growing disgruntled with a Clinton administration that is slow to address racial and economic inequality and fast to project American military might around the world.
posted by Apocryphon at 12:59 PM on August 21, 2016

a full-fledged centrist movement whose religious underpinnings would tilt it towards the right on social issues and the left on fiscal ones.

Let's just stop right there and say that such a movement is an internal contradiction. It simply does not exist. Fiscal conservatives are not interested in spending a dime on social issues. Someone who says they are socially liberal and fiscally conservative is someone who is all talk and no action. They say they are all for social equality as long is it doesn't cost them anything, either time or money or privilege or the slightest discomfort.

Socially liberal but fiscally conservative. What a joke and deserving of contempt.
posted by JackFlash at 1:23 PM on August 21, 2016 [2 favorites]

To mstokes650's point, here's Felix Rohatyn back in, oh, 1982: "The treatment of poor blacks is the test of our democracy. Democracy may be a great luxury that works only so long as there is growth to allocate. The system still hasn't been tested in allocating sacrifice. Will the middle class sacrifice to keep black mothers on welfare?" Much has changed, but much remains the same...
posted by twsf at 1:26 PM on August 21, 2016

Yikes, I read that completely backwards. Sorry.
posted by JackFlash at 1:34 PM on August 21, 2016 [1 favorite]

Personally I think this is backwards; I think xenophobia and racism and fear of societal change are all sharpened and heightened by economic misery. All of that fear of the other has roots in tribalism, which in turn is rooted in competition for resources. The more scarce resources feel, or seem, the more the "need" for tribalism seems heightened. Conversely it's much easier to pitch the idea of expanding the tribe to include X or Y group if the tribe has more than enough resources

By this logic rich, white men should be the most tolerant people around. Instead, we find that Trump supporters are richer than Sanders or Clinton supporters, whiter than Clinton supporters, more male than Clinton supporters, and better educated than the average American. In fact, voters who rank economic anxiety as their #1 concern are less likely than average to be Trump voters. And racism correlates with support for Trump more than it does for even other Republican candidates.

That theory doesn't hold up historically either. Redlining and blockbusting -- the most overt possible codification of tribalism -- really got going and flourished during the New Deal and postwar boom eras, when things were really pretty decent for white working and middle class Americans. But it overlapped with the Great Migration so for white Americans in the North and West, having enough wasn't enough, the mere possibility of sharing with black people moved them to make laws so they wouldnt have to. In the South, Jim Crow laws and lynchings were rampant in the same era.

I mean look, let's make things better for the poor, working and middle classes, because its the right thing to do and makes for a better country. But don't expect that to fix racism and sexism.
posted by pocketfullofrye at 6:52 PM on August 21, 2016

Anyway "socially liberal but fiscally conservative" usually just means something akin to classical liberalism, expressed via that ungainly construction because "liberal" and "conservative" are such overloaded terms.
posted by atoxyl at 3:02 AM on August 22, 2016 [1 favorite]

"Socially liberal but fiscally conservative" means "I am a libertarian but don't want to admit it because they're all batshit crazy / because I am batshit crazy but don't want to advertise it."
posted by Etrigan at 4:02 AM on August 22, 2016 [1 favorite]