A Proper Agenda
I read Obama’s speech in which he urged Congress to move on from last weeks’ farce with a little concern. It seemed that he misses the point about what a proper economic agenda ought to be.
Well from my point of view, naturally.
You see he listed there priorities:
- Get a deal done on the budget
- Pass immigration reform
- Pass a farm bill
Now, none of these strikes me as the most urgent issue we face. Yes I can see all being important, but no they don’t take priority over setting the economy back in balance.
That would be a balance between the rewards form work, and the rewards from wealth.
We have achieved a lamentable imbalance. The steady multi-decade decline in rewards to work, relatively and in some cases absolutely, have undermined our fabled middle class. Worse it has undone that all-American myth of opportunity. Worker productivity has soared, but worker rewards have not. The supposed link between the two has been severed. It is even becoming clear that the much discussed link between education and wages is weakening if not also severed. People are working hard but not benefitting. Somebody obviously is, and they are the very top income earners. Worse, since those at the top of incomes tend to hold most of the capital, they are benefitting twice over: disproportionately in terms of incomes, and disproportionately in terms of income from wealth – that capital.
So the ballyhooed inequality we heard so much about last election time is compounding. It is getting worse.
One outcome of this is the nastiness of our politics. Anger, resentment, and bitterness provide fertile ground for extremists. The Tea Party grew from such ground. Political extremism is also proving useful for those who have long hoped to undo our social programs. They can construct alluring arguments about the cost of such programs that play well with those whose hard work is not rewarded and who see themselves as being milked dry to pay for said programs.
A vibrant economy is a much less extreme one.
None of this is new. I imagine Obama hears as much constantly.
So why not put curing inequality on the agenda? Why not focus on it?
I think it’s because he has no answers. His advisory team is embedded in the accepted wisdom of our times – that there is a long term issue with sustaining productivity; that the link between wages and productivity has been broken by market forces out of our control; that there is a disconnect between the labor requirements of our economy and the skills of our workforce; and that, in any case, the spoils ought to go to those who “risk” to create jobs. In other words he lives firmly in what I refer to as a Reaganite world.
Oddly I think the Tea Party is far ahead of him on this issue. They do reject Reaganism. Or at least that part of Reaganism driven by big business, which is to say a fair bit of it. We saw this in the Tea Party’s willingness to defy big business during the debt default debacle. The rhetoric back and forth subsequently has confirmed that big business sees the Tea Party as too extreme and a threat to its hegemony over policy.
In any case, I would like to see rebalancing the economy high on the agenda. As in on top of it. This is not only for the economic fairness it would bring, but also because I see it as our most potent method for defanging political extremism.
If it turns out that our economy has changed in some fundamental way, and that wages are thus going to be under pressure permanently, then far from being a reason to make government smaller, it is a motivation to expand it further. A small government world can only co-exist with a stable political framework if it produces the missing balance between wages and wealth. Otherwise the clamor from those who do not share in those gains from productivity will force an expansion of government to offset the imbalance. Redistribution will grow, not shrink. Political tensions will grow likewise. And both democracy and capitalism will suffer.
The balance we both need and ought seek is between the requirements of democracy and capitalism. They live better together than apart. Obama ought, by now, to have realized that. It’s a shame he didn’t put rebalancing on his priority list. I would have thought it’s an election winner.
Then again he’s not running again. So why would he?
