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Friday, June 29, 2007
I'm Thinking of an Issue...Starts With "E"
Inclusion has put a challenge to the progressive policy community. What is an all-encompassing issue that nobody really knows exists?
According to this logic, alternative and less familiar ways of framing rising economic inequality and insecurity aren't viable because they don't show up on the pollster's static list of "issues." But this ignores Perlstein's most important insight, that "the greatest politicians create their own issues, ones that no one knew existed." (An insight I couldn't help but notice that is very similar to my favorite one of the late philospher Richard Rorty: "the talent for speaking differently, rather for arguing well, is the chief instrument of cultural change.")
Here's a shot: exploitation and economic fairness. I mean the exploitation of consumers and workers and managers- the people who've been left behind by the so-called Washington Consensus on economic policy, which puts the market above government in all matters except "touchy-feely" ones, which demands less government involvement because they say it will make everyone better off, which tells us that everything will turn out great if we just rely on ourselves and forget everyone else.
These policies have left too many people vulnerable to the predations of the marketplace. Workers don't get the wages their productivity rates show they deserve. Health care, housing, and college costs have risen above any reasonable estimate of their value. Public works are not kept up (think the New Orleans levies). People have to save too much for their own retirements and pay off enormous medical bills on their own.
The flipside is that some people are doing better than they should be. It's not just big, bad corporations and fatcat CEOs- it's doctors, lawyers and professionals in things like finance. Are doctors in the US twice as better as doctors in Europe? They get paid twice as much. Is Stephen Schwatzmann, the CEO of the Blackstone Group (seriously- could they have picked a name easier to villify?), worth the $700 million he just got paid? And then add on the fact that the tax code has gotten much less progressive. Is anyone really shocked that Warren Buffet, the third-richest man in the world, only pays a 17 percent tax rate?
Another name for exploitation is economic fairness. The problem isn't just that the outcome is bad- it's that the rules are rigged to reward people for things they haven't done. In other words, people may work hard and play by the rules, but when the rules aren't fair, you're only going to get so far.
Which rules have been changed? Everything from immigration policies to trade, labor market interventions to corporate regulations, education to housing policy, taxes to public investment. Not all of these things have gotten worse, but the sum of it is a retreat of government and an advance of the private marketplace. And they show up in the three things almost everyone agrees on: wage gains do not track productivity growth, the rich keep getting richer while the middle and lower classes don't move up much, and the cost of living has risen dramatically in many parts of the country.
And to what great benefit have these rules changed? The proponents of the Washington Consensus promised us higher growth rates and productivity increases. But growth has been below average this cycle, and productivity has grown much slower in the last three decades than it did prior to the implementation of the new economic regime.
My gut feeling is that an effective counterargument begins by targeting the core assumption of the Washington Consensus- that government can't do anything right, and the market does everything right.
Posted by Matt Lewis
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