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November 22, 2006
What is the Dems agenda
David Wessel wrote a thoughtful piece in his column "Capital" in yesterday's Wall Street Journal about the economic challenge facing the Democrats in the attempt to address the problem of rising inequity. One of the things he pointed out was the complexity of the problem.
Today's inequality reflects a confluence of forces. Technology is increasing employers' appetite for some skilled workers, while diminishing it for assembly-line workers in auto and textile factories. Imports and outsourcing are doing the same. Schools aren't graduating enough of the workers in short supply, such as engineers. Immigration is contributing to a glut of others, visible wherever day laborers gather hoping for work. Unions are atrophying. Corporate boards, hedge funds and sports teams are increasingly willing to write super-sized paychecks to a chosen few.
The list of ideas is impressive:
Unfortunately, the list of alternatives proposed -- while helpful -- doesn't get us to where we want to go. Yes, I agree with almost all of these. I can quibble with the exact formulation of some of them and disagree with one (raising the capital gains and dividends tax - I have long supported a sliding scale that reduces the tax on long run investments while increasing it on short term).
But there is something missing: the recognition that the nature of the economy has fundamentally changed. Too many of these ideas are based on the industrial era which will be most effective in only a portion of the economy. Yes, many will be effective for the I-Cubed Economy (such as the educational-oriented ones). However, they don't go to the heart of the issue.
Gene Sperling's quote is accurate - we must raise the tide as well as all boats. Where are the programs to raise the tide? Granted that the article was focused on inequality not growth. But the two go hand in hand. There is an ingrained fallacy in other thinking that treats them as separate (and generally as conflicting).
Actions that increase jobs and economic opportunity for all will promote both equality and growth. For example, where are the programs for entrepreneurship and business start-up, especially in the communities-left-behind and communities-at-risk? Where are the programs for on-the-job training, workers can keep their jobs and improve their own market able skills -- rather than wait until they are out on the street? Where are the programs to help small and medium size businesses re-orient their businesses to this new innovation led, design-focused competition.
Those should be a no-brainer for either political party. But the GOP calls them "industrial policy" and complains that they are interference with the mythical automatic workings of the market. Democrats call them "corporate social welfare".
Until both sides stop living in the past - and simply pulling out the same old solution, we won't be able to attack this problem.
The list of idea that the Dems are talking about is a good start (better than the previous do-nothing alternative). But it is only a start. Let's begin talking about the rest of the agenda.
Posted by Ken Jarboe at November 22, 2006 8:50 AM
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