POLITICS
12/03/2013 04:27 pm ET | Updated Jan 23, 2014

Third Way Warns Democrats That Running On Popular Economic Positions Would Be 'Disastrous'

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Jon Cowan and Jim Kessler of the supposed think tank Third Way have taken to the op-ed pages of the Wall Street Journal Tuesday to offer the nation another dose of the hyper-timid incrementalist nonsense for which they're best known. Their case this time involves income inequality, and how trying to ameliorate it is a crazy-dangerous thing for an elected politician to attempt.

At issue here is the fact that New York City mayor-elect Bill de Blasio and Massachusetts Sen. Elizabeth Warren, both Democrats, recently won elections rather handily -- and Warren herself is popular enough nationally to give her "2016 election buzz." These Third Way super-geniuses have assayed the electoral success of these two figures and concluded that their overall message is "bad" for Democrats, because it's based on a "we can have it all fantasy."

Is it, though? De Blasio has proposed, specifically, a modest tax on high-income New York City residents to fund universal pre-K for the whole city (an idea that Gov. Andrew Cuomo will almost certainly kill off in Albany), and more generally wants middle- and working-class residents of New York City to be able to afford to live in New York City. That's not "we can have it all," that's "let's do the bare minimum so the people of this city can survive."

Warren, in general, believes that more can be done to keep consumers from being preyed upon by banks and lenders, and has specifically proposed expanding Social Security. This latter desire is what Cowan and Kessler deem to be the unforgivable sin, despite noting that a "growing cascade of baby boomers will be retiring in the coming years," and that the "problem is that since 2010 Social Security payouts to seniors have exceeded payroll taxes collected from workers." All of which is a pretty good reason to do something like index Social Security benefits to the actual cost of living for seniors, or lift the $113,700 cap on income that is taxed for Social Security -- which are basically the modest reforms sought by those who want to "expand Social Security."

But hey, do you want to expand Social Security? According to Cowan and Kessler, you might as well shoot yourself in your very own face, because it's "exhibit A of this populist political and economic fantasy." Per Cowan and Kessler:

If you talk to leading progressives these days, you'll be sure to hear this message: The Democratic Party should embrace the economic populism of New York Mayor-elect Bill de Blasio and Massachusetts Sen. Elizabeth Warren. Such economic populism, they argue, should be the guiding star for Democrats heading into 2016. Nothing would be more disastrous for Democrats.

How big a disaster would it be for Democrats? Would expanding Social Security be the next Hurricane Katrina, maybe? Well, let's hear what actual Democrats are saying about this stuff.

1. A staggering majority of Democrats agree with the observation that "it's really true that the rich just get richer while the poor get poorer."

2. Among Americans, a clear majority support making no reductions to Social Security or Medicare. About 3 in 10 support only minor changes.

3. The majority of Democrats disagree with the contention that "government regulation of business usually does more harm than good."

4. Esteem for corporate America and Wall Street is falling rather dramatically among Democrats.

5. The coming wave of millennial voters is way, way, way into economic populism. As Peter Beinart reported back in September, "Pew found that two-thirds of Millennials favored a bigger government with more services over a cheaper one with fewer services, a margin 25 points above the rest of the population." This population cohort also favored expanding Obamacare, supported labor unions, and was "more willing than their elders to challenge cherished American myths about capitalism and class." The only good news if you hate economic populism is that these same voters "disproportionately favor" the privatization of Social Security. But this is nothing new. As Beinart notes:

Historically, younger voters have long been more pro–Social Security privatization than older ones, with support dropping as they near retirement age. In fact, when asked if the government should spend more money on Social Security, Millennials are significantly more likely than past cohorts of young people to say yes.

So yes, what a disaster this would be for Democrats, if they ran on these wildly popular positions! This is especially bad news for Alaska's Democratic Sen. Mark Begich -- no one's idea of a liberal populist firebrand and a lawmaker that's been deemed centrist enough to qualify as a "No Labels Problem Solver" (Cowan is a co-founder of No Labels). Begich is behind the effort to expand Social Security ... a fact that Cowan and Kessler maybe should have had on hand before they wrote this op-ed.

Having used Google and actual facts and 10 minutes of my time to demolish most of the legs of the Third Way stool, I might as well spend my remaining time hacking the last leg to bits.

Undeterred by this undebatable solvency crisis, Sen. Warren wants to increase benefits to all seniors, including billionaires, and to pay for them by increasing taxes on working people and their employers.

I don't know, guys, it seems to me that this is actually Warren's offering in the debate over the Social Security solvency crisis. One hallmark of particularly weak minds is the tendency to dismiss an actually germane argument about a topic, rather than contend with it.

Even more reckless is the populists' staunch refusal to address the coming Medicare crisis. In 2030, a typical couple reaching the eligibility age of 65 will have paid $180,000 in lifetime Medicare taxes but will get back $664,000 in benefits. Given that this disparity will be completely unaffordable, Sen. Warren and her acolytes are irresponsibly pushing off budget decisions that will guarantee huge benefit cuts and further tax hikes for Gen Xers and Millennials in a few decades.

I think it would be surprising for these Third Way people to learn that Warren does not actually take the liberal populist position on expanding Medicare. Warren does not support making substantial cuts to Medicare, but she's rather explicitly stated her opposition to single-payer, which puts her out of step with most Massachusetts Democrats. (Again I must ask, is Third Way aware of Google?)

In 10 years, we will spend $5 on the three major entitlement programs (Social Security, Medicare and Medicaid) for every $1 on public investments. And that is without the new expansion of entitlement benefits that the Warren wing of the Democratic Party is proposing. Liberal populists do not even attempt to address this collision course between the Great Society safety net and the New Frontier investments.

Yeah, I am going to give liberal populists a pass on their failure to address the collision course that vulnerable Americans and their earned-benefit programs are on with this centrist buzzphrase, "New Frontier investments," that Third Way has invented to stand in lieu of something with actual substance.

If you've come this far, you're probably wondering what Third Way's solution to Social Security's "undebatable solvency crisis" is. Well, I'm sorry to report that they don't seem ready to jump into that debate, and have offered nothing of their own. I reckon you'll be waiting a long time, too, given the fact that their wholly fact-averse take on the matter is primarily founded on what amounts to really funny feelings they have about the state of the electorate.

In the most comical part of their op-ed, Cowan and Kessler state: "For the past 144 years, what has happened in the Big Apple stayed in the Big Apple." While it's true that Bill de Blasio hasn't exactly become a household name (like Warren has) and New York mayors in particular haven't succeeded in seeking higher office lately (which, oddly enough, hasn't chilled the ardor that Cowan and his "No Labels" organization have manifested for Michael Bloomberg), anyone who knows anything about how cultural trends emerge and spread would find this to be an intellectually untenable thing to say about New York City. It was an attack on New York City, after all, that got one president reelected and the NSA all up in our metadata.

But Cowan and Kessler think that the real bellwether, electorally speaking, is a referendum in Colorado:

On the same day that Bill de Blasio won in New York City, a referendum to raise taxes on high-income Coloradans to fund public education and universal pre-K failed in a landslide. This is the type of state that Democrats captured in 2008 to realign the national electoral map, and they did so through offering a vision of pragmatic progressive government, not fantasy-based blue-state populism. Before Democrats follow Sen. Warren and Mayor-elect de Blasio over the populist cliff, they should consider Colorado as the true 2013 Election Day harbinger of American liberalism.

I'm not generally inclined to say that America is two steps away from becoming de Blasio Nation, but I'm even less inclined to attach too much weight -- let alone more weight -- to this referendum and the awesome trend-setting powers of Colorado politics. (Call me when every state has embraced Colorado's marijuana laws, and we'll talk.)

Warren obviously favors an expansion of Social Security's safety net, but her advocacy accomplishes something of secondary importance -- it gets the very notion of doing so into the larger debate. Passing such a law is by no means a done deal, and I suspect that plenty of Democrats will opt not to support an expansion. Nevertheless, by shifting that famed "Overton Window" slightly leftward, the effort may pay off in Social Security not getting scuttled. "I think you’ve got to stay with what’s possible," Warren herself has said.

I think that Third Way genuinely believes they want to protect Social Security. But what have they contributed to all of this, besides criticizing anyone who takes a bold stand? Well, their basic "doing something substantial for the poor could really hurt Democrats' reelection chances" stance has paved the way ... for President Barack Obama to float "chained CPI" -- a euphemism for making substantial cuts to Social Security -- and make it a legitimate part of the debate.

Wow. Nice work, guys. Say what you want about lawmakers taking a courageous position on Social Security, but how is Third Way's whole "be a gutless simp" approach to the matter working out for everyone else?

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