With Congress in recess and our lawmakers now back in their districts, there is presumably a slight chance of meeting one of them in the street. If, like me, your representative in the House is not of your political persuasion -- mine, Virginia Foxx, most definitely is not -- it might just be worth letting them know how vital it is that, by the time Congress re-convenes, the Republican Party leadership should have moderated its disastrous stance on taxation and federal spending. Having manufactured a debt ceiling crisis and set in motion cuts in federal spending that will likely tip us back into recession, it is hard to see how much more damage House Republicans can do. But they will no doubt try, unless we can persuade them of at least the following eight things.
1. It is right to worry about debt, but it is important to worry about the right kind of debt. The debts that will cripple us down the line are debts on our overseas trade and debts on our credit cards. Federal debt rises and falls with the state of the economy, and is the least threatening of the three forms of debt that now beset us. Being in hock to China or to a mega-bank does not make us free.
2. Most Americans are not under financial pressure because the tax-take is too high. Federal taxes as a percentage of GDP are at a 60-year low. Most Americans are under financial pressure because their wages are too low and their jobs insecure. Cutting public spending now simply adds to the downward spiral of job loss and falling demand. The regeneration of well-paying jobs is vital to our long-term recovery.
3. The argument that federal spending heaps debt onto the shoulders of our children ignores the capacity of public spending to trigger economic growth to clear that debt. Spending tax dollars now on the building of a bridge does not necessarily leave our children in hock - that depends on how the enterprise is financed -- but it does necessarily leave them a bridge. The better the bridge, the brighter the economic future.
4. Trickle-down economics did not work under George W. Bush and it will not work under Barack Obama. The key to economic recovery in a recession plagued by lack of business confidence is the certainty of future demand. Putting money in the hands of ordinary consumers is the best way forward. Recovery must trickle up, or it will not come at all. With unemployment and poverty running at record levels, tax cuts for the rich are at best an irrelevance and at worst an obscenity.
5. Markets only optimize individual freedom if everyone inside them has equal purchasing power, and income equality is not a contemporary American condition. Unregulated markets are engines of inequality as the post-Reagan years so clearly demonstrated. If we currently suffer from a culture of entitlements, that culture is stronger among the rich than among the poor. Greed at the top, not greed at the bottom, is the root cause of our present crisis. As the new (and vital) Contract for the American Dream has it, "too many at the top are grabbing the gains."
6. Markets work by generating winners and losers. The children of the losers do not compete on a level playing field with the children of the winners. True equality of opportunity for the next generation requires public policy to level the field by raising the base. Otherwise, "picking your parents with care" will continue to be the best guarantee of material success for yet another cohort of our richer children, and we will continue to squander the hopes and capacities of so many of their less fortunate contemporaries.
7. Going green is not a communist plot. It is a way of simultaneously saving the planet and our prosperity. The Cheney principle should apply. A one percent chance that Iraq had WMDs justified the invasion. A similar chance of climate change should justify action to prevent global warming.
8. The outsourcing of manufacturing jobs may serve corporate interests, but it does not serve ours. Only a stronger manufacturing base can get us back to the affluence we once took for granted. It is time for us to recapture control of our economic destiny from the Wall Street moguls and overpaid CEOs who took us into our contemporary distress.
If in making these points you experience push-back -- if you find yourself being told that, given you like welfare capitalism so much you should go live in one, and stop being so un-American -- then that may well be the time to remind your local conservatives of those other truths which they tend to discount: namely that the New Deal and the Great Society were just as homegrown as Reaganomics; and that there is nothing particularly patriotic in playing chicken, as the House Republicans just did, with the U.S. debt ceiling and the economy's triple-A credit rating. And as a parting shot, perhaps you should urge them to read the Contract for the American Dream. As the Contract says, "America needs jobs, not cuts." Are all Republicans so ideologically wedded to the Grover Norquist view that government needs to be cut "to the size where I can drag it into the bathroom and drown it in the bathtub"? It is worth asking them. Let us hope that the sanest amongst them are not.
These arguments are fully developed in David Coates, Making the Progressive Case: Towards a Stronger American Economy
First posted, with full academic sourcing, at www.davidcoates.net