Progressives are in Resistance mode now. We need to be, but remember we Resist so we can Reform
On Friday we got our first look at 2017 GDP growth, coinciding neatly with President Trump’s 100 day marker. Like the President’s performance over those hundred days, the GDP numbers were underwhelming. With annualized growth of only 0.7% in the first quarter of 2017—the slowest since 2014—this is a good moment to reflect seriously on the structural flaws in our economy.
The diagnosis is not hard. The engine of American prosperity has always been a strong middle class, and this is as true today as it was before. Unfortunately today the fruit of even slow growth is not going to the middle class, it is going to the already-wealthy. We need only compare the real GDP’s 0.7% growth rate with the S&P 500’s 5.53% growth rate in the same period. Capital is doing quite well, while ordinary Americans are not. This is only the most recent example of how the real struggle facing our economy is internal—a question of distribution of gains, of inequalities between the have’s and the have not’s.
This is not just a class question. The way our society structures the distribution of wealth has dramatic consequences for the stability and momentum of our economic and political system. Populist tremors hit both political parties in 2016, with Bernie Sanders’ reshaping the vision of the Democratic Party despite not being a member, and with now-President Donald Trump staging the only successful hostile takeover of his career by seizing the Republican nomination.
This political extremity is, in many ways, a reflection of our economic stratification. As Thomas Frank has noted, in states hit hardest by the impact of the “enlightened Davos ideology”—the upper Midwest—economic decline has left “an outlook that is profoundly bleak.” Presciently, Frank also reminds us that in the Midwest “radicalism lurks just beneath the surface.” Facing abysmal prospects and a rejection by both parties, we should not have been surprised by the regions electoral revenge. Most critically, this radicalism is in search of a simple, nonradical idea: a stable and growing middle class, with healthy wage growth and potential for advancement for all.
For a brief moment, the President could have embraced this call—and it seemed he might. But, looking back now from his 100th day, President Trump too has betrayed the yearning middle. His proposed remedy is to further shovel wealth to the already wealthy. His plan to resolve our economic woes is to offer dramatic tax cuts for the richest among us, supposedly to increase growth. In fact, if his plan were put into place, it would further exacerbate growing wealth inequality and simultaneously starve the government of revenues it needs to provide critical social services.
President Trump bears the burden of his failure. It also shows, though, that Washington is not the first place this crisis will be resolved. Instead, this failure re-opens the opportunity for progressives to claim the mantle of middle out growth, from the ground up in the states. Politicians often pay lip service to this idea, but it is time now to do it real service. We need to start putting into place policies that bring wealth to the middle class. We don’t need to look far to find them.
For instance, in Washington state the team at Civic Ventures have assembled a number of nonpartisan paths to a middle out economy. These include increasing the minimum wage to, at least, fifteen dollars an hour, and developing policies to address the growing threat of automation to the vast class of American workers. And we see another obvious solution in Kentucky, where former State Auditor Adam Edelen is pushing to bring solar energy to eastern Kentucky—supplementing dying coal industry jobs with equivalent and safer jobs. There are fifty states with progressives working in them, and never before have states had more capacity to act as laboratories of economy. Grassroots organizations have taken the lead in cataloging these ideas and pushing them forward, with groups like Indivisible holding complicit politicians accountable and organizations like New Leaders Council developing a new generation’s Compact with America.
These state efforts should, of course, be supplemented by action in Washington, D.C. A real tax reform program that raises taxes on the plutocratic class to pay for middle class tax cuts, and investments in health care and education. For instance, the Economic Innovation Group’s Investing In Opportunity Act would bring the trillions of dollars held by US corporations oversee back home to be invested in distressed communities across the country. Pairing that investment with a major (and critically necessary) public investment in public works and infrastructure repair would inject wealth directly into the middle class.
This is a unique moment in American economic life, when the circumstances require swift re-adjustment. If we want to right the course of our country, it must be based on stable, middle out growth. It is important for progressives to resist conservative attempts to exacerbate our economic inequalities. Tax cuts for the wealthy do not work. Congressional leaders should reject and resist. At the same time, progressive candidates and activists need to put forward a positive reform agenda. We have the ideas, the policy, and the energy. We should resist, but remember that we resist so that we can eventually reform. Thanks to the President’s proposed giveaway to billionaires, progressives have another shot at regaining the mantle of leadership. We ought to take it.