Winning the Edwards Vote

By Ron Blackwell and Thomas Palley

John Edwards' exit from the presidential race puts his supporters up for grabs. Both Senators Clinton and Obama want those votes. Here's how to win them.

The central plank of the Edwards' campaign was restoring a prosperous and secure middle class, which requires ending wage stagnation and having wages again grow with productivity. This must be the central economic policy goal of any candidate wanting the Edwards vote.

The generation long rupture of the wage—productivity link reflects deep structural failings in the economy that must be corrected. Helping hand social policies, such as trade adjustment assistance and the earned income tax credit, are welcome but they are not adequate to the scale of the problem.

Having government try to remedy wage stagnation through after-tax income redistribution does not address the core problem of unfair before-tax incomes. Though a progressive tax system is critical for fairness, it cannot ensure a prosperous middle class. That requires decent wages paid in return for a decent day's work.

The starting point for shared prosperity must be full employment, since only then do workers everywhere have the power to bargain increased wages that equal productivity growth. Monetary, fiscal, and exchange rate policy must work in coordinated fashion to this end. The best measure of full employment is when wages steadily rise with productivity.

Restoring the balance of power in labor markets is critical for wage bargaining. This requires labor law reform that ends employer intimidation preventing workers from joining unions and bargaining fair contracts, and government must vigorously enforce the law. The minimum wage must be reformed and tied to average wages so that it provides a true floor that rises as the economy grows. Unemployment insurance must also be reformed so that its duration is extended and coverage broadened.

Modernizing financial regulation is another needed measure. The housing bubble and sub-prime mortgage crisis show the financial system is broken. Today, the only instrument of control is the blunderbuss of Federal Reserve interest rate changes that inflict unemployment or inflation. New ideas exist and should be given space through a national financial markets reform commission that airs all views, and not just those of Wall Street.

The debate over fiscal responsibility must be redefined. That debate should be about containing healthcare inflation that threatens to bust the budget and funding needed public investment. It is time to break with conservatives' definition of fiscal responsibility that attacks government and seeks to cut essential programs like Social Security.

Public investment is critical. The economy sits on the edge of a recession and fiscal stimulus is needed to combat that danger. But beyond that, the country must invest in its future and fill the enormous investment gap resulting from a generation of neglect of public infrastructure. Public investment in schools, hospitals, roads, bridges, and public transportation is enormously productive. It creates jobs and raises private sector productivity, the key to future growth and an essential condition for a prosperous middle class.

Global warming presents new challenges that also call for public sector investment. Those challenges are an opportunity to create a 21st century green economy. To that end there is need for an Apollo-scale commitment promoting energy efficiency through new technologies, incentives for energy saving investments, and improved and subsidized public transportation.

Ron Blackwell
Tom Palley

Globalization means international economic policy is more important than ever. The trade deficit has hollowed manufacturing and must be reduced. Policy must put a stop to unfair international competition based on undervalued exchange rates, export subsidies, and unfair trade restrictions. America must also lead in the creation of a new international financial architecture that promotes fair and balanced trade, and only countries that truly join in this endeavor can be allowed full access to the America's markets.

Finally, there is need to tackle the problem of corporate governance and regulation. Corporations have been the major force rupturing the link between wages and productivity growth, and they have also been the major force driving globalization. That calls for a corporate reform agenda that addresses excessive CEO pay, restores shareholder control, and realigns business incentives so that corporations again serve the national interest as well their private interests.

John Edwards' campaign recognized the imminent challenge of recession and advocated fiscal stimulus. Both the Obama and Clinton campaigns have done likewise. However, it is not enough to just change the economic policy dial settings. The Edwards campaign also spoke to the need to change the long-term direction of the economy by restoring full employment, leveling the playing field between workers and corporations, and fixing unfair competition unleashed by globalization. That's the message that will win the Edwards vote.

Comments

[Alessan]

Obama supporters live in a fantasy land, he has no original ideas about anything, unity, offered by GW Bush, and former backstabbing Dem candidate Kerry hope without compassion. Obama is still the masked candidate, no one knows including his supporters where he stands on the most important issues of the time. Intends to debate McCain on he was against the war that McCain intends to continues, how will he do that, he never VOTED against the war, and everyone knows what he said in a speech, when he wasn't even in the senate, means nothing. I for one cannot take his word. Now more than ever he speaks in the words of John Edwards, but he is not Edwards, and will do nothing if he happens to be lucky enough to become President, because a group of people have been caught up in a fairy tale and think putting a different face on the President will automatically make people in other countries think the USA has changed, that's really a big laugh. At least Clinton is a more realistic
candidate, and knows that the budget has to be balanced, or nothing will get done, like healthcare for all, you can't balance the budget until we are out of Iraq. But Dems other than O or H have no choice other than voting for a continuing neo-con USA.

America will continue to see more of same, because none of the candidates will bring about any improvements, I am not inspired by a big overgrown, person of color who lives in a
dream land.

[Herrington]

Perfect. No amount of tax tinkering and Fed slight of hand can fix an economy that has starved its consumers into bankruptcy. Serious remedies that address tying the minimum wage to productivity growth are past due. While it is not ever going to be politicaly possible to redress the excesses of the Republican dynasty, the correct thing to do for both the working class AND the wealthy is to start to restore the conditions that created the most vaunted market in the world, namely, that American workers were highly paid.

Now that the smash and grab party is at and end because of having smashed everything, it is time for the rich and would be rich to sober up. Indeed, they will have to. There is little flesh left to be picked from the bones of what was a great nation.