Lipstick on pigs, sex ed for pre-K, earmarks gone wild -- this presidential campaign is descending to a bridge to nowhere. We cannot let that happen again. This country is up against it: The worst financial crisis since the Great Depression, Gilded Age inequality, Iraq and Afghanistan, catastrophic climate change, the lawless presidency and more. The next president will face stark challenges that cannot be ignored. We need a debate worthy of a great nation in trouble. And the only way that will happen is if citizens insist on it.
Today in the New York Times, the Institute for America's Future begins a series of "op ads" designed to highlight critical crises this country must address -- and to enlist others in challenging the media and campaigns to address them. For the first of these op eds, go here. We should all join in this effort. Challenge the gotcha journalism, the politics of diversion, lies and posturing -- and demand that this presidential campaign get down to the real questions the next president must face. (Full disclosure: I co-direct the Institute, although I post here in my individual capacity.)
For example: How do we make this economy work for most Americans?
Bear Sterns, Lehman Brothers, Fannie Mae and Freddie Mac -- the metastasizing financial cancer now threatens global recession or worse. How and whether to bail out the banks, how to avoid a severe downturn should be at the center of our debate.
But for the next president, the financial mess shouldn't obscure this economy's deeper problems. Underneath the current crisis is a stark reality: even when it is doing well, this economy hasn't been working for most Americans. In the last seven years, for example, when the economy was growing, when Treasury Secretary Paulson was hailing the "strongest world economy I've seen in my business lifetime," when President Bush and Senator McCain were declaring -- McCain as recent as yesterday -- that the "fundamentals of the economy are strong," working and middle income families did not share in the benefits.
From 2000-2007, corporate profits were up, productivity was up, but incomes did not keep up with prices. For the first time since the Census Bureau started publishing the records in the 1940s, the typical family actually lost ground over the seven years of "recovery." And the costs of basics -- health care, housing, gas and home heating, college tuitions -- soared. Poverty spread. More Americans went without health care. Savings were consumed. More added debt, tapping into their home's equity, providing the kindling for the mortgage inferno. And that's when the economy was "good." (For detailed analysis see EPI's new Stateof Working America) No wonder the Rockefeller/Time Magazine poll released in July revealed that fully half of Americans no longer believe the American dream is attainable by working hard and playing by the rules. Something is fundamentally wrong.
And it isn't like the weather. It isn't an act of God. Some blame "technological change," but America's middle class was built on the technological revolutions of the post-World War II period; technological change may expand the pie; it doesn't determine who gets what slice. Others blame globalization. It's true that the US strategy in the global economy has given corporations a club in negotiations with workers. We lost one in seven manufacturing jobs over the past seven years. But service jobs that don't compete in the global economy haven't fared well either. Others say the workers are at fault, for they lack the education they need. But as the Wall Street Journal reported last week, even incomes for college graduates also didn't keep up over the cycle.
The fact is that the very few captured the benefits of growth. The 15,000 richest families -- one one-hundredth of American households -- captured fully one quarter of all the growth of national income. The vast majority of households lost ground. (See Scott Lilly's analysis here)
This hollowing out of the American middle class is rather a direct expression of policies designed to benefit wealth at the expense of work, to empower CEOs and weaken workers, to privilege Wall Street over Main Street.
Over the last 30 years, conservatives and their ideas dominated Washington. Both parties joined in. Under Reagan and Clinton, banks were deregulated and a casino financial system grew in the shadows. Global trade deals protected property rights, not worker rights. Taxes were lowered on the wealth and raised on work. With the crushing of the PATCO air comptrollers strike, Reagan declared open season on unions. The minimum wage was frozen for a decade, lowering the floor. Companies under pressure from speculators and global competitors began shredding the promises once made to workers -- cutting health care, abandoning pensions, ignoring rules on hours and overtime. Undocumented workers were easily exploited. Even Microsoft, the most profitable monopoly of the time, resorted to using permatemps -- permanent temporary workers -- to avoid paying folks full-time benefits. Under Bush, this all came to a head.
What's needed is a fundamental change of direction. Instead of trickle down growth, we should be driving the economy from the bottom up. Instead of focusing on freeing up capital and executives, we should be empowering workers. The IAF ad suggests three fundamental reforms that reflect a growing consensus among progressive economists.
First, empower workers to organize. Unions help workers gain a fair share of the profits they help generate, and help to enforce agreements on hours, conditions and treatment. Since companies now systematically squelch organizing efforts, pass the Employee Free Choice Act, which would allow workers to choose how to organize -- either through by getting a majority to sign membership cards or by holding an election, and mandate negotiation of a first contract.
Second, forge a public social contract to replace the private one that the companies are now shredding. Mandate companies to provide basic health care, contribution to a public pension, paid vacation and sick days, a decent minimum wage, pegged to inflation. These mandates can be phased in over time; mom and pop stores can be exempted. The point is to enforce -- as other industrial countries do -- basic minimums in law so that companies can't compete on the low road, by driving wages and conditions into the ditch.
Third, make full employment the stated goal of our economic policies -- both the fiscal and trade policies of the administration and Congress and the monetary policies of the Federal Reserve, with the government acting as an employer of last resort to keep employment levels up. Over the last 30 years, market fundamentalists -- reflecting the priorities of Wall Street's investors -- have made inflation the priority, not full employment. But wages rose across the board only -- as in the last years of the Clinton administration -- when the economy neared full employment. When jobs are plentiful, workers can negotiate a better deal from their employers because they are better able to abandon a bad deal.
The Presidential Debate
How do the presidential candidates stack up on this agenda? McCain declares himself a "foot soldier in the Reagan revolution," embracing the basic mantra of market fundamentalists -- lower taxes (particularly for the wealthy and the corporations), less regulation, less domestic spending. He is skeptical of unions, and has voted repeatedly against raising the minimum wage, much less extending a public social contract to workers. He wants to unravel employer based health care, not mandate it. His basic promise is to shake up government, make it less wasteful, reduce taxes for companies and the affluent, and get out of the way. In this election, he is the proud representative of the course we've been on.
Obama, due in part to the contested Democratic primary race, has put forth a bolder agenda. He pledges to support the Employee Free Choice Act, and to reverse Bush's anti-union executive orders. He hasn't called for a new public social contract, but favors raising the minimum wage, and pledges health care for all. He's said little about running a full employment economy, much less about government as an employer of last resort. But he does call for a public investment bank, and large public investments in new energy and conservation, in modernizing our infrastructure and in investing in education and training.
The Debate We Deserve
Presidential campaigns aren't policy seminars. Candidates need to inspire voters, define themselves and their opponents. Insult, invective, lies and distortions have been part of American elections from the beginning.
But Americans also deserve a debate that exposes the choices each candidate would make on the fundamental questions facing the country. Why not make this a feature of the TV debates, rather than rehashing old distortions or trying to gin up personal conflicts? What if a debate stated with this question:
Most Americans saw little of the benefits of the last years of economic growth. Wages didn't keep up. Poverty spread. More people went without health care. And that's when the economy was growing. Both of you claim to be candidates of change. What fundamental changes would you make to insure that this economy works for working people?
Wouldn't that be a more interesting question than whether Sarah Palin was for the bridge to nowhere before she was against it?
A debate worthy of a great nation in trouble. That's not too much too ask. Nor too much to demand.
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