https://www.commondreams.org/views/2019/02/03/dear-democrats-stop-substituting-so-called-possible-whats-morally-necessary
As presidential historian Jon Meacham said on HBO’s “Real Time w/ Bill Maher,” it is often easier to make big honking changes than to try to accomplish incremental ones. Back in 2016, Democrats faced a choice between incrementalism—”a progressive who got things done”—and an advocate for a fundamental transition away from a rigged system. The party apparatchiks threw their weight and influence behind Hillary Clinton, a reluctant incrementalist who would have preferred to be a status quo candidate, and against Sanders, who advocated for more radical change. Polls show that Sanders would have trounced Trump, and Clinton’s ratings were always within the margin of error.
So, at a time when folks are desperate for change, incrementalism is bad politics. But it’s also a recipe for a global meltdown—literally.
Today, we face two existential challenges and both demand that Democrats shape the polls rather than be shaped by them.
The first is income inequality, and it is driven by the fact that the rich and corporations have used their wealth to completely subvert the democratic process in America. Elections are bought; politicians all but ignore the wishes of the people, while doing the bidding of the rich, corporations, and special interests; income disparity has reached grotesque proportions globally and nationally, fueled by public policies favoring capital over labor; and with monopolies and monopsonies keeping wages low even in times of full employment, there’s no solutions in the offing absent radical policy changes.
Historically, inequality of this magnitude has been a harbinger of revolutions—it presages crowds with pitchforks and torches storming the bastions of wealth. It is an oft repeated irony that throughout history, those who would seize wealth and power are undone by their success.
“The choice is clear. We can drift toward an economic and climate related Armageddon by following polls, or we can move toward a broadly shared sustainable and prosperous world by shaping them.”
The second challenge is climate change. In 2006, I wrote an article entitled Hotter, Faster, Worser, in which I noted that each year’s scientific research was showing that climate change and its accompanying disasters were occurring faster than previously forecast. This trend has continued in the intervening twelve years. Just last week, scientists discovered that the West Antarctic ice sheet is melting much faster than previously thought – which was preceded by a similar finding in 2014 and another in 2012. Prior to 2012, conventional wisdom held that climate change would have little effect on the Antarctic ice mass in anything other than geologic time. Now, it’s happening in real time.
Four months ago, the IPCC’s Special Report Global Warming of 1.5 C essentially said we only had 12 years left to avoid catastrophic warming and irreversible feedbacks. In other words, no matter how bad you think climate change might be, it’s likely to be worse, unless we act now, today. Literally.
And these two issues—income inequality and climate change—have a kind of negative synergy. Climate change will create a billion or more refugees who will feed the unrest that income inequality creates.
Both demand a radical departure from business as usual, and both have viable legislative fixes, with relatively high levels of public support, and that’s absent a full court press by Democrats. In fact, the Democratic leadership and the press seem mired in the notion that it’s best to continue the failed strategy of trying to jump the Grand Canyon in ten-foot leaps.
Newly-arrived Rep. Alexandria Ocasio-Cortez (D-NY) has been advocating a Green New Deal and a 70 percent tax bracket for income above $10 million, and Sen. Elizabeth Warren (D-Mass.) has proposed a 2 to 3 percent wealth tax on large fortunes. All three are serious proposals that would address climate change and income inequality with the urgency they demand, and they have a positive synergy—the revenue from repealing Trump’s tax cuts, imposing a tax on the ultra rich, extending the payroll tax above its current cap, developing a carbon tax and applying a transfer tax on securities could help fund the Green New Deal and Medicare for All, and it would effect relatively few Americans.
The choice is clear. We can drift toward an economic and climate related Armageddon by following polls, or we can move toward a broadly shared sustainable and prosperous world by shaping them.
Sadly, it looks like we’re choosing the former.
“There’s nothing in the middle of the road,” the progressive populist Jim Hightower of Texas famously quipped, “but yellow stripes and dead Armadillos.”
The “moderate.”
Such a soothing political word. It conjures up a reasonable, considerate person who seeks the middle ground between ideological extremists: Works well with others, crosses the aisle to make good policy, knows how to win incremental change rather than issuing jarring proclamations that jump too far ahead of the electorate. A moderate is pragmatic, gets things done and doesn’t let the perfect become the enemy of the good.
Oh, in these troubled times, aren’t such moderates—beloved as they are by right-wingers like Bret Stephens—desperately needed?
Get ready to hear more and more of that from mainstream media pundits as the Democratic Party moves more towards the kind of progressive populism put forward by the Sanders/AOC wing of the party. We’ll be asked by centrist journalists to take a careful look at more reasonable moderates like Gillibrand, McAuliffe, Bloomberg, Biden, Booker, Landrieu and many more (e.g. “Is There Room in 2020 for a Centrist Democrat?” and “The Loneliness of a Moderate Democrat”).
But what is the substance of all this centrism and moderation?
First and foremost, these moderates are united by their unwillingness to take on Wall Street. And because of that unwillingness, they are unable to confront the defining problem of our era—runaway inequality. They cannot face up to the fact that the wages of the average worker have been stagnant for an entire generation. Meanwhile the pay gap between the top 100 CEOs and the average worker has risen from 40 to 1 in 1980 to an obscene 800 to 1 today.
The centrists run away from this problem in large part because they are in a desperate race to win the very first primary—the fundraising primary. And it is no secret that victory goes to the candidate who garners the most financial support from Wall Street/corporate Democrats.
Rather than discussing runaway inequality and ways to ameliorate it through Medicare for All, free higher education, and higher taxes on the super-rich, these moderates instead will stress enhancing “opportunity,” and “removing barriers” to race/gender advancement. Rather than confronting billionaire oligarchs they want to “partner with business” and, in some vague way tame their excesses while also building a robust and fair economy with “opportunity for all.” No conflict needed. No diatribes against the billionaire class. Hear the melodious tones of moderation.
From this coziness with Wall Street flows the trope about being “socially liberal” and “fiscally conservative.” The moderate centrists, and their Wall Street donors, support LBTQ rights, the advancement of women in business, immigration and criminal justice reform, gun control, and abortion rights. At the same time, they believe the entire progressive runaway inequality platform is an affront to economic reason: High taxes on the rich will discourage initiative and innovation; single-payer health care and free higher education will bankrupt the country; breaking up the big banks will cripple investment and jobs.
Of course, the moderates must ignore the reams of data from all over the world that show that these progressive reforms would reduce inequality and enhance the well-being of nearly everyone, though it is true that reducing inequality would harm—at least to some extent—the precious privileges of the very few. The super-rich would have to pay more. They would no longer be able to financially strip mine the rest of us through wasteful stock buy-backs. Their billions would be reduced a bit. But most alarming would be their deflated egos: No longer could they bask in the false narrative that what is so very good for them is good for all of us.
But do “moderates” represent anyone other than their Wall Street donors? Is there a mass base for the kind of moderation they are putting forward?
Let’s take a look at the eye-popping data from the 2016 presidential election, put together by the Voter Survey Group, which polled 8,000 Americans (a very large sample which is eight to fifteen times larger than most of the surveys we usually see in the news.) A study of these voters showed that they could be divided into four major groups. (See Lee Drutman, “Political Divisions in 2016 and Beyond.” Note: the title names used below are mine not his.).
- The first group, Left Populists, are those who are both social and economic progressives. They support immigration, women and minority equality, LBGTQ rights and immigration. They also worry about rising inequality and support proposals that would attack it.
- The second group, Nativist Populists, also worry about rising inequality and support proposals that attack it. But they are more comfortable with traditional gender roles, have qualms about abortion, see immigration as a problem and are not particularly supportive about LBGTQ rights.
- The third group are the Arch Conservatives who are not interested in reversing economic inequality or social inequality.
- And finally we have the Socially Liberal/Fiscal Conservatives. This is the home base for the “moderate” politicians who are wooing Wall Street and see themselves as the sensible alternatives to the extremist populists.
So more or less, that’s who we are. If the electorate were equally divided among these four groups, the “moderates” might have an argument. The facts tell a different story:
- Left Populists account for 44.6 percent of the electorate according to this study.
- 28.9 percent are Nativist Populists. This means that nearly three-quarters of all voters fear runaway inequality and want to reduce it. But these economic populists are divided on identity issues.
- Arch Conservatives account for another 22.7 percent.
- And that leaves a miniscule 3.8 percent for the Socially Liberal/Fiscal conservatives.
How pathetic is that? It goes to show how out of touch these billionaires and their accolades are from political reality. They have no base. Nada. There’s no one there… except very rich Wall Street/Corporate funders and centrist pundits who feel compelled to find a judicious balance between left and right.
Danger Ahead
The data shows why Trump’s nativist, race-baiting, immigrant-bashing base-building makes some electoral sense. If he can hold both the Nativist Populists and the Arch Conservatives he can win again. And he can do that most easily against a candidate with virtually no natural base—the “moderate”—the Socially Liberal/Fiscally Conservative Democrat.
Given enough financial support, a “moderate” might be able to buy her or his way through the Democratic primaries, especially if many candidates split the progressive populist vote. One could imagine one of the “moderates” becoming a media darling of the center, which might further enhance his or her status.
But should one of them squeak through to become the nominee, we might have a Democratic debacle. The nativist economic populists on the right might flock back to Trump along with the arch conservatives who will never leave him. Trump may look incredibly weak now, but a Wall Street-backed Democratic “moderate” with a natural base of 3.8 percent could give the worst president in American history a real chance.
Jim Hightower, the great Texan populist, turned a phrase that comes to mind every time a Wall Street “moderate” is touted.
“There’s nothing in the middle of the road,” he famously quipped, “but yellow stripes and dead Armadillos.”
My wealthy friend doesn’t want to pay for your child care. He doesn’t want to help pay off your student loans. And he sure as heck doesn’t want to shell out the big bucks for a multi-trillion-dollar Green New Deal.
A friend sent me an email the other day, complaining about the 70 percent marginal tax rate floated by Democratic Representative Alexandria Ocasio-Cortez and the new wealth tax proposed by Democratic Senator Elizabeth Warren.
Ocasio-Cortez first mentioned the 70 percent rate in response to a question from CNN’s Anderson Cooper about how she proposes to pay for programs like a Green New Deal that could cost trillions of dollars. Higher tax rates, she suggested, might be one part of the answer.
Then Warren released a video explaining that her “ultra-millionaire tax” could raise nearly $3 trillion over 10 years, money that she says could be used to pay for programs like universal child care, a Green New Deal and student-debt forgiveness.
Oh, I forgot to mention, my friend is wealthy enough to get hit by both.
I’ve argued elsewhere that we can pay for a Green New Deal and that the obsession with finding a dollar of new “revenue” to offset every new dollar of spending is the wrong way to approach the federal budgeting process. My views belong to the macroeconomic school of thought known as Modern Monetary Theory — MMT, for short.
I’ve debated those views here at Bloomberg Opinion, and they are beginning to gain a foothold in policy circles. But there is a long a way to go before politicians and the journalists who interview them stop demanding a road map to the source of funding for every new spending proposal.
My wealthy friend doesn’t want to pay for your child care. He doesn’t want to help pay off your student loans. And he sure as heck doesn’t want to shell out the big bucks for a multi-trillion-dollar Green New Deal.
So where does that leave Democrats, who insist that they need the rich to pay for their progressive agenda? Here’s what I told him.
“I am with the Democrats. I want to see us build a cleaner, safer, more prosperous world. I agree with billionaire hedge-fund manager Ray Dalio, who argues that inequality has become so extreme that it should be declared a “national emergency” and dealt with by presidential action.
“And I worry very much that it may prove impossible to raise taxes on the ultra-wealthy (who have enormous political power). Then what? The planet burns, our third-world infrastructure falls into total disrepair, and our society becomes ever more bifurcated until the tensions reach a boiling point and…. The pitchforks are coming.
“The problem is that every politician is confronted with the question, “How are you going to pay for it?” What these journalists are really asking is, ‘Who’s going to pay for it?’
“The question is designed to stop any meaningful policy debate by dividing us up, and get us fighting over where the money is going to come from. Since none of the headline politicians has really figured out how to respond — by explaining that when Congress approves a budget, the Treasury Department instructs the Federal Reserve to credit a seller’s bank account — they all end up trying to answer it by pointing to some new revenue source.
“And then there are self-imposed constraints, like PAYGO, that require lawmakers to offset any new spending with higher taxes or cuts to some other part of the budget. That means you can’t even get a piece of legislation to the floor for a vote if isn’t fully “paid for.” It also makes passing anything that much harder, since it requires politicians to raise taxes or carve out money from other programs. And don’t even get me started on CBO.
“So that’s why you see people like Representative Ocasio-Cortez and Senator Warren looking at the ultra-rich to fund their agendas. Billionaires are the magic money tree!
“To be blunt, the super-rich have become victims of their own successful marketing campaign. Conservative billionaires like Pete Peterson spent decades complaining about debt and deficits, putting enormous sums of money into a PR campaign to turn politicians and the public against deficit spending.
“So here we are. As Hillary Clinton said during the 2016 campaign, ‘You have to go where the money is.’ That means you!
“What can higher-income taxpayers do? I guess they could point the finger at Congress and say: “Don’t look at us! That’s where the money comes from!” Because the truth is, funding a Green New Deal with some deficit spending means we get good-paying jobs, a cleaner world and more safe assets (Treasuries) for everyone, including wealthier taxpayers.”
To help my friend see the choices we face, I sent him a sketch that is shown here in a chart.
You don’t need precise data to make the point. Just think of it, loosely, as a reflection of the gap between the top and the bottom. Start off with today’s degree of disparity, represented by the black bar on the left.
Now suppose someone offers you three different ways to reduce inequality, shown in bars A, B and C. Each will leave you with a less unequal society but the same absolute disparity between the top and the bottom.
To get outcome A, you simply tax money away from the rich (the part shown in gray at the top). This does nothing to improve the material well-being of anyone below, but it does compress the distribution, so inequality is diminished.
Option B is your standard Robin Hood redistribution. Money is taxed away from those at the top, and money is invested in programs to lift everyone else (shown in blue). Again, the distance (or degree of disparity) between the top and the bottom is the same as under Option A, but this time the top lost and the bottom gained.
Finally, consider what happens if we simply invest in programs to benefit the non-rich (student-debt forgiveness, free child care and so on) without treating the super-rich as our piggy bank. In Option C, the top doesn’t move, but the bottom is boosted to new heights.
It’s sort of incredible that the option that is clearly better for both groups is the one we’re most afraid of. But that’s what happens when deficit phobias force politicians to “pay for” everything by going where the money is.
