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The Party of Prosperity? The Seven Reasons that Democrats’ Policies are More Economically Efficient

March 10th, 2010 Comments off

Or: The Seven Habits of Highly Efficient Economies

Republican economic policies are widely perceived (especially by Republicans) as being pro-growth and pro-prosperity, even though All. The. Evidence. Demonstrates. The. Opposite. (How dare they call themselves “conservatives”?) Even the rich get richer under Democrats — though not at the expense of the poor and the middle class.

Instead of pointing out that Democrats deliver more prosperity and less debt, Democrats’ main response is “Yeah, but…uh…Equality!” To which many Americans respond by reaching for the remote control.

If — as all the pundits proclaim — Democrats need a coherent, unifying, and compelling narrative (like the profoundly effective though sadly false narrative that is Reaganomics), how about this:

The Party of Prosperity

Democrats deliver more prosperity. They deliver it to more people. And they do it without busting the budget.

How do they achieve all that? Through the miracles of economic efficiency–policies that make the markets actually work — and work better — for the greater prosperity of all (including the rich).

Wisdom of the Crowds. Democrats’ dispersed government spending — education, health care, infrastructure, and social support — puts money (hence power) in the hands of individuals, instead of delivering concentrated streams to big entities like defense and business. Those individuals’ free choices on where to spend the money allocate resources where they’re needed — to truly productive industries that deliver goods people actually want.

Preventing Government “Capture.” Money that goes to millions of individuals is much less subject to “capture” by powerful players, so it is much less likely to be used to then “capture” government via political donations, sweetheart deals, and crony capitalism.

Labor Market Flexibility. When people feel confident that they and their families won’t end up on the streets — they know that their children will have health care, a good education, and a decent safety net if the worst happens — they feel free to move to a different job that better fits their talents — better allocating labor resources. “Labor market flexibility” often suggests the freedom (of employers) to hire and fire, but the freedom of hundreds of millions of employees is far more profound, economically.

Freedom to Innovate. Individuals who are standing on that social springboard that Democratic policies provide — who have that platform beneath them — can do more than just shift jobs. They have the freedom to strike out on their own and develop the kind of innovative, entrepreneurial ventures that are the true engine of long-term growth and prosperity (and personal freedom and satisfaction)–without worrying that their children will suffer if the risk goes wrong. Give ten, twenty, or thirty million more Americans a place to stand, and they’ll move the world.

Profitable Investments in Long-Term Growth. From education to infrastructure to scientific research, Democratic priorities deliver money to projects that the free market doesn’t support on its own, and that have been demonstrated to pay off many times over in widespread public prosperity.

Power to the Producers. The dispersal of income and wealth under Democratic policies provides the widespread demand (read: sales) that producers need to succeed, to expand, and to take risks on innovative new endeavors. Rather than assuming that government knows best and giving money directly to businesses, Democratic policies trust the markets to direct that money to the most productive producers.

Fiscal Prudence. True conservatives pay their bills. From the 35 years of declining debt after World War II (until 1982) to the years of budget surpluses and declining debt under Bill Clinton, Democratic policies demonstrate which party deserves the name “fiscal conservatives.”

Labor and Trade Efficiencies. (This is an update — I can’t resist adding a #8.) The social support programs that Democrats champion — if they truly provide an adequate level of support — give policy makers much more freedom to put in place what are otherwise draconian, but efficient, trade and labor policies. If everyone is guaranteed a decent wage by an excellent program like the Earned Income Tax Credit, we have less need for the economically constricting effects of unions and protectionism.

(These aren’t actually “The” seven reasons that Democratic policies are more efficient. There are many others. But the definite article made for a catchier post title.)

If you’re noticing that these talking points capture and co-opt the Republicans’ very own most cherished talking points…well yeah. (As my teenage daughter would say, “No duh.”) There’s a darned good dose of rhetorical jiu-jitsu at play here. It’s downright Machiavellian in its appeal to “Reagan Democrats,” Independents, and Republicans who are disaffected by their party’s thirty years of profligacy, malfeasance, and hypocricy.

But that doesn’t make it any less true. (If you don’t believe that it’s true, return to the first sentence of this post and start clicking links. Then come talk to me.)

And Democrats, in all their fecklessness — Obama in particular — could use a good helping of Machiavel.

Our president took all sorts of heat from his base during the campaign when he said that “Ronald Reagan changed the trajectory of America in a way that Richard Nixon did not and in a way that Bill Clinton did not.” But he was profoundly correct. FDR did as well. And their means were decidedly Machiavellian. (Here repeating the David Stockman link from above.)

Now Obama’s got his chance to change the trajectory. And there’s a narrative that can effect that change.

The Party of Prudence. The Party of Prosperity.

Use it.

** At risk of ending this post on a wild tangent, I can’t resist citing the passage I was thinking about in writing those last two words. In M*A*S*H (the movie) there’s a football game in which one of the M*A*SH team’s players is being harassed by an opponent. Here’s the dialog:

Bastard 88 called me a coon.
Called you a what?
Coon.
OK, that’s an old pro trick to get you thrown out of the ball game. Why don’t you do the same thing to him?
What, call him a coon?
No, the boys in camp used to talk about his sister. Her name was Gladys. Use it!

Without revealing what (hilariously) ensues, I’ll just say: it worked.

My new favorite title for this post: “Gladys!”

“Springboard,” Not Safety Net

November 20th, 2008 Comments off

I wrote an email to economist Alan Blinder at Princeton last week (which he was kind enough to respond to), in response to his NYT piece addressing our current…issues.

“social safety net”…America’s is in tatters…we need both repairs and a new metaphor. Lyndon B. Johnson had it right when he called upon the government to provide a “hand up, not a handout.” The Obama administration should seek to create a new “social trampoline” that not only catches people when they fall, but also propels them back into productive employment. If properly designed, such a social trampoline would both ease the short-run pain of recession and facilitate the long-run adjustment to globalization.

This man was speaking my language, though not quite in my words. I sed:

Just to second your notion in the NYT of renaming the safety net. If I could give our new president one piece of advice, it would be that.

But…”trampoline” sounds decidedly…risky, unpredictable, unsafe.

How about “platform,” or “springboard”?

Professor Blinder liked the language.

This may seem like nothing but rhetorical spin, but it’s important. “Safety net” gives the impression of catching failures. “Springboard” is about encouraging achievers–giving them a place to stand, and a little extra bounce on their way up.

Rhetorical advantages aside (it’s a lot easier to sell Americans on opportunity than on rescue, as the Republicans demonstrated for thirty years), it frames the whole discussion as a way to make everyone more prosperous–a non-zero-sum game–and thus engenders policies and programs that pursue that goal.

Yes, social-support programs can give some people the incentive to screw off and game the government. But they can equally give people the stable platform they need to work their way up and into the greater economic system–to succeed.

Again, progressives need to stop playing defense in the prosperity game. It’s not equity versus growth; it’s equity and growth. The Republicans don’t have the pro-growth policies. We do.