With Donald Trump and Ted Cruz locked in a bitter battle for the Republican nomination, the stakes in 2016 rise dramatically. The likely victory of either one of these deeply flawed candidates will give Democrats a chance not only to hold the White House, but also to realign U.S. politics. No wonder Republicans are panicking.
To seize the opportunity, however, Hillary Clinton will need to transcend the limits of a “populist” message based on identity politics, economic victimhood and redistribution. Thus far such themes have dominated the nomination battle with Sen. Bernie Sanders, but they won’t help Democrats forge a broader political coalition that includes suburban moderates, college-educated independents and many Republicans who are aghast at the prospect of branding the White House with a giant “T.”
Of course, with yet another caucus victory on Saturday, this time in Wyoming, Sanders will stay in the race, if only to keep tugging Clinton to the left. But Clinton needs to resist this ideological gravity, because Sanders’ left-wing populism is not an effective answer to the right-wing populism that Trump channels with such diabolic cunning.
Before the Bernie Bots clank into action, let me hasten to say I’m not positing moral equivalence between Sanders and Trump. Sanders is honest, principled and decent; Trump is, well, none of those things. But the lifelong socialist’s dream of turning America into a paternalistic, European-style welfare state isn’t the right prescription for what ails our country.
What most voters want is not a revolution, but a credible plan for unleashing American ingenuity and enterprise, and expanding middle class opportunity. The U.S. economy has been stuck in low gear since 2000. It has failed to produce good jobs and rising incomes for average Americans; in fact, the median wage is lower today than when Bill Clinton left office.
What’s happening? Jason Furman, President Barack Obama’s top economic adviser, says a slowdown in labor productivity growth is “the single most important factor” in explaining anemic income gains. And the most important source of productivity growth is what economists call “total factor productivity,” which essentially means innovation in what we produce and how we produce it.
In plain English, America needs to innovate its way back to robust economic growth that works for everyone. Yet what we’re hearing from the populists is very nearly the opposite — fanciful promises to protect Americans from disruptive economic change and “bring back” low-skill production jobs.
What really animates Trump and Sanders is fixing blame, not fixing the economy. The list of scapegoats is long. For Trump, it includes China, immigrants, freeloading allies and incompetent public officials. Sanders points an accusing finger at Wall Street banks, corporations, billionaires and the “1%” — the Bilderbergers of today’s conspiracy-mongering left.
Yet Democrats owe voters a hopeful alternative to populist outrage and the false panaceas of nativism, protectionism and democratic socialism. Raising the minimum wage is fine, but progressives need new ideas for strengthening the private economy’s capacity to create new wealth, not just redistribute existing wealth in the name of fairness. What’s more, the reflexive hostility toward U.S. “capitalism” in vogue among Sanders’ constituency of white liberals and millennials won’t help working Americans, who can only get ahead if the companies they work for compete effectively and — gasp — make profits.
the Progressive Policy Institute has just unveiled a progressive alternative to populism that is full of ideas for stimulating innovation and growth. Some challenge Democrats to think about old priorities in new ways. For example, with interest rates at rock bottom, Washington should borrow to finance a big push for modern public works. But more spending won’t get us very far if the money is funneled through outdated and highly politicized mechanisms like the federal highway program. It ought to be devolved to the states and replaced by a national fund that invests in critical economic priorities and opens infrastructure markets to private capital. It’s also time to speed things up, by putting a two-year deadline on regulatory review and approval of new infrastructure projects.
Democrats need a smarter approach to regulation in general. One way to spur innovation is to lower regulatory obstacles to start-ups, which generate most of the new jobs, and rein in occupational licensing, which makes it harder for low-income people to market their skills. For example, Washington should set up an independent commission charged with pruning old rules that have built up over decades and impose growing compliance and opportunity costs on small businesses and entrepreneurs.
Conservatives’ animus toward government blinds them to the ways policy can speed and spread innovation. For example, federal policymakers should free spectrum to extend the digital revolution to the 80% of the U.S. economy that is physical. Building on America’s technological prowess and entrepreneurial culture, the coming Internet of Everything can stimulate advanced manufacturing and open vast new fields of opportunities for U.S. workers.
Tax policy is another underrated policy instrument for stimulating investment and growth. Rather than sock Americans with higher taxes to pay for massive expansions of government, as Sanders has proposed, pro-growth progressives should cut middle class taxes and bring corporate tax rates down to globally competitive levels.
Free college sounds good, but of course someone will have to pay for it. Instead, progressives could give working families a break by encouraging U.S. colleges to grant degrees in three years rather than four. That’s the norm in many European countries, and it would immediately cut college costs by 25%. By awarding degrees based on demonstrated competency rather than seat time, progressives can give a leg up to learners who work full-time.
There are plenty of ways to help low-income and working families to get better career and technical training, buy homes and use smart phones to cut through bureaucratic barriers and manage the public resources dedicated to helping them escape poverty. But the point here is simple: The best antidote to Trumpian demagoguery — or Cruz’s radical right agenda — is an optimistic vision for enabling working Americans to adapt to change and create a new shared prosperity in the digital age.
It’s time for progressives to stand for economic progress.