Are Americans ready for a leader who challenges the market fundamentalism that has dominated our politics for the past half-century? Not a pretend populist like President Trump, but the real deal? The more progressive Democratic presidential contenders — particularly Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) — are betting their campaigns on it. Now, a compelling new report from the Roosevelt Institute details the problems with the current U.S. economy and suggests a new course.
“New Rules for the 21st Century,” authored by Nell Abernathy, Darrick Hamilton and Julie Margetta Morgan, starts with the inescapable reality: This economy doesn’t work well for the vast majority of Americans — and hasn’t for some time. (Disclosure: I serve on the Roosevelt Institute’s board.) Wages have been essentially flat for decades, and insecurity has risen. Basic investments in infrastructure and research and development have been starved. Wealth and income are ever-more concentrated, increasingly allowing the few the power to subvert our democracy. And the United States is failing basic tests for the future, such as educating the next generation and meeting the existential threat of climate change.
This abysmal record isn’t an accident, the report shows. It isn’t because of inexorable forces such as globalization, technology or the “invisible hand" of the market. It is because the rich and the big corporations have organized government power to rig the rules of the economy to benefit themselves. They evangelized market fundamentalism, the illusion that markets are self-correcting and efficiently serve the public interest, while governments are ineffective and wasteful. In reality, the authors conclude, “the free-market revolution was not about getting government out of the way — it was about using government to serve the interests of the elite private sector through fewer government restrictions that inhibit profit and more government intervention that support it.” The Republican right armed that argument with a “strategic racism” that has divided Americans from each other while exacerbating the racial and gender inequalities.
The report outlines what it calls the “one-two punch” used by the powerful. First, employ government to entrench regulatory, tax and procurement structures that serve the few: tax breaks for the rich and corporations, trade policies that benefit investors and multinationals at the expense of workers, weakened antitrust policies, gutting of unions and deregulation of banks. Second, corrupt and undermine public power: Subvert its capacity to serve the people by privatizing, outsourcing and/or reducing basic investments in education, mass transit, affordable housing and so on.
To change course will require a new, progressive one-two punch of initiatives that curb the power of big corporations and serve the public interest. In the first category: progressive taxes, revived antitrust laws, reforms to corporate governance rules to curb chief executive and shareholder excesses, financial regulation, and empowering workers to organize and bargain collectively. In the second: a modern-day economic bill of rights (Medicare for all, tuition-free college, a higher minimum wage, a jobs guarantee, universal day care, basic banking and Internet access) and investments in our future, such as the Green New Deal and infrastructure spending. (Also called for are democracy reforms — including universal voter registration and curbing big money in politics — to revive the average American’s political power.)
The authors of the Roosevelt Institute report make curbing corporate power their first priority, but politically it may be more attractive to lead with the second category: fundamental reforms such as an economic bill of rights that directly improve the lives of Americans.
The report’s argument is clear and compelling. Americans, the authors say, “are hungry for big, new ideas, and voters will reward leadership that is able to articulate those ideas clearly and put them into action.” Trump’s unlikely victory in 2016 provides one indication of that hunger, or at least the breadth of support for an arsonist who might burn the place down. Yet, Trump — for all his populist posturing — has ended up largely recycling standard conservative fare: tax cuts for the rich and corporations, deregulation and a predators’ ball of corporate interests using government to rig the rules even more, all accompanied by ever more venomous politics of racial division and insult.
The ideas primary that has broken out in the run-up to the Democratic presidential primaries provides a better test. The Roosevelt Institute agenda sounds like an amalgam of the platforms of Sanders and Warren, who have driven the ideas debate among Democrats, with others moving in their direction. What the report makes clear is that the conservative era is bankrupt. Fundamental reform is imperative. It is time for the democracy — for popular movements and courageous leaders — to galvanize support for that change in 2020 and beyond.