issue: Politics

CNN: What Democrats should talk about Friday

Posted on by The Progressive Policy Institute

Compared to the Republicans’ presidential cattle calls, the next Democratic debate will be an intimate affair, since the field has shrunk to just three candidates. They will gather in South Carolina Friday for a “candidate forum” moderated by MSNBC’s uber-progressive Rachel Maddow.

That sounds like a recipe for another rousing round of populism, business-bashing and exhortations by Sen. Bernie Sanders to Americans to stop worrying and learn to love democratic socialism. If so, it will spell trouble for the candidate everyone expects to emerge with the prize — Hillary Clinton.

After their first debate in Las Vegas, Democrats congratulated themselves on having been more substantive than the Republicans. True enough: No sentient viewer could confuse the GOP Gong Show with the PBS NewsHour.

But amid all the wonkery, something big was missing — a sense of economic optimism, buttressed by fresh ideas for stimulating innovation and growth. Working Americans want to know how they and their children can find opportunities and win in the global knowledge economy. Instead, Democrats dwelled at great length on how badly they are losing. They had plenty to say about inequality, but almost nothing about how to create new jobs, enterprises and wealth.

Continue reading at CNN.

RealClearWorld: Does Labour Have a Death Wish?

Posted on by The Progressive Policy Institute

All political parties struggle to reconcile their core convictions with their desire to win elections. But apparently there’s one party so pristinely principled that it despises its own electoral successes.

I refer, of course, to Britain’s Labour Party. In choosing as its new leader Jeremy Corbyn, a long-time fixture of the hard-left fringe, the party has emphatically repudiated the winning ways of “New Labour.”

Corbyn is a throwback to the doctrinaire socialism of the 1970s and 1980s, which became linked in the public mind to crippling strikes by imperious labor unions, economic stagnation, welfare dependence, reflexive anti-Americanism and enthusiasm for “revolutionary” forces around the world. An iconic image of the era: the actress and prominent “Trot” Vanessa Redgrave holding a Kalashnikov aloft while dancing with PLO gunmen.

The party’s thralldom to the “looney left” paved the way for Margaret Thatcher’s ascension and kept Labour out of power for 18 long years. Finally, in the early 90s, a band of young reformers led by Tony Blair and Gordon Brown jettisoned the party’s tired collectivist dogma and launched a drive to modernize the party’s image and governing philosophy. Inspired by Bill Clinton’s success here, they borrowed heavily from his “New Democrat” playbook.

Blair led Labour to a smashing victory in 1997, and went on to win two more elections. He and Brown served as Prime Minister for 13 years — Labour’s longest run in government ever.

While popular with British voters, New Labour’s attempts to define a modern and pragmatic progressivism were anathema to the party’s left. They disdained Blair as a glib and soulless centrist willing to sell out Labour’s socialist ideals for a mess of electoral pottage. That disdain curdled into intense hatred when Blair later supported George W. Bush’s invasion of Iraq.

Continue reading at RealClearWorld.

A Tale of Two Systems: Education Reform in Washington D.C.

Posted on by The Progressive Policy Institute

An important contest is taking place in Washington, D.C.—a race between two vehicles designed to carry children into the future with the habits and skills they need to live productive, meaningful lives.

The older of the two, the District of Columbia Public Schools (DCPS), uses a “unified governance model” that emerged more than a century ago, in which the district operates all but one of its 113 schools and employs all their staff, with central control and most policies applied equally to most schools. Since 2007, when Michelle Rhee became chancellor, DCPS leaders have pursued the most aggressive reform effort of any unified urban district in America.

Racing against them—and carrying 44 percent of D.C. public school students—is a very different vehicle, designed and built largely in this century. This model does not own or operate any schools. Instead, it contracts with 62 independent organizations—all of them nonprofits—to operate 115 schools. It negotiates contracts with operators, lets parents choose their schools, shuts down those that repeatedly fail to achieve their performance goals, and replicates those that are most effective. We know these as charter schools, authorized by the Public Charter School Board (PCSB), which Congress legislated into existence in 1996. Like DCPS, the Charter Board is a leader in its field, considered by experts one of the best authorizers in the nation.

Under both models, student performance is improving. Comparisons are tricky, because their demographics are different. DCPS students are not as poor: 75 percent qualify for a free or reduced price lunch, compared to 82 percent in charter schools. DCPS has more white students: 12 percent compared to charters’ 5 percent. And DCPS schools get $7,000 to $9,000 more per student each year than charter —particularly for their buildings and pensions.

On the other hand, all charter families make an active choice of schools, while only about half of DCPS families do, so some believe charter students are more motivated. Most experts agree that DCPS has more students “in crisis”—homeless, coming out of jail, former dropouts, and so on—because families in crisis don’t usually make the effort to apply for charters. And many charters don’t accept students midway through the school year or “backfill” seats after students leave, while most DCPS schools do. Far more students leave charters for DCPS during the school year than the reverse, and sometimes the new entrants set back schools’ test scores, graduation rates, and attendance rates.

It is hard to say just how these realities balance out. Fortunately, there are two independent studies that try to compensate for student demographics (but not for other factors). Stanford University’s Center for Research on Education Outcomes (CREDO) is a respected academic organization that has published extensive studies comparing charter and traditional public school performance on standardized tests. Its methodology compares charter students to demographically similar students in traditional public schools who have had similar test scores in the past.

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Washington Monthly: How New Orleans Made Charter Schools Work

Posted on by The Progressive Policy Institute

Last year 2.9 million children attended 6,700 charter schools in America—public schools independent of districts and free of many bureaucratic constraints. Since charters were invented in Minnesota twenty-four years ago, they have become the subject of intense battles between supporters and detractors.

Supporters point out that charters receive 28 percent less money per child, on average, but still have higher graduation rates and send a higher percentage of graduates to college than traditional public schools with similar demographics. Detractors counter that charters often push out the hardest-to-teach students, and, citing a national study published in 2013 by Stanford University’s Center for Research on Education Outcomes (CREDO), they report charters barely, on average, outperform those traditional schools on standardized tests.

But that average masks the reality more than reveals it. In truth, we have forty-four different charter school laws and systems in this country. A close look at the CREDO study shows that in states where charters are rarely forced to close when their students are falling behind—in Arizona, Texas, Ohio, and others—charter students do underperform their socioeconomic peers in traditional public schools on standardized tests. In states where charter authorizers close failing charters, however—in Massachusetts, New York, Indiana, the District of Columbia, and others—charters outperform traditional public schools.

The truth is that charters have lived up to their billing in some places and been a disappointment in others. In one city, however, they have fulfilled the vision of even their most ardent supporters: that chartering would not only raise student achievement, but gradually replace the old system.

Ten years after Hurricane Katrina, 92.5 percent of public school students in New Orleans attend charters. The Tulane University economist Douglas Harris, who leads a research team focused on education reform, calls it “the most radical overhaul of any type in any school district in at least a century.”

In Katrina’s wake, a governor and legislature frustrated with New Orleans’s chronic corruption and abysmal public schools placed all but seventeen of them into its new Recovery School District (RSD), created just two years before to take over failing schools. Gradually, the RSD converted them all into charters. Today it oversees fifty-seven charters in the city, while the old Orleans Parish School Board (OPSB) oversees fourteen charters and operates five traditional schools. (The city also has four charters authorized directly by the state board of education and one independent state school.)

The city’s two districts, unlike traditional districts, do more overseeing than operating; they steer more than they row. They authorize schools, negotiate performance contracts (charters), measure results, and close schools whose students are lagging behind. Not all the schools succeed; educating poor, minority students in the inner city is extremely challenging. But on a variety of measures, New Orleans is improving faster than any other district in the state, if not the nation. Indeed, it may soon surpass its state on many metrics, a rare feat for a major American city.

Before Katrina, most public schools were terrible. In 2005 the city ranked sixty-seventh out of sixty-eight districts in Louisiana, itself a low performer compared to other states. Last year, New Orleans was forty-first out of sixty-nine school districts in Louisiana.

Before Katrina, some 62 percent of students attended schools rated “failing” by the state. Though the standard for failure has been raised, only 7 percent of students attend “failing” schools today.

Before Katrina, only 35 percent of students scored at grade level or above on state standardized tests. Last year 62 percent did.

Before Katrina, almost half of New Orleans students dropped out, and less than one in five went on to college. Last year, 73 percent graduated from high school in four years, two points below the state average, and 59 percent of graduates entered college, equaling the state average.

And according to a 2015 CREDO study, between 2006 and 2012 New Orleans’s charter students gained nearly half a year of additional learning in math and a third of a year in reading, every year, compared to similar students in the city’s non-chartered public schools.

Because the OPSB was only allowed to keep schools that scored above the state average, the failing schools were all in the RSD. In the spring of 2007, the first full school year after Katrina, only 23 percent of RSD students tested at or above grade level. Seven years later, fully 57 percent did. As Figure 1 shows (page 68), RSD students in New Orleans have improved almost four times faster than the state average.

Little of this appears to be the result of demographic changes. In the 2012-13 school year, 84 percent of public school students qualified for a free or reduced-price lunch, compared to 77 percent before Katrina. And census data tells us that poverty among residents younger than eighteen rose from 32 percent in 2007 to 39 percent in 2013, approaching pre-storm levels. Some of the improvement could reflect a small increase in white students, who rose from 3 to 7 percent of the total over the past decade. But African Americans still make up 85 percent of the city’s students (down from 93 percent). And they have made the greatest gains relative to their counterparts statewide, no doubt because the RSD schools, which have improved the most, are 91 percent black. If one counts only African Americans, New Orleans had the lowest test scores in the state before Katrina, 8 percentage points below the state average. Last year the city’s African American scores exceeded the state average by five points.

If anything, today’s students may be more disadvantaged than they were before Katrina, because they lived through the hurricane and the subsequent spike in violent crime. A survey of more than 1,000 youths aged ten to sixteen, taken from 2012 to 2014, found that nearly 20 percent showed signs of post-traumatic stress, four times the national rate.

In short, a radically new governance model—a recovery district that converted all of its schools to charters—has produced what some experts believe to be the most rapid improvement in American history.

Continue reading at the Washington Monthly.

The Daily Beast: Will Iran Get a Better Deal Than U.S. Oil?

Posted on by The Progressive Policy Institute

As Congress takes up the Iran nuclear deal next month, it ought to confront this paradox: The agreement allows the Iranians to do something Americans can’t—sell oil to the rest of the world.

Don’t get me wrong. I support the deal, under which Tehran would stop enriching weapons-grade uranium for the next 15 years in return for relief from economic sanctions. It’s not perfect, but President Obama is right that it’s better than what we’d have if his conservative critics got their way—no deal, leaving the Islamic Republic on the brink of acquiring nuclear weapons.

Still, freeing Iran to crank up its oil exports stands in stark incongruity to what’s happening here at home. Domestic oil production has soared by an amazing 68 percent over the past decade, yet we can sell very little of it abroad thanks to outdated laws banning U.S. oil and gas exports.

Passed during the energy crisis of the 1970s, these laws were intended to protect the nation’s then-dwindling oil and gas resources as a strategic reserve against supply disruptions like the Arab oil embargo. But the premise used to justify this deviation from our country’s free trade principles—energy scarcity—has been shattered by America’s shale boom.

Continue reading at the Daily Beast.

The Hill: A run by Biden would reinforce VP trend

Posted on by The Progressive Policy Institute

Throughout his vice presidency, Joe Biden has rarely been considered as a potential presidential candidate in his own right. His two prior runs had come to little, his advancing age worked against him and his party had its eye on another candidate. Further, his immediate predecessor, Dick Cheney, had set something of an example by shunning presidential ambitions of his own.

Still, if Biden does decide to run, it would bring him in line with a strong trend among the 13 men who have held the vice presidency since 1945. More than 75 precent (10) ran for the top job; of these 10, 80 percent got their party’s nominations and 40 percent won their elections — not a bad track record.

Continue reading at The Hill.

POLITICO: New Democrats plan ‘assertive’ new presence in House

Posted on by The Progressive Policy Institute

The New Democrat Coalition sees opportunities this fall on taxes, trade, Medicare and others.
 by Lauren French, POLITICO

In the hierarchy of the House, moderate Democrats — a minority in a party already deep in the minority — should be totally powerless.

But a group of pro-business Democrats, who allied with President Barack Obama and Republicans to pass landmark trade legislation, are angling to cut more deals with the GOP and White House as a way to assert themselves — and force the Democratic Caucus to the center.

Led by Rep. Ron Kind of Wisconsin, the New Democrat Coalition of some 50 members sees opportunities this fall on taxes, trade, Medicare and government spending. Those are all areas where House Republicans have struggled to fashion 218-vote majorities from within their own party, with a cadre of restive conservatives often rejecting leadership’s compromises with Senate Democrats and Obama.

That leaves an opening for swing moderates to get legislation across the finish line.

“We need to reconstitute the center of American politics again, on both sides. That is a crucial role we have to play, especially when it comes to the economic message and what resonates in those competitive districts,” Kind said in a recent interview.

Moderates are tired of being overshadowed in a party where liberals have long dominated the agenda, even as Democrats slipped further into the House minority after the 2014 midterm elections. They’ve accused the White House and party leaders of focusing too much on niche economic issues like the minimum wage and pay equity — policies, moderates argue, that turn off suburban voters Democrats need if they want to take back the House. And top Democratic leaders have released them to break with the party’s liberal base, in many cases an acknowledgement that many moderates come from tightly contested districts.

Early returns have been positive.

When Obama needed support from his own party to pass landmark trade legislation, he turned to the New Democrat Coalition. The group mustered just enough votes — 28 in total — to clear fast-track trade authority through Congress, despite opposition from the party’s left, including Democratic Leader Nancy Pelosi of California. It was the latest — and most controversial — instance of the group flexing its muscles.

And now moderates are staking a claim to other economic polices normally dominated by Republicans. Reps. John Delaney of Maryland and Scott Peters of California introduced a “dynamic scoring” bill — an issue normally favored by Republicans — that would encourage budget scorekeepers to score tax cuts favorably to reevaluate how Congress spends money on infrastructure, research and education. Connecticut Rep. Jim Himes is one of the most outspoken advocates for reforming the Dodd-Frank financial regulations bill, which he supports, and Delaney has worked to find common ground on foreign tax issues with both parties.

“There is a real opportunity to work with the administration and to work with the majority to try and get [our issues] done,” said California Rep. Ami Bera, a member of the group. “There is an appetite.”

Read More on POLITICO.

As the GOP Debates Begin, Three Factors Explain This Year’s Presidential Clown Car

Posted on by The Progressive Policy Institute

This year’s overcrowded field of 17 GOP presidential candidates may be an amazing spectacle, but it really should come as no surprise. The so-called “presidential clown car” is parked at the intersection of three distinct rings in the circus of Republican politics: the party’s internal unhinging, an extraordinarily wide-open political field, and the electoral unfettering of billionaires.

In the past, it was the Democrats whose presidential politics were messy and unpredictable. The party catapulted previously obscure candidates such as Jimmy Carter, Bill Clinton and Barack Obama over the heads of more senior figures and right into the Oval Office. Yet once in office, Democratic presidents could expect little electoral deference from their fellow party members. In 1948 and 1968, segregationist Southern “Dixiecrats” ran as third-party candidates against fellow Democrats. In 1980, Ted Kennedy, via a primary challenge, did almost as much damage as the Ayatollah Khomeini to Carter’s reelection bid.

By comparison, Republican presidential politics was once as stable as the gold-standard dollar. For over a half century starting in 1952, every Republican ticket for president and vice president (except for 1964) included someone named Nixon, Bush or Dole. Presidential nominations almost always went to whoever had most patiently waited his turn in line. Indeed, nominees were generally household names who had been runners-up from prior nomination races, including Ronald Reagan (1980), the elder George Bush (1988), Bob Dole (1996), John McCain (2008) and Mitt Romney (2012).

Today, Republicans’ love of crown princes hasn’t entirely disappeared: runners-up from two prior primary battles — Rick Santorum from 2012 and Mike Huckabee from 2008 — have joined this year’s fray. And, of course, the field also includes the next-in-line member of the Bush family and the son of another previous contender, Rand Paul.

But as the overflowing debate stage will demonstrate, there are about another dozen active Republican hopefuls. And not withstanding the ludicrous Trump sideshow, no viable candidate is polling above the low teens or could be said to have broken out of the pack. This is all very untidy by the once orderly standards of the Republican Party.

Part of what ails Republican politics, as is so often the case, has a three word name: The Tea Party, which has taken to running little-known insurgents in primaries against more established (and more moderate) politicians. In 2014, Virginia GOP primary voters dumped House Majority Leader Eric Cantor like so many tea leaves into Boston Harbor. Senator Majority Leader Mitch McConnell was similarly “primaried” from the right, though he pulled through. And Speaker John Boehner always seems one reasonable statement or constructive compromise away from being toppled by Tea Party factions in the House.

And so, Republican primary voters have largely been liberated from their party’s longstanding traditions of deference and hierarchy. This shift is fueling the current free-for-all of governors, senators and several others with few discernible presidential qualifications. The political novice Ben Carson suiting up as commander-in-chief? The previously unelected Carly Fiorina starting out a political career at the very top? The noxious Donald Trump downsizing to smaller living quarters at 1600 Pennsylvania Avenue? Hey, somebody has to win this thing.

Fanning the flames is another under-appreciated statistic: This is only the second presidential election since 1928 without an incumbent president or vice president running for office. Aside from 2008, every one of those other twenty presidential elections included either an elected president seeking reelection (12 times); a sitting president who had succeed from the vice presidency (3 times); or the incumbent vice president (5 times).

All of this creates an exceptionally wide-open political field for both parties. On the Democratic side, Hillary Clinton can perhaps be considered a quasi-incumbent, being so closely linked to two prior Democratic administrations. But on the Republican side, none of the current candidates (Jeb Bush included) has held high-level office in a prior presidential administration.

For GOP aspirants, then, the slate is about as clean as slates can be – so why not try one’s luck in 2016? And in a post-Citizens United world, any alluringly extreme candidate who can catch the eye of a deep-pocketed tycoon will have the resources to stay in the game far longer than in the past.

Still, there is a spark of hope for Democrats who miss their party’s glory days of chaos during the primaries and noble defeat in the general election. Senator Bernie Sanders — previously unknown nationally and not even a registered Democrat — is steadily gaining traction against Hillary Clinton for the Democratic nomination. Thus Republicans should have faith: their opponents may yet find a way to snatch defeat from the jaws of victory.

This is cross-posted on the Huffington Post.

PRESS RELEASE: PPI Statement On Significant Progress of TPP Negotiations

Posted on by The Progressive Policy Institute

WASHINGTON— Ed Gerwin, Senior Fellow for Trade and Global Opportunity at the Progressive Policy Institute, today released the following statement after top trade officials from the 12 Trans-Pacific Partnership countries on Friday announced significant progress on the historic trade agreement:

“PPI welcomes Friday’s announcement that the United States and its 11 negotiating partners have made significant progress on the substance of the Trans Pacific Partnership (TPP) trade agreement.

“Modern trade agreements like TPP have significant potential to boost inclusive growth here in America, while also setting high standards for a broad swath of the global economy in such key areas as open rulemaking, environmental protection, labor rights and digital commerce. But to achieve these results and other important benefits for the United States, it is critical that these agreements are done right.

“We appreciate the continuing efforts of U.S. negotiators, the Administration, and trade supporters in Congress in working towards the conclusion of an agreement that is the best possible deal for America. We look forward to reviewing a completed agreement. And we are particularly grateful to Senator Ron Wyden (D-Ore.), Congressman Ron Kind (D-Wisc.), and other pro-trade Democrats for their leadership in writing unprecedented new rules that will assure an extensive, informed and transparent debate on an eventual TPP deal.”

Forbes: Congress Holds The Key To More Broadband Competition

Posted on by The Progressive Policy Institute

Are we getting enough broadband competition? And if not, where should we look for a new Internet access provider to keep broadband prices in check and to spur incumbents to increase speeds?

The answer may be staring you in the face . . . assuming you are reading this from a wireless device. Even if you’re looking at a desktop, your smartphone is likely within reach. And therein lies the key to broadband competition.

This week the Senate Commerce Committee is holding a hearing on “Wireless Broadband and the Future of Spectrum Policy.” With luck, policymakers will see the connection between more spectrum and broadband competition.

With the recent transition from third-generation to 4G, wireless networks now offer speeds—between 30 and 40 Mbps down—that are comparable to the average speeds attainable on a cable connection. And 5G wireless speeds promise to be even faster.

A super-charged wireless broadband offering would force DSL providers to upgrade to fiber, which in turn would cause cable operators to enhance their speeds.

When confronted with the notion of wireless-wireline substitution, the naysayers point to data limitations on wireless plans. But those limits are there to preserve the wireless experience given the constraints associated with commercially available spectrum. Relieve those constraints and wireless becomes an even closer substitute to wireline broadband (as those pesky data limits are likely raised).

How much additional spectrum is needed? A recent study estimates that the United States will need more than 350 MHz of additional licensed spectrum to support projected commercial mobile wireless demand, which represents a 50 percent increase in the supply of licensed broadcast spectrum.

And the source of this newfound spectrum? After the broadcasters’ spectrum, the next tranche of beachfront property would come from federal agencies, which have little incentive to give up the goods.

To align the broadcasters’ interests with those of wireless consumers, the Federal Communications Commission (FCC) came up with a novel idea—an “incentive auction” that permits broadcasters to share a portion of the proceeds from the sale; those who don’t participate will now be forced to explain to shareholders why they can put the spectrum to greater use.

Economists have a fancy word for this problem—some firms (think polluters) don’t “internalize” the cost of their actions. Sitting on valuable spectrum, while not as onerous as polluting, doesn’t cost an agency a dime. The key is to make these agencies internalize the cost of their actions (or inaction), as the FCC is about to do for the broadcasters.

There may be some impediments to importing the incentive auction wholesale into the realm of government agencies. Although the Department of Defense was compensated for its relocation costs via a portion of the proceeds from the recent AWS-3 auction, paying an agency to surrender spectrum may not induce the same response as paying a profit-maximizing firm. Another complication is that some underutilized spectrum is shared by several agencies. Still other agency heads might think that an influx of auction revenues would be met with offsetting budget cuts by Congress.

Several clever ideas have been floated to overcome this inertia and force agencies to internalize the cost of their spectrum holdings. Some have suggested that underutilized spectrum count against an agency’s budget at market rates; if the agency doesn’t relinquish the spectrum or put it to greater use, the agency sees its budget chopped. Alternatively, we could encourage direct transactions (sales or leasing plans) between private carriers and government agencies, cutting the FCC and Congress out of the loop.

For those who doubt that an agency could ever respond to financial incentives, there’s always command-and-control techniques; for example, Congress could establish a spectrum czar tasked with shifting a certain percentage of spectrum from the public to the commercial sector every year.

Whichever way is ultimately chosen, we must expedite the process. A study by CTIA estimates that it takes a staggering 13 years on average for wireless spectrum to be deployed after the legislative and regulatory process begins.

That’s unacceptable, particularly given the critical role that wireless broadband plays in the economy. MIT economist Jerry Hausman estimated that the FCC’s delay in licensing the first spectrum for cellular service, which was caused by regulatory indecision, cost U.S. consumers $31 billion to $50 billion in lost welfare annually for between seven and ten years.

According to a 2010 FCC analysis, making 300 MHz available by 2014 would create over $100 billion in economic value for the country. Given the shift in traffic from wireline to wireless networks since 2010, and given the potential of wireless to be an even more effective restraint on wireline broadband prices, the social value of an infusion of the same magnitude today could be worth even more.

Congress should assign a task force comprised of engineers and economists to investigate the best approaches and present a plan in 90 days. The cost of delay is simply too much to bear.

This piece is cross-posted from Forbes.

Financial Times: US income inequality rises up political agenda

Posted on by The Progressive Policy Institute

PPI President, Will Marshall, was quoted in a piece by Financial Times addressing how 2016 Presidential candidates are approaching strengthening the middle class and reducing income inequality:

Will Marshall, founder of the Progressive Policy Institute, says that Democrats too need to recognise the centrality of growth to any programme aimed at lifting middle class incomes. “Americans are aware that the private economy is ailing. Democrats don’t have a plausible theory for how they will unleash private sector growth,” he said. “Growth is the best antidote to inequality.”

Read the article in its entirety at Financial Times.

Chuka Umunna: These are “perilous times” for the Left

Posted on by The Progressive Policy Institute

On Wednesday, PPI hosted a lunch event at the National Press Club, “Progressives for Innovation and Growth: A Transatlantic Conversation,” on the economic challenge facing center-left parties. There, Chuka Umanna–Labour MP for Streatham and UK Shadow Secretary of State for Business, Innovation and Skills– gave the following keynote address:

Thank you so much to Will and the entire Progressive Policy Institute team for organising this gathering and inviting me to speak.

It is no secret that, as we sought to modernise the UK Labour Party in the 1990s and transform ourselves from a party of protest to a credible party of government, we drew much inspiration from President Clinton and the New Democrats. PPI was an incubator of so many of the ideas of that time which took the New Democrats into office. You were the original modernisers.

Unfortunately my party is suffering a relapse. We were established to be the political wing of working people in Britain, resolutely focused on ensuring that everyone has a stake in the future. But, too often over the last five years in opposition we behaved like a party of protest. Now we urgently need to modernise again so people can trust us to govern once more and fulfil our historic covenant with those that founded our Party.

The Democrats here have bucked the trend of progressive parties across the advanced world – the trend of losing General Elections since the global financial crisis. So, coming back to tap into your thinking and exchange views is a no-brainer.

Progressive challenge

We meet at perilous times for centre left “progressive” parties, across advanced economies.

We face a resurgent Conservative Party who have told a story about debt and deficit issues following the global financial crisis far more effectively than progressives. That crisis was a failure of the laissez-faire economic model the centre right were in thrall to and yet they have made the political weather since 2008/9.

In opposing the centre-right, we also compete with the populist left – in particular on economic policy – and the populist right – on issues of identity and belonging. I will touch on all this shortly.

The Danish Social Democrats provide the most recent example. In spite of winning the largest share of the vote by a comfortable margin in their General Election last month, they are out of power.

In May the British Labour Party went down to our worst defeat since 1983. The defeat comprised different elements: a failure to tackle Conservative hegemony in the Southern regions of England outside London; a challenge by the populist right – in the form of the UK Independence Party – in seats in the North of England; and a wipe out at the behest of the Scottish Nationalist Party in Scotland. A perfect storm.

It was England primarily that delivered the Conservative majority. We must win back support in Scotland but will need to prioritise taking seats from the Conservatives in England if we are to win again.

I cannot cover all of the reasons for our defeat but I shall make some observations on what it says about the challenges progressives face across the advanced world in this era of globalisation.

Economic competence

In the immediate aftermath of our defeat people have naturally prayed in aid arguments to suit their particular political perspective. But most agree our perceived lack of economic competence severely compromised our ability to gain the support needed to win.

It wasn’t that people like the Conservatives more than us – far from it – but they felt voting Labour represented a risk in a world of uncertainty. This was particularly so amongst older voters who vote in greater numbers and amongst whom support for Labour since 2010 dropped by eight points.

How did this come to pass?

Rahm Emanuel famously said you should never let a serious crisis go to waste. Our Conservative rivals heeded this advice, as did many other centre right parties across Europe. The 2008/9 crash occurred under our watch and they used it ruthlessly to make their argument.

In the UK the crash had precipitated a recession that brought about a collapse in tax revenues leading to a deficit of 11.1 per cent of GDP in 2009/10. This was inevitably going to have to be dealt with once demand and growth returned. So from 2008 in opposition through to government in 2010, Conservative Chancellor of the Exchequer, George Osborne reframed the economic debate in our country from one centred around the need for demand stimulus, to one resolutely focused on deficit and debt reduction.

Osborne argued that the Labour Government’s domestic spending before the crash had threatened our economy, and went on to argue – successfully – through the last Parliament, that if elected again, we would borrow, spend and tax more than the Conservatives. In so doing, our values were attacked too – they argued that not only were we incompetent, but that we were reckless and irresponsible too.

It was a ludicrous argument. We had reduced the national debt from 42 per cent of GDP in 1997 to 37 per cent of GDP on the eve of the crash in 2007. Before the crisis hit the deficit was small and unremarkable, averaging 1.3 per cent from 1997 to 2007 compared to 3.2 per cent beforehand under the previous 18 years of Tory rule. Indeed, so relaxed was Mr Osborne about borrowing before the crash that he signed up to our spending plans in 2007.

No matter. Mr Osborne’s argument stuck. As you would expect, he was greatly assisted by the fact that – notwithstanding the fact that the Labour government did not cause the crisis – the crash occurred whilst we were in office. But this was compounded because, once we left office, we failed to sufficiently concede where we went wrong – not properly regulating the banks and rebalancing our economy so we weren’t so exposed when the crash hit; in turn this compromised our ability to communicate what we got right.

At the general election just passed we had good policy to better balance our economy between sectors and regions, and to improve our trade position, but this was drowned out by the noise being made in relation to our alleged past economic misdemeanours on the deficit.

We were also not helped by some of the rhetoric the party deployed which gave the impression that we were against wealth creation and the productive businesses we would need to help us reform the economy if elected

Going forward we will need to ensure any weakness in our fiscal position is dealt with. It starts by asserting again and again that reducing our borrowing is a progressive endeavour – much as Democratic Nominee Bill Clinton did in 1992. We will need policy positions consistent with this goal. But, we must relate this to our values: compassion to ensure all have the support they need to get on; a responsibility to run sound public finances so we have resources to invest in people.

A vision of the future

We also failed to set out a vision of the future of our economy and our country that all could rally around.

Much of what we said focused on how terrible the country was and how we would regulate and clamp down on the many vested interests that we identified as being the source of all ills. This was hardly an optimistic, positive and patriotic story about what our country is and could be in the future. So, little wonder that even if voters did not believe the economy had improved under the Tories, too few believed it would get any better under Labour.

As globalisation has marched on and left too many behind, there has been an increasing sense in our country that the economy is not being run in the interests of people who work hard, play by the rules and do the right thing. In the absence of a positive narrative to explain how under a smart, enterprising Labour government every person and family would be empowered to take advantage of the opportunities the new digitally connected world can bring, social security and immigration dominated.

The social security bill was consistently one of the top three issues throughout the last Parliament. We spend more than £200bn a year – almost a third of all government spending – on the welfare state and this is not sustainable in the long run.

The Conservatives have chosen, in the main, to target entitlements the working poor and vulnerable receive to help make work pay – as the best way of reducing the social security bill. This is not something we would entertain. But we failed to set out an alternative way of reducing the benefits bill that convinced. In fact, we voted against every single social security measure put through parliament which helped reinforce the notion that we were not serious at getting to grips with this.

The price of successful politics is a constructive alternative and we did not have one. We need to rebuild support for our welfare state by setting out an alternative that puts notions of contribution and responsibility at its heart – where we all have a responsibility to work when we can and contribute in to the system if we want to we take out. That is what most people mean by fairness.

In addition to this, Ukip have sought to place blame for the lack of fairness in the system with immigrants. Many blue collar workers have understandably been troubled by the impact of immigration on our labour market. Whatever arguments are made by business of the necessity of immigration, for many blue collar workers it has meant more competition for jobs and the undercutting of their wages. The funding of public services has also been too slow to take account of population changes, putting local public services in some areas under pressure. This has proved toxic and provided fertile terrain for the populist right to use for their own divisive agenda.

The solution is not to pander to anti-immigrant sentiment or ignore it but to ensure proper enforcement of labour market rules and that new arrivals contribute into our system before they take out.

But, if we are to tackle the underlying causes of concern about social security and immigration, we must implement modern industrial strategies to stimulate innovation, grow the industries that produce better paying jobs, give people an education that match the needs of our industries, and give them the skills to connect into the digital global economy. Our education systems currently are simply not up to the job of giving workers the skills to adapt throughout their working lives to multiple career changes and constant technological advance. Again, we defended the status quo.

Above all, we need a system which doesn’t just treat people as commodities but where we value the work people do – the vocational and technical as well as the academic – and give them more of a say and greater employee engagement in the work place, fostering a greater sense of power and security in an uncertain, fast-changing world. This was not sufficiently central to our message – it must be for all progressive parties.

In other words there is work to do; real heavy lifting on the relationship between the economy and welfare if we are to win again.

National identity and belonging

The debate on immigration is symptomatic of the wider impact of globalisation.

People feel increasingly powerless in an age of globalisation that has brought about insecurity for so many. As a result, issues of belonging and cultural identity have taken on an increased importance as people search for security and solidarity in a fast changing world.

They are also increasingly mistrustful of a political elite who they believe is remote, passing laws and pulling levers at the centre, at a time when people want more power for themselves and autonomy for their communities. Progressives ignore this at our peril. If we do not address it, nationalism will flourish, which brings me to Scotland.

Although we were on the winning side of the argument in the September 2014 Scottish independence referendum, we lost 40 of our 41 seats there to the Scottish Nationalist Party at the General Election this year.

The rise of nationalism there was a factor that has deep, cultural roots. But, more than that, the constitutional issue of independence had become intertwined with issues of social justice. Whereas the English have tended to be slightly to the right of the Labour Party on economic matters, Scottish voters tend to the left of the party. The 2014 referendum campaign did not deliver the result the SNP desired, but it did give them the opportunity to set out a vision of the kind of independent Scotland they wished to create. In 2015 they successfully argued that an independent Scotland would be more progressive, stand up and protect them in a changing world.

In a sense, what we are witnessing – as the psephologist who came closest to predicting the UK result, Professor John Curtis of Strathclyde University, has argued – is the end of British electoral politics as we know it. He argues that the first break came in the 1970s when the links between Northern Ireland’s politics and the rest of the UK’s were broken; he argues we have just witnessed the second break where Scotland’s politics takes on a different character to that of the rest of UK, powered by issues of national belonging and cultural identity.

I think we can maintain the union but we should embrace people’s natural desire in our different nations to have more autonomy over their own affairs and give voice to the different cultural identities in the UK, whilst maintaining the benefits that the pooling and sharing of resources across the constituent parts of the UK brings. This is why I believe we need a more federal structure for the nations of the UK with a new English Parliament to sit alongside bodies in Scotland, Wales and Northern Ireland. We need a federal Labour Party too which recognises the unique character of each nation.

With a federal UK structure no nation will feel left out; each nation’s voice can be properly heard whilst maintaining a UK parliament that will be stronger as a result. To facilitate this we should establish a Constitutional Convention with all elements of political and civil society willing to participate, to settle this issue this Parliament. This is bread and butter for you here where the constitution takes pride of place. It would represent radical but much needed change in our country. It would be constructive of our renewal – government of the people, by the people, for the people perhaps.

Conclusion

I want to conclude in making a final observation. Our offer and the debate during the election was far too parochial.

If one considers what has had the greatest impact economically on people’s wallets in the first half of this year, it was the price of oil per barrel coming down to around $58 – an international phenomenon. The multinationals we seek not only to work with but ensure pay their fair share and play by rules, know no borders. And the biggest challenges we face, be it environmental or global terrorism, cross borders in a way they did not before.

This says to me that we can only ultimately build a fairer more equal world in an era of globalisation if we as progressives become far more organised and co-ordinated at a supra national level. For the UK that starts with maintaining our membership of the European Union in the coming EU referendum, but it extends beyond that to other institutions like the UN, the WTO. A better networked state in the modern age will be better placed to help its people thrive in this new era.

I look forward to working with you, in common cause and for the Common Good in the years ahead.

 

 

Wall Street Journal: Obama’s Big Idea for Small Savers: ‘Robo’ Financial Advice

Posted on by The Progressive Policy Institute

If you’re a Democratic policy maker worried about retirement savings for the little guy, would you deny millions of small savers access to financial advisers in ways that could cost them $80 billion in the next market downturn? Would you ask working families to pay more to keep the adviser they have?

The obvious answer to both is no. But the White House and the Labor Department have teamed up to propose a new “fiduciary rule” on brokers and advisers serving individual retirement account investors, which would produce precisely these unintended consequences.

The White House starts with good intentions—a concern that too many Americans are unprepared for retirement, and need to save more, and invest wisely. But instead of urging Americans to save, the administration has launched a campaign against a phony villain. If you’re not on a path to a secure retirement, the White House implies, it’s because evil financial advisers are ripping you off.

Continue reading at the Wall Street Journal.

The California Tech/Info Boom: How It Is Spreading Across the State

Posted on by The Progressive Policy Institute

Here’s an astounding fact. Since the recovery started in 2009, California businesses have created 1.5 million new private sector jobs. That puts California number one in private sector job creation among all states, slightly ahead of second place Texas, and more than double that of third place Florida. Moreover, total job creation in California since 2009 exceeds that of Germany, Europe’s largest and most successful economy.

How can this spectacular performance be explained? The answer: creativity and innovation. Since 2009, the Golden State’s economy has ridden the power of the sizzling tech/info revolution. From mobile to social media, to online video and the Internet of Things, California-based companies are leading the way.

This paper has two main goals. First, we document how the tech/info boom is helping propel the California economy. We carefully define the tech/info sector, building on our previous studies of California and other tech hubs around the world. We then show that the tech/info sector has directly accounted for more than 30% of the increase in real wage payments in California. These gains have boosted tax revenues and helped California run a budget surplus. In addition, the strong growth in California’s tech/info sector has translated into faster non-tech job growth than the rest of the country.

Download “2015.07-Mandel_The-California-Tech-Info-Revolution_How-It-Is-Spreading-Across-the-State”

PPI Statement on Iran Nuclear Deal

Posted on by The Progressive Policy Institute

Progressive Policy Institute President Will Marshall today released the following statement after the announcement of a landmark nuclear agreement between the United States, Iran, and five other world powers:

“Even before today’s nuclear deal with Iran was struck, President Obama’s critics accused him of giving away the store. Now the burden of proof falls on them to show why no deal is better than this deal.

“No deal means no constraints on Iran’s ability to enrich uranium and produce plutonium, giving it two paths to nuclear weapons. How will perpetuating this dangerous status quo make America or its allies safer?

“In contrast, the agreement reached in Vienna today between major world powers and Iran closes both paths to the bomb for the next decade. It also extends the embargo on missiles and bars Iran from designing warheads and testing nuclear detonators. Crucially, Iran has agreed to submit to more intrusive inspections than required by the Non-Proliferation Treaty.

“There’s no question, in short, that the deal moves Iran back from the nuclear threshold. Capping nearly two years of hard bargaining, it is a major diplomatic achievement for President Obama and his two Secretaries of State: Hillary Clinton and especially the indefatigable John Kerry.

“But it’s also a victory for collective security. The United States alone could not have wrung concessions from Iran without strong backing from its negotiating partners, Russia, China, Britain, France and Germany. Congress needs to keep that fact in mind as it takes up the accord. Unilateral action by U.S. lawmakers risks cracking the extraordinary united front the international community has maintained against Iran’s nuclear program.

“The agreement is far from perfect—no diplomatic deal ever is. Large questions remain about how and when sanctions on Iran will be lifted, and what happens 10 years from now when Iran resumes nuclear enrichment with more modern equipment, ostensibly to fuel civilian nuclear power. But the President has made undeniable progress, and he deserves progressives’—and the country’s—support.”

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RealClearBooks: Who Will Break the Spell of Polarization?

Posted on by The Progressive Policy Institute

Republicans are frequently blamed for America’s intensifying political polarization, and not without cause. Surveys show that they have moved farther to the right than Democrats have to the left and are less disposed to political compromise. The GOP also benefits more from polarization, in that it induces paralysis in Washington. For conservatives who see the federal government as a wealth- and liberty-destroying Leviathan, political obstruction is no vice.

Yet liberals seem to be warming to the new politics of polarization, too. Just as anti-government populism animates the right, anti-corporate populism is ascendant on the left. Populist tribunes like Senator Elizabeth Warren and New York mayor Bill DeBlasio are preaching a gospel of economic justice through redistribution, while Senator Bernie Sanders is peddling his version of European-style social democracy to ecstatic crowds on the campaign trail.

Can America really be moving simultaneously to the right and the left? Where have all the moderates gone? Are we doomed to political stalemate, or will one of the parties muster a durable majority for its governing vision?

How we came to this impasse, and how it might be broken, is the subject of Shattered Consensus: The Rise and Decline of America’s Postwar Political Order, by conservative scholar James Piereson. Progressives shouldn’t be put off by the author’s conservative leanings; this elegantly written book offers a perceptive if not always convincing guide to how U.S. conservatives understand themselves and their liberal opponents.

Piereson traces our present deadlock to the end of the broad political consensus forged in the crucible of Depression, World War II, and the Cold War. He sees the New Deal realignment as the latest of three “regimes” that have shaped the nation’s political evolution (Jefferson’s revolution of 1800 and the Civil War having set the stage for long stretches of Democratic and Republican ascendance, respectively). At the height of the postwar consensus, liberal ideas dominated U.S. political thought. The rout of laissez-faire economics and isolationism shoved conservatives to the margins, reducing their views, in Lionel Trilling’s memorable phrase, to “irritable mental gestures which seek to resemble ideas.” Americans voiced high levels of trust in government, which after all had saved the free-enterprise system, provided basic social protections for workers and the elderly, and organized the great victory over the Axis powers. Liberal historians like Louis Hartz and Richard Hofstadter proclaimed a national consensus on basic political values—an underlying “American creed” to which both parties adhered, even as they offered varying interpretations of personal liberal and equality.

Reading Piereson brought to mind a conversation I had years ago with another eminent scholar of the consensus school, Seymour Martin Lipset. In postwar Europe, he said, elections were usually contests between parties with distinct ideologies (e.g., Democratic Socialists vs. Christian Democrats) and separate social bases (working class vs. the bourgeoisie). In contrast, he likened U.S. parties to Macy’s and Gimbel’s—rival department stores competing for the same customers.

For better or worse, that dynamic has changed. Traditionally heterogeneous coalitions, U.S. parties are becoming more ideologically cohesive. Republican moderates are now a weak minority and liberal Republicans are virtually extinct. The parties tailor their appeals to different “customers”—the Republicans mainly white, working-class, and older voters, the Democrats young, minority, and highly educated voters. And it’s not just the parties; U.S. voters seem to want to live among people with a similar political outlook, and they’re sorting themselves accordingly.

As Piereson notes, the collapse of a reigning political paradigm makes it hard to cobble together majorities and govern. He wants a government capable of reducing public debt, stimulating economic growth, and reining in entitlement spending. Progressives would add other things to his list, but in either case, America needs a functioning government, even as left and right battle over its proper size and scope.

Piereson argues, plausibly, that the country is ripe for a “fourth revolution” that will realign U.S. politics around a broad majority. Which party is most likely to bring it about?

Here, the author’s analytical acuity deserts him, and partisanship takes the wheel. Take his account of the rise of “punitive liberalism” in the 1960s and 1970s. As liberal reformism curdled into hatred of U.S. society, Piereson suggests, liberals used government to push busing and other measures intended to “punish the nation for its past crimes.” Well, yes, some radicals spelled America with a “K” and called for revolution. But mainstream liberals fought nobly to advance civil rights; waged war on poverty, with less success; defended democracy against Soviet communism; tackled industrial pollution for the first time; and, ended a deeply divisive war in Vietnam. Did they leverage an affluent society’s sense of guilt to achieve these goals? Sure, but their aims were plainly ameliorative, not punitive.

Similarly skewed is Piereson’s caricature of President Obama as a ruthless partisan determined to foist a social-democratic agenda on the country. In fact, Obama ran a philosophically vague campaign in 2008, emphasizing his credentials as a “post-partisan” outsider who could rise above the toxic polarization in Washington. He did campaign on expanding health-care coverage—an idea that enjoyed majority support in 2008—but the plan he proposed once in office was a huge disappointment to the left, which wanted then, as it wants now, a single-payer plan.

Piereson also accuses Obama of “disdaining any compromise with Republicans over budget issues.” In fact, Obama sought a grand fiscal bargain after the 2010 elections, but congressional Republicans were mainly interested in killing Obamacare, even at the risk of government shutdowns and default. Deals were struck to whittle down the deficit, but generally on conservative grounds—as liberals bitterly noted—since most of the savings came from domestic spending cuts rather than from tax hikes. Any dispassionate observer of this president (and I speak as a Hillary supporter in 2008) has to admit that pragmatism, not ideology, is Obama’s political lodestar.

Piereson skips over the 1990s, possibly because the Clinton years belie his narrative of a Democratic party captured by liberal elites and alienated from Middle America. The advent of the New Economy and the Internet; vibrant growth and full employment; steep reductions in poverty and welfare dependence; falling crime and teen pregnancy rates; and, for good measure, a balanced budget—this recent stretch of effective progressive governance is conspicuously absent from Shattered Consensus.

Piereson hits nearer the mark in his account of Democrats’ current obsession with inequality and redistributionist politics, which he thinks will trigger a voter backlash against higher taxes and more intrusive government. One Republican presidential candidate who seems to agree is Jeb Bush, who has made 4 percent growth his campaign calling card. Whatever happens next year, Piereson is right to identify slow economic growth as the main challenge confronting America’s next “political regime.”

And plenty of pragmatic Democrats share that view: Hillary Clinton said as much in an interview with Charlie Rose, though she hasn’t emphasized the point recently. But imagine a 2016 presidential race that centers not on the ritual flaying of big government or big business, but on which party has the best ideas for reviving U.S. economic dynamism and shared prosperity. That would be a welcome sign that, consensus or no, our democracy is working again.