issue: Politics

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.

PRESS RELEASE: PPI Applauds Congress on Trade Votes

Posted on by The Progressive Policy Institute

Ed Gerwin, Senior Fellow for Trade and Global Opportunity at the Progressive Policy Institute, today released the following statement after passage of Trade Promotion Authority and Trade Adjustment Assistance legislation in Congress:

PPI applauds Congress for voting this week to advance a forward-looking trade agenda that will help grow America’s economy and support good jobs—while also upholding important progressive values.

Passage of Trade Promotion Authority (TPA) will enable the Obama Administration to complete negotiations of a vital market-opening trade agreement with countries in the fast-growing Asia-Pacific region, and will jumpstart significant trade talks with our allies in Europe, as well.

TPA will do this while requiring that all U.S. trade pacts advance progressive goals in critical areas like labor rights, environmental protection, and open digital trade. And TPA will help ‘democratize’ trade through rules to enable small businesses, entrepreneurs, and consumers to more directly participate in and benefit from global trade.

Trade Adjustment Assistance (TAA) has been a progressive priority since the Kennedy Administration. In voting to extend and expand TAA, Congress will assure that those American workers whose jobs are impacted by trade can obtain the support and training they need to succeed in an increasingly knowledge-based global economy.

PPI particularly acknowledges those pro-trade House and Senate Democrats—especially Senator Ron Wyden (D-Ore.), Representative Ron Kind (D-Wis.), and key members of the House New Democrat Coalition—whose support was decisive in advancing the trade agenda. These pro-growth progressives understand that trading with a growing global middle class can power more inclusive growth for Americans, and they wisely used their influence to assure that the trade process is significantly more open and transparent. As we continue an important debate on trade and its benefits, Americans should listen closely to these thoughtful leaders.

LeBron James and the Do-Something Democrats: Support for Democrats In the Arena on Trade

Posted on by The Progressive Policy Institute

In this year’s NBA Finals, LeBron James cemented his reputation as one of the greatest basketball players of all time­—becoming the first player in Finals history to lead both teams in points, rebounds, and assists in every game, and averaging an astounding 35.8 points, 13.3 rebounds, and 8.8 assists for the six-game series.

In addition to his basketball prowess, Lebron is also a student of oratory and leadership. When faced with criticism and second-guessing, he’s frequently cited Theodore Roosevelt’s 1910 address on “Citizenship in a Republic,” popularly known as the “Man in the Arena” speech. Like Roosevelt, LeBron believes that:

“The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, and comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds. . . . “

In Washington’s ongoing trade battles, there’s a group of Democratic House Members and Senators who are displaying the type of grit and determination that both TR and LBJ would almost certainly admire. These are the 28 House Democrats and 14 Democratic Senators who’ve voted to advance Trade Promotion Authority (TPA) legislation, often in the face of intense criticism from anti-trade forces.

These Democrats support a forward-looking trade agenda that includes critical priorities for progressives, including strong and enforceable labor and environmental standards, and new rules to protect innovation, to assure open digital commerce, and to “democratize” trade for small business and consumers. As pro-growth Democrats, they understand that increased trade can tap a burgeoning global middle class and help power more inclusive economic growth for middle class Americans.

These Democrats are also realists—and doers. They understand that writing modern rules for liberal trade is a messy and often-thankless task that requires hard work and perseverance. They appreciate that trade is always a negotiation and recognize the need for principled compromise among Congressional colleagues, the Administration, foreign governments, and the many and varied interests that make up America’s economic and social fabric.

While these Democrats know that they won’t achieve everything they seek, they also believe that it is vital to stand with the long line of Democrats—from FDR and Truman to JFK and Bill Clinton—who have progressively built an increasingly effective rules-based trading system that has fostered global peace and prosperity, lifted millions worldwide out of poverty, and continues to deliver substantial benefits to all Americans.

Many Democrats who have opposed TPA say that they support increased trade and stronger trade rules, and that they want to achieve the best deal for America. These TPA critics may be sincere, but they often offer only nebulous ideas on how to achieve these important ends.

Pragmatic, do-something Democrats, on the other hand, recognize the Trade Promotion Authority offers the only realistic, near-term means of achieving the outcomes that so many Democrats claim to want.  They know that our negotiating partners will never table their best and final offers to open markets or raise standards without TPA. And they understand that the United States will never achieve anything meaningful in trade if our trading partners must effectively negotiate with 535 members of Congress. This is especially so after last’s week’s spectacle in which labor and anti-trade groups prevailed on House Democrats to kill worker adjustment assistance—a six-decade Democratic priority—in a cynical bid to scuttle TPA and the overall trade agenda.

Pro-trade Democratic Members understand that key portions of the progressive coalition, including Democrats (58%), millennials (69%), Hispanics (71%), and mayors, believe that trade deals are good for the United States. But they’re not asking Americans to sign a blank check for new agreements. Under the leadership of Senator Ron Wyden, Congressman Ron Kind, and others, they’ve worked hard to assure that TPA includes unprecedented new transparency provisions, including the requirement that the text of any new trade deal be posted on the Internet for months before it is ever brought to a vote.

In a news conference before the NBA Finals, LeBron offered a pithy addendum to his favorite Roosevelt quote. When asked to guarantee a championship, LeBron said that he could only guarantee that “we will play our asses off.”

It’s time for Democrats who say they support expanded trade and progressive rules to get off of the sidelines—and to join the do-something Democrats who are “in the arena” sweating and striving towards those vital goals.

Al Jazeera America: Bill Clinton’s legacy re-examined as Hillary Clinton ramps up campaign

Posted on by The Progressive Policy Institute

PPI President Will Marshall was quoted in a piece by Al Jazeera America regarding the influence of Bill Clinton’s legacy as President on Hillary Clinton’s campaign:

Others said that Hillary Clinton, facing a far different country from the one Bill Clinton governed in 1990s, will have to stand on her own merits. For those who remember the era, his record is on balance an asset.

“I don’t think she’s going to have to relitigate the goods and bads of her husband’s legacy. I think generally it’s going to help her with boomers who remember the Clintons’ years as positive ones — years of growth, prosperity and peace and shared prosperity, at that. The ’90s were a great decade for the country for both upward mobility and for sharing the fruits of growth,” said Will Marshall, the president of the Progressive Policy Institute, a think tank based in Washington, D.C., that promotes center-left policy proposals and worked with the Clinton White House.

He added that it was unfair to judge the policies of the past by the much-evolved standards of the present, particularly on social issues.

“If you went back to 1972, I wouldn’t expect the Democratic policies to hold up in the 1990s any more than I expect the policies of the 1990s to hold up now,” he said. “People have to be judged by the standards and reference points of their time.”

Read the piece in its entirety at Al Jazeera America.

 

PRESS RELEASE: A Moment of Truth for Pro-Growth Progressives on Trade

Posted on by The Progressive Policy Institute

WASHINGTON–Ed Gerwin, Senior Fellow for Trade and Opportunity at the Progressive Policy Institute, today released the following statement prior to a vote on Trade Promotion Authority in the House of Representatives:

“Opening overseas markets to U.S. exports is integral to putting America back on a high-growth trajectory. PPI therefore urges pro-growth progressives to support President Obama’s major trade initiatives. To conclude trade agreements that advance U.S. interests, this President, like any president, needs Trade Promotion Authority (TPA). What’s more, TPA enables Congress to identify its key objectives for U.S. trade policy.

“As PPI has detailed in recent reports on the Obama Administration’s trade agenda and open digital trade, new U.S. trade agreements can make vital progress on issues that are important to Democrats and progressives. They can, for example, tap a growing global middle class to fuel more inclusive American economic growth, strengthen and expand the reach of rules on labor rights and environment protection, and ‘democratize’ trade by empowering entrepreneurs, small businesses, and consumers to more directly participate in and benefit from global commerce.

“TPA would provide a fairer and considerably more open process for considering new trade agreements, and would obligate future administrations—both Democrat and Republican—to pursue other progressive priorities in future trade agreements, as well. Without TPA and the important new trade initiatives that it would enable, other countries—particularly China—would have much greater influence in setting global trade norms that fail to reflect high standards or progressive goals.

“Key Democratic and progressive constituencies support TPA and new trade agreements. In endorsing TPA, the U.S. Conference of Mayors has emphasized that expanding trade is critical for good jobs in America’s metro areas, which depend on exports for fully one-third of their economic growth. And, according to recent opinion surveys, Democrats (58 percent), millennials (69 percent), and Hispanics (71 percent) all believe that free trade agreements are, on balance, good for the United States.

“PPI applauds those House Democrats who have stood up forthrightly for liberal trade and TPA. As the House takes up TPA tomorrow, we hope others also will reject the spurious arguments and bullying of anti-trade activists who yearn for the industrial landscape of the 1970s and imagine that Americans can prosper in isolation from the rest of the world.”

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The Daily Beast: California Democrats Should Heed Obama on Trade, Not Labor

Posted on by The Progressive Policy Institute

If any state ought to be pro-trade, it’s California. America’s second-largest exporter, after Texas, the Golden State boasts 840 miles of coastline rimming the burgeoning Asia-Pacific economy, as well as the nation’s busiest port, Los Angeles. Trade supports the jobs of more than 1 in 5 Californians.

Yet most of California’s overwhelmingly Democratic Congressional delegation refuses to support President Obama’s trade agenda.

Only two of the state’s 39 House Democrats – Reps. Ami Bera of Sacramento and Jim Costa of Fresno – have publicly backed Obama’s request for trade negotiating authority (or TPA in Washington speak). The rest are either opposed or undeclared. Has this famously entrepreneurial, outward-looking and future-oriented state suddenly caught the protectionist virus?

Not likely. It’s true that trade has become a tough issue for Democrats in recent decades as California has become more liberal. But the White House did manage to muster double-digit support among House Democrats there for pacts with Korea and Panama. The paucity of support this time may reflect Obama’s declining clout, but it’s also a testament to the success of a ham-fisted campaign of political intimidation spearheaded by organized labor.

In a raw display of financial muscle, the AFL-CIO has frozen all contributions to Democrats until after the TPA vote. Not only that, but labor and anti-trade “progressives” promise to spend lavishly on primary challenges to defeat Democrats, and if that doesn’t work, to spend more against them in the general election – to the benefit of Republicans.

Remember that the next time you hear progressives bemoaning the sinister power of money in American politics.  It’s insidious all right, but it’s hardly confined to the Koch brothers and right-wing super PACs.

Continue reading at the Daily Beast.

The Washington Post: It’s hard to be a moderate politician. It’s also more expensive.

Posted on by The Progressive Policy Institute

PPI Senior Fellow Anne Kim wrote an opinion piece for The Washington Post comparing liberal versus moderate Democratic campaign spending. Her analysis shows in the past three election cycles, self-described moderate lawmakers spent roughly twice as much as their liberal counterparts to win or defend their seats. In 2014, moderates outspent their liberal colleagues by a margin greater than 3 to 1 when all campaign spending is included.

This analysis is a follow up to a 2011 policy memo by Kim, The “Centrist Premium”: The High Cost of Moderation. 

Read Kim’s opinion piece for The Washington Post here.

PPI Applauds Senate Passage of TPA

Posted on by The Progressive Policy Institute

PPI applauds the Senate for passing Trade Promotion Authority and taking a key step in assuring that America continues to be a global leader in crafting strong, progressive trade rules that will help grow our economy and support good jobs—while also advancing important American values.

As PPI has detailed in recent reports on the Administration’s trade agenda and open digital trade, new U.S. trade agreements can make vital progress on issues that are important to Democrats and progressives. They can, for example, tap a growing global middle class to power more inclusive American economic growth, expand the reach of strong rules on labor rights and environment protection, reform past agreements like NAFTA, and “democratize” trade by empowering entrepreneurs, small businesses, and consumers to more directly participate in and benefit from global commerce.

TPA would provide a fair and more open process for considering new trade agreements, and would obligate future Administrations—both Democrat and Republican—to pursue these and other progressive provisions in future trade agreements, as well.

Finally, today’s vote illustrates the leverage that pro-growth, pro-trade Democrats can exercise in trade debates. As trade legislation moves to the House, PPI urges Democrats to continue to work constructively to build smart, progressive policies that enhance America’s global competitiveness. In addition to support for TPA, these efforts should include a comprehensive program of reform—in education, training, innovation, infrastructure, and more—like that proposed in the New Democrat Coalition’s American Prosperity Agenda. Unlike reflexive opposition to new trade initiatives, this approach will assure that America—and more Americans—can share in the significant benefits of global growth.

Creating New Pathways into Middle Class Jobs

Posted on by The Progressive Policy Institute

Many policy ideas on how to reduce income inequality and improve the upward mobility of low-income Americans are gaining popularity, on both sides of the political aisle. As usual, Republicans suggest that tax cuts heavily tilted towards the rich can address these problems, though many of their proposals would actually worsen inequality and mobility. Populist Democrats’ proposals include minimum wage increases, gender pay equity and the like—which deserve support but would have very modest effects on overall inequality and mobility into the middle class. If we want to have large impacts on these problems, and create systemic rather than mostly symbolic effects, there is only one place to go: postsecondary education or other skills by low-income workers, and whether they get the kinds of jobs that reward these skills in the job market.

Most job training in the United States now occurs in community and for-profit colleges, as well as the lower-tier of four-year colleges. We send many young people to college, even among the disadvantaged, but completion rates are very low and earnings are uneven for graduates. The public colleges that the poor attend lack not only resources but also incentives to respond to the job market. Approaches like sectoral training and career pathways, which combine classroom and work experience, show promise but need to be scaled, while employers need greater incentives to create middle-paying jobs.

This report proposes a three-part strategy for equipping more Americans with new tools for economic mobility and success: 1) A “Race to the Top” program in higher education, where the federal government would help states provide more resources to their community (and perhaps four-year) colleges but also require them to provide incentives and accountability for the colleges based on their student completion rates and earnings of graduates; 2) Expanding high-quality career and technical education along with work-based learning models like apprenticeship; and, 3) Giving employers incentives to create more good jobs.

 

Download “2015.05-Holzer_Creating-New-Pathways-into-Middle-Class-Jobs”

Productivity Growth Continues to Plunge: Why A Growth Policy Is Necessary

Posted on by The Progressive Policy Institute

Should progressives focus more on promoting growth, or fostering redistribution? The unfortunate fact is that we live in an era of weak productivity growth.  That means growth policies to encourage investment and innovation are essential for broad prosperity.

Based on today’s release from the BLS, ten-year productivity growth has now plunged to 1.4%, the lowest level since the 1980s (see chart below).  By comparison, ten-year productivity growth was 2.2% when Bill Clinton left office at the end of 2000, and hit a high of 3% at the end of 2005.

Productivity growth is the central force determining the size of the economic pie. Without productivity gains, living standards cannot show a sustainable rise.

 

Certainly real compensation growth is very weak as well. However, the difference between ten-year productivity growth and ten-year real compensation growth has also been narrowing.  It was 1.1 percentage points as of the first quarter of 2015, after peaking at 1.7 percentage points in 2011. That difference of 1.1 percentage points is only slightly above the 50-year average of 0.8 percentage points.

To put it a slight different way, real compensation growth has fallen from 1.5% in 2000 to 0.3% today, a catastrophic drop. However, two-thirds of that plunge can be attributed to a drop in productivity growth (from 2.2% to 1.4%), and only one-third to a widening of the gap between productivity and compensation growth. 

My conclusion: The sharp fall in productivity growth is the major reason why Americans feel so squeezed. Growth policies are key.

 

Marshall for CNN: Suddenly Britain looks like Italy

Posted on by The Progressive Policy Institute

Staid old Britain suddenly looks more like Italy. No less than seven parties are vying for seats in the parliamentary election taking place Thursday, a contest that has underscored the unraveling of any national consensus around certain fundamental assumptions about Britain’s role in Europe, its special relationship with the United States and even its own political cohesion and identity. But perhaps what’s most distressing about the campaign debate, from a trans-Atlantic perspective, is its utter insularity.

On Prime Minister David Cameron’s watch, Britain’s customary global role seems to be shrinking before our eyes. Indeed, London has been absent from the Ukraine crisis and has played only a marginal role in the U.S.-led campaign against ISIS. Meanwhile, to the consternation of UK military chiefs, Cameron reportedly refused to guarantee defense spending would not sink below the NATO-recommended threshold of 2% of gross domestic product. Britain’s army is reportedly set to be smaller than it was in Napoleonic times.

“David Cameron has presided over the biggest loss of influence for our country in a generation,” charges Ed Miliband, the main opposition Labour Party leader. While chiding the government’s “pessimistic isolationism,” however, Miliband seems likely to disappoint those looking to revive Anglo-American ties. His outlook on foreign policy seems to be an amalgam of soft multilateralism and post-Iraq wariness of security cooperation with Washington. Indeed, when challenged to show he is tough enough to confront Vladimir Putin, Miliband instead cited his opposition to President Barack Obama’s calls for strikes on Syria in response to chemical attacks on civilians. “I think standing up to the leader of the free world shows a certain toughness,” he said.

Continue reading at CNN.