It’s not a hard intellectual or political lift to say that a President Obama would be leaps and bounds much better for working people than John "Third Bush Term" McCain–partly because the bar has been set so low in the past eight years. But, it’s worth being clear-eyed about what we can expect.
I’ve been thinking about this topic for a long time and have a much more detailed look in the works. But, for the time being, an upcoming long article in The New York Times magazine gives some food for thought. Written by David Leonhardt, the piece is called "How Obama Reconciles Dueling Views on The Economy".
Leonhardt’s basic view is this:
John McCain’s economic vision, as he has laid it out during the campaign, amounts to a slightly altered version of Republican orthodoxy, with tax cuts at the core. Obama, on the other hand, has more-detailed proposals but a less obvious ideology.[emphasis added]
And:
Some of the confusion stems from Obama’s own strategy of presenting himself as a postpartisan figure. A few weeks ago, I joined him on a flight from Orlando to Chicago and began our conversation by asking about his economic approach. He started to answer, but then interrupted himself. "My core economic theory is pragmatism," he said, "figuring out what works."[emphasis added]
I’m all for pragmatism–if we were pragmatic, we would have a single-payer health care system because it’s the system that would save the most money and be better economically for companies and business.
But, pragmatism can sometimes–sometimes–cloud over some very important clear choices. That is, to take the health care system again, some would say that being pragmatic means constructing a universal health care system that is not single-payer because, pragmatically, it doesn’t seem like a winnable fight to eliminate the insurance industry from the picture (a position that I don’t agree with). "figuring out what works" can have two meanings. Either, literally, can it work economically and/or will it work politically.
Part of the problem with Leonhardt is that he poses the differences on economic policy in a fairly narrow and conventional framework. Here are two examples that stand out:
The new Democratic consensus isn’t complete, obviously. Labor unions, in particular, would prefer more trade barriers than many other Democrats. During the primaries Obama nodded, and at times pandered, in this direction. Since then, he has disavowed that rhetoric, to almost no one’s surprise.
And:
But it’s not entirely clear what the alternative is, at least in the broad sense and at least for the time being.
A much more left-wing agenda than Obama’s would consist of erecting new trade barriers, reregulating various industries and otherwise getting the government even more involved in the economy than Obama would
. This program has the dubious distinction of being disliked by both voters and experts alike. Populism hasn’t won a national election, or even the Democratic nomination, in decades, and economists can point to any number of ways why it wouldn’t work anyway.
Most unions don’t want to erect "trade barriers". This is a subtly different way of throwing out the old "protectionist" epithet. What unions want is to forge a trade policy that isn’t based on the lowest common denominator. Or, more specifically, a trade policy that isn’t based on the search for the lowest wage.
But, Leonhardt does make a few observations that are worth considering. For the sake of brevity, I want to focus mostly on the tax issue:
Obama’s agenda starts not with raising taxes to reduce the deficit, as Clinton’s ended up doing, but with changing the tax code so that families making more than $250,000 a year pay more taxes and nearly everyone else pays less. That would begin to address inequality.
That is a good thing. However, I’ve taken a close look at Obama’s tax policies and, frankly, it’s small-bore. Leonhardt is right when he says:
McCain, by continuing the basic thrust of Bush’s tax policies and adding a few new wrinkles, would cut taxes for the top 0.1 percent of earners — those making an average of $9.1 million — by another $190,000 a year, on top of the Bush reductions. Obama would raise taxes on this top 0.1 percent by an average of $800,000 a year.
That shows the stark difference between Democrats and Republicans. But, then, Leonhardt says:
To put it another way, the wealthy have done so well over the past few decades, with their incomes soaring and tax rates plummeting, that Obama’s plan would not come close to erasing their gains. The same would be true of households making a few hundred thousand dollars a year (who have gotten smaller raises than the very rich but would also face smaller tax increases). As ambitious as Obama’s proposals might be, they would still leave the gap between the rich and everyone else far wider than it was 15 or 30 years ago. It just wouldn’t be quite as wide as it is now.[emphasis added]
The point here is this: leaving this wide gap between rich and poor is unconscionable. And unnecessary. We could raise the higher rates far more than Obama suggests, generate a lot more revenue for investments in jobs, health care and energy–and still leave the rich quite well off, thank you very much. But, there is a fear of doing so that has nothing to do with economics.
Probably since the 1980s, the Democrats have fallen into the ideological straight-jacket that requires that they come up with some gimmicky promise to cut taxes. Sen. Obama is no different.
Looking at how Sen. Obama addresses taxes makes the point–and I think underscores his general views about taxes. He often refers to "tax relief". A change election—-a change in the way things are done in Washington and, more important, a change in the rhetorical phrases that frame policy—-means tossing out the nonsense about "tax relief". As George Lakoff has pointed out:
The word relief evokes a frame in which there is a blameless Afflicted Person who we identify with and who has some Affliction, some pain or harm that is imposed by some external Cause-of-pain. Relief is the taking away of the pain or harm, and it is brought about by some Reliever-of-pain.
The Relief frame is an instance of a more general Rescue scenario, in which there is a Hero (The Reliever-of-pain), a Victim (the Afflicted), a Crime (the Affliction), A Villain (the Cause-of-affliction), and a Rescue (the Pain Relief). The Hero is inherently good, the Villain is evil, and the Victim after the Rescue owes gratitude to the Hero.
The term tax relief evokes all of this and more. Taxes, in this phrase, are the Affliction (the Crime), proponents of taxes are the Causes-of Affliction (the Villains), the taxpayer is the Afflicted Victim, and the proponents of "tax relief" are the Heroes who deserve the taxpayers’ gratitude.
Every time the phrase "tax relief" is used and heard or read by millions of people, the more this view of taxation as an affliction and conservatives as heroes gets reinforced [emphasis added]
.
So, political leaders should stop talking about "relief", as if somehow taxes are an affliction—as opposed to the dues we pay to live in a decent society—and focus on the real problem: that rich people and corporations are either not paying their fair share of their dues or dodging taxes (Wal-Mart is a prime example ).
On its merits, Sen. Obama’s tax cut plan, which Leonhardt discusses, is quite modest: He proposes a $250 immediate tax cut for 150 million workers and their families—-$50 lower than the recent Bush Administration’s $300-a-person tax "rebate" that was widely derided as a political ploy that would do very little to alleviate the economic stress facing workers. And, if economic circumstances get worse, the new Administration will send another $250 per person. The cost to the U.S. Treasury would be $70 billion if both $250 rebates were implemented—-a likely scenario given the economic crisis underway.
But, the truth is that the proposed tax cut is a distraction and an unnecessary drain on the U.S. Treasury when far more important challenges face American workers. Tossing American workers a few hundreds bucks out of the Treasury, which will further hobble the government’s ability to do its job, will undercut the ability to launch national health care, fund infrastructure projects and move the economy towards a carbon-free future.
For the sake of brevity, I will end with this passage, which gives some insight into Obama’s instincts:
In Obama’s second book, "The Audacity of Hope," he goes further: "Reagan’s central insight — that the liberal welfare state had grown complacent and overly bureaucratic, with Democratic policy makers more obsessed with slicing the economic pie than with growing that pie — contained a good deal of truth." [emphasis added]
The partial embrace of Reaganomics is a typical bit of Obama’s postpartisan veneer. In a single artful sentence, he dismissed the old liberals, aligned himself with the Bill Clinton centrists and did so by reaching back to a conservative icon who remains widely popular. But the words have significance at face value too. Compared with many other Democrats, Obama simply is more comfortable with the apparent successes of laissez-faire economics.[emphasis added]
I’ll post more on this topic down the line. I view these discussions as important to have. I think you can hold complicated ideas at the same time: that Obama is light years ahead of McCain for workers, that he could, in fact, be an extraordinary president and, that, finally, if he becomes a great president, he will do so because a movement that kept building moved him to move the country even further in a progressive direction.
