Friday, March 17, 2006

Are Liberty and Equality Parting Ways?

Joel Rogers gave a presentation this week arguing that despite globalization, most of the economy is still locally based, and states should take the lead in creating a more progressive economic future. But first, candidates and thinkers must develop a clear, concise description of what a progressive economic program would look like.

Rogers is founder and head of the Center on Wisconsin Strategy (COWS), a UW-Madison professor of law, political science and sociology, and is listed as a research associate at the Economic Policy Institute (EPI). (His bed-hair photo on the COWS site makes him look like a 30-something web consultant, but in person he looks more like he could play the President on 24.) He received a 1995 MacArthur Fellowship for his activism and scholarly work in the area of labor, the American workplace and democracy, which makes him a “genius” in some minds.

His wide-ranging talk was both dense and accessible. I’ll share my notes and reflection here and in subsequent posts…

Contrary to Thomas Friedman’s flat world vision, “the economy is not sliding on its way to Bangladore. Geography matters.” Most of the economy is organized in space, and so is politics. Therefore state-level action focused on the economy can still have an impact, through measures that focus on growing value, reducing waste and “grounding capital,” i.e., encouraging investment in infrastructure and new businesses that address local needs.

Rogers believes the left has drifted from politics and economics to issues advocacy; to prevail, they must return to providing “deep, ongoing benefit to vast numbers of the working class,” which is a core tenet of progressivism. For now, there’s no clear strategy or consistent set of ideas being advanced.

In contrast, the right has a clear objective — “end all social constraints on capital” — that calls for deregulating business, starving government, crushing unions and redistributing wealth upward. The basic message: “You’re on our own (YOYO!), and anybody who tells you different is a liar!” And, it has built the infrastructure to advance its agenda politically.

For many Americans, each advance increases their material insecurity, and reduces the social capacity to relieve it. Today, 45 million people — far more than on welfare — in the active labor force are in dead-end jobs, with little or no healthcare insurance or retirement plans. And no one, including progressive candidates, is effectively talking about this.

They get distracted by the war in Iraq and gayabortion, or get caught in the health care muddle. Progressives focus too much on redistribution of wealth through taxes — which turns off the business world — when talking out growing an economy that benefits everyone could lead to a productive discussion. Nor have we been effective in defining democratic government and its worth to the economy. Unless we spell it out, attempts at reforms will be met with “Don’t touch my money, because I don’t believe government can help solve the real problems I see.”

We are at an exceptional moment, Rogers said, in the evolution of progressive politics and are “transitioning out of the unification of liberty and equality” that took hold in the last century. As an illustration, he showed the nation’s productivity index, which has grown steadily since post-WWII. Until the mid-70s, the median wage and median family income closely tracked this rise.

U.S. Productivity Index vs. Median Wages and Income

But since then, wages and income have flattened. And where has the wealth produced by these gains gone? To the upper 10%, even more to the upper 1%, still more to the upper 0.1% and so on. And where's the argument to support this redistribution? That investment by the wealthy results in more jobs?

In fact, this chart portrays a "power curve of inequality" leading to the end of shared prosperity in America, where more and more Americans are mired in sub-minimum-wage jobs. If the minimum wage had continued to track productivity growth, it would be $18.50.

This is an unsustainable path. Rogers said that at present rates of deficit spending, our foreign debt will equal 50% of the GDP by 2008. As if to underscore the point, the next day, Congress raised the debt ceiling again.

Candidates Mark Ritchie and Earl Netwal were in the audience, as well as DFL eminence Don Fraser. Rogers was brought to town by Growth and Justice, and his presentation slides are available there.

More later.


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