Election 2008  
comments_image Comments

Democrats: What is the Meaning of Change?

Does change mean sticking with the political playing field we now have and just putting in a new quarterback?
 
 
Share
 

Many people now believe the United States cannot afford to continue with the policies of the Bush - Cheney administration. Those policies have undermined global support for America that is a key part of national security, and have produced an economic expansion that has by-passed working families and looks like ending in misery with collapsing house prices.

However, if there is agreement that the heavy-fisted Bush-Cheney agenda is no longer acceptable, the question remains what will follow. Among Democratic presidential candidates, though there is much talk of change, its meaning remains unclear.

Beginning some thirty years ago, Ronald Reagan initiated a fundamental re-positioning of American politics that was later completed by Newt Gingrich, Dick Armey, and Tom Delay. That re-positioning shifted the entire political spectrum to the right.

This raises the question does change mean sticking with the political playing field we now have and just giving control of the football to new Democrats like Senator Hilary Clinton? Or does it mean re-positioning the playing field and shifting the political spectrum as proposed by progressive Democrats like Senator John Edwards?

Behind this difference lie vital real world consequences that will profoundly impact America's working families. For Clinton-style centrists, today's economy works reasonably well. Globalization delivers prosperity by providing cheap imports that lower prices; financial boom on Wall Street benefits all by raising stock prices; and higher corporate profits drive investment that increases growth and incomes. However, growth also creates losers which means the market's "invisible hand" must be accompanied by a "helping hand". Consequently, there is need for policies to supplement the incomes of the working-poor and to assist workers who lose their jobs because of trade.

For Edwards-style progressives the picture is very different. Globalization has created a divide between country and corporations, with companies abandoning the U.S. by shifting jobs and investment offshore. That maximizes profits but undermines wages and future prosperity. Higher profits have not raised growth, but have instead come at the expense of wages and increased income inequality. And Wall Street has spearheaded these changes by demanding that companies raise rates of return and rip up the old social contract with workers and their communities.

From a progressive standpoint the problem with new Democrats is they tackle symptoms, not causes. Though helping hand social policies are welcome, progressives believe such policies are not up to the challenge confronting America's working families. Meeting that challenge requires deeper change, which is what the 2008 election is all about.

Yet, surfacing this difference has proved difficult. That is because the Clinton campaign has used the political tactic of "bunching" to obscure differences. That holds for every major issue from healthcare, to trade policy, to taxing Wall Street hedge fund incomes. On each issue the Clinton campaign has bunched up and signed-on, but always reluctantly and late.

This tactical effectiveness of bunching requires progressives to raise directly the question of change and its meaning. For Senator Obama change is a matter of political style. For Senator Clinton it means restoring the economic policies of the 1990s. However, with the exception of tax cuts, those policies are the policies of today. Thus, the 1990s ushered in NAFTA and free trade with China, and cemented trends from the 1980s regarding trade deficits, the separation of wages from productivity growth, and the dominance of Wall Street. What really saved the 1990s were the Internet and stock market bubbles, which is not a sustainable foundation for prosperity.

The 21st century has gotten off to a rocky start with America squandering much political and economic capital. Now, Americans want change. The Democratic primaries offer two visions of change. One changes possession of the political football, the other changes the football field. That's the debate the country needs, and it seems to be finally bubbling to the surface in the last days if the Iowa campaign.

Thomas Palley is the founder of the Economics for Democratic & Open Societies Project. Read more of his work at www.thomaspalley.com.

 
See more stories tagged with: