Tuesday, December 05, 2006
And Now For The Heavy Lifting
Even though the Democrats have taken over Congress, changing the American economy will not be an easy task. Globalization has intertwined our economy so inextricably with those of other nations that protectionist policies against exports could actually hurt American companies - and their workers. Moreover, the multinationalism of many corporations weakens the jurisdiction of any laws we pass to regulate corporate behavior. According to BusinessWeek, "Global forces have taken control of the economy. And government, regardless of party, will have less influence than ever." Even the more culturally neutral Time magazine has suggested that moderate reform is the only possible course - i.e., "Why The Center Is The Place To Be". We can afford to be as a nation, implies Time, neither red nor blue, but purple. Yeah, purple... Is that purple in the sense of yielding slavishly to the neo-royalty of the billionaires - or the purple of asphyxiation as we have the economic lifeblood squeezed out of us by the depredations of transnational greed?
According to Robert Kuttner of The American Prospect, a populist groundswell brought the Democrats into power. Initiatives to raise the minimum wage were passed in six states on Election Day - which, as Kuttner says, signals a desire for even broader considerations of economic justice that will affect the middle class as much as the working poor. Even the high and the mighty have started to bend to the will of the people. Clinton Treasury star Robert Rubin has preached tax increases to the Economic Club of Washington, and Barney Frank of the House Financial Services Committee has met with business leaders to exchange reduced regulations for better treatment of trade unions, higher wages, and a more enlightened stance on health care coverage. Bargaining has begun - but it remains thus far only bargaining, not arm-twisting.
The 800 pound gorilla in the room during the 2006 election was the economy. Kuttner says, "Clearly the voters are sick of an economic system that allows moguls to make annual incomes running into the hundreds of millions for manipulating commerce in ways that leave ordinary people worse off. In an election billed as a referendum on Iraq and Republican corruption... the sleeper issue was the economy as it affects regular Americans." Finding the solution, however, is another issue altogether. Kuttner adds, "...transforming this reality will require a lot more than a higher minimum wage or even universal health insurance...The current rules of globalism do weaken government's ability to use instruments that once allowed prosperity to be more widely shared - tighter regulation of finance, a more progressive tax system with the proceeds invested in ordinary people, and a stronger labor movement."
In the end, Kuttner asserts that populism must (and will) trump "centrism", and that even negotiators like Barney Frank may come to realize that winning back the economy for the average American may require more regulation, not less - its effect on the opinion of foreign investors notwithstanding.
"Now, The Hard Part" from The American Prospect