Only a few months ago, it looked as if Republicans had recaptured their old claim to be the party of ideas, especially on the economic issue that has seized the attention of most Americans: the stagnation of middle-class incomes.
The GOP’s former vice presidential nominee, Rep. Paul D. Ryan of Wisconsin, unveiled proposals to help the struggling middle class. Sen. Marco Rubio of Florida, another conservative hero, inveighed against income inequality. Even Mitt Romney, the once and perhaps future presidential candidate, has started saying it is time to get serious about poverty.
Meanwhile, Democrats seemed like an extinct volcano. Many of them campaigned for November’s congressional election without any clear economic message at all. It didn’t turn out well.
In politics, nothing concentrates the mind like electoral defeat – unless it’s the low roar of an oncoming presidential campaign.
And so, in the last few weeks, the Democratic volcano has erupted with ideas. President Obama listed dozens in his State of the Union speech, beginning with a tax increase on the top 1 percent to pay for child-care and education benefits for the middle class. House Democrats went further, proposing a tax on financial transactions that would allow for broader tax cuts for workers. And a think-tank task force co-chaired by former Treasury Secretary Lawrence H. Summers proposed a platform including tax breaks for middle-income folks as well as corporate tax incentives to push companies toward sharing profits with their workers.
“Stagnation in wages and income is a choice, not a necessity,” Summers said as he unveiled the report. “A different choice is possible.”
You probably haven’t seen much about, much less read, his report; it’s 160 pages long and stuffed with serious economic analysis of why most Americans’ incomes haven’t grown much in real terms since – ouch – 1973.
But its prescriptions are serious, and they are probably closest to what Hillary Rodham Clinton’s economic platform will be, when we get to see it. The report was sponsored by the liberal Center for American Progress, whose founder, John Podesta, is expected to become chairman of Clinton’s presidential campaign. The think tank’s president, Neera Tanden, was Clinton’s chief policy adviser in 2008.
The core argument is that economic growth alone isn’t enough to ensure sustained prosperity any more. Unless profits are broadly shared, the argument goes, the economy won’t generate enough domestic spending to keep growth going – or alleviate the widening gap between rich and poor.
The solutions would be on almost any Democrat’s wish list: more spending on education and training, more spending on roads and bridges and airports, paid parental leave for both fathers and mothers, and paid sick and vacation days for all.
But then there’s that corporate reform: legislation to push employers to share more of their growing profits with their employees, and to shift financial incentives for executives from short-term stock price increases to long-term growth.
The report calls for strengthening the 2010 Dodd-Frank financial regulation law, including tougher punishment for financial crimes beginning with mandatory “clawbacks” of bonuses paid to executives who are found responsible for malfeasance.
That sounds like a bow to Sen. Elizabeth Warren of Massachusetts and others on the Democratic left who have long complained that Wall Street got away with too much in the Great Recession. But the Summers report doesn’t call for breaking up or shrinking big banks, as Warren has proposed, so it’s unlikely to satisfy every progressive.
It won’t make every centrist Democrat happy, either. The Progressive Policy Institute, a think tank spawned by Bill Clinton’s New Democratic movement, began work this week on a list of policies focused on promoting private sector growth. “We need to expand our growth agenda to attract voters who may not agree with us,” the group’s president, Will Marshall, told me.
And what does Hillary think? She’s not saying. As the prohibitive front-runner in a Democratic nomination race she hasn’t formally joined, she can let the arguments percolate.
But for Democrats who worried that their party’s idea shortage might be chronic and disabling, the eruption of economic prescriptions must come as a relief. There’s a debate underway, and the front-runner even has a draft platform in hand. The Democrats won’t have to wage another campaign without an economic message after all.