Liberal Economics:

Issue #20, Spring 2011

First Principles: Arguing the Economy

The Editors

No debate is more fundamental in politics than economics. It’s the sun; everything else revolves around it.

This debate has never been more important than it is today. As the economy slowly rouses itself from its long slumber, it’s vital that progressives are adequately armed for the economic battles to come. We need forward-looking arguments that take new economic realities into account, and stronger ways of showing how badly supply-side economics has failed the country.
In this second installment of our “First Principles” series, we take on these challenges. Leading off the package, Andrei Cherny writes of the need today to use “Jeffersonian means to Hamiltonian ends”—to adapt our top-down economic policies to the bottom-up world of individualized workplaces, which are more and more central to our post-industrial economy with each passing year. We hope progressive policy-makers heed his notions about how to rethink our economic policies in what he calls the “Individual Age.” David Madland lays out a new theory of the middle class. It is not merely that a healthy middle class should be an end in and of itself, as progressive politicians have usually argued. Rather, it is that a strong middle class is a means to better social ends: It produces higher rates of growth, leads to more trust, and brings on better governance. This is an important linkage that progressives usually don’t make.

Since Madland’s and Cherny’s lessons will take time to seep into the bloodstream, we need to chalk up some wins in the meantime. We asked Elaine C. Kamarck to describe three economic fights that progressives should pick now, in the short term, even as we recalibrate our long-term thinking. What she suggests may surprise you.

But returning to our first principles is only half the battle. We also need to take on the conservative ideas that led to our current predicament. Paul Pierson explains the damage conservative economic policies have done to the country and shows how—in toxic combination with the concomitant increase in the importance of lobbying and campaign money—those policies altered our political system, making it far more responsive to the wealthy and far less responsive to the middle class. It’s a history lesson every liberal needs to know and internalize.
Finally, Jonathan Chait looks at the principle that most defines conservative economics today: taxophobia. Chait reminds us of some dark corners not often visited, and makes a point that should be more central to progressive arguments than it is: that what conservatives really care about above all else is protecting the well-off from any hint of redistribution. That’s a devastating charge; a shame we don’t hear prominent progressives make it more often.

First Principles: Arguing the Economy
Individual Age Economics by Andrei Cherny
Growth and the Middle Class by David Madland
Three Fights We Can Win by Elaine C. Kamarck
Inequality and Its Casualties by Paul Pierson
The Triumph of Taxophobia by Jonathan Chait