Obamanomics


By Joe Campbell
August 26th, 2008


 
In the past ten years, a Democratic consensus has emerged from opposing poles represented by Robert Rubin, Secretary of the Treasury under Clinton, and Robert Reich, Secretary of Labor under Clinton.

The consensus stems from a shared conclusion:

In the past generation, the American economy has been benefiting the vast majority of Americans less and less; and the trends that are causing this cannot be stopped.

There are many factors that have caused, worsened and continued to escalate this core problem:

  • the demise of America’s manufacturing base;
  • the increasing gap between the pay of CEOs and top corporate officials and the average worker;
  • the way the tax code has begun to tax labor at a far higher rate than it taxes capital;
  • the shrinking of organized labor;
  • the increasing instability due to globalization.

All of these are the symptoms and all of these are the causes.

Our economic system is breaking – the middle class is being squeezed; we are transferring a tremendous amount of our wealth to autocracies and our rivals around the world because of our dependence on oil; budget deficits are burdening our government which now practices a nefarious for of socialism, only for the rich; globalization is creating insecurity; our society is becoming more stratified1, with many traditionally class-conscious European countries becoming more socially mobile; our infrastructure is eroding.

Barack Obama’s answer to this – accepting the Democratic party consensus – is a mix of short-term and long-term measures.

  • To alleviate the squeeze on the middle class as certain industries leave America looking for cheaper labor, he proposes to create jobs with infrastructure improvements and to push the development of a green energy industry.
  • To aid small businesses and to reduce the instability created by the greater turnover in jobs in a globalized marketplace, he proposes a universal health care plan that combines a government plan open to all citizens, various incentives for businesses to offer coverage, and various incentives for individuals to get coverage on their own.
  • With regards to taxes, he proposes tax cuts (graph) to those who need it and tax increases to those who have benefited most from our society – those making over $250,000.00.
  • To prepare the next generation for the globalized marketplace, Obama proposes various improvements to education.
  • Barack Obama is also the only candidate who has pledged to protect the foundation of the internet. (John McCain has recently come off the fence to support a policy that directly undermines the architecture of the internet since it began.)

For a more in-depth and reflective look at Obamanomics, check out David Leonhardt’s cover story this weekend in the New York Times Magazine.

Addition: What Obama and the Democrats have been struggling with is a way to frame this in a visceral way that can be easily understood. Here’s my proposition:

McCain and the Republicans want to give big corporations whatever they want – even if it hurts American in the long term. (Offshore drilling; telecom immunity; free trade without sensible provisions regarding labor and environmental regulation; tax cuts on corporations and the wealthy while the government needs more income; opposing the protection of the basis of the web, net neutrality, so that internet providers can make a bigger profit.)

Obama and the Democrats want corporations to do well, but at the same time, they want to protect American society from the destabilizing forces of globalization and to protect what has made America the most prosperous nation on earth – including a stable middle class and social mobility – both of which we are in danger of losing due to reckless Republican policies.

That’s the narrative – it’s not class warfare. It’s about protecting what has made America great against the forces of globalization, overly greedy corporations, and rapid change.

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5 Responses to “Obamanomics”

  1. Lies About Obama’s Tax Plans - 2parse/blog Says:

    […] Obama’s plans are designed to help. Obama’s plans – which are the fruit of a kind of Democratic consensus that has emerged in the past ten years on how to deal with the destabilization …. Obama is asking that those individuals who have gained the most from our society and economy […]

  2. Obama v. McCain on Health Care - 2parse/blog Says:

    […] Obama sees his health care plan as part of an attempt to soften the effects of globalization. […]

  3. Ben Woodward, CFA Says:

    Where have socialist policies, even well intended, ever worked in real life? Cuba, Venezuela, the Soviet Union, Nazi Germany?

    The left has a great foil with dubya, but the solutions being offered by Obama are nothing more than a welfare state/nanny state or whatever you would like to call it. More tax and spend isn’t going to help anyone even the intended target(s).

    Government doesn’t work. You work, I work, corporations work, the Salvation Army works, alcoholic’s anonymous works, but government sucks the life blood out the economy.

    We can have an advancing economy or a welfare state, it’s our choice.

  4. joe@2parse Says:

    Well – Ben –

    I’m not quite the ideologue you are. I try to be practical – and don’t base my politics on quasi-religious beliefs.

    To look at the plan above and call it socialism is simply wrong. unless you consider any government programs to be socialistic – which you might.

    what do you mean – by the way – when you say “government doesn’t work” – it certainly accomplishes things. it built much of america’s infrastructure – which is not in need of repair – which is one of the programs you seem to be deriding. yet, without government investment in infrastructure – which has been a constant ever since that great capitalist alexander hamilton proposed it – the market wouldn’t have flourished.

    your thoughts seem muddled and unclear. you state facts but do not back them up: “Government doesn’t work.” and “government sucks the life blood out the economy.” and “More tax and spend isn’t going to help anyone even the intended target(s).” Are these all beliefs – or do they have some quasi-rational basis?

    if you could clear up what you mean by some of this – and explain what role the government can/should have in an advancing economy, it would be appreciated.

  5. The Crimes Behind Cindy McCain’s Fortune - 2parse Says:

    […] No – she apparently wants Obama to come up with another reason to explain away her husband’s doubling down on the economic policies of the Bush administration and calling for massive tax cuts for the biggest companies and the richest individuals while […]

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