It's not the GDP, stupid! The obsession with "economic growth" as measured by a rising GDP is wrongheaded. The GDP — the total value of goods and services produced within the U.S. in a year — is a useful measure of economic activity. But it says nothing about how the fruits of that activity are distributed across the population. It says nothing about the state of the environment, the health and education of our people, or working conditions. And it does not subtract for the human costs of war or the depletion of our natural resources.
A progressive economic program weighs all these factors. It seeks a healthy — not a maximum — rate of economic growth. The goal is to optimize quality of life across the population with sustainable use of natural resources.
An unfettered market — the dream of the Right — invites corruption and at best gives short shrift to anything but growth. Thus, progressives and the Right disagree strongly about the role of government . In each of the following areas, their approaches are in stark contrast:
3. Public Investment
All the actors in the economy pursue their own interests. Only the government is charged with protecting the public interest. Regulations should:
· ensure that investment opportunities are honest,
· set rules for competing businesses that are open and fair,
· define and protect rights of workers, including the right to form unions,
· protect consumers against fraud and misrepresentation,
· protect our resource base and the quality of our environment.
Social insurance programs such as Social Security and Medicare give people a measure of protection against hazards everyone faces that would otherwise impoverish many families. For meeting such needs, social insurance programs are far more cost-effective, efficient, and reliable than commercial insurance.
· Support strengthening Social Security and Medicare as social insurance programs.
· Resist turning them into hybrids with commercial components.
While there is much talk of the importance of investment in our economy, the greatest shortfall today is in public investment — in infrastructure (especially rail and other forms of mass transit) and in human capital (health care, education, basic research).
Public investment helps us twice:
· Spending during the investment phase provides jobs for Americans and stimulation of the American economy.
· The results of the investment — such as a more efficient transportation system and a healthier, better-educated workforce — improve productivity of workers and competitiveness of business.
Wages. Workers as well as owners and top managers should share the fruits of productivity gains. Instead, profits and CEO salaries have soared while wages have been stagnant. Suppression of unions contributes to this situation.
· Raise the federal minimum wage to the level of a living wage and index it to the national average wage. Employers relieved of pressure to provide health insurance should be required to meet this standard.
· Productivity gains should in part be reflected in a shorter work week.
Jobs. Good job opportunities should be available to everyone who is willing and able to work. Instead, we have a structural jobs crisis with no solution in sight.
· Initiate a great public investment program, partly through block grants to cities and states, paid for by canceling projected tax cuts for the very rich. This will keep money in America and put it to use rebuilding our economy.
The focus of trade policy has been to protect the interests of business and investors. Future policies should have a much broader focus.
· Insist on protection of workers' rights and fair labor and environmental standards as conditions for trade with us under favorable terms.
· Provide help to U.S. workers and small businesses hurt by trade liberalization.
· Seek to broaden the range of interests represented in the WTO.
In times of recession, the twin goals are to promote recovery and to ameliorate impacts on the most vulnerable — those whose incomes are below average even in good times. Stimulation at the top promotes the first goal (weakly) but not the second.
· Existing social insurance programs are the first defense. Strengthen Medicare and extend it to cover everyone.
· In times of recession, target federal grants to cities and states to provide temporary employment on public projects.
The long-term health of our economy is imperiled by reckless spending and tax cutting. Fiscal discipline means prudent spending AND assuring revenues adequate for government to meet its responsibilities to its people.
· Prudent Spending. Funding big-ticket military items of doubtful military value, such as missile defense and new nuclear weapons, while scrimping on less costly equipment for our troops, is morally indefensible and economically ruinous.
· Taxes. The nation's costs in times of war and peace should be met by a tax system based on ability to pay. This requires taxing capital income at the same rate as wages and it requires taxing large inheritances. The huge shift of tax burden that has occurred from the super-rich to the middle class must be reversed.
· Borrowing to Cover Trade and Budget Deficits. Running enormous budget deficits and financing them largely through international borrowing is a sure path to economic ruin. Large tax cuts accompanied by domestic deficits are unacceptable. Strong-dollar policies that encourage international borrowing must be reversed.
As a society, we have moral obligations to future generations. No "free-market economy" takes care of these. The role of government is crucial.
· Drastically reduce consumption of fossil fuels.
· Protect our resource base and the quality of our environment — air, soil, groundwater, rivers, lakes, forests, wetlands, minerals and scenic beauty.
· Build a strong and safe infrastructure for public transportation.
· Ensure access to post-high-school education for all qualified students.
· Expand support for basic research — the source of tomorrow's technology.
Dan Cornwell 6-12-06