I don't usually look for inspiration on TV, but Friday night I found it... on Bill Maher's show, no less. His special guest was Elizabeth Warren, whose new book, This Fight Is Our Fight: The Battle To Save America's Middle Class is now available. She puts the rise of Trumpism into the context of increasing economic inequality. As she told Maher's audience Friday, she wrote that productivity has gone up in this country from 1935 to the present. But where America used to invest that capital in the middle class, things started changing-- drastically and for the worse-- once Reagan, and the string of conservative shills who followed him, was elected president. From 1980 on the middle class has taken it on the chin. Trickle-down economics-- AKA, what George H.W. Bush admitted was "voodoo economics"-- with it's tax cuts for those at the top, coupled with less money to invest in education and infrastructure and basic research, while turning the banksters loose to do whatever they could get away with and while the giant corporations in the country were deregulated, has set the table for desperate people turning to populism-- whether Trump's version of fascism or the real kind of progressive populism represented by Bernie and Elizabeth Warren. "And what happened," explained Warren, "was that America's middle class began to shake, began to crumble, and now we're in a place where Donald Trump could deliver the knockout blow."Paul Krugman reviewed the book for the NY Times two weeks ago. It's since hit their #1 spot. Krugman seems a little competitive sometimes but his review is OK and forgive him for his colossal lapse in judgment during the 2016 election cycle.
Warren lays out a position I’d call enlightened populism. She rails against the growing concentration of income and wealth in the hands of a tiny elite; argues that this concentration of economic rewards has also undermined our political system; and links unequal wealth and power to the stagnating incomes, growing insecurity and diminishing opportunities facing ordinary families. She puts a face on these stresses with capsule portraits of middle-class travails: a Walmart worker who needs to visit a food pantry, a DHL worker forced to take a huge pay cut, a millennial crushed by student debt.She also makes good use of the autobiographical mode, contrasting her stories of modern hard times with the opportunities her (and my) generation had in a more generous, less unequal era. Her own success story, she tells us, depended a lot on the now-vanished availability of high-quality, low-cost public universities, plus a relatively high minimum wage-- “a $50-a-semester tuition changed my life.”But how can the harshening of life for ordinary Americans be turned around? Warren calls for restored financial regulation, stronger social programs and renewed investment in education, research and infrastructure. Isn’t this the standard Democratic position? Yes and no.Yes, what Warren is preaching sounds very much like the second coming of the New Deal-- as she herself acknowledges: “We built it once, and we can build it again.” But: Warren brings an edge to her advocacy that many Democrats have shied away from, at least until recently. Even the Obama administration, while doing much more to fight inequality than many realize, balked at making inequality reduction an explicit goal.Furthermore, Warren comes down forcefully on the left side of an ongoing debate over both the causes of inequality and the ways it can be reduced.One view, which was dominant even among Democratic-leaning economists in the 1990s, saw rising inequality mainly as a result of ineluctable market forces. Technology, in particular, was seen as the driver of falling wages for manual work, and attempts to fight this trend would, the argument went, do more harm than good-- raising the minimum wage, for example, would lead to job losses and higher unemployment among precisely the people you were trying to help.Given this view, even liberals generally favored free-market policies. Maybe, they suggested, rising income inequality could be limited by spending more on education and training. But limits on income concentration and support for workers would, they assumed, mainly have to come from progressive taxes and a stronger safety net.The alternative view, which Warren clearly endorses, is all for taxing the rich and strengthening the safety net, but it also argues that public policy can do a lot to increase workers’ bargaining power-- and that inequality has soared in large part because policy has, in fact, gone the other way.This view has gained much more prominence over the past couple of decades, mainly because it’s now backed by a lot of evidence (which is why I call Warren’s populism “enlightened”). At the beginning of her book Warren talks about her frustration with politicians refusing to raise the minimum wage even though “study after study shows that there are no large adverse effects on jobs when the minimum wage goes up.” She’s right. Later, she writes about the adverse effects of the decline of unions; that, too, is a view supported by many studies, from such left-wing sources as, um, the International Monetary Fund.So Warren in effect gives intervention in markets equal billing with taxes and social spending as a way to combat inequality, marking a significant move left in Democratic positioning.But why has actual policy gone the other way? Here Warren, both in the Senate and now in this book, has been harsher and more explicit than most Democrats have been in the past, condemning the corruption of our system by big money-- and naming names.A case in point, recounted in “This Fight Is Our Fight”: Back in 2015 there was a congressional hearing on the Labor Department’s proposed “fiduciary rule,” requiring that investment advisers act in the interests of their clients. (No, that wasn’t already the case — and kickbacks for giving bad advice were a regular part of the scene.) When a prominent financial economist associated with the Brookings Institution, Robert Litan, testified against the rule, Warren did what most politicians wouldn’t: She pointed out that his research supposedly making the case against was effectively a piece of paid advocacy on behalf of a big mutual fund manager. (Litan ended up severing his ties with Brookings, which said he had broken the rules.)...[W]hat Democrats need right now is a reason to keep fighting. And that’s something Warren’s muscular, unapologetic book definitely offers.
