Clive Crook vs. The Populist Democratic Politicians

Daniel Drezner directs us to Clive Crook:

danieldrezner.com :: Daniel W. Drezner :: Clive Crook vs. economic populism: Clive Crook's Financial Times column today ($$) plows a familar road -- the Democratic turn towards economic populism:

Whoever wins their party’s presidential nomination, the Democrats are preparing to fight the next election on a platform of left-leaning populism. The contrast with Bill Clinton is evident. He was a centrist, pro-trade, pro-enterprise president – an avowed “New Democrat”. The next Democratic occupant of the White House, if the candidates’ campaigns are to be believed, will be old-school.

Mr Clinton campaigned against the odds to secure passage of the North American Free Trade Agreement. Today the party is against such deals. Mr Clinton worked hard to get China into the World Trade Organisation. Hillary Clinton and Barack Obama are Senate co-sponsors of a new China-bashing law. And the move to the populist left is not confined to trade. All the Democratic contenders are turning up the volume on stagnating middle-class wages, soaring profits, swindling bosses, dwindling union membership (Mrs Clinton and Mr Obama back the abolition of secret ballots on union representation), tax loopholes for the super-rich, oil company gouging, insurance company gouging, drug company gouging and every other kind of gouging....

Mr Clinton’s conviction that globalisation was good for America owed a lot to the experts – including economists of the highest professional standing – who surrounded him. Recently, eminent economists such as Alan Blinder, Paul Krugman, Larry Summers (who served as Mr Clinton’s Treasury secretary) and Brad DeLong have all expressed new doubts about the benefits of globalisation for the US. It is all more complicated than we thought, they say. It was hard enough for Mr Clinton to fight for freer trade when every highly regarded economist in the country said it was good for the US. Now that their message has changed to “We might have been wrong about this. We’ll get back to you”, the prospects for liberal trade have dimmed....

Economic populism traditionally marries scepticism on trade with fear of big business: “It’s all about profit.” A striking feature of many Democratic proposals is the belief that cheaper petrol, cheaper drugs, universal health insurance, higher wages, more generous employment benefits, almost any good thing you can think of, can be achieved by demanding them, in one way or another, from companies, or else by raising taxes on the super-rich....

There is no question that the Democratic contenders are talking about the issues that concern most Americans. There is an excellent centrist case to be made for tax reform, to lift the burden of income and payroll taxes from the low-paid and to increase the burden on the better-off. Universal healthcare is long overdue, a shameful state of affairs in so rich a country. Americans pay more than they should for their medicines. More generous and more imaginative assistance for Americans who lose their jobs because of trade – or because of changing tastes and technology – is needed.

The present administration has little to offer on any of these questions. But the costs of reform cannot be confined to foreigners and plutocrats.

It's a somewhat odd column. The Democratic economists--Summers, Blinder, Krugman, and that other guy who doesn't belong in such company--are right to say that things are complicated: globalization has not delivered the growth-accelerating flow of capital to the developing world that it was supposed to, and the Clinton focus on restoring fiscal stability to America was then immediately undone by Bush who used the running room we had created to redistribute income upward. Knowing what we know now about the morals, competence, and values of the bush administration and the Republican congressional leadership, I do not know a single Democratic economist who does not wish that we had raised taxes on the rich more, reduced the deficit less, and spent more on infrastructure and social programs than the Clinton administration actually did. And while we are franticallhy and desperately trying to mark our beliefs to market with respect to international monetary and financial affairs so that we can give good policy advice, we have not yet succeeded in doing so. This is how things are: Would Clive Crook rather we sent our time telling lies?

It's a somewhat odd column. As best as I can tell, Clive Crook approves 100% of the Democrats' substantive policy agenda: "There is an excellent centrist case to be made for tax reform, to lift the burden of income and payroll taxes from the low-paid and to increase the burden on the better-off. Universal healthcare is long overdue, a shameful state of affairs in so rich a country. Americans pay more than they should for their medicines. More generous and more imaginative assistance for Americans who lose their jobs because of trade – or because of changing tastes and technology – is needed." If this be "populism," let us make the most of it.

What Clive Crook wants, I believe, is Whig measures sponsored by Tory men (and women). But that would reauire a very different Republican Party than America has today. Perhaps Clive Crook should devote himself 24/7 to trying to build such a party--certainly nobody else is. But until those reality-based Tory men (and women) supporting Whig meassures whom Crook wishes we could vote for emerge, we have the poiticians we have. The constructive strategy is then not to lament that they have populist goals, but to demand that they pursue their populist goals by adopting policies that might actually work rather than policies that sound good in focus groups. And the constructive strategy is also to demand that America's business elite that they support policies that make them partners with rather than adversaries of the rest of America.

Comments

[Barry]

Brad, it's not an odd column. There've got to be lots of Republicans worried about what will happen if/when the Democrats take over in 2009. They right has shot it's credibility to h*ll with the past several years; the new Democratic Congress will probably not be in a mood to accomodate anything that they don't have to.

Some serious tax raising and social spending is in order.

[Cranky Observer]

Kevin Drum claims that US politics tends to be a pendulum. To me it appears that the pendulum has been fixed so that it never goes left of center-right (say, 6.5 out of 10) since 1938 or so. Perhaps it is time for a few years of balance?

Cranky

[Denis Drew]

Like almost everyone else, Clive Crook leaves off the progressive agenda the one thing that can make the other improvements possible: re-unionization of American -- this time with the sector-wide/nation-wide bargaining setup they have in well fed-labor countries.

Until the power is reset in the labor market -- which will automatically reset it in the political realm (David Broder says that when he started out 50 years ago, all the lobbyists in D.C. were union) the core cause of all the other inequalities will not have been removed.

[anne]

Brad DeLong:

"What Clive Crook wants, I believe, is Whig measures sponsored by Tory men (and women)."

Precisely; this is just a British conservative's sneer at Democrats and a practiced failure to notice the least policy nuance of a Democratic candidate other than the cry of gouging here and gouging there. All is left, left, left when your a right right right Britisher not allowed to govern despite Tony Blair for all these years. Poor Dear.

[anne]

Agreed; all I want and will insist on in voting is a candidate who has promised to leave iraq immediately and completely. I will simply not vote for a candidate who does not so promise. I am decided that I may not have a viable candidate to vote for, but I will not vote for a candidate of continued occupation.

Thank you for reminding me, why I find this essay so empty. Policy that does not begin with leaving Iraq, has no attraction to me.

[anne]

When a British conservative writes of populism, left or right and lacks sense enough of what democracy should be about not to mention that any populism must entail ending our insanely tragic occupation of Iraq which is just what a majority of Americans have wished no matter the deception and fear-mongering keeping us in Iraq, then the writer knows knowing of what contemporary populism must be.

As for economics that mean anything, in the coming fiscal year we will be spending about $624 billion for the military, $18 billion for nuclear deterrence and more than $150 billion for Iraq and Afghanistan. How's that for pop pop populism, whatever it means?

[anne]

Brad DeLong writes:

"I do not know a single Democratic economist who does not wish that we had not raised taxes on the rich more, reduced the deficit less, and spent more on infrastructure and social programs."

I assume this should read:

"I do not know a single Democratic economist who does not wish that we had ... raised taxes on the rich more, reduced the deficit less, and spent more on infrastructure and social programs."

[Anon]

Brad, I had an entirely different reading of the column than you did. I thought it was clear what Clive Crook wanted: to bash the Democratic move to the left that he thinks is coming.

'We need to do these things', Crook says, 'just not the way the Democrats want to do them.' Bash, bash. Stupid liberals! We hatesssss them!!!

There's nothing - nothing - that the establishment hates more than someone who might not be pro-rich.

[anne]

Absolutely, this is just a British Tory wishful frustrated bashing and I like bashing Tories back.

[Charles]

Brad, I hope you aren't comparing the Democrats to the Whigs. Last I checked, that party was not a significant force in American politics.

I wouldn't dispute that turning Democrats into 21st century Whigs is what Crook craves.

[bigTom]

My reading was a bit more moderate than yours (and your commentors). I too worry that populist measures may do us harm.

IMO globalization has been a net positive, at least if you measure the entire world, and not just our small piece of it. Even here it has delivered for our economy in aggregate, even as it has increased inequality, and makes many of us feel insecure about their jobs. IMO opinion job loss due to trade/off-shoring has reduced inflation, which allows the Fed to tolerate a higher non-inflationary growth rate than would otherwise be possible. So it is an open (at least for a non-economist like myself) question whether the jobs created by this "stimulus" make up for those directly lost to globalization.

Of course it is correct to assert that inequality has grown, as well as the percentage of the pie going to corporate profits. It would seem that some sort of mildly corrective policy change is in order. I'm just concerned that the populist slogans that sell so well politically might make it difficult to follow up a Democratic win with policies that are well informed by Brads profession.

[christofay]

Clive doesn't know the oil is running out. England is going to become a cold snivelling place again. Someone give him a call please.

And if he is concerned and under 40, he can enlist on our side of the pond.

I wouldn't pay for the FT, or da over-rated Econ. Go to the library and read for free.

[Kevin Carson]

Whether Cook believes it or not, it's quite possible to be an economic populist and still be "pro-trade and pro-enterprise."

All an economic populist has to do is run against privilege--against corporate welfare, against the Copyright Nazis of the RIAA and MPAA, against the military-industrial complex, and against all the other million and one restraints on competition that privileged corporate actors use to protect themselves against genuine trade and enterprise.

As for globalization, simply eliminating state-enforced privilege and restoring free markets and free enterprise would go a long way toward restoring decentralized local economies. Most of what's called "free trade" is actually mercantilism: global trade on the taxpayer tit. It's no coincidence that the corporate sectors flourishing in the global economy are the beneficiaries of either government subsidies (agribusiness and aerospace) or "intellectual property" [sic] privileges (biotech, entertainment, software).

The best thing an economic populist could do would be to run on a platform of REAL free trade and free markets, and demonize the Republicans and big business in terms of their own professed values--show what a bunch of corporate welfare moochers they really are, and rub their faces in their own lying rhetoric.

[STS]

With almost 100% of That Orwellian Party's Senators unwilling to put the expressed will of the voters and the obvious national interest ahead of the whims of "His Imperial Majesty" at 1600 Pennsylvania Ave, I am reluctant to describe That Party as "Republican". They don't appear to believe in separation of powers, most of the bill of rights, or indeed the notion that our government is "instituted among men" by the authority of "We the people".

We sure could use a big-R "Republican" party that was interested in the continuance of the small-r republic.

[Admiral Tirpitz]

"I do not know a single Democratic economist who does not wish that we had not raised taxes on the rich more, reduced the deficit less, and spent more on infrastructure and social programs."

I also had trouble with that bit, Anne. I'm still not sure what Brad means.

[Hal]

We're not going to get out of Iraq with the Congress we have during the remainder of this administration, and if a Democrat is elected in 2008 we won't exit immediately either. It will take a year or more, while some panel of savants decides what we should do, before there will be any movement. The Democrats have let Iraq go on and on and on and now it is too late to "lose" the war with Bush at the helm. That will come later and poison the atmosphere for the next administration.
Re inequality. Forget reviving unions that can't be revived. If you want a more equitable distribution of income, legislate it. Tax the rich and give some of it to the poor. The simplest and most effective approach.

[anne]

Admiral,

We can properly read Brad DeLong's sentence as "I do not know a single Democratic economist who does not wish that we had ... raised taxes on the rich more, reduced the deficit less, and spent more on infrastructure and social programs."

Hal,

Unions are fine in many frames from bold janitors and maintainence workers in Houston to actors and directors and designers and writers and athletes and doctors and dentists and lawyers and (shudder) K to 12 teachers and professors. Unions at Wal-Mart are however impossible in the current climate and may be impossible in future, but the possibility really can be eased.

[demisod]

Given the collapse of corporate paternalism, health insurance and retirement income are issues that cry out for attention. Corporations have done a nice job (and boosted profits handsomely in the process) of shifting risk to their workers for the last several decades. It might be time for the political system to present them, or the people that have benefited from their rise in profits, a bill for this and use it reduce that risk.

[anne]

Demisod argues well and properly, but there was never corporate paternalism there were only employee protections that were a result of an emerging tradition of government and union protections that were long in forming and are steadily being eroded these years.

Teddy Roosevelt, as Republican, began the response to the need for employee protections a response continued through Franklin Roosevelt and eventually through the civil rights movement, a response fought increasingly by conservatives and with increasing Republican success in recent years even to a Republican presented Supreme Counrt majority setting aside employee protection against wage and benefits discrimination.

[anne]

We have, by the way, had the Supreme Court turn aside from limits to corporate power extending not just to the civil rights era but to limits from the time of Teddy Roosevelt. A supposedly conservative Supreme Court, a Supreme Court supposed to respect precedent actually turning radically activist on behalf of corporate influence.

Brad DeLong's colleague David L. Kirp * has just written of a Supreme Court reversion to the precedent of protecting "robber barons," a reversion that is all but unnoticed otherwise among economists save for cheering at the University of Chicago.

* The current print edition of Nation Magazine.

[robertdfeinman]

Populism has become the new, all-purpose, smear term now that "liberal" is losing some of its utility. There are no "populists" in government with the possible exception of Bernie Sanders (a socialist).

Just because some pols want to see taxes raised on the super wealthy doesn't make them "populists". There are several good reasons for supporting this: a) the government needs the money, b) it is a way to head off wider resentment by making some minimal changes, c) economic efficiency (the wealthy do not spend their money in socially beneficial ways).

"Populists" want not only the power of the super wealthy to be restrained, but also that of oligopolies. No politician is proposing reinvigorating anti-trust and similar laws that I'm aware of.

The other smear is to associate populism with unionism. I've never understood the economic arguments against unionism. If the costs to a firm go up they simply raise their prices to cover. Since most major industries are oligopolies their price rises will be matched in most cases.

If firms believe they can't "afford" to pay decent wages it isn't because of unions, its because they are competing in a global economy with people making pennies per hour. Squeezing out unions won't solve this problem. US workers are not going to work for $1 per day again.

I think most opposition to unions come from the authoritarian, egotistical meglomaniacs who run many of today's big firms. Just look at the statements from the heads of Whole Foods and Walmart. Their rants are viceral, not rational.

[Paul G. Brown]

Politics isn't about ideology anymore. It's about tribalism.

I think I agree with some commentators who've read Mr Cook as simply another conservative seeking to bash progressives. But Brad's point remains; Mr Cook isn't bashing progressive ideology, he's bashing members of the tribe-who-wear-their-feathers-in-the-left-ear.

As for Unions. I'm entirely in agreement with the principle of workers organizing to let them respond to capital and management as a group. What I'm skeptical of is the idea that the social structures of traditional Unionism have much relevance. Service economies--outside certain fields--are characterized by jobs that are quite specific in their requirements, and share little with other jobs.

I don't know what the precise answer is, but I'm not sure Computer Programmers Local 501 is quite the way to go.

[anne]

"I don't know what the precise answer is, but I'm not sure Computer Programmers Local 501 is quite the way to go."

"I don't know what the precise answer is, but I'm not sure the Screen Actors Guild is quite the way to go."

"I don't know what the precise answer is, but I'm not sure the Directors Guild is quite the way to go."

"I don't know what the precise answer is, but I'm not sure the American Medical Association is quite the way to go."

"I don't know what the precise answer is, but I'm not sure the American Bar Association is quite the way to go."

"I don't know what the precise answer is, but I'm not sure the baseball players union is quite the way to go."

"I don't know what the precise answer is, but I'm not sure a professor's union is quite the way to go."

I'm really not sure about, well....

[anne]

I'm not really sure, but....

http://www.nytimes.com/2006/11/21/us/21janitor.html?ex=1321765200&en=f139e42d0ca84d0a&ei=5090&partner=rssuserland&emc=rss

November 21, 2006

Cleaning Companies in Accord With Striking Houston Janitors
By STEVEN GREENHOUSE

Houston's major cleaning companies and the union representing 5,300 janitors there announced a tentative contract yesterday that ends a monthlong strike, raises the workers' hourly wages by nearly 50 percent over two years and provides them health coverage.

Under the three-year deal, the first for the janitors since they unionized last year, their pay, which now averages $5.25 an hour, will increase to $6.25 on Jan. 1, 2007; to $7.25 on Jan. 1, 2008; and to $7.75 on Jan. 1, 2009.

Further, the employers agreed to increase a janitor's typical shift to six hours a day, from four. Many of the janitors had said they were being given too few hours of work to support their families.

As a result of the rise in both hourly pay and the hours in the workweek, the employees expect to see their paychecks double over the next couple of years.

"It's a moment of great victory," said Mercedes Herrera, a janitor for five years who earns $5.15 an hour. "We all came together, and the union gave us strength. Many of us have never received a raise. I've earned the same ever since I started, so the raise is great." ...

[anne]

What is interesting is that unions in Europe worked not just for their own members but worked together not just for union members but for broad social equity. Everyone in France has health care insurance, not just union members. There is free college and university supported by unions, not just by students. Unions can look broadly and make a difference, if we can look broadly.

[anne]

Don't need no unions, nohow...

http://www.epi.org/printer.cfm?id=2759&content_type=1&nice_name=webfeatures_snapshots_20070718

July 18, 2007.

Employer-Provided Health Coverage Declining For College Grads in Entry-Level Jobs
By Liana Fox and Elise Gould

A college degree is no guarantee of receiving health insurance on the job. Over the recent recession and recovery, college graduates in entry-level jobs (defined as employed college graduates between 23 and 27 years old) have become increasingly less likely to receive employer-provided health insurance coverage.1 Their incidence of employment-based insurance has fallen roughly nine percentage points from 1999-2000 to 2004-05, from 69.6% to 60.5%.

This recent sharp decline was preceded by a rise in coverage in the late 1990s due to a tight labor market for college grads in entry-level jobs. However, employment-based health coverage for these recent college graduates has been falling since 1983-84, when it was at a high of 80.0%. Therefore, entry-level college grads are one-quarter less likely to have employer-provided health insurance than they were over 20 years ago.

Note

1. Based on tabulations of March CPS data samples of private wage and salary earners ages 23-27 with a substantial labor force attachment, defined as working at least 20 hours per week and 26 weeks per year. Coverage is defined as being included in an employer-provided plan where the employer paid for at least some of the coverage.

[Paul G. Brown]

Anne -

My point is that the organizations you've listed initially aren't structured in the same way an industrial union like the janitor's union is. There isn't a system of shop-stewards, local committees, and a national hierarchy.

I'll give you an example of the difficulty. Union membership, and the union's organizing principle, revolved around jobs being held by individuals over the long haul, at a physical site. You lose your job at one work-site, you need to re-join the union when you are re-employed at another. You often lose seniority, also. But today, people change employees with alacrity. A Programmer's Local 501 would be overwhelmed, organizationally, by the rate at which firms are created, employ people, need to be organized, and so on.

My family's background is the Australian Labor movement. Back in the day I was a Union rep in a public sector union. I'm an advocate of workers organizing, but I'm saying that the social and organizational structure of a 'modern' union needs to reflect the realities of a modern workplace. Perhaps a return to a craft guild, where membership was independent of employment, is one possibility. Perhaps using the internet as a platform to organize a more 'social network' approach is another.

I was reacting to a blanket statement like "America needs to re-unionize", which isn't really very helpful.

[anne]

Paul, I understand you are right but am annoyed with how easily we are discarding what should be an actively referred to New Deal legacy. This is the reason I have pestered Brad DeLong about this session's Supreme Court corporate favoritism that turned aside decades of balance in corporate-employee and corporate-public interest balance. We are turning aside from history beyond Teddy Roosevelt in the name of conservatism which is really radicalism.

[anne]

Yes; I know your precision in comment is correct and I am only drawing attention to the narrowness of our present thinking in economics. But, the sense of populism that would be raised by our essayist is British Tory narrow. Look at a Democratic Congress after all these years that is ignoring all sorts of domestic social benefit needs in hopes of simple offering children due health insurance at a poor fraction of the already accepted increase in military spending. So much for pop pop populism.

[David Lloyd-Jones]

Anne, and others,

I don't see why Wal-Mart's imperviousness to unions should be taken for granted.

Obviously it can be helped by legislation. Any decent country would clearly write the Rand Formula into law. (This is the Canadian principle, named after Mr. Justice Rand, that you don't have to join the union, but if you benefit from the contract you do gotta pay the union dues.)

Equally obviously, there is a necessary Federal role in the protection of union organizers from locally empowered thugs, including police-force thugs.

Still, the big problem remains: there are only about 1.5 million Wal-Mart workers. Maybe a few hundred thou at MacDonalds.

How do you get a system that protects the largest and most important group of workers: the undocumenteds?

[David Lloyd-Jones]

A small addendum on the passing of the Industrial Age: I read somewhere that manufacturing employment in China has now peaked out and is on the decline -- in absolute numbers, yet!

[andres]

David: no surprise, given that many Chinese firms have now discovered the wonders of outsourcing. Maybe China can increase manufacturing employment by creating a manufacturing base in the hinterlands or resurrecting the northern Chinese rustbelt, but I doubt either region has the low-wage and transportation advantages of Vietnam or Indonesia, for example.

[andres]

I've joined the debate late, and only because I just noticed that Brad's following snippet cannot go unchallenged:

"The constructive strategy is then not to lament that they have populist goals, but to demand that they pursue their populist goals by adopting policies that might actually work rather than policies that sound good in focus groups. And the constructive strategy is also to demand that America's business elite that they support policies that make them partners with rather than adversaries of the rest of America."

Brad once again plays the part of the politically naive liberal doofus. The simple fact of political life in the US is that for every Bill Gates or George Soros who advocates progressive government policies (in addition to engaging in philanthropy), there are at least a dozen Richard Cheneys, Sam Waltons, Rupert Murdochs, Jeffrey Skillings, and Ken Lays who will savagely oppose government policies if they bear any resemblance to the New Deal or decrease their after-tax profit margins.

The majority of the US business elite will never support policies that turn them into partners rather than adversaries of the rest of America. This stubbornness doesn't simply arise out of myopic class interest; it is a political-cultural fact of life created by the US business elite having swallowed libertarian ideology hook, line, and sinker, even though such ideology bears little resemblance to the progressive compassion of Adam Smith or David Ricardo.

By contrast, the Scandinavian business cultures never swallowed such ideology and government policy in the nordic countries was much more influenced by pragmatic economists such as Knut Wicksell and Bertil Ohlin.

Which brings one back to De Toqueville's famous challenge: you do not have to change the laws, or even the men running the government, but you must change the spirit in which government and the economy is run. If you do not, the country will be in for interesting times in the Chinese sense.

[anne]

David Lloyd-Jones and Andres offer cogent criticsms to which I quite agree.

After all, forget an absense of universal health care, forget the limits of unions, America is the only developed country that does legislatively offer workers a single paid sick day a year. This means relaying on the kindness of employers, the result being about 50% of American workers any lack paid sick days. So much for the miraculous advent of mitigations for employees. We have been busily undoing the New Deal legacy for quite a while, and there was much that needed doing to develop the legacy before we began the undoing.

[JonF]

Re: This stubbornness doesn't simply arise out of myopic class interest; it is a political-cultural fact of life created by the US business elite having swallowed libertarian ideology hook, line, and sinker,

I disagree. I think myopic class interest is exactly what the problem is, with faux libertarianism providing a fig leaf of respectability. I say "faux" because no corporation is truly libertarian; they are all perfectly happy to suck at government's teat and lobby for laws to their own benefit. Note what has become of government with the party of "small government" in power.

[David Lloyd-Jones]

Andres,

I think you are almost certainly right.

If China is not yet outsourcing to Vietnam and Indonesia, still the rest of the world is switching somewhat to them.

During Brazil's debt crisis in the early '90's, when they were giving away the whole damn store in exchange for writing off bonds, I switched several million dollars' worth of greige goods for a friend from China to Brazil.

In the same vein, I sat in on a meeting in Montreal last week where a pair of importers were negotiating with Chinese friends of mine -- and everybody knew that the elephant in the kitchen was that China didn't necessarily get the business. (Omigod, why doesn't Southern Sudan have looms for all that superb cotton? Well, given five years of peace I imagine that could be arranged...)

The race to the bottom is really really real live stuff. The good news, of course, is that this is the process by which the people at the bottom get themselves up from dead deep despairing Hell.