President Obama’s speech yesterday promising a renewed effort to turn the economy around and make prosperity work for all Americans is long overdue.
Democrats must develop a more responsible economic policy that abandons the centrist consensus on business and regulation that it shares with Republicans. Since the days of President Clinton with his model of smaller more responsive government for facilitating economic growth, the once-upon-a-time party of the working classes has increasingly become indistinguishable from the hear-and-now party of big business and deregulation.
Over the last 20 years the debate between liberal and centrist Democrats has been about foreign policy, nation building, and balancing the war on terrorism with the civil liberties of their constituents. The failure of yesterday’s close vote in the House to prohibit the NSA from collecting and mining the phone calls of Americans highlights the drift of the Democrats’ vision for such a balanced policy. Most of them voted against President Obama to prohibit the blatantly anti-democratic actions of our intelligence agencies to spy on citizens without reasonable suspicion or due process. Yet, they remain behind the President’s floundering economic policy to reward risk-taking at the cost of massive and growing inequality between the wealthy and everyone else.
Luckily that is starting to change with push back from liberals like Sen. Elizabeth Warren (D-MA), who is renewing the debate about the purpose of a market economy and its role in the shared prosperity of a nation. Not only is Sen. Warren pushing to renew the Glass-Steagall Act, which regulates investment and commercial banking from engaging in the kinds of risky financial practices that started the Great Recession, she is quickly becoming the champion of corporate oversight. Last week she refused to vote with her party on its student loan interest legislation because it does too little to address the gravity of the problem.
Warren’s call to action on financial regulation and consumer protection highlights the growing need to return to matters of economic fairness. The truth is in the numbers. While the jobless recovery has stalled improvements for middle class Americans and the poor, it has fueled larger than ever gains by the top income earners. The rich are getting richer, while the rest of America is floundering. Without adequate employment opportunities, out-of-reach education, and unaffordable health care costs, social mobility for college graduates and younger generations is quickly becoming a Horatio Alger tale of the past.
The new edition of Fortune magazine has a revealing expose on the world’s billionaires that captures the behemoth problem of rising income inequality. The expose lists the world’s billionaires by country, and represents them as colored circles on a map. The U.S. has more combined wealth than all of the countries of the E.U. put together. What is more, the size of its circle compared to developing nations is like a giant star to a pin dot. The massive inequality of wealth, income, and resources highlights the problem of an economic policy driven by the laisser-faire myth that no regulation is better for market performance in the long run.
Consider the contrast of desperate job seekers and billionaires. In the last year the unemployment rate decline by .06 of a percent. Millions of Americans remain out of work, or without adequate compensation to address their needs. By contrast, this country added 56 new billionaires in that same year, from 515 to 571. That is not a system built on economic fairness that will last for much longer.