The Fifties

Michael Barone's latest article covers the challenges facing Democrats in their new position of power. He notes that they will have a hard time getting anything done (because their majorities aren't such that they can just run over the Republicans, and because of the veto pen). He then comments on where the Democrats economic aspirations will take the country.

Thoughtful Democrats like Clinton aide Gene Sperling and Yale professor Jacob Hacker have argued that Americans, even amid prosperity, are increasingly insecure in our globalized economy and wary of downside risks if they have to change jobs or learn new skills. They look back with nostalgia sometimes toward the unionized lifetime jobs many held 50 years ago in mid-century America, and argue that government needs to provide more protection against risk.

The problem is how to do it. Congress cannot recreate mid-century America by snapping its fingers, and the seemingly risk-free health benefits and pensions that unionized companies promised are now in peril because the business model of firms like the Big Three auto companies, the old-line steel companies and the legacy airlines has become unsustainable.

Congress didn't snap a finger to take us from the 1950s (when workers had more rights, the wealthy paid very high taxes (over 70$), and blacks couldn't vote in the south), but they got us here. If we decide that needs of the American Middle and Working Class should take priority over the American Corporate sector, than that, at least, gives us a target to aim for. Rome wasn't built in a day. But of course, Barone, being a conservative and thus favoring corporations over people, isn't interested in building this particular Rome.

Barone then engages, Houdini like, in a bit of rhetorical sleight of hand.

One interesting proposal by Sperling is for a "universal 401(k)," which would give all workers tax-sheltered savings accounts, funded by employers and employees. One option is to give low earners tax credits, perhaps even refundable tax credits, for their contributions to the accounts. Over time, this would increase low earners' wealth accumulation -- progressive redistribution. But it would also tend to transfer funds from the federal treasury to individuals, from the public sector to the private sector -- not the direction Democrats usually want to go.

It's a proposal that looks a lot like the Social Security individual investment accounts George W. Bush called for, and Democrats scorned. It would be ironic if this turns out to be the major progressive achievement of this Democratic Congress.

The difference between this idea and the Bush proposal is that this plan is in addition to Social Security, and the Bush plan was instead of Social Security. That's a pretty big difference there. There's also the deceit that Democrats are opposed to all tax cuts. Democrats have, over the years, proposed many tax cuts and breaks for the working class and middle class. It's simply that they think the wealthy can pay a bit more in return for the nice lives they have.