“Prosperity Economics” Instead Of Right-Wing Austerity Economics

Isaiah J. Poole

With the elite conventional political wisdom so congealed around the idea that the federal government is broke, that our top priority must be to “cut the spending” without discussing the merits of the government spending we are told we must be eager to cut, and that we have to break the promises of economic security we have made to seniors and people who are struggling on the economic ladder, it is particularly important now to remind Americans that there is another way out. Or, more precisely, there is only one way out of our economic morass, and the way of forcing middle- and low-income people to made do with less while showering more relief on the wealthiest among us is not it.

“Prosperity Economics; Building an Economy For All” is important not because it breaks dramatic new ground in the economic debate, its co-author, Jacob Hacker, said during a presentation today at the Economic Policy Institute. But its significance is the very fact that the conservative austerity agenda is becoming so entrenched in both political parties, and in the Republican party, extreme to an unprecedented degree.

“The bipartisan consensus that drove our politics and drove our economy has come undone,” Hacker said, referring to policies that Republican presidents, even including Ronald Reagan, supported that would ensure economic security to vulnerable citizens and hold corporations accountable to basic obligations to the public good.

“The point is simply that these ideas used to be considered common sense, and the only arguments that have been proffered against them are myths,” he said.

Prosperity Economics,which Hacker co-wrote with Nathaniel Loewentheil, is intended to pierce the myths and to make clear that there is an alternative view of how we should rebuild the economy from the bottom up.

“Shared prosperity, according to prosperity economics, is built on three pillars: growth, security and democracy,” the report says. “These three pillars support a strong secure middle-class and reinforce one another.”

The report calls for “immediate action to jump-start our sagging economy” by spending on infrastructure, schools and the other underpinnings of the economy that have been allowed to decay through years of disinvestment at both the federal and state levels.

It also says “security for workers and their families, for the environment and for our public finances” is vital. To provide that security, we need to protect Social Security, Medicare, and other health and income security programs from cuts. We need to resist the corporate-fueled efforts to recklessly roll back environmental regulations without regard to the growing scientific evidence of climate change and health dangers. And we must have a democracy “that is not overwhelmed by money or hamstrung by political procedures”—such as the routine use of the filibuster by Senate Republicans to obstruct the will of the legislative majority—”that allow the wealthiest and most partisan to dictate policies.”

“The experience of 2008 tells us that an economy built on the prosperity of a few is inherently unstable,” said Deepak Bhargava, director of the Center for Community Change, in response to Hacker’s report. What we can successfully do instead is grow the economy and create millions of new jobs quickly, using the prescriptions in this report. He added, however, “We have to be honest. Our leaders in Washington are running headlong in the wrong direction.”

That’s why it is important to “get this out to as many grassroots people as possible” and pressure politicians to change course, said Richard Trumka, president of the AFL-CIO. He and other union leaders are using the report as a framework for arguing against right-wing economic policies in the weeks ahead.

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