Time For The G-Word

Bill Scher

To spark a debate worthy of a great nation in trouble, The Institute for America’s Future “Op-Ad” series launches today in the New York Times. The first installment is here, on “Reviving the American Dream.”

Since the last seven years have seen corporate profits soaring but wages not keeping pace with inflation, the Op-Ad calls for a “new social contract” — Make it easier for workers to organize. Guarantee decent wages, pensions, health care, vacation and sick leave. Establish “full employment” as “the central target of our economic policies, with government acting, when necessary, as employer of last resort.”

All of that involves having our government get off the sidelines, where conservatism has left it, and back on the field — setting and enforcing rules of the road, and picking up the slack where the private sector falls short.

Uttering the government G-word has been taboo in our debate for a long time. But as the conservative failures pile up, that’s changing.

As today’s New York Times outlines, McCain is rhetorically moving away from his conservative record opposing government involvement, while Obama is trying to pin McCain down on his past anti-government record:

On the campaign trail on Monday, Mr. McCain, the Republican presidential nominee, struck a populist tone. Speaking in Florida, he said that the economy’s underlying fundamentals remained strong but were being threatened “because of the greed by some based in Wall Street and we have got to fix it.”

But his record on the issue, and the views of those he has always cited as his most influential advisers, suggest that he has never departed in any major way from his party’s embrace of deregulation and relying more on market forces than on the government to exert discipline.

While Mr. McCain has cited the need for additional oversight when it comes to specific situations, like the mortgage problems behind the current shocks on Wall Street, he has consistently characterized himself as fundamentally a deregulator and he has no history prior to the presidential campaign of advocating steps to tighten standards on investment firms.

He has often taken his lead on financial issues from two outspoken advocates of free market approaches, former Senator Phil Gramm and Alan Greenspan, the former Federal Reserve chairman. Individuals associated with Merrill Lynch, which sold itself to Bank of America in the market upheaval of the past weekend, have given his presidential campaign nearly $300,000, making them Mr. McCain’s largest contributor, collectively.

Mr. Obama sought Monday to attribute the financial upheaval to lax regulation during the Bush years, and in turn to link Mr. McCain to that approach.

“I certainly don’t fault Senator McCain for these problems, but I do fault the economic philosophy he subscribes to,” Mr. Obama told several hundred people who gathered for an outdoor rally in Grand Junction, Colo.

Mr. Obama set out his general approach to financial regulation in March, calling for regulating investment banks, mortgage brokers and hedge funds much as commercial banks are. And he would streamline the overlapping regulatory agencies and create a commission to monitor threats to the financial system and report to the White House and Congress.

In other words, both candidates are making a claim that he can use the tools of government best to make the economy work for everyone. Neither is arguing that Wall Street should be left alone to run the economy as it feels like.

Of course, it’s one thing to say you believe in effective government. It’s another thing to display the policy knowledge and judgment to convince voters that you mean it.

But what’s clear is the political debate has moved to where the country has been for a while. A majority believes that our government should directly create jobs to modernize infrastructure and generate clean energy, should guarantee quality health care for all, should allow employees a free choice to organize in unions, and should hold irresponsible corporations accountable.

That’s good. But we must go farther. Candidates should be not be allowed to simply allude to more robust government involvement. Deeper questions must be asked so people can best assess who really has a vision for effective, progressive government.

How will you use our government to create new jobs and strengthen our economic foundation? What new rules will you set to ensure good corporate behavior? How will you enforce them? Will you let corporate lobbyists write rules full off of holes or staff enforcement positions in your government?

What other questions would you ask about the role of government, that would ensure we get a truly informative debate that clarifies the choices before us?

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