As in 2010, Dems Lost Without an Economic Message Worth Fighting For

Election 2014 was a sad replay of 2010. And it didn’t have to be that way.

In early summer 2010, three progressive economic activists – myself, Dean Baker, and Robert Kuttner – met with Obama political adviser David Axelrod in his tiny office in the White House, steps away from the Oval Office. We told him what he already knew from polling: Despite the success of President Obama’s stimulus plan in preventing economic disaster, Americans were still not feeling any improvement in jobs and wages. We understood White House economic advisers were arguing for more action to create jobs and spur the still-weak economy, but the political operation was resisting.

So we made our case, which we were also making in public: President Obama should put forward a bold job-creation program, including investment in infrastructure and new energy technologies, aid to fiscally-strapped states that were then laying off teachers and cops, and perhaps even a plan for direct public service jobs. Axelrod listened politely and then told us it wasn’t going to happen. Americans wouldn’t support more public spending, he claimed, and told us even some Democratic senators wouldn’t vote for a bold jobs plan like we were proposing. It would never pass.

We told him they didn’t have to pass the big jobs plan in the 2010 Congress. Instead, we urged him to think of it as a way to show the voters what is really needed – beyond the initial stimulus – in a longer-term battle revive the badly damaged economy and to begin to create the new industries of the future. And it would show voters that Democrats were leading the fight – against Republican obstruction – for a continued effort to put Americans to work. It would allow the president to stump the country, like a modern-day Harry Truman, asking voters to elect a new Congress that would continue the fight to overcome the worst economic crisis of our lifetimes.

Baker, Kuttner and I left the White House having failed to convince Axelrod. The White House election jobs message featured “Recovery Summer” activities featuring the president and cabinet members telling economically stressed voters that the initial stimulus program would soon produce results people could feel. Obama’s message to voters was, “Have faith. The jobs and wages part of the recovery is coming.”

On Election Day 2010, Democrats watched in agony as they lost six Senate seats and over 60 seats in the House, transferring majority control from Nancy Pelosi to John Boehner. In a press conference the next day, the president declared the lesson of his “shellacking” was that he hadn’t made enough progress in creating jobs.

In 2012, with the president on the ballot, Axelrod made the election a choice between man-of-the people Obama and private equity, job-destroying Mitt Romney, so clearly dismissive of the 47 percent. The Rising American Electorate came out in record numbers.

Flash forward to today: the 2014 election was just as disastrous as 2010. Many observers now agree that Democrats again lost big because they failed to offer a clear economic message to economically insecure voters – and they once again failed to attack Republicans for sabotaging action to create jobs.

But What Economic Message?

Some analysts argue Democrats should have bragged more about how well the economy has recovered from the 2008 financial crisis and recession. But to the extent Democrats had an economic message voters could hear, that was it. President Obama repeatedly tried to show voters that the economy is growing and Democrats should be given credit for the economic recovery.

Voters had another view, expressed bluntly on a popular t-shirt: “What recovery?” Exit polling found that two out of three voters still believe that the country is going in the wrong direction. Of the 48 percent of voters who told exit pollsters the nation’s economy was “not so good,” 58 percent voted Republican as against 41 percent who supported Democrats. And of the 22 percent of voters who thought the economy was “poor,” a whopping 79 percent voted Republican. Democrats were clearly not seen as having fixed the economy – and, perhaps more importantly, Democratic candidates again failed to remind voters of the many ways Republican obstruction, austerity and government shutdowns had sabotaged the recovery.

Progressive Populists Need to Lead the Fight for an Economic Agenda

The big lesson in all this: progressives can’t afford to just let Democrats craft the message, while we attend to voter turnout and local initiatives. And let’s be clear, there has been a tendency among progressive groups to let the president call the shots on what we should (and should not) organize around. During the fight for the early stimulus program, they wanted us talking about job creation. After it passed – and especially after President Obama turned to deal-making, and offering to cut Social Security and slash spending, to get a “Grand Bargain” with Republicans to reduce the deficit – our push for action on jobs was not so welcome at the White House.

Over the last several years, many groups, understanding that big transformative ideas were off the official table, started to elaborate an agenda of smaller White House-approved ideas they called the “middle-out agenda” for prosperity. They advanced a set of (mostly) good reforms and ideas aimed at helping the middle class and poor families on the sort-of-Keynesian argument that “a strong and stable middle class is the key driver of American economic growth.” The Middle-Out Economics page of the Center for American Progress elaborates a variety of these proposals, from raising the minimum wage to “enhancing worker protections” to paid family leave to expanded apprenticeship opportunities for millennials.

Most of these ideas are good priorities for progressives, and it can be argued that, over the long term, success in passing these reforms would put more money in middle-class pockets and even give people the economic security to spend more and stimulate the economy – over time. Two big important parts of this “middle-out economics” – the women’s economic agenda (paid family leave, equal pay, and other proposals) and raising the minimum wage – were the focus of a lot of progressive organizing. And they proved to be very popular with 2014 voters – even if those same voters elected Republicans.

But without an overarching agenda for economic growth, job creation and higher wages for all Americans, most voters were content to blame the party in power for the fact that the economy was still making them feel insecure and profoundly worried about the future for their children.

Some Plans for “Economic Growth” Are Nothing but Hoaxes

If we want to win, progressives need to fight for a bold “Jobs and Growth and Wages” agenda. But we will have competition. Republicans aggressively claim that their old proposals for dramatic budget cuts, tax cuts and regulation cuts will unleash a wave of economic growth and job creation.

And conservative Democrats are talking about jobs and growth, too. Third Way put out a post-election memo called The Democratic Party After 2014 (sorry, not on the web) in which they rather dismissively described the 2014 Democratic message as the “fairness agenda,” and argued persuasively that, while many people see fairness as a good thing, “voters want growth and prosperity.”

When we look at the Third Way agenda for growth and prosperity, the devil is in the details. Under their encouraging theme of “Make it here, sell it there,” they call for “increasing public investments that drive private sector job creation” (good) and “owning the global clean energy export market, from renewables (good) to nuclear (dumb). And they also call for “reforming the tax code so business doesn’t flee the country” (which could mean cracking down on inversions, but, knowing Third Way, more likely means cutting corporate income taxes).

But under the theme they call “Modernize the Safety Net,” these conservatives make the vague case that we must “modernize” health care and Social Security – so that we can “leave room in the budget for critical investments.” On health care, progressives have repeatedly made the case that a more comprehensive and efficient health care system can reduce drivers of future deficits. But for conservative Democrats, what they often mean is cutting Medicare costs by raising the retirement age. And on Social Security, the Third Way organization has been an aggressive advocate of proposals (like the Obama “Grand Bargain” plan) to cut benefits by messing with the cost of living index – although they ran for the hills when they criticized Sen. Elizabeth Warrren for coming out for expanding Social Security and many groups, including mine, fought back.

Conservative Democrats’ proposals to cut Medicare and Social Security benefits are not part of a growth agenda. They would depress the economy. Progressive proposals to put more money in seniors’ pockets in an expanded Social Security and Medicare system would stimulate growth. And making rich people pay a little more to finance the system by “raising the cap” on payroll taxes is not only more popular, it would not hurt growth.

There’s a more important debate to be joined here: the Third Way tries to force a false and politically destructive choice: If we want to “make room in the budget” for public investment to spur growth, they claim, we need to cut the safety net. That’s the same argument Republicans and austerity mongers like Peter G. Peterson and his “fix the debt” campaign have been making for years. Republicans (and maybe Third Way?) make the same argument about infrastructure investment: “Slash taxes on the money multinationals have stashed abroad, and we will make them use some of that windfall tax savings on infrastructure.”

It didn’t work when it was tried before. Their general trickle-down, “cut tax rates for the rich and corporations” agenda, which was also tried and failed before, requires that Americans take on faith that this time those funds will be invested in job-creation and not to pad corporate profits and private savings of the rich.

Conservatives have their plans for economic growth, but they have been tried, and they kill jobs and lower wages. Progressives must lay out and fight for our better, more popular and more effective agenda for jobs, wages and growth. But our dialog with voters can’t feel like just an intellectual exercise of who’s got the better plan for growth. We are talking about people’s lives and the future of our country. In the words of Sen. Warren, the wealthy and powerful and the big corporations have “rigged the system” so that whoever we vote for, we get their austerity agenda.

  • Americans voted in 2008 for Barack Obama to end the financial crisis and revive the economy. But while he was able to pass a stimulus and save the financial system, the banks stopped him from breaking them up – and the GOP prevented him from taking the next step and investing in the next generation of jobs and industries.
  • Worse yet, Republicans didn’t even get blamed for obstructing a round-two jobs program, because powerful interests convinced the president to turn to deficit deals.
  • Democrats attack GOP politicians (like Mitt Romney) who outsource jobs to other countries, but days after this disastrous election, the White House joined Republicans (and big corporations) to push another job-killing trade deal.
  • Polling shows Americans overwhelmingly favor requiring multinational corporations to make a larger contribution in terms of taxes to help finance needed public investment, but the emerging bipartisan consensus for “tax reform” would produce, at best, no new revenue, or at worst, even less revenue for America’s needs.

The economic priorities Americans really care about should shape our economic message, as outlined by Warren in a post-election email to supporters, about how to “un-rig” the rigged system.

The lobbyists’ agenda is not America’s agenda. Americans are deeply suspicious of trade deals negotiated in secret. . . They have been burned enough times on tax deals that carefully protect the tender fannies of billionaires and big oil and other big political donors, while working families just get hammered. They are appalled by Wall Street banks that got taxpayer bailouts and now whine that the laws are too tough, even as they rake in billions in profits. If cutting deals means helping big corporations, Wall Street banks and the already-powerful, that isn’t a victory for the American people — it’s just another round of the same old rigged game.

Yes, we need action. But action must be focused in the right place: on ending tax laws riddled with loopholes that favor giant corporations, on breaking up the financial institutions that continue to threaten our economy, and on giving people struggling with high-interest student loans the same chance to refinance their debt that every Wall Street corporation enjoys. There’s no shortage of work that Congress can do, but the agenda shouldn’t be drawn up by a bunch of corporate lobbyists and lawyers.

Americans understand that building a prosperous future isn’t free. . . They want us to make investments that will pay off in their lives, investments in the roads and power grids that make it easier for businesses to create good jobs here in America, investments in medical and scientific research that spur new discoveries and economic growth, and investments in educating our children so they can build a future for themselves and their children.

In recent speeches since the election, Warren quotes the findings of a post-election by Hart Research for the AFL-CIO. Here’s the good news we can build on in the fight for jobs and growth and good wages.

75 percent want to increase funding for public schools from pre-school to college.

73 percent want to raise taxes on corporations’ overseas profits to ensure they pay as much as on US profits.

62 percent support increasing Social Security benefits and requiring high-income people to pay Social Security taxes on all wages – like the rest of us do.

62 percent support raising taxes on the wealthy and corporations to fund important economic priorities.

62 percent want to raise the minimum wage to $10.10 per hour.

57 percent favor ending tax loopholes that encourage US companies to send jobs overseas.

55 percent want to spur the economy by brining immigrant workers out of the low-wage shadows and contributing fully to our economy through comprehensive immigration reform comprehensive.

67 percent say public investment in key economic priorities is a more important priority than cutting taxes.

And by 80 percent to 13 percent, Americans feel politicians do too much to support Wall Street financial interests and not enough to help average Americans.

Those views, held by strong majorities of Americans, represent support for a progressive populist program for jobs, growth and good wages – an agenda worth fighting for. Let’s get to work.

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