It’s more than just messaging. I agree with Harold Meyerson im that Democrats need to have an economic message. I think they should have focused on the economy rather than getting sidetracked by healthcare insurance, immigration, gun control, or any of the 1,001 issues they’ve turned to over the last six years other than the economy.
What messaging Democrats have had on the economy has largest been oriented towards the minimum wage. That is an error. Fewer than 3% of American workers earn minimum wage and at least half of those aren’t eligible to vote by virtue of age or non-citizenship.
After that their priority has been legalizing illegals. That isn’t even the top priority among immigrants (it’s second-highest).
This is more than just a messaging problem. It’s a problem of priorities. Democrats need to revise their priorities towards what will benefit most Americans.
Here’s Mr. Meyerson’s best suggestion:
One way to do that would be to reduce taxes on the middle class and the poor. Cutting the payroll tax would be a good place to start, offsetting the shortfall by instituting taxes on investment income that would go, like payroll taxes, to supporting Social Security and Medicare.
I don’t think that taxes on investment should be raised. I think they should be more targeted. His other ideas, e.g. infrastructure spending, are Democratic evergreens which, sadly, benefit very few workers, are poor investments these days (what’s the marginal value of the 153rd bridge across the Mississippi?), and have weak multipliers.
I think that Democrats are going to need to think much more out of the box than this to have a solid, credible economic message and that will require a change in priorities.
“I don’t think taxes on investment should be raised.”
Why not? It’s all ill gotten fiat money anyway. Once you understand that the number of widgets produced per hour is due to fractional reserve banking it’s all smooth sailing. Just increase reserve requirements and employment will blossom.
But seriously folks. Does it ever occur to anyone that the core principle should be to get the hell out of the way and harness the ideas and efforts of hundreds of thousands, if not millions, of people rather than have a few MIT or Harvard professors locked up in a room thinking deep thoughts and tinkering with the economy as if this was their theme song:
http://m.youtube.com/watch?v=WeYsTmIzjkw
Lolz!
Democrats need to revise their priorities towards what will benefit most Americans.
What, that doesn’t mean insuring that illegal transsexual aliens have the right to serve in the Marine Corps infantry and be a member of George Zimmerman’s firing squad while looting in Ferguson, Mo on leave?
Seriously, no one the Democratic leaders know is hurting. You think Alan Grayson or Nancy Pelosi or Joe Biden’s lobbyist sons have done anything but get richer during this downturn? Hillary poor mouthed it earlier this year showing just how far above everyone else she is.
They’re not that concerned about the economy because the people they know and that give them big money are doing fine, and they don’t give a shit about anyone else. So in the meantime it’s distraction after distraction: Ferguson, Trayvon, abortion, transgender rights, the war on women, RAAAAAAAAAACCCCCIIIIIIISSSSMMMMMM!®,.etc.
And the only difference between the Dems and the Reps is that the Reps are openly hostile to the working class and poor, while the Dems pretend helping the poor is their raison d’etre.
And given that the Number 1 Dem has indicated he wants to cut energy usage by over a quarter in the next ten years, it couldn’t be clearer that they want to destroy the economy further. It’s not like they’ll be asking Al Gore or Rob Reiner to cut back on their carbon footprint.
Have to agree that the minimum wage is a minor thing to concentrate on. I would disagree on infrastructure in that I think the electric grid could still use work, and given that our internet capabilities lag the rest of the first world so much, we could use some buffing there also.
Steve
The pressing problem is that the financial system is insolvent. I do not know the extent because I do not follow it anymore, but you would need to know the official on the books items plus the shadow banking items and the interconnections.
Japan has been engineering a soft landing for 20 years, and they are still dragging the bottom. The props need to be pulled, and the system needs to be allowed to attain equilibrium.
This was caused by fiat money and fractional reserve lending. I usually do not go after Wall Street investors, bankers, or PE guys because they do what they are supposed to do. It is the system that is the problem, but they can only do what they do because of the system.
The Fed and fractional reserve lending are not going away, but Glass-Steagall was an effective way to allow this financial system to exist without destroying the economy. It was not perfect, but it provided a firebreak.
Before G-S, the financial system used the Fed to over-leverage their assets, and this lead to an asset bubble. These assets were stocks, and we all know how that ended. The second time it was tried it ended with the financial collapse of 2008.
So, step number three would be to increase capital requirements and asset quality standards. Step number one would be to reinstate G-S and repeal Dodd-Frank. Step number two would be to create a program/plan to deal with the collapsed financial institutions caused by step three.
(Democrats could have reinstated G-S, but they did not. This is because they supported repealing G-S, and therefore, they are complicit in everything that followed.)
Tax cuts, minimum wage hikes, regulation eliminations, infrastructure spending, or any other scheme will not work until the system for capital investment achieves equilibrium, but without a firebreak between investors and government backed currency, the most profitable investment is credit creation.
Why would anybody go through the hassle of creating widgets instead of creating financial products especially when these products are being produced with other people’s money. The people who create actual goods do not control a large enough share of the economy to be of any consequence.
The Democrats are able to spout nonsense because they know the Republicans will oppose them. If the Republicans ever agreed to bring the financial system to heel, the Democrats would be like the dog that caught the car, but Republicans do not have that much sense.
The financial services industries account for less than 10% of GDP.
What percentage of credit creation is the financial sector responsible for?
For those following at home, here is a little history lesson. Back in ancient times about 8 years ago, people such as myself were proclaimed to be idiots and crazy by the people who claimed to know everything about the financial system.
They claimed that there was no housing bubble because a bank would never lend more money than an asset was really worth, and they knew this because the free-market knows everything.
They claimed that there was no way the housing market could collapse the financial system. They claimed that investors price in future events because the free market knows everything.
They claimed that the only problem with the free market was the government, and if the government got out of the way, the free market could function properly. They were wrong about everything, and as soon as things went bad, the free market ran to the government to save it.
The people who knew everything explained that the cause of everything was President Carter, Jesse Jackson, ACORN, and Al Sharpton. They forced the banks to make bad loans. Somehow, the banks were able to force the government to make bad loans, but why quibble.
Banks do not work the way that these experts think they do. They rely upon capital and stocks. If investors are all knowing and banks are making bad loans, their stocks should tank, and they should become undercapitalized. So much for the experts and their conservative acolytes and groupies.
When it became apparent that the banks had made a lot of bad loans, the experts assured us that they would be more than willing to work out repayment options because banks did not want a lot of foreclosed property on their books, and the acolytes and groupies agreed. Of course, they did not know how the mortgage industry worked before shooting off their mouths, and again, they were wrong.
I am once again being corrected by the investor class.
Somehow investors are able to make record profits with the financial sector in questionable shape, and they do this by influencing the government because the financial sector the 800 lb gorilla in the room. These same investors cannot make any money manufacturing goods because the same government pushes them around like the 98 lb. weakling.
Please, give me a f*cking break. The acolytes and groupies are that stupid. I am not.
The government is indirectly propping up a lot of investments through its various programs over the last six years. In essence, these investments are receiving unemployment insurance. How many whining conservatives have written off any of these investments because they are tainted? None, zero, zip, zilch, nada.
To my friends on the left, the next time you are arguing with an asshole about unemployment or food stamps, ask them the above question, and wait for the answer.
The finance sector made up about 4% of the economy in 1980. It has grown to 10%. What have we gotten in return for that growth? If its primary role is to assess risk and allocate capital, what has it helped grow?
Steve
There is the support for the financial sector that is not being included, but more importantly, the 60 trillion lb. gorilla is the shadow banking sector. I guess we are supposed to forget about that.
Oh wait, all hail the great and wonderful free-market investors, and pay no mind to the government goodies being funneled to their lazy asses.
What’s the Right Economic Message?
Oh, to answer the question:
They’ve got to start by admitting there’s a problem – “The economy is humped, and we don’t know what to do!”
But that ain’t happening because the elites can’t admit they don’t know what they’re doing. And that’s assuming they don’t know what they’re doing, which is being far more charitable than I care to be.
But until they admit serious problems exist, nothing can be done. And they won’t win elections if they admit serious problems exist, so instead we’ll get carping about things around the edges that don’t mean anything important is being done: fiddling with marginal tax rates, minimum wage, one lousy pipeline, etc.