the Financial Times (Europe’s main English-language business paper), writing about the US presidential campaign, is shocked – shocked! – that leftwing politicians in the US _dare_ have leftwing programmes:
Does this mean the Democratic party, which is generally (although not universally) anticipated to be heading to both congressional and presidential victory next year, is abandoning the centrist economic legacy of the Bill Clinton years? The rhetoric, if not always the fine print of the various plans that the candidates have rolled out, would suggest that it is.
Ooh. Abandoning centrism. That’s a criticism hurled at the right all the frigging time right?
And that criticism is focused on one thing only: the supposed protectionism of the leading candidates, pushed by “populist” Edwards (remember that this is a European paper – populist has nastier overtones here than in the US)
Nevertheless, the candidates face a very different world to the one Mr Clinton grappled with during most of the 1990s. Perhaps the biggest contrast is that Americans have become deeply pessimistic about their prospects over the last few years. Some polls show that a majority believe their children will be worse off than they are – a strikingly new and un-American mindset.
In the 1990s, the dissemination of new technology and the rising tide of productivity growth did lift all boats, although some more than others. The median household income rose by 14 per cent during Mr Clinton’s period in office and the proportion of Americans living below the poverty line fell. In contrast, since 2001, median household income has fallen in real terms while the poverty rate has risen.
Over the same period, premiums for health insurance have risen by almost 90 per cent and the proportion of Americans without healthcare has leapt to 47m. Meanwhile, studies estimate that those who lose their job and find a new one are on average paid 13-21 per cent less than in their previous position and are far less likely to have health insurance.
The fact that such trends have occurred during a period in which productivity growth has continued to be impressive explains why Democratic candidates are focusing much less on the Clintonite agenda of boosting innovation and productivity and much more on the politics of widening inequality – or on what Mrs Clinton calls “trickle-down economics without the trickle”.
But being worried by, or reacting to, that widening inequality is “un-American”, and the politicians that focus on this are pandering to voters’ basest instincts, (not so implicitly – not understanding the world we live in, where such things are inevitable, natural and, of course, desirable).
The only thing that seems tolerated in the Dems’ programme is their focus on healthcare, because on that issue the corporations now agree that something needs to be done.
The one area where there is a strong consensus between economists and Democratic political consultants is on the drive for universal healthcare. That partly reflects how much has changed in the US since Mrs Clinton’s notoriously botched attempt at healthcare reform in 1993. Then she was almost universally opposed by business lobbies.
This time round large corporations, such as Wal-Mart, have signed up to reform. “There is a recognition that the existing system is imposing a growing competitive cost on American businesses,” says Jason Furman, a senior fellow at the Brookings Institution.
The only constituency of the main stream media is business. Now that may not be so surprising coming from a business paper, but if you look at what other papers say, they in fact seem to parrot what’s in the business papers, who have more money to pay journalists and thus more actual content, reporting and original analysis. The business papers provide lots of facts if you knoxw how to read them, but they also create a very tight narrative which is the nechoed elsewhere (and which is why I spend so much time (i) deconstructing their articles and (ii) scouring their inside pages for nuggets or facts that prove the exact opposite of the official line they peddle).
What strikes me though is how blind they are. The healthcare fiasco in the US is a direct result of “reform” (unregulated market forces gone amok). Stagnant wages have led to the unsustainable support of consumption by debt, whose collapse will leave corporations pretty vulnerable. Lower standards for anything only make it easier for emerging market competitors tocome on the market – if we have any edge, it’s in high quality, high value products to the highest standards, not in commoditized crap. And so on.
Vibrant middle classes create more prosperity than looted ones. Why the business world has lost sight of that basic truth, I will never understand. And thus we see the sorry sight of news articles presenting midly left-of-center policies as almost extremist, and presenting reacting to the obviosu plight of massive chunks of the population as shameless opportunists. It’s depressing.