IT'S 1929 IN BRODERVILLE:

One Bold Thinker Among the Democrats (David S. Broder, March 14, 2004, Washington Post)

Why is this boom leaving so many worse off? Frank's catalogue of causes is a familiar one: globalization and its handmaiden, the outsourcing of jobs to low-wage countries; the weakening of unions; the tilt of the tax system in favor of the wealthy investor. And Frank endorses the regular catalogue of remedies urged by Kerry and other mainstream Democrats. They include tougher trade rules, restoration of union organizing and bargaining rights and steps to make the tax system more progressive. Like everyone else, including Bush, he says education, innovation and skills training are the keys to a healthy long-term economic future.

But unlike others, Frank does not stop at that point. Just as he is bold in diagnosing the cause of the problem -- a private economy geared to producing wealth, not jobs -- he is equally daring in his remedies.

Toward the end of his speech, Frank uttered a sentence one can hardly imagine coming from the mouth of a 21st-century American politician. "Our problem today," he said, "is too little government."

When I asked him in an interview Thursday if he was sending a message to Kerry, Frank said, "It's a message for all Democrats. What I'm saying is we're in a situation now where we need the government, and where is it? We've cut taxes, we've criticized bureaucracy, we've almost condemned the public sector. I'm saying it's time to talk positively about government and use it to do what the private economy is no longer doing."

His proposal is to tax some of the wealth the private sector is now producing so abundantly -- "a fairly small percentage," he said, without being specific -- "and use it to employ people on socially useful purposes."

Frank urges that we "take some of the wealth that is being created by this wonderful thing, this increased productivity, this new technology and the ways of using it, and all this innovation, and let us use it for our own undisputed public purposes. Let us give cities and states more money so they can have more people policing, fighting fires, cleaning up the environment, repairing facilities that need to be repaired, enhancing train transportation, building highways, helping construct affordable housing in places where that is a crisis, helping pay for higher education for students."

As Frank acknowledged, this whole approach smacks "to some extent [of] the New Deal philosophy." And that is why no one, including the Democratic presidential candidate, is likely to endorse it wholesale.

What could better summarize the utter vacuity of the Left than to advocate a New Deal "solution" to an economy with stable prices, low unemployment and strong growth? Mr. Frank's prescription is bold in much the way that giving a healthy person preventive chemotherapy would be.

MORE:
Smile, these are good times. Truly: Anxiety is turning to paranoia about jobs. Take a deep breath: most Americans have rarely had it better (The Economist, Mar 11th 2004)

Waiting for the job recovery might be a good time to take a broader measure of the material well-being of Americans. Their condition is widely held to be perilous. The economy, it is said, is being “hollowed out” by international competition and the connivance of business and political elites, creating “two Americas”, one rich, one poor. Median income of American households, commentators often say, has been stagnant, though census figures give a rise of one-fifth since 1980. Lou Dobbs, on CNN's “Lou Dobbs Tonight”, is just one media fabulist who makes his living by claiming that, as America is being “exported”, so the well-being of middle Americans is in a parlous state.

It is a good story, but false on many levels. For a start, this slow growth in median income overlaps with a scale of immigration into America outpacing all immigration in the rest of the world put together. Many immigrants have come precisely to take up the lowest-paid jobs. As a result, in the 20 years to 1999 some 5m immigrant households were added to those defined as below the poverty level. Yet among native-born Americans, poverty rates have declined steadily since the 1960s. In the case of black families, median incomes have recently been rising at twice the pace for the country as a whole.

Strip out immigrants, and the picture of stagnant median incomes vanishes. Indeed, for the nine-tenths of the population that is native-born, middle-income trends continue their improvement of the 1950s and 1960s. For these people, inequality is not rising, but falling. Gregg Easterbrook cheekily points out in his excellent recent book, “The Progress Paradox” (Random House), that if left-leaning Americans seriously want better statistics about middle-income gains, then they should simply close their borders.

Mr Easterbrook points to something else about the figures for median household income. A quarter-century ago a typical household had three members. Today, it has just 2.6 members. Simply by this effect, median households have seen their real incomes rise by a half.

Another measure of improved well-being is increased access to jobs. Between 1980 and 2002 Americans in work rose by over 40%, a far brisker pace than the 26% growth in the population. Some three-quarters of the adult population are now in work, close to a record and some ten percentage points higher than in Europe. [...]

Of course, many American households struggle to survive on minimum-wage jobs with employers who do them few favours. We will look at low-paid work in a future week. What this piece attempts to argue is that the middle is far from being hollowed out. As Mr Easterbrook emphasises, most Americans have at least two cars and their own house, and they send their children to college. Certainly a bigger share of household income is being spent on things that did not feature 50 years ago, such as high-tech health care. But it has brought the benefit of a longer and better life, and not just for the old: since 1980, infant mortality has fallen by 45%.

At the end of last year, America's household wealth, at $44 trillion, passed the previous peak set in early 2000. With Americans wealthier than ever, why are many so anxious?

Posted by Orrin Judd at March 16, 2004 6:53 PM