May 12, 2015
David Brooks used the victory of the Conservatives in the United Kingdom to celebrate the “center-right moment” in his column this morning. To make his case he largely creates a caricature of the left to argue for the greater wisdom of the center-right. He tells readers:
“Over the past few years, left-of-center economic policy has moved from opportunity progressivism to redistributionist progressivism. Opportunity progressivism is associated with Bill Clinton and Tony Blair in the 1990s and Mayor Rahm Emanuel of Chicago today. This tendency actively uses government power to give people access to markets, through support for community colleges, infrastructure and training programs and the like, but it doesn’t interfere that much in the market and hesitates before raising taxes.
“This tendency has been politically successful. Clinton and Blair had long terms. This year, Emanuel won by 12 percentage points against the more progressive candidate, Chuy Garcia, even in a city with a disproportionate number of union households.
“Redistributionist progressivism more aggressively raises taxes to shift money down the income scale, opposes trade treaties and meddles more in the marketplace. This tendency has won elections in Massachusetts (Elizabeth Warren) and New York City (Bill de Blasio) but not in many other places.”
For political purposes it is undoubtedly advantageous to imply that the “opportunity” progressives favored the market more than the “redistributionist progressives,” but it is not true. Taking the case of President Clinton, he promoted trade agreements that deliberately placed manufacturing workers in direct competition with low-paid workers in the developing world, while maintaining or increasing the protections for highly paid professionals like doctors and lawyers. This had the predicted and actual effect of raising the incomes of those at the top at the expense of those at the middle and bottom. This upward redistribution was not due to market forces, but to policy design.
Similarly, Clinton allowed for the growth of huge financial firms that relied on the government for implicit too big to fail insurance. This free government insurance was a massive subsidy to the top executives and shareholders of these institutions.
Clinton also strengthened and lengthened copyright and patent monopolies. These are forms of government intervention in the market that have the same effect on the price of drugs and other protected items as a tariff of several thousand percent. In the case of drugs the costs are not only economic, but also felt in the form of bad health outcomes from mismarketed drugs by companies trying to maximize their patent rents.
And, the federal government directly intervenes to redistribute income upward when the Federal Reserve Board raises interest rates to slow job creation, keeping workers at the middle and bottom of the income distribution from getting enough bargaining power to raise their wages.
In these areas and others, David Brooks center-right politicians, as well as “opportunity” progressives are every bit as willing to use the government to intervene in the market as people like Warren and de Blasio. The difference is that the politicians Brooks admires want to use the government to redistribute income upward, while Warren and de Blasio want to ensure that people at the middle and bottom get their share of the gains from economic growth.
Their agenda is laid out in more detail in this report from the Roosevelt Institute.
Addendum:
I should also add that David Brooks’ “opportunity progressives,” Tony Blair and Bill Clinton, laid the groundwork for massive housing bubbles whose collapse sank their respective economies. It would be hard to be imagine a more disastrous economic policy, although in Clinton’s case the worst could have been avoided if his successor was awake.
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