November 18, 2015
In today’s Washington Post, columnist Ruth Marcus contrasted the policies that Bernie Sanders advocates, which she characterizes as being about redistribution, with the policies advocated by the Wall Street funded policy group Third Way, which she describes as being about “expanding opportunity for participation.” While it is true that Third Way would like its policies to be described as being about expanding opportunity, it does not follow that this is true.
Third Way has promoted the macroeconomic, trade, and regulatory policies that gave us the Great Recession. While some of us were warning about the dangers of the housing bubble, Third Way was taking up space in the Washington Post and elsewhere warning about the dangers of retiring baby boomers. When the bubble burst, it left millions unemployed and tens of millions losing much or all of the equity in their homes. Low- and moderate-income families were especially hard hit. This did not expand opportunities for participation.
More generally Third Way has supported trade policies that have been designed to redistribute income upward and cost the country millions of good-paying middle income jobs. They also have refused to support measures that would address the ongoing trade deficit by adopting serious policies on currency management. It is understandable that Third Way would justify policies designed to redistribute income upward by saying they care about opportunity (“more money for Wall Street” is not a good political slogan), but that hardly makes the claim true.
On the other hand, policies advocated by Sanders, like a financial transactions tax and universal Medicare system, could provide a solid boost to growth by eliminating hundreds of billions of dollars of waste in the financial and health care sectors. These resources could be freed up to support productive investment, leading to an enormous boost to growth.
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