Loser Liberalism is a Winner

I wish all my liberal friends would read this free book, reviewed here by Jared Bernstein, so we can take on the right wing economics that dominates our discussions.--SS

Loser Liberalism is a Winner:

I just finished Dean Baker’s new book, The End of Loser Liberalism. It’s a great read, and somehow elating. Dean offers a compelling way forward.

The thesis is that when it comes to the central economic debates of our day, progressives are stuck on the losing side of a false dichotomy. They/we:

…have accepted the conservatives’ framing of political debates…a framing where conservatives want market outcomes whereas liberals want the government to intervene to bring about outcomes that they consider fair.

This is not true. Conservatives rely on the government all the time, most importantly in structuring the market in ways that ensure that income flows upwards.

As Dean sees it, conservatives are not at all the free market advocates they claim to be. You’ll be hard pressed to find Adam Smith’s invisible hand anywhere in the story he tells, but you’ll see conservatives’ thumbs on policy scales throughout the economy.

There’s the anti-inflation bias at the Fed, which puts more weight on price stability than on low unemployment, thus providing greater protection to the assets of the wealthy than to the livelihoods of working families. There are the strong dollar and trade policies that put our manufacturing workers at a comparative disadvantage to our competitors.

There’s anti-union bias, the government bailout backstopping the biggest banks, government-provided patent monopolies, corporate liability protections, favorable tax rates for non-labor income, and housing policies that disperse the biggest benefits to the richest homeowners.

In every case, the wealthy have used their money, power, and clout to tweak the politics and the market in ways that make money float up. Yet their rhetoric is all free markets, with lots of deep caterwauling against liberals and their socialist ways.

Dean’s argument is not, however, that liberals should embrace true free market ideology. While he wants the market to work out the details around those issues that markets handle most efficiently—pricing commodities, for example—he has no beef with structuring market returns. He just wants them structured on behalf of the broad middle-class on down to the poor.

Liberals stop losing not by showing conservatives what free markets are really about, but by beating them at their game—by restructuring issues like those above in ways that deliver prosperity far beyond the top 1%. Labor laws that balance the collective bargaining playing field, a Fed that pursues full employment, progressive taxation, an end to inefficient patent monopolies, balanced trade policy, universal health care, and so on.

To me, this is a truly hopeful agenda in the following sense. Too often, it seems like progressives are trying to lead a parade with hardly anyone marching behind us. We argue that the broad public is with us in our advocacy for government policies that would help them, or at least they should be, or they would be if they understood the issues at hand. But why on earth should they be with us?

Especially today, most people see government much more in the way Dean describes it than in the way progressives envision it. That is, they view government as bought and paid for by moneyed interests, a place where politicians would never waste time helping the little guy or gal get ahead when they could be raising funds from their corporate sponsors. Why support a jobs program when you could bail out a bank or cut taxes on a high-end constituent?

If Dean’s right, then conservatives should love the government because it tilts the market and its returns their way, and visa versa: the bottom 99% should feel estranged from it for the same reason.

But what if this were reversed? What if government supported market structures that rewarded working families throughout the pay scale; that dampened inequality and boosted mobility; that fostered collective bargaining, supported manufacturing, fought to keep unemployment low, kept banks from growing TBTF?

Not only would growth be far more likely to reach more people under this model; not only would the living standards of the majority once again have a chance to grow with GDP and productivity. But the government would be viewed as an ally, not an enemy. If government were good to a lot more people, a lot more people would be inclined to support good government.

I think Loser Liberalism is a winner. Let me know what you think.

Update: A commenter aptly chides me for not mentioning that the book is FREE at the link above…something about breaking that patent monopoly…