The day the right lost the economic argument

President Obama's speech clinched the case against Norquist-style austerity — and won over the likes of USA Today

By Michael Lind

If you need any further evidence of the stark ideological divide that separates progressives from conservatives, you can find it by contrasting President Barack Obama’s speech on the economy with the response of the House Republicans...the president provided a capsule summary of the mainstream progressive narrative about the U.S. economy from 1945 to 2009:

In the period after World War II, a growing middle class was the engine of our prosperity. Whether you owned a company, swept its floors, or worked anywhere in between, this country offered you a basic bargain – a sense that your hard work would be rewarded with fair wages and benefits, the chance to buy a home, to save for retirement, and, above all, to hand down a better life for your kids.

But over time, that engine began to stall. That bargain began to fray. Technology made some jobs obsolete. Global competition sent others overseas. It became harder for unions to fight for the middle class. Washington doled out bigger tax cuts to the rich and smaller minimum wage increases for the working poor. The link between higher productivity and people’s wages and salaries was severed – the income of the top 1% nearly quadrupled from 1979 to 2007, while the typical family’s barely budged.

Towards the end of those three decades, a housing bubble, credit cards, and a churning financial sector kept the economy artificially juiced up.

That’s an excellent statement of the progressive theory of the case. What collapsed in 2008 was not merely the lesser stock and real estate bubble of the 2000s, but the larger Bubble Economy which had been “artificially juiced up” since the 1980s.

If you accept this thesis, as most progressives do, there can be no going to back to pre-2008 “normality”— because from Reagan to George W. Bush the “normal” was abnormal and sustained only by the Keynesian stimulus provided by Reagan’s and George W. Bush’s military build-ups and the stock market and real estate bubbles fueled by tax cuts for the rich. (Conservatives oppose Keynesian stimulus in the form of productive infrastructure investment, but support Keynesian stimulus if it benefits rentiers, defense contractors, real estate speculators and money managers).

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http://www.salon.com/2013/07/25/the_day_the_right_lost_the_economic_argument/

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We hear all the time about how government is the problem. Well, it turns out we rely on it in a whole lot of ways. Not only does it keep us strong through our military and our law enforcement, it plays a vital role in caring for our seniors and our veterans, educating our kids, making sure our workers are trained for the jobs that are being created, arming our businesses with the best science and technology so they can compete with companies from other countries. It plays a key role in keeping our food and our toys and our workplaces safe. It helps folks rebuild after a storm. It conserves our natural resources. It finances startups. It helps to sell our products overseas. It provides security to our diplomats abroad.

So let's work together to make government work better, instead of treating it like an enemy or purposely making it work worse. That’s not what the founders of this nation envisioned when they gave us the gift of self-government. You don’t like a particular policy or a particular president, then argue for your position. Go out there and win an election. Push to change it. But don’t break it. Don’t break what our predecessors spent over two centuries building. That's not being faithful to what this country is about.