Economic Policy

This has been a busy week for progressive economic policy wonks. It started with a cover story in The New York Times Magazine about Sen. Barack Obama’s economic positions; moved to “Poverty Day,” the day on which the U.S. Census Bureau releases income, poverty and insurance data; and will end with the release of EPI’s newest State of Working America report. To boot, numerous speakers at the Democratic Party National Convention have spoken about the problems facing working Americans.

Despite this week’s torrent of data and commentaries – despite this week’s torrent of words – about economic conditions, a coherent story about the problems, causes and solutions is missing. Rather, it seems as if progressive-minded leaders are pulling their punches. In his speech last night, for instance, vice-presidential candidate Joe Biden spoke elegantly about the problems of working families but timidly about solutions. He briefly mentioned such fundamentally conservative solutions as tax cuts and welfare reform before moving on.

But at least Biden exuded passion. The night before, former Virginia Gov. Mark Warner gave a keynote address that was essentially a laundry list of safe, small-bore (a.k.a. “bi-partisan”) economic policies divorced from any larger economic story. What point should working people in struggling communities like those in Virginia’s Appalachian or Southside regions take from Warner’s remarks? That education and rural broadband access are good?

The absence of an economic story illustrates a criticism voiced by economist James Galbraith in his recent book, The Predator State. Writes Galbraith:

Liberals continue to behave as though they face a philosophically coherent adversary and as though the politics of the day require formulating a program that responds to that adversary …. This leads to a paralysis of thought and action and to programs doomed to futility and failure from the beginning.

This failure of imagination when it comes to solutions leads to cautious, incremental steps ill-suited to today’s challenges. (A dynamic that Robert Kuttner describes in an article about balanced budgets in The American Prospect.) Until progressive economic critiques are coupled with a willingness to offer solutions flowing from the critiques, the prospects for meaningful reforms are limited, regardless of what the data say or which party controls the levels of government.

From Bloomberg, unions are being made increasingly uneasy by Wall Street's influence over the Obama campaign.

AFL-CIO Secretary-Treasurer Richard Trumka delivers a slap at former Treasury Secretary Robert Rubin in a slide show exhorting union members to back Democrat Barack Obama for president.

Blaming unfettered global trade and inadequate government regulation for lost manufacturing jobs and a staggering economy, Trumka's presentation cautions that ``it will do us little good if, when the next Democrat moves into the White House, Wall Street takes command of our country's economic policy.''

Trumka leaves no doubt that the rebuke is aimed at Rubin, Wall Street's most prominent Democrat. It's ``hard to tell the difference'' between Rubin and Republican Treasury Secretary Henry Paulson, the presentation says. Trumka's critique reflects the concern among organized-labor officials that Rubin and like- minded Democrats may win the behind-the-scenes battle to shape Obama's economic thinking.

``I'm hearing Rubin's name more and more associated with the campaign's economic policy,'' says James Torrey, a top Obama fundraiser and chief executive officer of New York-based Torrey Associates LLC, a hedge-fund investor.

My former chief, CBPP's Bob Greenstein, has an impassioned defense of his former employee Jason Furman at the Huffington Post. Bob rightly skewers some of the reporting on Furman—particularly an erroneous report that he favored Social Security privatization.

I do have to gently disagree, however, with a two of Bob's arguments. First, he states that:

Everyone involved in the 2005 debate over Bush's privatization proposal knows it was Furman's devastating analyses shredding the Bush plan and skewering the arguments of privatizers that formed the intellectual core of the successful opposition. Democratic Members of Congress, unions, and grassroots campaigns against the Bush plan built much of their critiques on Furman's work.

The suggestion that "everyone involved" in the SS debate "knows it was Furman's" work that "formed the intellectual core of the successful opposition" is a bit of an overstatement. (Also, while saying "I'm the greatest rapper alive" is standard in hip-hop, it's somewhat out of place in policy analysis). Furman's work on SS at CBPP was great, but it was only part of a larger Team Progressive effort that formed the "intellectual core" of the defense. Ezra Klein is closer to the mark when he notes that Furman:

... was a staunch ally during the Social Security privatization fight, and did as much as any economist not named Dean Baker to push back on the then-pervasive idea that Social Security was in crisis and required conservative reform.

Second, Bob suggests that Furman's hire doesn't necessarily represent a "move to the political center":

.... several news accounts, including a Huffington Post column, portrayed Obama's hiring of Furman as a move to the political center now that Obama has wrapped up the nomination. This, too, is dubious. Prior to Furman's hiring, Obama's two top advisers on economic and fiscal policy were University of Chicago economist Austan Goolsbee and Harvard economist Jeffrey Liebman. Goolsbee, Liebman, and Furman are all moderately left of center. In fact, reading the work of all three (each of whom is considered a top-notch economists) leads one to put Furman modestly to the left, not the right, of the other two. In recent years, Furman's work has focused, in particular, on how to change government policies so the gains of economic growth are more evenly shared, with more gains going to low—and moderate—income working families and fewer to corporate profits than has recently occurred.

While it may be true that Furman is modestly to the left of Goolsbee and Liebman (the distinction isn't clear to me based on their written work), the real divide here involves Furman's views on fiscal policy as well as the role of economic institutions—particularly collective bargaining, new basic labor standards like paid leave, and other forms of market regulation—in creating an economy that works for all Americans.

Obama doesn't exactly have a boldly progressive economic agenda, but it includes many progressive elements—such as paid sick days and leave, indexing (not just increasing) the minimum wage, and expanding collective bargaining—that Furman, as far as I can tell, has never publicly endorsed. In my view, the biggest problem with Furman's infamous Wal-Mart paper is precisely his failure to include these reforms, as well as universal health care, as recommendations to "change government policies so the gains of economic growth are more evenly shared." In a subsequent online debate with Barbara Ehrenreich, he had a perfect opportunity to correct this imbalance, but failed to do so—instead, again quoting Ezra Klein, riding his initial argument "to a level of dogmatism that appears unwise."

Greenstein's case for Furman would actually have been strengthened if he had acknowledged the obvious: Furman is pretty much a 1990s-style "third way" guy with the pros and cons that ideology entails. Among the pros, Furman supports the current welfare state and would increase government transfers to low- and moderate-income folks: the cons, he wouldn't require much more from corporate American (other than an increase in the minimum wage). Moreover, he hasn't publicly made the same moves to the left as some others in the Rubin camp. Importantly, Obama is already on record supporting many of the key elements of a progressive economic agenda, one that does require more from business. It's our job to make sure he holds to those positions whoever his advisers may be.

Uchitelle in the NYT, Borosage, and, my favorite, Dean Baker on why Obama (wisely) didn't pick a crazy-ass progressive economist like say, Dean Baker.

The reality is that if Obama had picked a progressive economist (a.k.a. a Neanderthal protectionist), who had not been initiated into the Wall Street club, he would have gotten beaten up so badly by the media that he would want Reverend Wright to come back for more press events.

There's also supposedly a video of Baker floating around in which he exclaims, in his prophetic voice: "God bless American capitalism? No, God damn American capitalism!"

Furman argues in Uchitelle's article that his own views are "irrelevant.” But that strikes me as spin—the blow-up around Furman's appointment will help keep him fair and balanced, but based on his writing and quotes, he's a true believer in Rubinomics, and it's inevitable that those views will influence the advice he gives.

Baker is probably right about how a progressive economist would have been treated by the media, and Borosage is right when he says Furmangate really isn't about Furman, it's about Obama's economic views. But I'd still love to see an economist from the non-Rubinite camp on Obama's staff alongside Furman. And to be even more super-duper-radical, how about a woman on either the paid staff or unpaid economic advisor list (right now the same list of roughly five white guys is regularly cited). My top pick for either would be Heather Boushey, who's currently working for the Joint Economic Committee on the hill, has as much or more policy savvy as Furman, and knows way more about labor market economics, which I hear just might be an issue in this election, than he does.

According to yesterday's WaPo, one of the "starker contrasts" in this year's presidential election is "between McCain's emphasis on job creation and reducing regulation and Obama's focus on immediately easing financial problems."

Right.

Here's Dean Baker's response:

While Obama has certainly made a point of crafting policies that are intended to ease the financial problems of low and moderate income families, most notably providing universal health care, it would be difficult to characterize Senator McCain's agenda as focusing on job creation.

Senator McCain's economic proposals center on maintaining the tax cuts put in place under the Bush administration. The economy has sustained the slowest pace of job creation on record during the Bush years, creating jobs at annual rate of just over 700,000 a year (0.5 percent). By contrast, it created jobs at almost a 3 million annual rate during the Clinton years.

It would be wrong to attribute the entire falloff in the pace of job creation between the Clinton and Bush administrations to President Bush's tax cuts, but it would be difficult to argue that an economic policy that centers on maintaining these tax cuts has a "emphasis on job creation" as the Post told readers.

See also, Krugman.

Via Economist's View, some interesting musings by Cato's Will Wilkerson on the case for a modern libertarianism that accepts the need for social insurance:

... when I actually defend something like the arguments for an economic safety net [that the] giants of libertarian thought [Friedrich Hayek, Milton Friedman, James M. Buchanan] actually set forth, lots of libertarians accuse me of not really being libertarian at all. And many liberals act surprised, as if I’m being saucily iconoclastic by wandering so far off the reservation. I can tell them that Hayek was actually in favor of a guaranteed minimum income and that Friedman basically invented the idea behind the EITC, but they’ll still think I’m some kind of congenial squish.

....

... with the obsolescence of the anti-communist alliance with conservatives, many libertarians have sloughed off much of their previously tactically useful sympathy for socially conservative initiatives. Freed to be full-on social liberals, many libertarians are left sensing a much deeper cultural affinity for the left than the right. And this leads naturally to seeing more clearly their ideological affinities with welfare liberals. And then you read thinkers like Hayek, Friedman, and Buchanan, and you think: Oh, yes. This is extremely sensible. And now that the welfare-liberal elite has become rather more economically literate and is no longer sighing over five year plans, there is no reason to think they cannot find this sensible, too.

So that’s where I’m at. An old-fashioned market liberal who thinks Hayek, Friedman, and Buchanan get it right, and who thinks Rawlsian welfare liberals should be able to recognize themselves in these thinkers.

As a refresher, here's Hayek on the safety net in The Road to Serfdom:

... there are two kinds of security: the certainty of a given minimum of sustenance for all and the security of a given standard of life, of the relative position which one person or group enjoys compared with others. There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision. It is planning for security of the second kind which has such an insidious effect on liberty. It is planning designed to protect individuals or groups against diminutions of their incomes.

I know very little about the intellectual history of libertarianism, but I wonder if Robert Nozick's Anarchy, State, and Utopia, written in 1974, didn't play a big role in turning libertarian opinion against economic safety nets. There's no room for Hayek's "comprehensive system of social insurance" in Nozick's austere systemization of a atomistic, ultra-minimal state.

What one of America's leading bankers had to say in his testimony before the Senate Finance Committee on the nation's economic problems:

Our leadership has delayed far too long in attempting to deal intelligently with our problems, which can be met only by the bold and courageous action of government, coupled with the unselfish, intelligent, and cooperative support of our business and financial leadership, the whole effort designed in the interest of our entire people. In the mad confusion and fear brought about by our present disordered economy, we need bold and courageous leadership more than at any other time in our history for the reason that our industrial evolution has made necessary a new economic philosophy, a new business point of view and fundamental changes in our social system. The nineteenth century economics will no longer serve our purpose—an economic age 150 years old has come to an end. The orthodox capitalistic system of uncontrolled individualism, with its free competition, will no longer serve our purpose. We must think in terms of the scientific, technological, interdependent machine age. which can only survive and function under a modified capitalistic system controlled and regulated from the top by government.

Pretty radical stuff, isn't it? That's one banker who will never get a job in an Administration, to say nothing of heading the Federal Reserve.

Except he did. The banker is Marriner Eccles—his testimony is from February 1933. FDR appointed Eccles to a post in the Treasury Department later thar year. In 1935, FDR appointed Eccles to be the first Chairman of the Fed Reserve, a position he held until 1948.

This week's edition of Too Much has more about Eccles and the relevance of his views to our current economic woes:

Looking back on those years, in his 1951 memoir Beckoning Frontiers, Eccles would do his best to explain the impact he set out to make. Mass production, he noted at the outset, demands mass consumption, but people can’t afford to consume if the wealth an economy generates is concentrating at the top.

In the years leading up to the Great Depression, that concentrating was accelerating. A “giant suction pump,” charged Eccles, “had by 1929-30 drawn into a few hands an increasing portion of currently produced wealth.”

“In consequence, as in a poker game where the chips were concentrated in fewer and fewer hands,” Eccles observed, “the other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.”

Sound familiar? The decade of the 1920s that Eccles describes in his 1951 memoir comes across today as eerily familiar. Then as now, the U.S. economy was floating on a sea of debt.

Then as now, inequality was hollowing out the nation. Eccles put the matter bluntly: “Had there been a better distribution of the current income from the national product — in other words, had there been less savings by business and the higher-income groups and more income in the lower groups — we should have had far greater stability in our economy.”

One more interesting tidbit about Eccles: while serving in the Treasury Department he wrote much of the 1933 Glass-Steagall Act, a law that separated investment and commercial banks. Glass-Steagall was repealed in 1999, a move supported by the Clinton Administration and Treasury Secretary Robert Rubin. A few days after the Administration agreed to support the repeal Rubin announced he was taking a top job at Citibank, which had lobbied for some 30 years for repeal. In 1998, Citibank announced plans to merge with Travelers Insurance, a move made easier by the repeal. As Barack Obama noted in a recent speech, "by the time Glass-Steagall Act was repealed in 1999, the $300 million lobbying effort that drove deregulation was more about facilitating mergers than creating an efficient regulatory framework."

The "bishop of the poor" wins in Paraguay:

A former bishop has ended Paraguay's 61 years of one-party rule, beating the reigning party's candidate to win the country's presidential election.

Late last night, Fernando Lugo, a mild-mannered leftist who quit the clergy three years ago, saying he felt powerless to help Paraguay's poor, was announced as the winner of the elections after some uncertainty.

....

Lugo, nicknamed the "bishop of the poor", was confident Paraguayans would elect him in the hope of seeing "a different country", likening himself to a David fighting a "monstrous Goliath". The Colorado party has stayed in power by means of democracy and dictatorship, ruling even longer than Cuba's Communist party.

Eight months ago, Lugo welded unions, Indians and poor farmers into a coalition with the main opposition party to form the Patriotic Alliance for Change.

....

Lugo will take office on 15 August, and has vowed to carry out agrarian reform to ensure poor peasant farmers can till their own land in a country where a small, wealthy elite owns the vast majority of farmland and cattle ranches.

Lugo's election is a welcome change. Paraguay ranks below most of South America on the UN's human development index—among South American countries with more than a million people, only Bolivia ranks lower.

Writing in the New York Times Week in Review, Louis Uchitelle reviews the recent decline in the floor for wages in the U.S. labor market.

The $20 hourly wage, introduced on a huge scale in the middle of the last century, allowed masses of Americans with no more than a high school education to rise to the middle class. It was a marker, of sorts. And it is on its way to extinction.

Americans greeted the loss with anger and protest when it first began to happen in big numbers in the late 1970s, particularly in the steel industry in Western Pennsylvania. But as layoffs persisted, in Pennsylvania and across the country, through the ’80s and ’90s and right up to today, the protests subsided and acquiescence set in.

Hourly workers had come a long way from the days when employers and unions negotiated a way for them to earn the prizes of the middle class — houses, cars, college educations for their children, comfortable retirements. Even now a residual of that golden age remains, notably in the auto industry. But here, too, wages are falling below the $20-an-hour threshold — $41,600 annually — that many experts consider the minimum income necessary to put a family of four into the middle class.

The nation’s political leaders — Democrats and Republicans alike — have argued that education and training are a route back to middle-class wages for those who have fallen out. But the demand isn’t sufficient to absorb all the workers that the leaders would educate.

…. The trend in the hourly work force is striking. Take only the peak years in each business cycle, starting in 1979. The proportion earning at least $20 an hour declined from 23 percent that year, to 20 percent in 1980, to 18 percent in 1989, and to 16 percent in 2000. Manufacturing was hit the hardest.

Uchitelle doesn’t take the data to the next point, which is a focus of our research at The Mobility Agenda: the high proportion of the U.S. labor market made up of low-wage jobs. Our policy leaders haven’t focused nearly enough on the fact that the U.S. isn't just losing better jobs, growth in low-wage jobs is changing our economy in ways that affect all of us. Our economy is heavily dependent on individual spending. When workers don’t earn enough to take care of daily expenses like housing, transportation, and food – spending and consumption decline. And that hurts the economy for all of us. As is apparent today.

Unfortunately, over 40 million jobs in the United States—about one in three—pay low wages of $11.11 or less, often providing no employment benefits and little flexibility. Even though the United States is among the wealthiest nations in the world, employers pay these workers less than workers who hold similar jobs elsewhere.

The last decade has seen some progress on advancing a number of well-known policies to improve job quality by boosting the minimum wage and expanding publicly subsidized employment benefits, like child care and wage subsidies such as the Earned Income Tax Credit. Likewise, we support efforts to address education and advancement strategies that prepare workers for skilled jobs.

Still, when one worker advances out of a low-wage job and another worker takes it, the job does not change.

In contrast to the manufacturing jobs, many of these jobs are in growth sectors like retail and hospitality, jobs that will not be off-shored because they are geographically specific.

At The Mobility Agenda, we’ve surveyed key contacts across the nation for new ideas and strategies to strengthen the labor market by improving these jobs. State and local stakeholders are experimenting with a host of new initiatives to improve low-wage jobs. These innovative ideas are less well known and are not commonly incorporated into the agenda of advocates and academics. For much more information about these new strategies, see our web based resources on this research, starting here.

For the most recent debunking of the idea that rising health care costs are due to the retirement of the baby boomers and other demographic factors, see this great summary by Maggie Mahar of a recent speech by Princeton's Uwe Reinhardt.

"... what will drive costs in coming years, will come, not from the demand side of the equation, but from the supply side," says Reinhardt, repeating his theme. We can be certain that, without some significant reforms, suppliers will continue to invent new products for every age group, charging us more and selling us more -- using whatever methods it takes, from direct-to-consumer advertising to promises of near immortality and perpetual youth (just as 120 can be the new 80, 55 can be the new 35!)—if we just swallow enough pills and replace enough body parts. ....

In yesterday's Dem debate, Charlie Gibson and George Stephanopolous set what must be a new low in debate moderation (the fact that David Brooks gave them an "A" today tells you all you need to know). One particularly egregious example—Gibson repeatedly asserting that cutting the capital gains taxes increases revenue—was made even more maddening by the failures of both Obama and Clinton to say much useful in response. Today Dean Baker has a good post that the candidates should review before they answer any more questions about capital gains taxes:

... the evidence that a capital gains tax cut raises revenue is rather dubious, since most of the apparent increase is likely due to timing: investors delay selling stock when they know a tax cut is imminent. After the cut takes effect, they then declare their gains and pay taxes at the lower rate.

But this is only part of the story. As President Reagan noted when he signed the 1986 tax reform, taxing capital gains at a lower rate than other income gives people enormous incentive to game the tax code. If the tax rate on ordinary income for high-income taxpayers is 35 percent, and the tax rate on capital gains is 15 percent, then these folks can get a 20 percent return if they can make wage, interest, rent or dividend income appear as capital gains income. This can fuel a lot of creative tax shelters. This gap will also lead to an increase in capital gains tax collection – at the expense of ordinary income tax collections.

There is one other important point worth noting about the capital gains leads to more taxes story. Presumably the greater collections are supposed to come from people selling their stock or other assets more frequently. This means more fees for the financial industry, but is this what we really want to promote. The fees from these trades are a drain on people’s investments. There is a lot of research showing that active traders typically lose money. Is it good policy to promote more active trading (that is, if you don’t work on Wall Street)?

If only to avoid another debacle like "temporary, targeted, and timely", it might be a good idea for progressives to have their own handy, alliterative catchphrase to use to frame the second economic stimulus package and related measures, like responses to the foreclosure crisis, Democrats in Congress are calling for.

Here's my first crack at a catch phase: reform, relief, and recovery. That is, anything that Congress does on economic policy this year should be designed to: reform a broken economic system that has given us two asset bubbles in the last decade and a return to Gilded Age levels of inequality; relieve the economic distress and dislocation caused by the current downturn; and be of sufficient size to bring about a broad-based recovery from the current downturn.

The Nation magazine recently praised efforts by the Congressional Progressive Caucus, led by Congresswoman Barbara Lee (D- CA), to introduce a plan to cut poverty. The detailed package of policy proposals, “The Anti-Poverty and Opportunity Initiative,” calls for:

…. $73 billion in FY 2009, increasing to $129 billion in FY 2018, to fund a comprehensive strategy to cut poverty in half in a decade, including: expanding child care and increasing Head Start funding; making the Child Tax Credit fully refundable and expanding the Earned Income Tax Credit for larger families; increasing funding for Food Stamps programs; increasing housing vouchers by 200,000 annually; lifting restrictions on TANF, Food Stamps, SSI and Medicaid for documented immigrant families; fully funding block grants to states with broad anti-poverty strategies and distributing targeted grants to states for families where a parent or child has a disability; increasing funding for Indian Health Services, education, housing and infrastructure, natural resources management, and other areas impacting Native American poverty; and reversing the 20 percent cut in child support enforcement.

The initiative incorporates many policy ideas advocates, academics, community organizations, and other stakeholders have been wishing that Congress and the administration would adopt – for many years now. Individual lists might differ a bit from Congresswoman Lee’s, but any Congressional staffer from a progressive office already has a list like this memorized.

So why aren’t these proposals the law of the land?

It's probably because supporters have reached everyone persuadable by talking about the proposals as “anti-poverty” initiatives for forty years. And all that support still isn’t enough to overcome the opponents of legislation like this. While many people want to do something about poverty—it’s not a high priority for voters. In February, the Gallup Poll asked voters about "the most important problem facing the country" and just 2 percent named poverty/hunger/homelessness.

That means friendly policymakers don’t have the political space they need to take on opponents.

And continuing to use the poverty banner means it is unlikely that this plan will generate adequate support in the future. There are a few reasons for this:

* The U.S. definition of poverty is out of date and flawed, allowing opponents to use it to limit policy solutions to a narrow very low-income group.
* Public understanding of the causes of (irresponsible and immoral behavior) and remedies (responsible personal behavior) for poverty hinders adoption of the policy solutions we seek to address it.
* Defining the problem as “poverty” opens the door to a losing scenario in the legislative debate.

In fact, when Senator Clinton announced her support for a plan to adopt a goal to cut child poverty in late February, the conservative think tank Heritage Foundation took the opening to criticize and offer their alternative:

Robert Rector, senior research fellow on welfare and family issues at the Heritage Foundation, says Clinton refuses to even acknowledge the two primary causes of child poverty -- out-of-wedlock births, and parents living on welfare instead of working. "What she wants to do is combat poverty by putting the responsibility on the U.S. taxpayer, who already spends about $450 billion a year fighting poverty," says Rector, "while [at the same time] specifically avoiding the issue of changing the behaviors that are the cause of poverty.”

See the problem?

The poverty debate provides a classic example of the imperative not to sacrifice our larger policy goals for the sake of an incremental or different advance, particularly when that advance actually undermines the shared agenda for the long term. By advancing a plan to set a target for cutting poverty, elected officials and candidates set up a problematic future, and one that threatens to undermine the policy goals.

Let’s imagine the likely scenario to come. Whether or not a candidate who has promised to set a goal to cut poverty wins the White House, we can expect continued efforts by some advocacy groups and members of Congress to push for the goal and the policy to match.

The mainstream media will portray the likely legislative options as two competing proposals: one we like (a comprehensive approach to addressing inequality and economic mobility) and one we don’t (solve poverty with marriage and harder work).

Our opponents are able to push these concepts with success because they are consistent with a broad public understanding of the causes of poverty, and a widely held belief that government programs cannot really address the issue of poverty or inequality. We already lost this same fight in battles over welfare. Why would we want to engage in it again?

We don’t need to re-fight that battle. We know that some people (democrats and low-income voters) are persuaded by a sympathy lens on the issue (the one that the word “poverty” calls up for many people in this country) to support a limited set of policies. Unfortunately, this language actually decreases support for progressive policies like a living wage.

Moreover, we also know that using an economic narrative moves these same voters and others (working-class, non college-educated men, older men, Republican voters, union households, and older voters without a college education) to support more of our policy goals.

So, if there is no true demand for a goal to cut poverty and it won’t help add new support, it would be much smarter strategically to use an economic case to promote the same larger policy agenda without the damaging poverty headline.

In fact, the Progressive Caucus members have proposals that would address poverty, social and economic mobility, and inequality that they’ve put under an economy title, the “Rebuild and Reinvest in America Initiative.” They should focus on this legislation and incorporate the “anti-poverty” agenda into that legislation.

Everyone who wants anti-poverty policy to be high on the agenda after the upcoming election should stop talking about goals to cut poverty and instead talk about an economy that will work for everyone.

Changing the way we start the conversation with others about this issue doesn’t mean we don’t care about the poor anymore or that our policy goals have to change at all. It’s just an acknowledgment that if we want to win, we have to change the narrative to one that works for us, and for more of the public too.

The cost of car insurance can be a major barrier to driving. And we know that people with access to a reliable, affordable car are more likely to be employed, earn more, and work more hours. We also know that low-wage workers drive fewer miles than higher income people, which makes transportation to work a regressive tax on employment. (For much information more on transportation and work, see our resource page on transportation and the labor market.)

Recently, we've been monitoring efforts in a couple states to reduce the cost of car insurance and we found this new article about pay-as-you-drive car insurance in the popular journal Democracy intriguing.

Pay-As-You-Drive Car Insurance
by Jason Bordoff

If you're like most Americans, you eat too much at all-you-can-eat buffets. With auto insurance, it's no different. Drivers who are similar in all respects—age, gender, driving record—pay roughly the same premiums whether they drive 5,000 or 50,000 miles per year, even though the likelihood of a collision increases with each mile. This "all-you-can-drive" pricing scheme imposes significant costs on society: more traffic accidents, congestion, air pollution, greenhouse gas emissions, and dependence on oil. It's also inequitable, as low-mileage drivers, particularly low-income people and women, subsidize high-mileage drivers.

Read More.

This week's Too Much has a great piece on Austin Goolsbee, the University of Chicago economist who is Barack Obama's top economic advisor. While noing that Goolsbee often comes across as a conventional centrist and has said some wrongheaded things about the housing bubble (like most conventional centrists who missed it altogether), the article argues that Goolsbee has been "downright good" when it comes to inequality:

In short, Goolsbee may be a centrist. But rich people don’t impress him. And their academic hired guns don’t impress him either. FDR and his economic advisers shared that same sort of skepticism about grand fortune. They also had something else: grand popular movements, out in the streets, demanding real progressive change.

Those movements turned skeptics about grand fortune into crusaders against it. That could happen again. In Austan Goolsbee, we’ll have a skeptic whispering in a President Obama’s ear. Now we just need a loud enough progressive movement.