The Democrats should keep the fight going

Elizabeth Warren offers a manifesto for the democratic resistance to President Trump

Gulf News

This Fight Is Our Fight: The Battle to Save America’s Middle Class

By Elizabeth Warren, Metropolitan Books, 337 pages, $28

These days, one often hears laments that academia has become too insular, that scholars aren’t willing to participate in the hurly-burly of real-world debate. “Professors, we need you!” declared my New York Times colleague Nicholas Kristof, urging academics not to “cloister yourselves like medieval monks.”

Such laments are often accompanied by praise for the handful of professors who do step outside the cloister — people like Jill Lepore, who combines the roles of Harvard historian and New Yorker staff writer. Oddly, however, I’ve never seen Elizabeth Warren mentioned in this category. Yet it’s hard to think of a better example.

Warren went from Harvard law professor to highly effective policy activist. The Consumer Financial Protection Bureau, a key part of the 2010 Dodd-Frank financial reform, was her brainchild, and by all accounts has been remarkably successful at catching and deterring fraud. Then she became an influential senator, one who was widely expected to be a sort of external conscience for Hillary Clinton’s presidency, de facto leader of the “Democratic wing of the Democratic Party.”

Then came the Trump upset. Now prominent Democrats need to figure out how to be effective leaders of the opposition — as the party’s base sees it, the resistance. Warren’s new book is in effect a manifesto offering one vision about how that role should be played. Is it persuasive? The answer is complicated.

Warren lays out a position I’d call enlightened populism. She rails against the growing concentration of income and wealth in the hands of a tiny elite; argues that this concentration of economic rewards has also undermined our political system; and links unequal wealth and power to the stagnating incomes, growing insecurity and diminishing opportunities facing ordinary families. She puts a face on these stresses with capsule portraits of middle-class travails: a Walmart worker who needs to visit a food pantry, a DHL worker forced to take a huge pay cut, a millennial crushed by student debt.

She also makes good use of the autobiographical mode, contrasting her stories of modern hard times with the opportunities her (and my) generation had in a more generous, less unequal era. Her own success story, she tells us, depended a lot on the now-vanished availability of high-quality, low-cost public universities, plus a relatively high minimum wage — “a $50-a-semester tuition changed my life.”

But how can the harshening of life for ordinary Americans be turned around? Warren calls for restored financial regulation, stronger social programmes and renewed investment in education, research and infrastructure. Isn’t this the standard Democratic position? Yes and no.

Yes, what Warren is preaching sounds very much like the second coming of the New Deal — as she herself acknowledges: “We built it once, and we can build it again.” But: Warren brings an edge to her advocacy that many Democrats have shied away from, at least until recently. Even the Obama administration, while doing much more to fight inequality than many realise, balked at making inequality reduction an explicit goal.

Furthermore, Warren comes down forcefully on the left side of an ongoing debate over both the causes of inequality and the ways it can be reduced.

One view, which was dominant even among Democratic-leaning economists in the 1990s, saw rising inequality mainly as a result of ineluctable market forces. Technology, in particular, was seen as the driver of falling wages for manual work, and attempts to fight this trend would, the argument went, do more harm than good — raising the minimum wage, for example, would lead to job losses and higher unemployment among precisely the people you were trying to help.

Given this view, even liberals generally favoured free-market policies. Maybe, they suggested, rising income inequality could be limited by spending more on education and training. But limits on income concentration and support for workers would, they assumed, mainly have to come from progressive taxes and a stronger safety net.

The alternative view, which Warren clearly endorses, is all for taxing the rich and strengthening the safety net, but it also argues that public policy can do a lot to increase workers’ bargaining power — and that inequality has soared in large part because policy has, in fact, gone the other way.

This view has gained much more prominence over the past couple of decades, mainly because it’s now backed by a lot of evidence (which is why I call Warren’s populism “enlightened”). At the beginning of her book Warren talks about her frustration with politicians refusing to raise the minimum wage even though “study after study shows that there are no large adverse effects on jobs when the minimum wage goes up.” She’s right. Later, she writes about the adverse effects of the decline of unions; that, too, is a view supported by many studies, from such left-wing sources as, um, the International Monetary Fund.

So Warren in effect gives intervention in markets equal billing with taxes and social spending as a way to combat inequality, marking a significant move left in Democratic positioning.

But why has actual policy gone the other way? Here Warren, both in the Senate and now in this book, has been harsher and more explicit than most Democrats have been in the past, condemning the corruption of our system by big money — and naming names.

A case in point, recounted in This Fight Is Our Fight: Back in 2015 there was a congressional hearing on the Labor Department’s proposed “fiduciary rule”, requiring that investment advisers act in the interests of their clients. (No, that wasn’t already the case — and kickbacks for giving bad advice were a regular part of the scene.) When a prominent financial economist associated with the Brookings Institution, Robert Litan, testified against the rule, Warren did what most politicians wouldn’t: She pointed out that his research supposedly making the case against was effectively a piece of paid advocacy on behalf of a big mutual fund manager. (Litan ended up severing his ties with Brookings, which said he had broken the rules.)

So This Fight Is Our Fight is a smart, tough-minded book. But is it an effective blueprint for progressive political revival? The evidence suggests that it’s incomplete.

Consider the case of West Virginia, where Obamacare cut the number of uninsured by about 60 per cent, where minimum wage hikes and revived unions could do wonders for workers in health care and social services, the state’s largest industry. That is, it’s a perfect example of a state that would benefit hugely from an enlightened-populist agenda.

But last November West Virginia went almost three-to-one for a very unenlightened populist who made nonsense promises to bring back long-gone coal jobs, and has tried — so far unsuccessfully — to gut Medicaid, which covers more than a quarter of the state’s residents. Why? A lot of the explanation surely involves identity politics — white and male identity politics. To her credit, Warren repeatedly acknowledges the political importance of prejudice; she’s not one of those people who insist, as Bernie Sanders sometimes seems to, that bigotry won’t be a political factor if only your economic program is progressive enough. But she doesn’t offer any good answers. And let’s be honest: Republicans have gone after Warren herself, in a way they haven’t gone after Sanders, in part because of her gender.

But maybe it’s a matter of time, and what Democrats need right now is a reason to keep fighting. And that’s something Warren’s muscular, unapologetic book definitely offers. It’s an important contribution, even if it isn’t the last word.

–New York Times News Service

Paul Krugman is a distinguished professor at the CUNY Graduate Center.

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