Which Presidential candidate called for “high sustained economic growth where more people can have earned success?” and in what year? No, it was not Bill Clinton in 1992. No, it was not Barack Obama in 2012. It was Jeb Bush in a sit-down with Sean Hannity during the CPAC conference. (For details see http://reason.com/blog/2015/02/27/jeb-bush-defends-himself-on-common-core )
This statement which he repeated in many different ways during that interview gives a useful insight into Bush’s thinking. The statement is also chock full of well-crafted messages he wants to send to potential Republican voters and donors.
It appears that even people like Mitt Romney have discovered what everyone else has observed for the past six years – that the vast majority of Americans (not just the lazy 47% who are dependent on government) have not benefited from the recovery – Romney and other Republicans sound like populists when they claim that despite the recovery from the Great Recession (which the National Bureau of Economic Research dates from 2009) wages and the incomes of most Americans have not recovered.
[For an interesting survey of how six potential Republican candidates for President position themselves about the issues they think will be important in 2016, see Michael Tomasky “2016: The Republicans Write” The New York Review of Books Vol LXII, No. 5 (March 19, 2015): 18-20. Only a couple of them even attempt to take the stagnation in middle class incomes seriously.]
In fact, median incomes of year round full time male workers have been flat since 1972 (full time female workers have seen significant raises but they still make significantly less than men). Family incomes when they have risen have done so because people are taking on extra part-time jobs and more people in each family are working. Family spending of course had been fueled by higher and higher levels of debt up to the great financial crash of 2008.
So Bush’s statement is clearly a signal to Republican voters, donors and political operatives that if they want to beat Hilary Clinton in 2016, they have to present credible arguments as to how to make things better for the vast majority of Americans. At the very least they have to make it appear as if they want to make things better for that majority. Bush’s formula involves three elements.
First, despite the absence of details, we know what “high sustained economic growth” means to Republicans. Ever since Reagan it has meant unleashing the power of the private enterprise economy. This policy has come to be known as neo-liberalism. It was the subject of my book Surrender, How the Clinton Administration Completed the Reagan Revolution (U.of Michigan Press, 1998, pbk 2000) but my book’s coverage ended in 1998. A more recent book that takes the story up to today is David Kotz’s The Rise and Fall of Neo-Liberal Capitalism (Harvard U. Press, 2015). Neo-liberalism involves cuts in taxes for businesses and higher income Americans, reductions in regulations, policies to restrain wage growth (increasing the ability to import manufactured goods puts downward pressure on blue collar wages while pursuing policies decidedly unfriendly to unions makes it difficult to capture productivity increases as wage increases) and a whole host of other policies. Since the early 1980s, neoliberalism has led to the increases in inequality as documented by Thomas Piketty and Emanuel Saez and referenced many times in these commentaries. (For those who have not seen the famous diagram just go to the Emanuel Saez website and check out the article “Striking it Richer” http://eml.berkeley.edu/~saez/saez-UStopincomes-2013.pdf).
It’s not that the government gets completely out of the way. Massive spending on defense (and wars) has never been the object of the budget cutters (with a few libertarian exceptions like former Presidential candidate Ron Paul) at the national level. At the state level, spending on police and prisons remains virtually sacrosanct. (Even as prison populations fall, it is virtually impossible to close prisons in many states due to the political power of those whose livelihoods depend on such institutions.)
Despite the fact that Reaganomics has dominated national policy since the 1980s, and despite the fact that it failed on its own terms during the 1980s, Republicans still insist that it worked very well and we need to get “back” to it.
(For those who are skeptical of this assertion, Chapter 8 in Surrender has data showing that the 1980s was no improvement over the “bad days” of the previous years. The small, somewhat insignificant, departures from strict Reaganomics since then – including a rise in top tax rates on high income individuals – did not harm the economy under Clinton. In fact, the macroeconomics of those years were better than during the Reagan years.)
The major fact, however, is that under Clinton and under Obama, Democrats have hardly “abandoned” Reaganomics.
(I know many Democrats do not believe this which is why I wrote my book back in 1998. But the inequality trends did not get reversed by Clinton and much of the deregulation of finance that set the stage for the housing bubble and the crash of 2008 was put in place while Clinton was President. Meanwhile, Obama’s recovery policy has been heavily weighted towards making sure the financial sector recovered. His recovery act was painfully inadequate in terms of job creation --- mostly because after the recovery act spending ended he was forced to compromise with Congress and accept cuts in government spending which actually limited the pace of recovery. In addition, the re-regulation of finance under the Dodd-Frank Bill has been stymied so far --- while the largest financial institutions have grown even larger and more powerful than before 2008.)
Next note the word “sustained.” That permits Bush to attack the growth that has occurred under Obama and even Clinton as “unsustainable.” If he finds himself running against Hillary Clinton he could argue – rightly in my opinion – that the Clinton prosperity of the late 1990s was based on an unsustainable stock market bubble.
Finally, we find the words--- “More people can have earned success.” The word “more” is Bush’s acknowledgement that too many Americans have not seen the success they deserve. Productivity growth is up, banks and large corporations are awash in cash, the stock market is doing very well – but wages have not caught up. Now, don’t expect Bush to support raising the National Minimum Wage and increasing the ability of unions to wring wage increases from their employers. Nevertheless, the idea that too many workers have not been paid enough is being acknowledged. Since the eight years of Obama have not solved that problem, Bush can assert that Republican policies will.
Finally, the last part is also important. Bush wants EARNED success. In other words, no government handouts – no culture of dependency. With the word “earned” Bush signals that he is safely within the fold -- that he understands the distinction between the undeserving poor who vote for Democrats because they are “takers” and good solid hard working Americans who should vote for Bush and the Republicans anticipating that the prosperity of the one percent will trickle down to them.
Bet you didn’t think a short sentence fragment could be packed with so much meaning.
Michael Meeropol is professor emeritus of Economics at Western New England University. He is the author (with Howard Sherman) of Principles of Macroeconomics: Activist vs. Austerity Policies.
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