Donald Trump may be failing America, but what have the Democrats offered in return? Gerald Epstein is highly critical of the Democratic plan for America called “A Better Deal.” The best that can be said of it is that the plan is not as bad as its lame title. Epstein says there are some good proposals in the plan, but almost none go far enough. The promise to create millions of high-paying jobs, he notes, is weak on details. The plan provides no clarion call around which America could rally. It has little on poverty, healthcare or, a particular sore spot of mine, fiscal and monetary policies to maximize growth. Even its infrastructure proposals are bare bones. Rapid growth in public investment and adequate social programs to distribute benefits fairly is the best way to create jobs and higher wages. In our era, we must also control the excesses of Wall Street, which has put persistent downward pressure on wages for a generation.
Epstein goes on to analyze more progressive alternatives proposed in the budget offered by the Democratic Progressive Caucus, as well as ideas from Bernie Sanders and Elizabeth Warren. He highlights economist Bob Pollin’s proposals for climate change, the boilerplate from the California’s plan, about which the Democrats say little. The Epstein’s piece is an extremely valuable review of the true options the nation has and should take. Bob Pollen has co-auhored the issue's piece on Puerto Rico.
Arloc Sherman and Tazra Mitchell offer another vital entry to our issue on how to make America great again. As I write this, the Republicans, who of course hold a majority in both houses of Congress, are planning a broad attack on the central social programs of the American safety net. These notably include Social Security and Medicare. But I am betting that the Republicans will have their greatest success reducing benefits to America’ most vulnerable, the poor and their children. For example, Medicaid is likely to be cut in one way or other, as well as food stamps, which would hurt children in particular.
Who will protect the poor children of America? The nation has basically the highest child poverty rate in the rich world. In turn, children are America’s poorest people—as a group they have the highest poverty rate. The mindless insensitivity of the Republicans is frightening. Will they resist serious expansion of the Child Tax Credit for example? They have put forward a new child tax credit plan but they refuse to make it refundable even for those who can’t find work. This is just one example. Another has been their mind-boggling delay to fund the popular and effective Child Health Insurance program.
Of course, the Republicans argue that social programs have made poverty worse, and that many of the poor cheat. This makes the excellent piece by Sherman and Mitchell of the Center for Budget and Policy Priorities all the more vital.
They show incontrovertibly how social policies have improved the cognitive and emotional abilities of children, as well as their health outcomes. The programs make them better workers who earn more over time. They not only earn more, but they are also less likely to go to prison, and they attend college in higher numbers—all when these children are raised from poverty by social programs. The empirical evidence is now overwhelming.
Food stamps are a favorite punching bag of Republicans, for example. As Sherman and Mitchell point out, however, a study of long-term effects of food stamps shows that children whose parents qualify for food stamps have significantly fewer health problems and higher high school graduation rates. This is but one study of many the authors cites.
Neglecting America’s children could well be the Republicans’ most damaging and dangerous legacy. History will measure a nation’s morality by the way it took care of its children. America is failing.
The Trump Administration has been highly criticized for its inadequate response to the suffering in Puerto Rico after the devastation wrought by Hurricanes Irma and Maria. It’s likely, even if attempts were made in good faith to help Puerto Rico, that the administration did not fully understand the circumstances that led to the island economy’s deep-seated problems. Of course, the Trump administration may also have deemed Puerto Rico’s devastation unimportant to the president’s political base.
As Amanda Page-Hoongrajok, Shouvik Chakraborty, and Robert Pollin note, Puerto Rico’s economic and social crisis began in the late 1990s, leading to large increases in public debt that were overwhelming. Economic activity itself began falling in 2005 and in 2017, before the hurricanes hit, was 23 percent below the 2005 peak. New plans to restore growth are tragically counter-effective because they demand government austerity, following a failed pattern for developing nations that fell into financial crisis. Government spending cuts will deeply affect healthcare, education and the pay for government workers.
But there may be a true opportunity to have a green economy lead the way to rebuilding Puerto Rico. The authors make the bold claim that substantial green investments coupled with a carbon tax and debt forgiveness by Puerto Rico’s creditors are a path forward in a situation too many see as desperate. As they write, “Overall, this green growth program is capable of delivering much lower energy costs on the island, while also steadily reducing, and finally eliminating altogether, its dependence on fossil fuel imports. The green growth program will also be a major new source of job opportunities and will create widespread opportunities for small-scale ownership forms to flourish within the island’s energy sector.” This is an exciting and hopeful piece for the Challenge. Any proposition to make, or keep, America great cannot leave Puerto Rico out.
Oren M. Levin-Waldman and Paul Lerman present an intriguing economic study based on a famed social choice theory, which leads them to make a very strong theoretical and empirical argument for a substantial minimum wage. The so-called median voter theorem holds that when the average wage is higher than the median, voters will demand a higher tax burden because taxes would be the basis for greater redistribution. A higher average wage means those at the top are pulling it up compared to those in the middle of the pack, the median. But empirical data do not confirm that higher taxes are the response to the gap between median and average wages. As the authors write, ” To the extent that a higher tax burden can be used as a proxy for redistribution, states with a greater distance between median and mean wages and higher levels of inequality are not more likely to have higher tax burdens.” But here is the key. These states are more like to adopt a higher minimum wage to redistribute incomes. These states’ experiences suggest the higher minimum wage is a viable response to the gap between mean and median. A very interesting argument.
Our essayist M.E. Sharpe skillfully takes on two of the personalities of our time in this issue. The first is Donald Trump and in particular his mental stability. The second is Hillary Clinton and her analysis of her own campaign. He first reviews the book, The Dangerous Case of Donald Trump: 27 Psychiatrists and Mental Health Expert Assess a President, edited by Bandy Lee, M.D. He focuses on the famed psychiatrist Robert Jay Lifton, who wrote the introduction. Referring to the contributors to the book, Lifton says in an interview with Bill Moyers, that, “We argue that Trump’s difficult relationship to reality and his inability to respond in an evenhanded way to a crisis renders him unfit to be president, and we asked our elected representatives to take steps to remove him from the presidency.”
Sharpe goes on to report on Hillary Clinton’s 500 page tome, What Happened. He admires Clinton’s platform, but writes that, “Barack Obama’s and Hillary Clinton’s failures to shout loudly over Republican congressional objections about their plans to make substantial infrastructure investments go a long way to explain Clinton’s failure to win the election. And Obama’s fear of being accused of throwing the election by speaking out about Putin’s extensive interference was a serious mistake.”
On the personalities of our leaders, our future depends. Gerry Epstein article on the Democrats’ “Better Deal” sadly suggests the Democratic Party is following in Obama and Clinton’s footsteps.