Thursday, March 05, 2015

The macroeconomic policy solution must be married to an electoral strategy

In my reading, admittedly selective but nonetheless informative, it appears there is a growing consensus for the type of macroeconomic policy that is needed to get the economy out of the doldrums. The policy consensus I'm referring to is restricted to those who are Democrats.  In the Clinton years many of them embraced a deregulation/free trade agenda.  Larry Summers was prominent among them.  Now he has turned to a Keynesian view, a natural progression given that underemployment is the core economic problem.  (See below.)

But it should be equally obvious that Republicans do not agree with this agenda at all.  So, if the agenda is to be implemented, there needs to be an electoral strategy that complements it, as a full partner, not as a second fiddle.  The obvious goal of such an electoral strategy is to generate turnout.  The Democrats lost big time in 2014 with a very low voter participation rate.  The discouraged voters are the ones who need to be the focus of the electoral strategy.  They need a good reason to participate.  That reason should be made obvious to everyone.

There is then the question whether the economic policy advocated for in advance of the 2016 elections should be more limited than the full array of solutions one would bring to the fore if the Democrats already had control of Congress and the White House, because it is clear that the Conservative political machine will work hard to counter the message of the Democrats and they have the money advantage.  So getting discouraged voters to sort through this is not an easy task.

I have yet to see others write about what a marriage between economic policy and electoral strategy would look like.  I have done so in my essay How to save the Economy and the Democratic Party - A Proposal.  It argues that there should be a sequencing to the economic policy, with step one based on a massive infrastructure investment plan coupled with a debt forgiveness plan on state and local governments.  It suggests not to take on making the income tax more progressive at present.  The reasons are electoral rather than economic.  Even conservatives might buy into Keynesian stimulus now, or at least not resist it too much, so the politics in advance of the 2016 election might not be so much a turnoff to discouraged voters. 

This thinking could be wrong, I admit.  But what I believe is right is a need to understand what will engage discouraged voters and bring them to the polls in large numbers.  The full boat of economic policy might not do that.  So the pundits on economic policy need to be disciplined enough to understand that there is no good in giving the "right answer" if that is DOA politically. What we need is a process that gets an economic policy which Democratic candidates can run on - and win.

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