Matt Yglesias

Progressive Unity on the Economy

You can expect to hear a lot after the election about divides between the liberal and centrist blocs inside the Democratic Party. And, indeed, if the record of 2007 and 2008 is any guide it’s true that the Blue Dog bloc in the House (and their analogues in the Senate) may have very different ideas from those espoused by congressional liberals. But one little-noted aspect of this divide is that on a more elevated level, on the level of policy analysts and opinion leaders, the different wings of the progressive camp are much closer together on economic policy than they were ten or fifteen years ago. We’ve seen Larry Summers calling for fiscal stimulus and now Bob Rubin joins with EPI’s Jared Bernstein to express a unified progressive vision on the economy:

The Bible got this right a long time ago (paraphrasing slightly): there’s a time to spend, a time to save; a time to build deficits up and a time to tear them down. Though one of us (Mr. Rubin) is often invoked as an advocate of fiscal discipline, we both agree that there are times for fiscal discipline and times for fiscal largess. With the current financial crisis, our joint view is that for the short term, our economy needs a large fiscal stimulus that generates substantial economic demand.

We also jointly believe that fiscal stimulus must be married to a commitment to re-establishing sound fiscal conditions with a multi-year program that includes room for critical public investment, once the economy is back on a healthy track. [...]

With respect to trade, the choice is not trade liberalization versus protectionism. Instead, as trade expands, we must recognize that protecting workers is not protectionism. We must better prepare our people to compete effectively and help those who are hurt by trade — not just dislocated workers, but those who find their incomes lowered through global competition. This means investing more of the benefits of trade in offsetting these losses, through more effective safety nets, including universal health care and pension coverage.

The real question going forward will be whether self-described centrist legislators are willing to heed the advice of Rubin, Summers, and others about the essential need for stimulus, for new spending on infrastructure, and for major investments in health care and education or whether they’re going to choose to play the role of spoilers and try to grab as much special interest cash as possible for their troubles.