How Corporatists and Progressives can work together for a better America and a better world.

[UPDATE: Well. Not being able to see the trees for the forest, I grabbed some information from a friend's email alert and repeated his typo without thinking for even a minute or reading what I was writing. Sad, when the frontal lobes start to wither. I have unwittingly, and that is the accurate term, conflated two fine organizations here. One is the actual subject of this post, the very estimable Campaign for America's Future, in business for five years or so and only tangentially related through donor and support networks with another noble outfit, the Center for American Progress. They are independent of each other and each deserving of great respect. Fortunately, or actually understandably, CAP and CAF are in agreement about the problems facing America's economy and what to do about them including the wisdom of using the language of investment, although CAP emphasises productivity rather than ROI as an output valuation metric. Good thing about their agreement on approach, and the commonality of their sources of funding coming from the Enlightened faction of the Corporatists; it would otherwise be seppaku for me.]

[Not being certain of the conventions here at Corrente I will treat this document as a for-the-record laboratory notebook and strike out the erroneous passages, while new text will simply be integrated. My apologies to all for the error, and I promise from now on to remember to take my ginsing tea every morning along with my Ensure. Bringiton, 02Dec08]

Not all Corporatists are the same. We have had a full 30 years under control by Rapacious Corporatists, of the sort typified by Jack Welch, Carl Icahn and T. Boone Pickins, and they have stripped the nation of its wealth while outsourcing jobs, downsizing worker paychecks and institutionalizing under-employment. This is the crowd that has operated as a criminal organization using the Republican Party as a political front, focused on exploitation and extraction of wealth without regard for long-term consequence. It is their abuse of power that has brought us where we are today, all but bankrupt financially and greatly diminished morally. As BushCo and the Republican Party now yield control of the political stage, the Rapacious Corporatists dominance is – for the time being – finished.

Taking their place, in control of and operating through the Democratic Party, is a different wing of the Corporatists. They are no less committed to capitalism and profitability, but instead of a Corporate Raider philosophy they are focused on long-term growth and stability in the manner of Bill Hewlett and Dave Packard. It is in partnership with these Enlightened Corporatists that Progressives have an opportunity to bring about significant and lasting social progress.

To create that partnership and implement structurally meaningful programs, however, means that Progressives will have to work with the Obama administration and the Democratic Congress, who together form this season’s political front group. This is not a pleasant prospect for many Progressives, who harbor ill will from the brutality of the Democratic primary along with a (well-justified) leeriness when it comes to working with Corporatists. These inhibitions will have to be overcome if Progressives are to have a voice in the decisions that are inevitably going to be made. The only other available choice is to stand aloof and allow the Conservative wing of the Democratic Party, the BlueDog coalition, to seize dominance and control. To do so would be an extraordinary opportunity lost, and a grave error in judgment.

To give voice to a Progressive/Corporatist coalition, a formal policy institution was founded in 2003 called the Center for American Progress (CAP). Seed funding was from Herb and Marion Sandler, with continuing financial support from George Soros and other members of the Democracy Alliance. With the initial cash coming from billionaires, some Progressives will understandably be concerned that the purpose of CAP is to co-opt the Progressive movement rather than facilitate it.

I say, pay them no mind.

If Progressive ideas cannot succeed in this environment, stepping into the opening provided by widespread rejection of the Reactionary Right and the criminal Republican Party while armed by the funding of millions of dollars of support from Enlightened Corporatists, then we surely deserve to fail. Real Progressive change will then have to come from a new generation, if by some happenstance one survives.

Regular readers, at least those who read all the way through what I write and don’t just skip to the end, are already familiar with CAP and their connection to Obama. It was compatibility between Obama and CAP, on committing to political formulations that extend beyond historical frames of Left and Right, that allowed an early partnership culminating with CAP Chairman John Podesta being installed as the head of Obama’s transition team. Remember that - it is the Chairman of CAP who is winnowing down the list of people from which Obama will make his staffing choices. Further, strategic control of Enlightened Corporatist sources of funding allowed the Democracy Alliance to choke off financial support for the Democratic Leadership Council and Third Way as well as undercut Hillary Clinton’s ability to fundraise, thereby effectively delivering the Democratic nomination and the Presidency to Obama. He is their creature; they own him, and he will dance to their tune.

Some Progressives feel that Obama has not been clear about his intentions, perhaps because for some reason they haven’t been able to take the time to look around. The CAP website is nothing less than a blueprint for the policies and programs Obama intends (in fact, is compelled) to pursue and is a cornucopia of information on a wide variety of topics. CAP has been issuing policy statements for some time, and now with assurance that their chosen candidate will become President they are rolling out a series of more specific proposals. Economic conditions being uppermost in everyone’s concerns, the first major effort at specificity has gone into blocking out Obama’s strategic economic proposals.

On November 19, 2008, Campaign for America's Future sponsored a conference in DC titled Real Investment In America: A Post-Election Perspective, in co-ordination with release of a detailed publication called The INVESTMENT DEFICIT in America: Yesterday’s Achievements, Today’s Problems, Tomorrow’s Solutions. It is, IMNSHO, an extraordinary document; I highly commend it and strongly suggest that it be read, both to understand the direction of Obama’s domestic economic policy and how Progressives have been able to integrate our goals within the now-dominant Enlightened Corporatist culture.

The conference is remarkable from a number of standpoints. One is the scope of the topics, another is the frankness with which objectives are articulated, and another is the speakers, the advocates for these policies, who have given their names and their reputations to the cause. From the Progressive community, supposed by some to be unrepresented in Obama’s agenda:

Rep. Barbara Lee D-CA9; Incoming Chair, Congressional Black Caucus
Rep. Lynn Woolsey D-CA6, Incoming Co-chair, Congressional Progressive Caucus
Rep. Keith Ellison DFL-MN5, ADA 100%, Drum Major Institute A+
Rep. Rosa DeLauro D-CT3, ADA 100%, Drum Major Institute A+

And speaking for Populists, someone from their adult faction:

James K. Galbraith, Lloyd M. Bentsen Jr. Chair and Professor of Government Relations, Lyndon B. Johnson School of Public Affairs, University of Texas at Austin

From Union Labor, also supposedly unrepresented:

Arlene Holt Baker, AFL-CIO Executive Vice-President
Ron Bloom, US Steelworkers Director of Corporate Research

Presenters from participating policy organizations argued the case for specific areas of public funds expenditure, based in part on an analysis from Moody’s that has been previously discussed here at Corrente. The topics and economic benefits are the same, while the format is different and the title pun has been removed:

John Irons, Economic Policy Institute

Another Progressive key point, one that has also often been remarked upon here, is the principle that a person should be paid a fair day’s wage for a fair day’s work. It is, in my mind, absolutely the first step towards improving our educational system. Compared to many other modern countries, the United States vastly undercompensates our teachers:

Eric Lotke, Campaign for America's Future

Treating teaching as a second-tier occupation is the most foolish of all possible national economic policies. It undermines the core engine of future prosperity and does more to imperil national security than all other threats external and internal combined. We should pay primary and secondary teachers half again the prevailing median wage, at the very least, and all of the costs for their own continuing education; anything less is a disgrace.

Investment Deficit in America, the CAF document itself, makes a set of claims using language that might be arresting to the Progressive ear. The objectives are framed in business language, in terms of Return On Investment, a terminology that is music to the ear of Conservatives and Corporatists alike. After decades of arguing in favor of Progressives bestirring themselves to learn the language of the ruling class, I am very pleased to see these sorts of framings:

America grew up investing in its land and its people. Historically, we directed roughly 8 percent of our gross domestic product to long-range investments, and the investment paid off. Now we are down below 4 percent. Our post World War II infrastructure is starting to decay, and we aren’t replacing it. We are lamenting the loss of jobs rather than hiring people to renew and rebuild.

Direct public investment—in new energy and conservation, in modernizing our infrastructure, in education and training, and research and development—should be the centerpiece of any recovery plan. That is not only necessary to lift the economy in the short run; it is a vital down payment on the sustained public investment that we need to sustain a competitive and decent society in a global economy. The needs listed in this report provide a guidepost for both recovery and for long-term sustainable growth.

Our Roads:

Vehicle travel on America’s roads increased 41 percent between 1990 and 2006 while miles of available road only increased 4 percent. Not surprisingly, congestion increased…The combined annual “congestion cost” reached a staggering $78 billion…Poor road conditions cost American motorists $54 billion every year in repairs and operating expenses—$275 per motorist… The U.S. Department of Transportation estimates that every $1 billion of federal funding invested in transportation infrastructure creates 47,500 jobs. Rebuilding highways puts people to work at home in America and create resources—roads—that can never be shipped overseas… Every dollar invested in highway construction generates $2.50 of GDP in the short term.

Our Rail System:

American Public Transit Association estimates that residents of places with high quality transit systems pay about $100 per year in taxes to finance the system, but they save $500 per year by using it. The Cambridge Systematics and Economic Development Research Group estimates that every $1 invested in public transport, generates an average of $6 in economic returns. Economist Robert Pollin estimates that every billion invested in mass transit creates 19,795 new jobs. These jobs are inherently domestic, cannot be exported, and create infrastructure that will always stay American in a global economy.

Our Energy Supply:

America’s future growth and prosperity depend on a secure supply of affordable and sustainable energy.…invest $500 billion over 10 years…would add over 5 million high-wage, green-collar jobs. It would stimulate the economy by adding $953 billion in personal income, $324 billion in retail sales and $1.4 trillion in new gross domestic product

Our Water Infrastructure:

Experts believe that billions of dollars in health care are spent on more than 7 million mild-to-moderate and over half a million moderate-to-severe cases of infectious waterborne disease in the United States every year. The costs of cleaning up sewage spills and leaks also run into the hundreds of millions of dollars. Every year sewage contaminated beaches must be closed, resulting in additional economic losses of as much as $2 billion per year… The Massachusetts Infrastructure Investment Coalition estimates that 57,400 jobs are created directly and indirectly from related construction projects for every $1 billion spent on improving our water infrastructure.

Our Education System:

Perry Preschool Project in Ypsilanti, Michigan developed a high quality educational approach for three and four-year-olds with low socioeconomic status, low IQ scores, and a high risk for school failure…The program cost on average $19,271 per participant, a considerable investment on an unproven program. Yet researchers tracked the results and the return on investment was stunning.

Comparing program participants to a matched control group, by the age of 27 the preschool participants were half as likely to need public assistance and one fifth as likely to commit crimes; they were nearly three times more likely to be homeowners and four times more likely to have monthly earnings above $2,000.98

The cost-benefit estimated by the age of 27 that savings of the initial investment per child came at $7.16 per dollar invested —a return of more than seven times…By age 40, the cost-benefit estimate of the initial investment per child came at $16.14 per dollar invested—a return of more than 16 times.

There’s much more, but you get the idea. The old saw about “What is good for business is good for America” had it backwards; the correct formulation, the Progressive frame, is “What is good for America is good for business.”

And how much public investment are we talking about? Is this one of those half-measure, mealy-mouthed, throw-a-dime-at-it kind of Corporatist dekes, all talk and no performance? That question about Obama’s plans has occurred to many; as noted here, economists like Joseph Stiglitz are calling for boldness:

WHAT President-elect Barack Obama will need to do is horribly complicated but also very clear.

First, he must stop the economy from going deeper into recession. Then he needs to bring about a robust recovery, preferably in ways that support the long-term needs of the United States: by repairing our neglected public works, invigorating our technological leadership, making our society greener, fixing our health care problems, healing our social and economic divide, and restoring our social compact.

- snip -

There is an emerging consensus among economists that a big — very big — stimulus is needed, at least $600 billion to $1 trillion over two years.

Professor Stigliz should, pardon the expression, hold onto his hat. From the CAF publication, this conclusion [emphasis mine]:

The challenges ahead are great—but no greater than the challenges that previous generations of Americans overcame. It is time to renew America for the 21st century so our children will inherit a country as special as the country we inherited from our grandparents.

The American Society of Civil Engineers estimates that $1.6 trillion is needed over the next five years to bring our infrastructure back to good condition.

The Apollo Alliance estimates that a $500 billion investment in clean energy would march us towards energy independence and create 5 million new jobs.

Roughly $400 billion more is needed for human capital, investing in schools for our first-graders, college for our young men and women, and lifetime learning for the mid-career changes that millions of workers will experience in the new economy.

The total investment runs in the range of $2.5 trillion. Seen as a cost, it may look like a problem.

Seen as a long-term investment that will take years to pay off and pay dividends over time, it looks like a solution. The investment will create good jobs now—particularly in construction and manufacturing—that stay in America and build things that will never leave. The investment will hire school teachers and train engineers, strengthening our greatest resource—our people. These longterm investments will pay back the up-front cost many times over the years.

The great challenge for the American people is not finding the money. The great challenge is finding the political will to think beyond the current budget cycle or the next election, to think on a time horizon of decades and design solutions on the scale of the problem.

But what about the BlueDogs, always vowing to block any expenditure not balanced by either revenue or other cuts? They are reportedly assuaged and some see that as cause for concern, that perhaps the BlueDogs are getting an edge where Progressives are not.

But what did the BlueDogs get, exactly? From Politico:

But the members present expressed a willingness to sacrifice their balanced-budget demands in the short term for some assurances over the long haul that Obama will tackle federal spending.

That’s it? Obama makes a J. Wellington Wimpy offer, “I’ll gladly pay you Tuesday for a hamburger today” and they accepted? Hard to believe. Rather, I expect they’ve been given assurances that they will each get a piece of the pie - or rather a slice of the sausage - as the money is budgeted, in return for staying far enough out of the way so as to not be a disruption. While that $2.5 Trillion won’t be evenly distributed it will get spread around, and at an average of $5.5 Billion per District it will be a major prize for those who cooperate.

While this is all at this point only a promise and the proof will be in implementation, the approach should satisfy any Keynesian and is supported by Progressive economists including Paul Krugman and Robert Reich. It will come in stages, with the first installment of $500 Billion or so expected to be ready for Obama’s signature as soon as he takes office.

Reading Resources:

Herb and Marion Sandler from the SF Bay Area, about whose decency, integrity and Progressive purpose no superlatives are near sufficient. They are extraordinary people, Nobel Prize caliber, and should be much more widely recognized than they are.

Democracy Alliance, a semi-secret, CT inspiring, highly influential pooling-of-influence organization for the Enlightened Corporatist wing of the Power Elite.

CAF public investment economic policy conference – Real Investment In America: A Post-Election Perspective, includes audio, video and PowerPoint presentations.

CAF public investment economic policy publication- Investment Deficit in America: Yesterday’s Achievements, Today’s Problems, Tomorrow’s Solutions [PDF].