The third way. A method that combines both liberal economics and socialist economics and tried to find a balance between them.
(image by Economic Timeline)
It's becoming increasingly clear that, at least politically, 2014 will be "The Year of Economic Populism." Now the question is, who gets to decide what that really means?
A couple of recent policy disagreements offered us glimpses of the debates that could shape tomorrow's new populist initiatives. These are the debates we should be having -- and they're debates that progressives can win.
The first disagreement began when the leaders of a Wall Street-funded organization called Third Way used a Wall Street Journal op-ed to attack popular Sen. Elizabeth Warren, dismissing the idea of "economic populism" in the process.
Jonathan Cowan and Jim Kessler probably didn't know what hit them. After years of being treated like stars in the nation's capital for their corporate-friendly views, it must've seemed as if the whole town had suddenly turned against them.
Shortly before their op-ed ran, President Obama declared that inequality is "the defining challenge of our time." The Center for American Progress (CAP) announced the creation of the Washington Center for Equitable Growth (WCEG) at roughly the same time, even as founding director John Podesta was being tapped by the White House to serve as a "counselor" to the President for one year.
It was a measure of today's shifting political landscape that a major response to Third Way came from Neera Tanden, CAP's President, who vigorously countered Cowan and Kessler in a piece entitled "Washington 'Centrists' Don't Want Obama to Target Inequality. They're Pushing Bad Politics -- And Bad Economics."
We certainly agree with Ms. Tanden on both counts. This new focus on populist themes is a welcome shift from CAP's emphasis one year ago on "Reforming Our Tax System, Reducing Our Deficit," and is a hopeful harbinger of things to come.
Ms. Tanden even placed the word "centrists" in quotation marks, a sound practice that should be emulated elsewhere. (Self-described "centrists" like Messrs. Cowan and Kessler hold political views that are far to the right of public opinion's true center.)
The conventional wisdom of previous years which Cowan and Kessler represent -- one in which disagreements focused on which forms of deficit reduction to emphasize, rather than on questioning the wisdom of making them a foundational financial goal -- has been disproved by the facts on the ground. The resulting resurgence of "economic populism" is good news.
But this new "populism" remains undefined, and there will be an ongoing political temptation to employ rhetoric which sounds populist but is vague enough to avoid offending powerful interests.
Although the President's speech was welcome, it didn't offer much in the way of specifics, either in describing the causes of the current crisis or identifying the individuals and forces responsible for it. Anat Shenker-Osorio analyzed it, and especially its use of the passive voice, in an op-ed for the Boston Globe called "And Then Inequality Happened."
"Taxes were slashed," said the President, and "growth has flowed to a fortunate few."
The perception of a policy vacuum can lead to heated debate, as differing schools of thought compete to fill it. That might have been what we saw in the reaction to a piece written by Ezra Klein on his Washington Post "Wonkblog" entitled "Inequality isn't 'the defining challenge of our time.'" Klein argues that unemployment, not inequality, should be the left's over-riding issue.