The Democratic agenda for 2016 is shaping up, and the results are...pretty disappointing.
With the basic structure of ObamaCare in place, the remaining items on the health care to-do list are expanding Medicaid at the state level and defending the law in the courts. With some tinkering, universal coverage is within sight. This leaves the party in a bit of a bind for 2016. Democrats have been trying to get universal health care since the Truman administration. What do they do next?
The answer, it seems, is the "parental agenda." It's a good goal. But it's not nearly ambitious enough to deal with the problems facing much of the country. Democrats should embrace aggressive, universal benefits of all kinds if they want to really soothe what ails the middle class. And they should start the sales pitch now.
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The political context here is that Democrats failed to properly deal with the Great Recession, which seriously hurt basically everyone but 1 percenters. People dispute endlessly about who is responsible for the single greatest policy error — that would be the insufficient stimulus — but the bottom line is that Democrats were in charge of the entire government for two whole years, and they failed to fix the problem. A very slow recovery has meant that ordinary people have seen flat or declining incomes since President Obama was elected.
The flip side of that situation — that 1 percenters are capturing essentially all real income growth — is the political question of the age. But Democrats find themselves with policy tools unequal to the task.
That brings us to the new focus on children. Jonathan Chait outlines two proposals: universal child care, because women are now expected to work outside the home, and universal pre-K, because it benefits the economy. The first is an unquestionable good, though of course limited to people with young children.
But there are reasons to be skeptical of the second. Studies by James Heckman find that early childhood education has a large economic return to society, because better-educated people are more productive. As such, it would attack the problem of "stagnant opportunity" for tomorrow's children, concludes Chait.
This argument, like practically all liberal education thinking, commits the fallacy of composition. Liberals, based on the observation that more educated people tend to make more money, conclude that increasing educational attainment will increase incomes. But this does not necessarily follow. You could produce a more educated population making the same amount of money.
In fact, this has actually happened. Since 1973, we've increased college attainment from 12.6 percent of the population to 30.4 percent; high school has gone from 59.8 percent to 87.6 percent. During that time, incomes for the bottom 90 percent have been flat. And even if education could solve the problem of stagnant wages, which it can't, it still is of no help to the majority of the population that is no longer in school.
In other words, education is only somewhat related to how the social product is divided. Education surely increases productivity, but it has little or nothing to do with who gets those productivity gains. Absent big-time egalitarian policy, the answer is, quite simply, the rich.
A better set of policies would be social democracy-style universal transfers and benefits. In addition to universal child care and education, add universal illness insurance, wage insurance, a beefed-up Earned Income Tax Credit, a government job guarantee, and even a universal basic income. The point is to put some non-wage cash into the hands of the bottom 90 percent. This will definitely increase incomes, and it can happen now.
Now, let me restate that child care and education (especially universal pre-K) are good in and of themselves. Everyone should have access to them both. But it is simply not enough to solve our stagnant wages problem, which has been generations in the making.
