What is a genuinely centrist position on the economy?
Time for some radical pragmatism
Ever since the Reagan administration, the political center has been personified by the corporate executive. This white-collar worker has some socially liberal leanings, but his number one priority is seeking profits that benefit himself and his company, and that enable him to hire workers who earn salaries, pay taxes, and contribute to overall economic growth. In other words, he combines a moderate version of the Republican Party’s economic libertarianism with a slightly tempered variation on the Democratic Party’s libertarianism on social issues and questions of national identity.
But does this person really exist in sufficient numbers to be considered the political center anymore? A comprehensive survey of voters in the 2016 presidential election suggests not. Indeed, this research shows that while there are very few voters in this old center, there are quite a few in an alternative center where very few political candidates place themselves. Instead of combining a Republican position on economics with a Democratic position on social issues, this alternative center does the reverse — combining, roughly speaking, a Republican position on social issues with a Democratic position on economics.
Donald Trump appeared to position himself somewhere in this new center during his 2016 campaign for president — which probably helps to explain why voters tended to view him as a moderate. They don’t see him that way anymore, in part because the president has governed far more like a Reaganite Republican than one might have expected or hoped.
But if Trump has mostly abandoned the new center he once haltingly and temporarily staked out, what would it look like for a presidential candidate to embrace it in 2020? What policies would this candidate champion? What arguments and appeals would she use to persuade voters to rally to her campaign and agenda? And what vision of the country’s past, present, and future would she invoke to lend it weight and urgency?
What makes an economic policy distinctively centrist is its capacity to speak to the concerns of the broadest possible slice of the electorate — while remaining at all times keenly aware of the main points of fracture in contemporary public opinion. Americans want health care to be more affordable, and they like the idea of universal access to care. But they're also strongly opposed to changes that will force them to give up the things they like about their current health-care plans. They're worried about climate change but also fear that the costs of combating it will outstrip the costs of adjusting to a warmer, wetter, stormier planet.
Negotiating these tensions and contradictions requires a combination of idealism and pragmatism, urgency and a willingness to compromise. The incentive to do so is the promise of achieving a decisive political victory and helping to unify and heal our badly polarized country. The key is to follow public opinion wherever it leads, even when it diverges from the broadly libertarian consensus that prevails among elites of both parties.
On economic policy, that means breaking sharply from Republican orthodoxy and embracing ideas usually associated with the Democratic Party. That will make much of what follows quite controversial with conservatives. A subsequent column devoted to social issues and questions of national identity will likely inspire a similar response among progressives.
When it comes to specific economic policy, a new centrist agenda would begin by promising to stand by, protect, and in some cases expand the existing social and economic safety net and other benefits for the poor and middle class. Social Security, Medicare, Medicaid, and food stamps would be declared sacrosanct. No more talk of privatization and exposing beneficiaries to the vagaries of the market. No more threatening to move to block grants. Means-testing at the far upper end of the income and wealth scale could be placed on the table along with expansions in other areas of the population, but otherwise voters would know that slashing entitlements to fund tax cuts for the wealthy had been ruled out.
One expansion of benefits that might be paired with upper-income means-testing is a lowering of the age at which people become eligible for Medicare, perhaps to 55 or even 50, provided they demonstrate need. This falls far short of the ideal of "Medicare-for-all,” which so many Democrats have recently endorsed, but it would approximate the "public option” for health insurance that was left out of the Affordable Care Act just a decade ago on the grounds that it was too radical.
It would be wonderful if the United States could transition smoothly to a single-payer system, but it can’t. The cost would be stupefyingly high, draining revenue and resources that will be needed for many other policy priorities (see below). Opposition from tens of millions of Americans who are happy with their employer-provided insurance would be fierce. And the economic consequences for the private-insurance industry, its employees, and the medical professions would be enormous and potentially devastating.
For all those reasons, it’s best to move slowly, methodically, and responsibly — continuing the process, begun with the passage of Medicare, Medicaid, and ObamaCare, of increasing the number of people granted affordable access to the medical system, with special focus on those who are frozen out of the system entirely or who struggle the most to pay continually rising premiums, copays, and deductibles.
Something similar can and should be done about the cost of child care, which, like the cost of health-care coverage, sucks up an ever-growing portion of American paychecks, contributing to the widely felt perception that living standards are declining over time, and encouraging working-class Americans to avoid starting families altogether. From the left, Matt Bruenig has proposed a smart and ambitious program of universal family welfare benefits that has the potential to respond to this problem while appealing both to conservatives who want to encourage child-rearing and progressives who fear government privileging traditional two-parent families and penalizing single parents.
Then there’s the need for selective industrial policy and trade protectionism. If people were pure economic utility maximizers, detached from places and communities, equally capable of acquiring the (constantly changing) set of skills necessary to flourish and thrive, willing and able to move to where the best jobs are, and if zoning laws, patterns of development, schooling options, and transit systems in those places made it possible for people to enjoy a good quality of life once they arrived in these bastions of economic dynamism and growth, then relying on the market would be sufficient to generate relatively just economic outcomes.
But none of this is the case. Free markets might encourage economic growth in the aggregate, but on the ground there are still winners and losers, and the losers — those who live in places that have stagnated or declined as a result of the incessant churn of post-industrial capitalism — feel understandably angry and appalled at a system that has produced their suffering and immiseration. Why would they affirm that system, consider it a good thing and worthy of their allegiance, when it has produced so few concrete goods for themselves and their dying communities? The suggestion that they should grin and bear it while those in positions of political power don’t even attempt to exercise control over the outcome is especially galling.
That’s where industrial policy and protectionism come in. The new center will stand or fall by its commitment to demonstrating the will of those wielding political power to take macroeconomic matters at least partially into their hands. Yes, we need to encourage aggregate economic growth. But public servants also need to show that they understand that there is nothing just about standing idly and impotently by while communities across the country are ground into dust by the creative destruction of capitalism.
The goal of such policies would be to prevent the growth of inequality across regions. That end, as well as the mitigation of the grossest inequalities within regions, can also be furthered by progressive taxation. The new center will therefore also favor a return to the upper-income-tax rates that prevailed from 1932 to 1981, when the U.S. was more egalitarian than it is today, and be open to exploring the possibility of new wealth taxes. The revenue generated by these new taxes will help to pay for existing and new government programs. But they will also perform the civically essential function of pushing back against the corrosive growth of income and wealth stratification.
And that brings us to the greatest policy challenge of all for any responsible politics in the 21st century, left, right, or center: climate change. The reason this is the greatest challenge is not only a function of the scope of the problem, which is mind-boggling. It’s also the greatest challenge because it involves the most formidable collective-action problem in human history, with countries across the world, and citizens within those countries, expected to sacrifice present prosperity in order to mitigate negative externalities that for the most part have yet to materialize. Persuading these countries and citizens to make these sacrifices therefore requires a monumental leap of faith or act of trust in scientific authorities at a time when trust in institutions is at an all-time low. That many on the left have begun making apocalyptic doomsday pronouncements, as if hyperbole alone will solve these problems rather than exacerbate them, isn’t helping matters.
How should the center respond? By adopting a stance of radical pragmatism. Everything should be on the table. Wind, solar, water, and other forms of renewable energy. Nuclear power. Vastly increased fuel efficiency standards aimed at weening us away from fossil fuels altogether. Scrubber systems to remove industrial air pollution.
Markets can be incentivized to pursue these and other priorities, but the government itself will have to take the lead in many areas, preferably by putting underemployed people to work for the sake of the common good of the country and the entire world. What the center should not do is fall for the allure of carbon taxes, which are often regressive, adding to the economic burdens shouldered by the poor and middle classes. (French president Emmanuel Macron learned the perils of carbon taxes when a protest against a new gas tax metastasized into the Yellow Vest movement that has destabilized the country over the past three months.)
If this centrist agenda sounds like something many progressives would applaud or at least view as a good start, that’s because the new center takes its economic cues from the left side of the traditional spectrum. Things look quite different once we turn to social policy and the question of national identity.