By the end of tonight—day two of the first round of the Democratic presidential primary debates—there will be various takes, including who has a better plan to fix health care, who prioritizes the climate crisis, and who’s the most likeable. Here at the Roosevelt Institute, we’re judging the candidates on one essential criterion: How are they planning to fundamentally shift the power dynamics in our economy and our democracy?
Why? Because as our President and CEO, Felicia Wong, argues in her Boston Review article, a new economics is being born—one that is being argued everywhere from academic journals to the 2020 campaign trail and is moving with surprising alacrity to mainstream consciousness.
Over the last 50 years, policymakers and wealthy Americans have worked together to consolidate power with a calculated one-two punch. First, policymakers changed the rules and regulations that shape our economy, allowing financial elites to concentrate their power—over consumers, over workers, over communities, and ultimately over the political system. At the same time, policymakers in both major parties eroded the government’s capacity to grow it equitably and deliver vital services to all Americans. Pushing the unproven idea that markets are always more effective than government, the dominance of this free-market ideology created a government that has ceded traditional public roles to the private sector—even when pursuing collective public goals like universal access to essential goods and services.
This calculated one-two punch—concentrated private power and misused public power—stands as an obstacle to achieving any progressive goal, such as raising workers’ wages, improving the health care system, and reducing carbon emissions. The only way to build a more dynamic and inclusive economy is through a new progressive one-two punch that curbs corporate power and reclaims public power.
After watching the first round of the Democratic debates, there are two ways to know if a candidate would govern in a way that would change our country’s distorted power dynamics. First, hearing them propose big, structural changes to who gets a say in our economy and our democracy. This includes reforms to antitrust law and enforcement, the rules that guide US corporations (known as corporate governance), and labor law. Second, if talk about how the government can be deployed to work for all of us. This means offering proposals to improve Americans’ lives that not only deliver immediate benefits but also correct for the market dysfunctions that entrench and consolidate power.
Here are a few real-world examples:
Low- and middle-income Americans struggle to pay for college, often taking on debt that becomes a long-term burden. One approach to solving this problem is increasing the size of need-based grants for low-income students and making student loan repayment income-based to minimize monthly payment burdens. This approach would help some students, but it would not get at the heart of what’s driving the college affordability crisis: public disinvestment, perverse incentives for education institutions, and government subsidization of predatory for-profit colleges. As a result, it would reinforce the inequality inherent in today’s colleges.
Another approach would be to reimagine higher education as a public good. This would mean the government would focus on public provision of higher education instead of relying on a patchwork of providers. It would also mean that the government would take responsibility to ensure meaningful, universal access to high-quality college education, which would surely include making college affordable, but would also require steps to address discrimination and improve quality at all public schools.
A status quo approach to reducing carbon emissions in transportation would only tweak at the margins of our system. Business-as-usual examples, such as raising the cost of gas or providing tax credits for electrical vehicles (EVs), would primarily shift private incentives. These tweaks alone would not begin to address the breadth of the challenge with the speed needed to address the climate crisis. Further, these market tweaks would exacerbate inequalities, as tolls like the EV tax credit disproportionately benefit top income earners, and lower-income earners with no alternative to fossil fuels cars pay more at the pump.
Harnessing the full potential of public power, an alternative approach would be to use the government’s unique coordination ability and build out a network of charging stations, ultimately solving a big challenge for EV adoption. We could also invest our public power via public funds in effective and inclusive public transportation systems, with particular attention paid to communities of color who are traditionally ignored by public investment. By investing in research and development (R&D) designed to make the US a world leader in battery storage, we could make EV cheaper and more efficient. Bonus: doing so would lay the foundation for long-term competitiveness and also create jobs. In the end, carbon pricing and individual subsidies may be part of the path toward combating climate change, but these methods cannot be the primary solution.
From gun violence to wealth inequality to racial discrimination, our country is facing many crises today—and we want to see our presidential candidates talking about how they would address each of them. But it’s essential to understand that these crises are connected. The concentration of power in our economy and our democracy are at the heart of America’s economic and social challenges. Correctly identifying distorted power dynamics and crafting policies to address them must be a requisite for anyone seeking the presidency in 2020 and beyond.