Ideas in Development

Not surprisingly, it's a centrist agenda, aimed clearly at the middle class and designed to appeal to those segments of the electorate that Democrats have had some trouble reaching out to. There are other books in this genre - "We've got to move to the center, attract moderates, white males, entrepreneurs, new economy workers, soccer moms, the persistently indecisive swing voter, and independents." Regarding the book competition between books for the best liberal tract, I think that Matthew Miller's The 3 Percent Solution, which was published a couple of years ago, is a superior book. It presents stronger arguments and boasts a broader, more complete agenda. Miller also put much more emphasis on aiding the jobless and working poor than The Plan.

What do Emanuel and Reed have to say?

The first part of the book begins energetically with a strong criticism of recent Republican hyper-commitment to politics, staying in power, and creating a one-party America. (In my view, many of today's Republicans are a bit like Leninists - they have become practitioners of a no-holds-barred politics, democratic centralism, and a goal of single-party hegemony.) The authors write: "Conservatism became a strategy for winning elections, not leading a nation - for staying in power, not respecting its limits." They note how little progress has been made in the War on Terror or in assisting Americans who are struggling with the erosion of the old economic compact: "…spending an entire career working for the same company. People knew of at least one sure ticket: If they worked hard, they were bound to get ahead. Even people without fancy educations could find a good job. And that good job brought its own certainties: health care, a pension, and sometimes a promotion. When the country grew, so did wages." This world is rapidly disappearing, due to globalization and the digital revolution.

But for Emanuel and Reed, the critical task is not winning by copying Republican skills at message framing, micro-targeting the vote, raising more money - important though these are. The real piece of work is reassuring the American voter that there are real policy alternatives that address national, non-partisan interests. Not ones for nostalgia, "this book is based on the premise that instead of mourning old arrangements, we should make new ones." (No more Democratic whining, please!)

These introductory remarks are embellished with a so-so analysis of "what went wrong." It's the authors' beliefs that political "hacks" (Rove and other Republican and Democratic wannabes) have distorted our politics and dialogue. They charge that an inordinate attention to messaging wastes time and money and risks presenting Democrats as shallow, valueless, idea-free politicos. They contend that pure opposition will not turn the tide. Lastly, they imply, jokingly, that the central focus for Democratic domestic policy should be the phrase - "Ozzie and Harriet don't live here anymore."

Ditto. You've got my attention. So now, where's the beef?

This is where The Plan enters the room. It's an eight point manifesto.

To start, the weakest link is the single set of foreign policy proposals. Both authors are a bit in over their head here. More regular troops, improved intelligence, more multilateralism, a domestic counterterrorism unit (We need Jack Bauer, for real.), and a major reform of FEMA and Homeland Security are all reasonable ideas to consider.

But this is all tactics, not much strategy. On this front, they defer to Peter Beinart's book, The Good Fight. The authors and Beinart (a good bloke who admits he was wrong to support the Iraq War) are right that the Marshall Plan and Cold War liberals have something to teach about a broad-based alliance against today's Islamic "fascism." But Gary Hart's last two books on geo-politics say it better and he is much more sensitive to the mistakes made by that earlier cohort of the best and the brightest - Iran (1953), Guatemala (1954), Viet Nam (1950), and many other places that we should not have intervened militarily.

Implicit in Emanuel's and Reed's argument is the worry that if too many Democratic leaders take the position that they are unwilling to almost ever use military force, the White House will be off-limits on grounds of security risks. This is almost certainly true. But good foreign policy leadership uses multiple tools - political, economic, military, and "American principles." Within his "grand strategy," Hart calls the latter the "Fourth Power." He worries that we are already moving away from our status as a republic to being an empire. Indeed, Bush and Cheney are re-creating the "imperial presidency", pushing preemptive and preventative war, spying domestically, and drawing a line in the sand, signaling, "you're either for us, or against us."

The rest of the agenda is as follows:

Universal citizen service

Universal college access

Universal retirement savings

Universal children's health care

A return to fiscal responsibility and an end to corporate welfare as we know it

Tax reform to help those that are not wealthy build wealth

A hybrid economy that cuts US gasoline use in half

Each strategy is elaborated with the necessary detail and the particular initiatives are generally, quite compelling and well worth reading. Many of them also simplify, as they expand the existing public incentive and support systems for work, income, and saving. Here are a few specific examples:

Replace the five major education tax credits with a single $3000 refundable tax credit for four years of college and two years of graduate school. (It appears similar benefits would be available for training and attendance at a community college.)

Require colleges to set multi-year tuition and fee levels to help families and students budget for the future.

Replace subsidized bank loans for post-secondary schooling with tuition grants to colleges and universities that are disbursed to working students, those that have committed to certain careers and professions, etc.

Require all employers to offer a 401 (k) automatic option (while allowing employees to opt out) and make these portable

Make the Saver's credit permanent and refundable

Increase fairness of federal subsidies for saving

Eliminate the capital gains tax on the middle class and restore on the rich

Create affordable health insurance options for small business

Combine the dependent, child care, and earned income tax credits into one

Make it possible for homeowners with incomes below $50,000 that do not itemize to get the home mortgage deduction

Establish a 10 percent ceiling to the personal income tax rate for the middle class

Their alternatives also pass political and administrative feasibility tests. Many just require the government to write a check or a citizen to file a tax return.

Given how bad things have been, the enactment of these rational measures would make me think that I died and went to heaven. (This article was written before the November 2006 election.)

However, despite the strengths of the agenda and book, there's something that bothers me. It's not just the standard DLC swipe at Democrats that push class warfare. It's not their unambiguous judgment that welfare reform succeeded. There is something big missing and it has to do with their Ozzie and Harriet quip and their superficial treatment of this issue. "It's the economy, stupid."

Although talked about and referred to, nowhere do they delve into the key traits of the New Economy, starting with its evolution of the new business model (e.g., Dell and others) where the firm has become a "virtual" corporation - a mere nexus of contracts, with minimal loyalty to their workforce and supplier chain.

Also requiring more intensive discussion includes items such as the following: Out-sourcing and off-shoring; the decline of unions and their wage-premiums; the growth of foreign industrial policies; the disappearance of "internal job ladders" in many firms; the absence of clear career paths and the need for new types of labor market intermediaries; improved school-to-work transitions for those not bound for four-year colleges today; the challenge of creating more service-focused (less lobbying-driven) business trade associations and chambers of commerce; the importance of experimenting with and replicating effective high-skilled, high-performance workplaces, employee ownership, gain-sharing and profit-sharing, open-book management, employee-based health and safety committees, and so on. It's all about the high-road imperative to compete, globally, on quality, not primarily costs. Likewise, where's the classic Democratic commitment to a living wage or full employment?

Keeping this backdrop in mind, the challenges of balancing work and family are large. Accessing good jobs is getting harder. Increasing rates of severe poverty, growing inequality, persistent wage stagnation for those on the bottom, growing employment insecurity, and weakened countervailing power to corporate hegemony characterize the current scene. The Plan, despite its merits, falters when considering these challenges and their causes. Training and saving will not restore the American Dream for all. Making it in today's economy is like playing a game of musical chairs where the music gets faster and faster, as more chairs keep disappearing.

Although there is no going back, we need to head for an economy that seeks long-term profits, embodies good ethical stewardship that's consistent with competitiveness, is flexible and family-friendly, treats employees like assets, recreates more well-defined career paths, promotes lifelong learning and portable benefits, shares productivity gains, gives employees voice, and most of all, builds trust.

The authors of The Plan say too little about these issues and are, at times, too easy on corporations such as those who terminated their defined benefit pension commitments that their employees counted on for their retirement.

A book that complements The Plan and makes a first run at wrestling with these big issues is MIT business professor Thomas Kochan's Restoring the American Dream: A Working Families' Agenda for America (2005). He argues that many US households have not prospered in the new Knowledge Economy. Unceasing economic restructuring in good times and bad have deeply threatened American values of justice, fairness, family, and work. "We cannot make the transition to a knowledge economy with a workforce that is stressed, frustrated, and insecure. Businesses need to rebuild relationships based on trust. And working families need to take control of their own destinies." Kochan stresses that this is a call to action for families, business, labor, and government.

I admit that much of this is uncharted territory. It raises much more serious questions of managerial and partnership-building capacity than The Plan. It requires new carrots and sticks for encouraging new "High Road" business practices and alliances with other stakeholders.

But, in my view, we will not achieve Congressman Emanuel's and Bruce Reed's vision without embarking on this journey as well. As Kochan points out, "the solution to our problems is too important to be left to the market."

Or better: we need a market shaped around the values of family, efficiency, opportunity, creativity, solidarity, and voice.

R. Emanuel and B. Reed, The Plan. New York, NY: Public Affairs Books, 2006. ($19.95)

T. Kochan. Restoring the American Dream. Cambridge, MA: MIT Press, 2005. ($24.95)

William Schweke is Vice President, Innovation and Learning at CFED the Durham office (919-688-644) Schweke@cfed.org (The ideas in this essay are the author's. Nobody else should be held accountable.) October 2006 and Revised in January 2007.