Item: On Election Day, ballot initiatives to raise the minimum wage passed overwhelmingly in all six states where the activist group ACORN and the labor movement made them a priority. These included the bellwether states of Missouri, Montana, and Ohio, where the wage initiatives contributed to a surge in turnout and helped progressive Democrats win narrow Senate victories. Since only about 7 percent of workers are helped directly by a higher minimum wage, the vote was widely seen as a symbolic expression of distress by the broad, working middle class seeking a change in economic priorities.
Item: On Election Day, ballot initiatives to raise the minimum wage passed overwhelmingly in all six states where the activist group ACORN and the labor movement made them a priority. These included the bellwether states of Missouri, Montana, and Ohio, where the wage initiatives contributed to a surge in turnout and helped progressive Democrats win narrow Senate victories. Since only about 7 percent of workers are helped directly by a higher minimum wage, the vote was widely seen as a symbolic expression of distress by the broad, working middle class seeking a change in economic priorities.
Item: The group Trade Watch reported that nearly every Democrat who picked off a Republican-held seat campaigned as a critic of trade deals like NAFTA that are less about exporting goods and more about making it easier for American business to export jobs. Even the still-Republican lame-duck Congress recently denied President Bush the authority to make more of these trade deals.
Item: This past week, corporate takeovers set an all-time record of $60 billion in two days. In these takeovers, the new owners borrow most of the money, pocket a lot of it, and often lay off workers and cut pension plans to pay the increased interest costs, before selling all or part of the company back to the investing public. These financial plays not only enrich the super-rich and leave ordinary people more vulnerable, but they also add debt and risk to the entire economy.
Item: Robert Rubin, the Democrats' most influential economic adviser, recently gave a high-profile speech to the Economic Club of Washington, calling for tax increases. Rubin, chairman of the executive committee of the banking conglomerate Citigroup, wants to use the proceeds mainly for budget balance. Citigroup is a very major player in the corporate takeover game. Rubin is a passionate free-trader.
Item: Democrat Barney Frank, the reliably liberal incoming chairman of the House Financial Services Committee, has been meeting with business groups offering a grand bargain. Democrats will lighten up on regulations that business finds burdensome, if business stops beating up on unions and starts supporting measures like broadened health coverage and a higher minimum wage. Frank is a sharp critic of recent trade deals.
Item: BusinessWeek for November 20 headlined its cover story, "What the Election Won't Change: Global forces have taken control of the economy. And government, regardless of party, will have less influence than ever." Time Magazine's post-election issue of November 20 showed huge red and blue circles, with a narrow overlap of purple, and the cover-line: "Why the Center is the New Place to Be."
Add it all up, and you see the challenge facing Democrats. Clearly the voters are sick of an economic system that allows moguls to make annual incomes running into the hundreds of millions for manipulating commerce in ways that leave ordinary people worse off. In an election billed as a referendum on Iraq and Republican corruption (which it certainly was), the sleeper issue was the economy as it affects regular Americans.
But transforming this reality will require a lot more than a higher minimum wage or even universal health insurance. BusinessWeek is right: The current rules of globalism do weaken government's ability to use instruments that once allowed prosperity to be more widely shared -- tighter regulation of finance, a more progressive tax system with the proceeds invested in ordinary people, and a stronger labor movement.
As Rubin's role attests, the partisans of a globalized casino economy are almost as influential in the Democratic Party as the Republican Party. As Barney Frank takes a closer look at the abuses and risks of the new wave of speculation on Wall Street, he may find that the financial economy requires more regulation, not less, to deliver on the promise of an America with more broadly shared prosperity.
As for Time Magazine's umpteenth story on a new centrism, a few newly elected Democrats are indeed more centrist on divisive social issues -- but all ran as economic populists. And the cure for economic insecurity is not in a new center, but in a progressive politics far more robust than we've seen in decades -- one that challenges the bipartisan corporate dominance of key economic questions, including the rules of trade.
So, while the voters have given Democrats a plea to reverse the elite domination of the economy, broader prosperity will require a far more fundamental transformation than what's currently on the political menu.
Robert Kuttner is co-editor of The American Prospect. This column originally appeared in The Boston Globe.
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