Simon Johnson's Blog, page 2

COVID-19: The Butcher, the Brewer, and the Baker

By James Kwak

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”

—Adam Smith, The Wealth of Nations

[image error]Image by Mandy Fontana from Pixabay

This is the most famous line from the most famous justification of market capitalism. Smith’s point is that it is individual self-interest that drives the economy. In the next paragraph, he goes on to describe how gains from trade explain the division of labor in a modern economy:

“The certainty of being able to exchange all that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men’s labour as he may have occasion for, encourages every man to apply himself to a particular occupation, and to cultivate and bring to perfection whatever talent or genius he may possess for that particular species of business.”

As I’ve said before, “whenever the butcher, the brewer, the baker, or the invisible hand is invoked, the reader should hear alarm bells going off.” The COVID-19 pandemic provides a particularly stark demonstration of the problems with Smith’s comforting fable and how it is used in contemporary politics.

Market capitalism depends on the happy assumption that everyone has some marketable skills: something that person can do that can be exchanged for money, with which she can then exchange for everything else that she needs to survive. If you believe that premise, then you can criticize poor or unemployed people as lazy good-for-nothings and destroy the social safety net with a clean conscience. This was the philosophical justification behind welfare reform, for example, which placed created work requirements for and imposed lifetime benefit caps on recipients, assuming that all they needed was sufficient incentive to find a job and get to work. Indeed, it is the philosophical justification behind the modern conservative economic platform.

But think about what is happening right now. At this moment, to a reasonable approximation, the only people with any marketable skills are those in health care, manufacturing of drugs and medical supplies, and food production and distribution, and certain critical infrastructure functions (electricity, gasoline, communications, etc.). That’s why tens of millions of people could suddenly be out of work, through no fault of their own.

So what do we do? We help those people. The Federal Housing Finance Agency suspends foreclosures and evictions for homeowners with federally-backed mortgages. States expand and accelerate unemployment benefits. Even the Trump administration proposes sending cash to every person in the country to help them pay the bills. (They also want to create a giant slush fund to help business owners, which I don’t agree with, but that’s not the point here.) We do what we can to make sure that people can stay in their homes, get enough food, and take care of their families.

At any moment in the past decade, there were millions of Americans who couldn’t find work, or couldn’t get enough hours to make ends meet—through no fault of their own. They came from broken households, or poor neighborhoods without good schools, or countries torn apart by war. Or they were disabled fighting in Iraq or Afghanistan, or they suffer chronic medical conditions that limit their ability to work. Or they held full-time jobs that suddenly vanished one day because people in other countries could do those jobs more cheaply. The prevailing attitude to these people—at least judging by the economic policies put in place by the politicians who were popularly elected—was: screw them.

But what happened to them is no different from what happened to most of us in the past week. The only real difference, as far as I can see, is that they were a small enough minority that most people could pretend they didn’t exist, or that their problems were their own fault. Now there are so many of us in the same bucket that we can’t—or don’t want to—say the same thing about ourselves. Sure, I could have become a doctor, which would give me a marketable skill right now, but I don’t think it’s a moral failing that I didn’t.

So the lesson I think we should all take away from this crisis is this: If someone cannot provide for herself and her family in a market capitalist economy, that is not a moral failing on her part. There are always people who struggle to get by, through no fault of their own. Indeed, I strongly suspect that there will be more and more of them in the future, as robots and artificial intelligence get better and better at doing things that were once the sole province of humans. As a society, our duty is to care for the welfare of all of our members—and, yes, that requires action by the government, just as tens of millions of people will soon be relying on government checks.

The problems of market capitalism are always there to see, though many people choose not to look. Perhaps this crisis will open our eyes.

 

 

 

COVID-19: The Statistics of Social Distancing

By James Kwak

It seems that social distancing is the primary strategy for slowing the propagation rate of COVID-19. That and widespread testing are the key tools for containing an outbreak, for reasons discussed repeatedly in the media.

[image error]Photo by Hans Braxmeier from Pixabay

But does it work? Or, more to the point, how well do different degrees of social distancing work? How strict does it need to be, and how tightly does it need to be enforced? It seems to me that this is an important and at least theoretically answerable question.

Thanks to ubiquitous commercial and government surveillance, there are staggeringly comprehensive databases of exactly where people are at all times. Google has one, for example. Picture for yourself an enormous aerial picture of some metropolitan area with a dot for every person’s location; then picture those dots moving around as time passes. That’s more or less what is available. (Some people are blocking their location data, and some people don’t have personal surveillance devices smart phones. But there are certainly enough people transmitting their location to do the analysis discussed below.)

Assume for a moment a can opener that we have a good measure of the number of cases of COVID-19 in any geographic area at any time. (We don’t have to know every case; it would be enough if we were testing a random sample of people every day.) Then the analysis is conceptually simple. We need some measure of social distance. Ideally we’d want to count the number of people that each person comes within one meter of for each day, then average that number across the entire population. GPS is only (theoretically) accurate down to about 5 meters, but it can give us a rough idea of how many people could be close to each other at once.  That’s the social distance variable, which we can measure each day. Then we basically need to regress the percentage daily change in the number of COVID-19 cases against the social distance variable, with some sort of lag to account for the fact that cases don’t appear for several days. Given the number of places where there have been outbreaks, we should be able to get some idea of how low the social distance variable has to be in order to flatten out the rate of new infections.

OK, that’s the easy part. Now back to that can opener. The problem is that official case counts depend on three major factors: (a) the underlying rate of infection in the population (what we care about); (b) the number of tests being done; and (c) the selection criteria for those tests. You get very different results if you only test sick people in the hospital as opposed to testing a random sample, even if you do the same number of tests. So the harder question is figuring out how the official case count relates to the underlying rate of infection.

Still, though, this is conceptually just a multivariate regression. On the right (independent variable) side, in addition to the social distance variable, you need a variable for the number of tests, and you need a set of dummy variables for the various testing strategies that different places have employed (i.e., one for the American test-only-the-sick-and-the-rich-and-famous strategy, one for the Korean test-everyone-within-range-of-the-outbreak strategy, and so on). You can probably think of other things you should control for, like the weather (readily available). Again, given the number of outbreaks that have occurred all over the world, there is a decent chance that there is enough variation to actually get results.

There are a couple of problems that the statistically-minded among you have already noticed. One is that once people are trying to implement social distancing, not only will they avoid proximity with other people (which is visible by GPS), but they will also behave differently when they are in proximity with others (not visible by GPS). There are also differences in cultural behavior—handshakes vs. la bise vs. a small bow—that affect propagation. You may be able to overcome that using variation within a single culture (e.g., the United States, where there is plenty of variation in how people in different parts of the country are behaving).

I haven’t the statistical or data management skills to do this myself. And maybe even if it’s done right the margins of error are too big to be useful. But if no one is doing it already, it seems worth trying.

COVID-19: Not One Penny

By James Kwak

The airline industry is trying to hold up the federal government for $29 billion in grants and another $29 billion in loans. They threaten that if they don’t get the grants they will lay off employees, and that if they don’t get the loans they will use their remaining cash on dividends and stock buybacks.

[image error]Photo by Júlia Orige from Pixabay

First of all, the second threat is staggering in its audacity. At current course and speed, the airlines will go bankrupt. When you are in financial distress, the last thing you should do is take your scarce cash and hand it to your shareholders. That meets at least the spirit, and perhaps the letter, of a fraudulent conveyance in bankruptcy law. But it represents the pinnacle of the idea of shareholder capitalism: screw the workers, screw the creditors, just take the money and run.

More importantly: the federal government should not give the airline industry a single penny either in grant aid or in sweetheart loans. I understand the economic challenges here. Thousands of workers are at risk of losing their jobs and not being to pay for food or rent in the midst of the greatest crisis of our lifetimes. To the extent we want to help them, the top priority is to give money directly to them.

It is true that there is some value in preserving the airlines as viable entities rather than letting them go bankrupt. If there were other companies able to take over their assets and workforces and put them to productive use, then by all means they could just fail, but that is probably not the case right now.

If the government does choose to rescue the airlines themselves—and not just their workers—it should do so by buying equity in the companies, at prices that don’t already reflect the possibility of a bailout. (Most of the value that airline stocks have today is probably based on expectations that they can get a good deal out of the crony-capitalist Trump administration.) That way, when the economy someday recovers and people start flying again, the U.S. government—and hence its taxpayers—will benefit, not the people who currently happen to own stock in airlines. And the government should not dilute its ownership by finding creative ways to funnel cash to the industry on favorable terms, as it did with the megabanks in the financial crisis (most notably the third Citigroup bailout). Airline executives and their shareholders have no viable alternative; without a government bailout, their most likely future is bankruptcy and being bought by some private equity firm for a fraction of the face value of their debt (paid to creditors, not shareholders).

Either way, the principle is the same: not one penny of free money.

 

COVID-19: Who Bears the Losses?

By James Kwak

Our business and household sectors are losing lots of money every day, and will continue to lose money for the foreseeable future. People no longer spend money at restaurants. Restaurant owners can no longer pay the rent or pay back their business loans. Restaurants fire their workers, who lose their paychecks and can no longer pay their rent, or their credit card bills, or their student debt. In an economic crisis like this, the overriding question is: who ultimately bears the losses?

[image error]Photo by skeeze from Pixabay

We’ve been through this before. In the 2008 financial crisis, we applied the usual rules of capitalism—unless you were a large bank. Businesses failed and their owners (including shareholders, for corporations) were wiped out. Renters were evicted. Homeowners lost their houses. Investment funds that had bought mortgage-backed securities and collateralized debt obligations lost their money. Workers lost their pensions. Small banks were shut down by the FDIC. Big banks, however, got unlimited cheap credit from the Federal Reserve to stay afloat, thanks the the people we all know.

Will things be different this time? Perhaps. The Trump administration seems more willing than the Obama administration to relax the rules of capitalism—which should not be too surprising with a president who flaunts any and all rules, is more than happy to dole out goodies to his friends, and is unable to add numbers together. I think the megabanks can rest assured that they are still too big to fail and can count on unlimited support from their friends at the Federal Reserve and Treasury—Title II of the Dodd-Frank Act notwithstanding.

The surprise so far as been the decision to suspend foreclosures and evictions of anyone with a federally-backed mortgage for at least sixty days. Fannie and Freddie also are suspending mortgage payments for up to a year. This, as far as I can recall, is more than the Obama administration ever did for ordinary people hit by the collapse of the housing bubble in 2008 and 2009. Again, it shouldn’t be that surprising that Donald Trump is willing to take losses onto the federal balance sheet—it’s not his money, after all. This time, though, it happens to be the right thing to do.

These rules, of course, don’t apply to the private sector. If you are a small business owner who owes rent to your landlord or interest to your bank, there’s no reason to think you’re going to be let off the hook. The same goes for tenants with private landlords. Which raises the question: When the economy is hit by what is essentially an “act of God,” why is it that the owners of capital are kept whole, and the renters of capital have to bear all the losses? It’s not efficient—the economy would be a whole lot better off if people didn’t have to leave their homes and businesses didn’t have to close—and it certainly isn’t fair. Yet that’s the way our capitalist system works.

There is only one entity in the country—and perhaps the world—that can absorb the losses being generated by this crisis: the federal government, with its unmatched ability to borrow money. This time around, the top priority of the government should be direct assistance to the people who need it most—both workers and business owners who need cash to buy food, stay in their homes, and take care of their families. It should finance that assistance by borrowing money—at record-low interest rates—and by taxing the rich people who can most afford to absorb losses. Landlords and lenders will be made whole because of the money their borrowers are getting from the government, but they or their shareholders, to the extent they are rich, will lose money in the form of taxes.

It’s not that complicated. But I doubt our society and political system are equipped to solve this problem.

This post was largely inspired by a friend who I think prefers to remain anonymous.

Thoughts About COVID-19: PPE

By James Kwak

PPE, as we now know, stands for Personal Protective Equipment, like face masks and gloves. Right now there isn’t enough of it, and that’s one of the constraints on being able to test people, which is one of the biggest problems we face.

[image error]

Photo by ehpien (CC BY-NC-ND 2.0)

The only point I want me make here is this: This is how capitalism is supposed to work. If you’re a for-profit healthcare provider—or any kind of provider that is trying to provide the most value, however defined, with limited resources— you are not going to stock up on enough PPE to handle every possible scenario you might face. This is what management consultants and business school professors have been saying for decades. PPE, like inventory, is a form of working capital. If you can reduce the amount of working capital you need, you can translate that dollar-for-dollar into cash for your shareholders—or, if you’re a non-profit, into clinics for poor people, salaries for your executives, or that next gorgeous building you’re going to put up. Excess working capital is pure inefficiency.

Sure, there’s the risk that you might run out in an emergency. But capitalism works on expectations: If there’s a 1% chance of a $10 million loss, you’re willing to spend $100,000 to prevent it. If there’s a 0.001% chance (according to your latest models) of a $1 billion loss, you’re only willing to spend $10,000 to prevent it. COVID-19 was basically off the probability charts, at least as far as operational preparedness was concerned. This is exactly parallel to the factors that created the financial crisis. VAR models only attempted to estimate the potential risk in scenarios that were, say, 1% likely, and they were excessively optimistic because they were based on historical data from the Great Moderation. Hospital preparedness similarly was based on historical data with no pandemic.

In capitalism, you know you can only prepare for 99% of the scenarios. It’s just not value maximizing to worry about the others. If those others occur, you go bankrupt, dust yourself off, and start again.

But that’s why capitalism is a lousy way to run a healthcare sector.

What should we instead? Well, probably the federal government should have a big stockpile of medical equipment to be used in an emergency. You know, big government.

Brief note from the author: I haven’t written anything about COVID-19 because I have no particular expertise in medicine or public health. But there are some aspects of the crisis that are amenable to economic, statistical, or simply logical analysis. This blog, as a few people may remember, was born during the financial crisis as an attempt to help make sense of what was going on. (Hence the subtitle at the top of the page: “What happened to the global economy and what we can do about it.”) To the extent I think I have anything to say that I think might be useful, I’ll put it up here.

Be safe.

About that Democratic Primary …

By James Kwak

Today is the day of the New Hampshire primary, and, perhaps more importantly, lots of people in California are getting their ballots around now. Before you cast your vote in the Democratic presidential primary, I wish you would read Take Back Our Party, either online (for free) or in print. But I know most of you won’t, so this is what I want to say.

As a preamble, if you are a moderate Democrat—if you think welfare reform and financial deregulation were good ideas; if you think, along with Barack Obama, that more oil production is a good thing; if you think that America’s health care problems can be solved by private health insurance companies—what I am going to say is not for you. Go ahead and vote for Joe Biden, or Pete Buttigieg, or Amy Klobuchar.

The key message of Take Back Our Party is that the national Democratic Party of the past thirty years has been a failure, both as policy and as politics. What victories there were happened despite the party establishment (gay marriage, for example) or were actually moderate Republican policies (Obamacare). Both Presidents Clinton and Obama turned their backs on redistribution and social solidarity, preferring the soaring rhetoric of growth and opportunity: maximizing overall economic growth while giving everyone the “opportunity” to participate in prosperity. But what we got was modest growth whose benefits were monopolized by the 1%, soaring inequality, and widespread economic insecurity. (For the numbers, see Chapter 2 of Take Back Our Party.) As a society, we have to recognize that growth is not the answer. What we should care about is the actual welfare of ordinary families: whether they can afford health care, whether they can afford a place to live, whether they can go to college, whether they can retire, and so on. Those are the things our economic platform should focus on—not the myth that a rising tide lifts all boats.

Now, the issue on everyone’s minds is electability. Sure, we may want Medicare for All—but what most people want more than anything else is to defeat President Trump. And many people think that the most electable candidate is the most right-wing candidate. This is based on the theory of the median voter. The idea is that you can line up all voters on an ideological spectrum, and they will vote for the candidate who is closest to them—which means that we want to nominate someone in the middle (or, more accurately, someone just to the left of Trump).

The median voter theory is nonsense. If it were true, Donald Trump would not be president today. Nor would the Republicans have a majority of the Senate, and a majority of governorships, and a majority of state legislatures. They have achieved this electoral success despite running far to the right of where most Americans stand on just about every issue—immigration, abortion, gay rights, taxes, you name it.

We have to give people a reason to vote for us. The problem is, for decades, Democrats have not given people a reason to vote for them. Once upon a time, we were the party of the people—of workers, the New Deal, and the social safety net. Then (for reasons discussed in Chapter 1) we became the party of finance, technology, innovation, and economic growth—the party of the 1%, claiming that we were also the party of the 99%. Our talking points became economic growth, fiscal responsibility, and technocratic expertise—things that the Republicans claimed, too. And eventually, people forgot why they should vote for us.

The central problem of our time is inequality. The central political problem is that too many people feel left behind by our economic and political system. Those are the conditions that lead people to vote for a charlatan like Donald Trump. We are not going to win them back by saying that we will return to the “good old days” of the Obama administration, or that we are going to bring America together, or that we have impeccable educational and professional credentials, or that we are not as ridiculous as Trump. We tried that in 2016, and we lost.

I think it was one of Bill Clinton’s advisors who said that every election is ultimately about change versus more of the same. Right now, many people are hurting—because of stagnant wages, falling life expectancy, increasing out-of-pocket health care costs, the opioid epidemic, student debt, rising rents, insufficient retirement savings, and so on. And yet the Democratic establishment continues promising more of the same: incrementalism wrapped in phony post-partisan rhetoric, along with a healthy dose of “Isn’t Trump stupid?” That’s why we do well with well-educated professionals living in thriving urban centers—with people who are already doing pretty well. But this is not a recipe for victory.

Donald Trump offers change—xenophobia, white supremacism, and misogyny—even if many of his actual policies are standard conservative fare. We need to offer change as well: universal health care, free college, and Social Security. Our vision is more compelling than his. But we have to have the courage to offer that vision to the American people. Otherwise we will remain, as we were in 2016, the party of an increasingly bankrupt status quo.

That is all.

Take Back Our Party, Print Edition

By James Kwak

I’ve never wanted to write a book as much as I wanted to write Take Back Our Party. And I’ve never wanted people to read one of my books as much as this one—in particular, before the 2020 Democratic primary season ends. For that reason, I bypassed the usual publication route. (As my editor at Pantheon liked to say, the period for turning a manuscript into a book is, for unknown reasons, the same as the gestation period of a human. In his defense, he did get both 13 Bankers and White House Burning out in around 5–6 months.)

[image error]Instead, David Dayen, executive editor of The American Prospect, agreed to publish the book online, and it went live here in December. In addition, I wanted there to be a print edition for people (like me) who, well, prefer reading things on paper—and for mailing to people who should read it. Ryan Grim at Strong Arm Press gamely agreed to publish it, knowing that it was already available on the Internet. Jordan Jones did the interior design and Soohee Cho did the cover. The print edition has a small number of corrections, it has real footnotes with accurate page citations (something you can’t do with Internet-style hyperlinking), and it has a descriptive index so you can look up your favorite neoliberal from the past three decades.

You can order a print or ebook copy via the Strong Arm website (or, of course, from your least-favorite monopolist). They should start shipping on Tuesday, and I believe the ebook is available right now. The online version at the Prospect will still be available for the foreseeable future.

I’m pretty sure I’m going to lose money on this, taking the book design costs into account, but that was never the point. The point was for people to read it. So do that now.

Economism on Marketplace

By James Kwak

David Brancaccio of Marketplace has started a new radio project called Econ Extra Credit: reading a first-year economics textbook, one chapter per week, along with his listeners. Luckily, he chose one of the textbooks produced by the CORE project, a group of economists who set out to rewrite the economics curriculum in the wake of the financial crisis and Great Recession.

David invited me to talk with him about “Economics 101” and the one-sided impression of the world that people often take away from the class—especially those for whom it is their only economics class. This, of course, was the subject of my 2017 book Economism: Bad Economics and the Rise of Inequality.

You can hear the whole interview here. Enjoy!

False Choice

By James Kwak

The scene: Two well-dressed, fully employed people sitting at a table in the chic café at their workplace.

Martha: Do you like your health plan?

George: I love it.

Martha: How much do you pay for your plan?

George: About $550 per month.*

Martha: Do you have a deductible?

George: I have a $1,000 deductible for my whole family.

Martha: What about co-payments?

George: I have to pay 20% of the cost for hospital stays and outpatient surgery.

Martha: What if you just want to see the doctor?

George: I pay $25 to see my primary care physician, and $40 to see a specialist.

Martha: Can you see anyone you want?

George: I pay more if I see people out of network, but the insurer still pays something.

Martha: I’m thinking about switching to the new plan they’re offering. Have you heard about it?

George: No. What is it?

Martha: Well, it covers everything, including vision and dental. And you can see anyone you want.

George: How much does it cost?

Martha: Nothing. There are no premiums and no deductibles or co-payments. Well, you may have co-payments for prescription drugs, but there’s an annual maximum of $200.

George thinks.

George: I think I’ll keep my health plan. I just like it.

End scene.

All those people saying that that Medicare for All will take away people’s health insurance against their will? And that some people would rather be able to keep their current plans, so we should instead just have a public option? They are George.

Health insurance is an intermediate financial product. It’s a contract you buy that pays you money in certain states of the world. It’s not something that people want in and of itself. They don’t want choice in insurance plans for the sake of having choice. They want health care, and someone else to pay for it.

That’s Medicare for All, at least in the Bernie Sanders bill (also endorsed by Elizabeth Warren, although they differ in the political tactics of how to pass it). It gives you all health care that is “medically necessary or appropriate for the maintenance of health or for the diagnosis, treatment, or rehabilitation of a health condition”—for free.

You can argue that this will be expensive—although Warren has produced a detailed plan for how to pay for it. You can argue that Warren’s financing scheme will be bad for the economy—although it’s hard to ignore the fact that the transfer of wealth from the very rich to everyone else would be an enormous economic stimulus.

But you can’t in good faith argue that Medicare for All is bad because it forces people to give up their existing health insurance. Because at that point you are arguing that people are like George: Given the ability to see any provider for free, they would choose to continue paying thousands of dollars in premiums and cost sharing to get access to a limited network of doctors and hospitals. And even given the low opinion that much of the political class has of ordinary voters, that’s a bit much.

* All figures for George’s current plan are from the Kaiser Family Foundation’s 2019 Employer Health Benefits Survey, and are based on the average costs for a PPO plan (the most common type of plan at the large employers whose employees are most likely to be satisfied with their health insurance). Employee contribution: p. 100. Deductible: p. 112. Co-insurance for hospitals and surgery: p. 128. Co-payments for doctors: p. 131. George is also indirectly paying the employer contribution (more than $14,000 per year) in the form of lower wages, but I assume that, under either Sanders or Warren, employers would end up paying a similar amount, at least in aggregate.

 

Take Back Our Party, Chapter 4: Our Democratic Party

By James Kwak

Ever since I finished Economism (and the 2016 elections, which happened about the same time), there has only been one thing I have wanted to write. I tried in “The Importance of Fairness: A New Economic Vision for the Democratic Party,” and in “A New Economic Vision, in 27 Words,” and again in “Hey Democrats, the Problem Isn’t Jobs and Growth.”

I wanted to write this thing because it has become clear to me not only that our economic world is screwed up in all sorts of obvious ways, but also that the only viable path to fixing it runs through the Democratic Party. The Republican Party is what it is; even if it weren’t currently in the grip of a madman, it would at best be the party of Mitt Romney, Paul Ryan, Lindsay Graham, Marco Rubio, Ted Cruz, … you get the point. The 1% will always have their party. The problem is that the 99% don’t have theirs. The result has been the rightward drift of our entire political system, in which Republicans use their turns in power to advance their extremist agenda, and we Democrats use our at-bats to hold the line and nominate reasonable people to the Supreme Court.

So the important question is how the Democratic Party can be rallied behind a new economic vision that can both stem the rising tide of inequality and wrest control of the political landscape back from the conservatives. And that, of course, means we have to replace the economic vision of Clinton, Obama, Clinton, and most of the primary candidates today: the fantasy that private sector growth, aided by clever government nudges to make markets work better, can solve all problems for all people.

The working title of Take Back Our Party—the one I carried around in my head but was too embarrassed to tell people—was Manifesto of Our Democratic Party. (David Dayen eventually agreed with me that it was too presumptuous.) But they idea was very simple: They—the party establishment—have their Democratic Party; but we have a vision of a different Democratic Party. And ours is better. Hence the titles of Chapters 1 and 4.

Their party has failed, both as policy (25 years of rising inequality) and as politics (see the enormous shift in control of state governments over the past decade and the election of Donald Trump). If you’re reading this, you probably agree with me. (If you don’t, read Chapters 2 and 3.) But the question is what to replace them with.

In my 27-word economic vision from back in 2017, this is what I said:

All people need a few basic things:

An education
A job
A place to live
Health care
A decent retirement

Let’s make sure everyone has these things.

That’s basically what Chapter 4 says, in many more words, except that I dropped jobs from the list (for reasons explained in depth there).

The epigraph of that chapter was originally another Don Draper gem: “If you don’t like what is being said, change the conversation.” For too long, the Democratic economic message has been that we like markets and business just as much as the Republicans, only we are better at managing markets and helping businesses grow. And throughout that time, this may have been true, but ordinary people know they are getting left further and further behind as the rich jet off into another dimension of wealth and success. Another clever infrastructure investment plan or a new tax credit for apprenticeships, supposed to generate jobs and growth, is not going to change the way people see the world.

We need to change the conversation. We need a new message. We can’t just say we feel people’s pain and ask them to trust us to increase economic growth. Our message should be that a good society takes care of all its members; that that means making sure everyone has the basic necessities of life, including health care, education, housing, and retirement income; and that government is the way a society fulfills these obligations to its members. This is the message that Franklin Roosevelt proclaimed in 1944.

I can’t promise you that this is the right platform to lead us to victory. But I can promise you that the one we have now isn’t working. It isn’t slowing the rise of inequality, and it isn’t giving voters a reason to choose us. It’s time for a change.

Here’s the final chapter of Take Back Our Party. Thanks for reading.