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  • Sheri Rivlin Allan Rivlin

Democrats Often Leave Out the Economic Topic Sentence: “We Need to Get More Money in the Hands of Ha

On Meet the Press last Sunday, Chuck Todd asked Senator Chuck Schumer (D-NY) why he believes Democrats will do better than expectations in the upcoming election. Senator Schumer, one of the leading voices for the Democratic message in this cycle, gave three reasons starting with a familiar list of economic policies, including increasing the minimum wage, equal pay for women and tax reform so corporations are not rewarded for shipping jobs overseas.

“First and foremost, economic issues predominate... the average voter, every poll shows far and away, cares most about economic issues. They tend to be for the Democrats when economic issues like minimum wage, like equal pay for women, like not sending jobs overseas predominate.” (His other two reasons were the Democrats superior ground game and the alternative choice Republicans are offering).

Senator Chuck Schumer

Democrats all across the country are running on a similar set of economic proposals:

  • increasing the minimum wage,

  • equal pay for women,

  • investing in education and job skills training,

  • helping families with college affordability and student loan debt,

  • Investing in infrastructure like roads and bridges, modernizing schools, and upgrading energy and data networks,

  • Tax reforms to keep jobs at home and make sure the wealthy are paying their fair share.

Public opinion polls tell us strong majorities of the voters support the Democratic positions on these issues and in addition Republicans have established a strong record of opposition to most of these proposals. Too often though, these elements are presented, individually (or commonly in trios) as popular proposals rather than weaving them into a coherent economic proposal. This is what Senator Schumer did when he essentially said, “We have popular economic proposals like A, B, and C.”

What often goes unsaid is that each of these is part of a coherent strategy to create better paying jobs, the public’s dominant priority. Often, each is described as desirable in its own right, fair and necessary. The minimum wage is called a living wage, overdue because low wage workers have not had a raise since 2009, necessary for the just principle that in America a full-time job should earn a family a life above the poverty line. All of this is true, and equally strong arguments can be made for the other proposals, but as strong as these arguments are for the individual policies, Democrats are coming up short in the economic arena because they are failing to tie these policies together into a coherent economic strategy designed to create higher paying jobs. In many recent polls voters see Republicans as the party more trusted to create jobs.

“I know how to [create good jobs]. First, we will invest in education, not cut it. Second, stop the tax breaks for the wealthy and focus on small businesses. Third, reduce the cost of college. The economy is not better until it is better for you, and we can do better.” Mary Burke, Democratic candidate for Governor in Wisconsin

The list of issues Democrats are running on closely follows the list suggested by my former colleague, Hart Research Partner, Guy Molyneux in a memorandum and discussed in a New Republic article co-written by Ruy Teixeira, a senior fellow at the Center for American Progress, urging Democrats to embrace an economic populist economic message they call “Everyone Economics”( as in “an economy that works for everyone not just the wealthy few”).

“The fuel behind Everyone Economics is the reality of large and growing economic inequality in America. But our survey results suggest that the language of “equality” (or “inequality”) is not how actual voters talk about this problem” write Teixeira and Molyneux. “Instead, they want to see expanded opportunity: “What worries Americans is less the size of statistical gaps in income or wealth, and more their sense that the system prevents average people from moving up the ladder while those at the top get a free ride.”

We see this as moving the discussion in the right direction. We agree with the emphasis on middle-class opportunity, but think there is a more direct way to sum up these policies and their direct impact on struggling consumers — these policies are designed to get more money into consumers’ hands and family bank accounts. That is the direct benefit to voters and this should be central to the message.

The complete statement: “We need to get more money into the hands of hardworking American families so they can spend it in their local communities on things like school supplies, home improvements and restaurant meals — so the middle-class will once again become the job creators, lifting the economy back to health.”

One question the pollsters have not asked is whether respondents would rather have an economy that offers more opportunity or more money in their family’s personal bank account — but we think it is safe to predict more consumers would take the cash than the abstract concept.

In some sense this is exactly what Republicans have been doing all along with their consistent emphasis on tax cutting. The GOP counts on voters to choose lower taxes over any abstract promise the Democrats might offer. The problem is, most of the benefits of tax cuts go to relatively few voters at the top of the income distribution, as Mitt Romney pointed out in his famous 47 percent speech. This speech also underscores the Republican fear that Democrats would frame their policies exactly as we are suggesting here — implicitly, vote for us and we will get more money in your hands. It is not a bad idea to take cues from the private fears of the opposition expressed behind closed doors and secretly taped.

But this framing has several other virtues:

It aligns personal gain and public benefit. The policy proposals are all designed to get more money in people’s hands and this in turn will strengthen the economy for everyone. The economy’s greatest challenge today is that average families do not have enough money to spend. Getting more money in people’s hands will allow them to spend more money in the community creating the demand that will give businesses the confidence so they can create more, better paying jobs.

It puts the Democrats core economic theory in simple terms. As Democrats we have done such a poor job of implementing Keynesian economic theory (modified by Monetarist theory and updated for current realities), that we can no longer use the words “economic stimulus.” Still, our economists are fully convinced that the current economy’s ailments are well described by the classic theory and with the Federal Reserve doing everything it can to help stimulate the economy, what is missing is fiscal policy to take its share of the load stimulating the economy. The idea of “getting the economy moving by getting more money in the hands of hardworking families” is a far more attractive frame for the same set of policies than calling for “economic stimulus.” It is a testable assertion whether it is as good as, or better than, “creating opportunity for more people to succeed in an economy that works for everyone not just the wealthy few.”

It is not merely a set of government spending proposals. The minimum wage increase is not government spending, nor is the Paycheck Fairness Act. Both are proposals to have employers pay a fair and livable wage to employees that will also get more money into the hands of hardworking American families. The infrastructure projects are not make-work projects; they are needed to maintain safe highways, modern schools, and up to date energy and data networks that business need for growth. Tax reform that closes loopholes, broadens the tax base and lowers rates has been an area of potential bipartisan compromise since the days when bipartisan compromise was non-toxic within the Republican Party.

It allows Democrats to turn the wheel of the economic virtuous cycle. By embracing policies that get more money into the hands of hardworking American families, Democrats have a better greater claim to the virtuous economic cycle than the Republicans do with their tax cuts. (Most economists will tell you each billion dollars cut in taxes will have less economic impact than the same billion dollars in government spending (especially for tax cuts that mostly go to the wealthy compared to spending for those in the middle and lower income levels). When hardworking families have more money they will spend it in their local communities on things like school supplies, home repairs, and restaurant meals. This provides the demand businesses need to pay workers more and hire more help.

It rebuts the core Republican economic argument. The Republican economic argument has not been updated for several cycles. It continues to be very similar to what George W Bush advocated before the global economy crashed: cutting taxes and regulations so “job creators” have the confidence to hire more workers. But Elisabeth Jensen, Democratic candidate for Congress in Kentucky’s 6th Congressional District provides the final sentence to the full statement. Rich people are not the job creators; when the American economy is working well, consumers are the job creators.

When middle-class families have more money and they spend it in their local communities on things like school supplies, home improvements, and restaurant meals, the middle-class will once again become the job creators lifting the economy back to health.

“When our government increases the minimum wage, ensures equal pay for equal work, and invests in our infrastructure, which is the most basic thing our government should do, Kentucky’s working families will be the job creators. Every time we do improvements on our home we will be the job creators. Every time we buy a new car we will be the job-creators. When we can afford to go out for dinner a few more times a month or to go to the movies, we will be the job creators.

“When Kentucky’s working families have a little more money in their pocket, they’re going to spend it here in our communities and they’re going to give our businesses security the confidence to grow and to create new jobs. When we pass the minimum wage; when we ensure equal pay for equal work; when we invest in our infrastructure, Kentucky’s working families, our middle class, will be the job creators.” Elisabeth Jensen, Democratic candidate for Congress KY-6

Reviewing campaign websites and debate transcripts from across campaign 2014 we see many Democrats making strong economic arguments but many others missing opportunities to present a coherent message. By contrast, the Republicans nearly all sound the same. The Republicans are laser focused on a small number of bad ideas and good talking points, but many Democrats have good ideas but ramble while presenting them. Nearly all Democrats are running on increasing the minimum wage and several other elements from the list at the start of this post. The weakest statements present the policies individually. Better ones link them together into a unified job creation strategy. Even better arguments link them to broader themes of economic inequality, economic opportunity, or government policies that make a direct positive difference in the lives of voters in the form of more money in their hands and bank accounts.

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