David Leonhardt

The statement didn’t even get that much attention. I’m guessing you heard a lot more about the college-admissions scandal than about the president’s threat of extralegal violence. So let me tell you a little more about the threat.

In an Oval Office interview with writers from the right-wing news site Breitbart, President Donald Trump began complaining about Paul Ryan. As speaker of the House, Ryan blocked efforts by other House Republicans to subpoena and investigate people on the political left. Trump’s loyal allies in the House “wanted to go tougher,” Trump said, “but they weren’t allowed to by leadership.”

To Trump, the incident was part of a larger problem: “You know, the left plays a tougher game. It’s very funny. I actually think that the people on the right are tougher, but they don’t play it tougher. OK? I can tell you I have the support of the police, the support of the military, the support of the Bikers for Trump. I have the tough people, but they don’t play it tough — until they go to a certain point, and then it would be very bad, very bad.”

This wasn’t the first time Trump had mused about violence, of course. He has talked about “Second Amendment people” preventing the appointment of liberal judges. He’s encouraged police officers to bang suspects’ heads against car roofs. He has suggested his supporters “knock the hell” out of hecklers. At a rally shortly before 2018 Election Day, he went on a similar riff about Bikers for Trump and the military.

I’m well aware of the various see-no-evil attempts to excuse this behavior: That’s just how he talks. Don’t take him literally. Other Republicans are keeping him in check. His speeches and tweets don’t really matter.

But they do matter. The president’s continued encouragement of violence — and of white nationalism — is part of the reason that white-nationalist violence is increasing. Funny how that works.

After Trump’s latest threat, I reached out to several experts in democracy and authoritarianism to ask what they made of it. Their answers were consistent: No, the United States does not appear at risk of widespread political violence anytime soon. But Trump’s words are still corroding democracy and public safety.

His latest incitement fit a historical pattern, and one with “scary echoes,” as Daniel Ziblatt, who co-wrote the recent book “How Democracies Die,” told me. Trump combined lies about his political opponents — Democrats who need to be investigated (for made-up scandals) — with allusions to a patriotic, violent response by ordinary citizens. Latin American autocrats, including Hugo Chávez in Venezuela, have used this combination. So did European fascists in the 1930s.

The United States, thank goodness, does not have armed citizen militias carrying out regular attacks, as those other countries did. But our situation is still worrisome. “Violent talk can, at minimum, encourage lone-wolf violence,” Steven Levitsky, Ziblatt’s co-author and a Harvard political scientist, said. “It can also slowly normalize political violence, turning discourse and ideas that were once unsayable and even unthinkable into things that are sayable and thinkable.”

These risks are not just hypothetical. In 2017, a House candidate body-slammed a reporter who asked a probing question — behavior with no recent precedent. Trump praised the now-congressman, Greg Gianforte, for the assault. In the Bright Light Watch survey of political scientists late last year, only 49 percent said the United States did not tolerate political violence, a notable decline from earlier levels. Some respondents cited Gianforte.

Statistics on hate crimes are notoriously unreliable, but the evidence strongly suggests that they’re rising. The FBI’s data shows an increase. The Anti-Defamation League reports a 73 percent rise in “extremist-related killings” during the last four years.

Not all attacks come from people who identify with the political right, obviously: The 2017 attempted mass murder of House Republicans on a baseball field is one horrific example. But most politically motivated attacks do indeed come from the right. Last year, 39 of the 50 extremist killings tracked by the ADL were committed by white supremacists, and another eight were committed by killers espousing anti-government views.

Drawing a direct line from the purveyors of hateful rhetoric to any specific hate crime is usually impossible. And it’s usually a mistake to try. The motive for these crimes — be it in New Zealand last week or Pittsburgh last year — is typically a stew of mental illness, personal anger and mixed-up ideology. Trump doesn’t deserve to be blamed for any specific crime. But he does deserve blame for the trend.

It isn’t very complicated: The man with the world’s largest bully pulpit keeps encouraging violence and white nationalism. Lo and behold, white-nationalist violence is on the rise. You have to work pretty hard to persuade yourself that’s just a big coincidence.

This article originally appeared in <a id="7051a203-0e7b-4d38-aa85-8309469fbcc2" href="https://www.nytimes.com/2019/03/17/opinion/trump-violence.html">The New York Times</a>.

It isn't complicated: Trump encourages violence

The president of the United States suggested last week that his political supporters might resort to violence if they didn’t get their way.

<h1>Barack Obama had an even more consequential presidency. He halted the worst financial crisis since the Great Depression. </h1>

He did so in part by signing a stimulus bill full of spending on education, wind energy and other programs with lasting benefits.

He also put in place new regulations for Wall Street and extended health insurance to almost 20 million people.

Yet for all that both men accomplished, neither changed the fundamental direction of the U.S. economy.

By the end of Obama’s eight years, gross domestic product growth was still disappointing. Middle-class and poor families were still receiving less than their fair share of that growth. Median household wealth was lower than it had been two decades earlier. In the most shocking sign of struggle, average life expectancy has declined in recent years. Rich Americans, on the other hand, continue to thrive, amassing Gilded Age-level concentrations of wealth. The resulting frustration helped make possible the rise of Donald Trump.

This history suggests that the Democratic Party’s economic agenda needs to become more ambitious. Modest changes in the top marginal tax rate or in middle-class tax credits aren’t enough. The country needs an economic policy that measures up to the scale of our challenges.

So far, only one candidate among the 2020 contenders has an agenda with this level of ambition: Elizabeth Warren. Her platform aims to reform American capitalism so that it once again works well for most American families. The recent tradition in Democratic politics has been different. It has been largely to accept that big companies are going to get bigger and do everything they can to hold down workers’ pay. The government will then try to improve things through income taxes and benefit programs.

Warren is trying to treat not just the symptoms but the underlying disease. She has proposed a universal child-care and pre-K program that echoes the universal high school movement of the early 20th century. She favors not only a tougher approach to future mergers, as many Democrats do, but also a breakup of Facebook and other tech companies that have come to resemble monopolies. She wants to require corporations to include worker representatives on their boards — to end the era of “shareholder-value maximization,” in which companies care almost exclusively about the interests of their shareholders, often at the expense of their workers, their communities and their country.

Warren was also the first high-profile politician to call for an annual wealth tax, on fortunes greater than $50 million. This tax is the logical extension of research by economist Thomas Piketty and others, which has shown how extreme wealth perpetuates itself. Historically, such concentration has often led to the decline of powerful societies. Warren, unlike some Democrats, comfortably explains that she is not socialist. She is a capitalist and, like Franklin D. Roosevelt, is trying to save American capitalism from its own excesses.

“Sometimes, bigger ideas are more possible to accomplish,” Warren told me during a recent conversation about the economy at her Washington apartment. “Because you can inspire people.”

Before I go further, I want to offer two caveats. One, Warren’s grasp of the country’s problems does not necessarily mean that she should be the Democratic nominee for president. Politics is not an expertise competition. The nominee should be, and most likely will be, the candidate who best inspires voters. Maybe that will be Warren, or maybe it will be someone else.

Two, I don’t agree with all of Warren’s proposals. Her plan to break up the big technology companies seems too uniform, for example. Her plan to put workers on corporate boards may not be as practical as, say, a big federal push to increase workers’ bargaining power.

But whatever my — or your — specific objections, Warren is identifying the right problems and offering a coherent vision for a post-Obama Democratic agenda. “Clinton and Obama focused on boosting growth and redistribution,” Gabriel Zucman, a University of California, Berkeley, economist who has advised Warren, says. “Warren is focusing on how pretax income can be made more equal.”

She isn’t simply proposing larger versions of Obama’s (worthy) tax cut for middle-class and poor families, as several 2020 candidates have. Her plans are also much more detailed than those of Bernie Sanders (who, to his credit, pushed the party to become bolder). And she has avoided getting trapped in the health insurance wonkery that too often dominates progressive policy debates. The future of the republic does not actually depend on the relative sizes of Medicare, Medicaid and the private market.

It may, however, depend on whether Americans’ incomes and living standards are consistently rising.

In the months to come, I hope that every other 2020 candidate offers answers to the questions that Warren has taken on: How can corporate America again help create a prosperous, growing middle class, as it did from the 1940s through the 1970s? How can the power of giant corporations — over consumers, workers and smaller businesses — be constrained? How can the radical levels of wealth inequality be reversed? How can the yawning opportunity gaps for children of different backgrounds be reduced? How can the next president make changes that will endure, rather than be undone by a future president, as both Obama’s and Clinton’s top-end tax increases were?

It is not surprising that Warren has jumped out to an early lead in the ideas primary. The main theme in her life, both professional and personal, has been economic opportunity. Her father was a carpet salesman at Montgomery Ward in Oklahoma City in the 1960s, until he had a heart attack. He had to switch to lower-paying work as a janitor, and her mother got a minimum-wage job, answering phones at Sears.

Warren’s three older brothers all went into the military. “That was their chance to make it into the middle class,” she told me. Warren went to college and became a teacher, until the school chose not to renew her contract rather than give her maternity leave. She then went to a public law school — for $450 per semester — and became a bankruptcy expert, early on at the University of Houston and ultimately at Harvard.

“The way I see it is, I have lived opportunity,” she said. “I’ve lived the kind of opportunity that comes from a government that invests a little in its kids, a government that tries to keep the playing field a little bit level for folks like my family.”

Her theory of political change has been shaped by two experiences — one failure and one success. As a professor in the 1990s, she served on a federal bankruptcy commission and fought against legal changes that favored banks over borrowers. The fight went on for a decade, and Warren’s side lost. The defeat left her believing that a technocratic legislative debate — “the inside game,” as she calls it — almost always favors industry lobbyists.

The success came during the Obama administration, when she pushed for an agency to protect consumers against banks’ misbehavior. The idea was new. It was also simple enough for voters to understand. She hawked it on “The Daily Show With Jon Stewart.” This time, Warren’s side won. Trump has since constrained the agency, but it still exists and is still doing good.

Those experiences help explain why Warren thinks that bigger changes are sometimes more feasible than modest ones. Bigger changes — tangible, new ideas — can overcome voter cynicism. “A lot of people don’t believe you can actually make any change on economics,” Warren says. I would add another, even larger, example to the pattern: Obamacare. Trump has undone many of Obama’s more modest changes, on taxes, climate and other areas. But Obama’s grandest accomplishment endures. For all its flaws, it proved too popular to kill.

Warren’s agenda is a series of such bold ideas. She isn’t pushing for a byzantine system of tax credits for child care. She wants a universal program of pre-K and child care, administered locally, with higher pay for teachers and affordable tuition for families.

And to anyone who asks, “But how will you pay for that?” Warren has an answer. Her wealth tax would raise more than $250 billion a year, about four times the estimated cost of universal child care. She is, in her populist way, the fiscal conservative in the campaign.

The wealth-tax proposal has shifted the national debate more than any other 2020 proposal so far. It has made people realize the most middle-class families pay an annual tax on their largest asset — called the property tax. But the wealthy do not, because financial holdings aren’t taxed the way real estate is. Some center-left economists have criticized a wealth tax as too disruptive, potentially threatening some family-owned businesses, but many others have praised it. “This type of wealth tax,” Gene Sperling, the former top economic adviser to Obama and both Clintons, has said, “is essential.”

Perhaps the biggest reason to be hopeful about Warren’s larger agenda — separate from her fate as a candidate — is that it’s popular. Americans are deeply divided on social issues like abortion, religion and, to some extent, immigration and guns. But a clear majority favors a wealth tax. A clear majority favors universal child care. A clear majority favors aggressive government action to check corporate power and create decent-paying jobs. On economic issues, as Warren says, “The progressive agenda is America’s agenda.”

To other 2020 candidates, I’d say: Be ambitious. Tell the country how you would end the new Gilded Age and improve people’s lives. Presidential campaigns are the time for big ideas.

Elizabeth warren actually wants to fix capitalism

Bill Clinton had a consequential presidency when it came to the economy. He brought down the Reagan-era deficits, helping spark the strongest economic boom in decades, and he made the tax code more progressive.

Elizabeth Warren actually wants to fix capitalism

<h1>President Donald Trump likes to brag about the supposedly booming economy. So do other Republican politicians. Some journalists have gotten into the habit too, exaggerating the strength of the economic expansion, because it makes for a good story.</h1>

Here’s the truth: There is no boom. The economy has been mired in an extended funk since the financial crisis ended in 2010. GDP growth still has not reached 3 percent in any year, and 3 percent isn’t a very high bar.

Last week, while attending an economics conference in Washington, I discovered one particularly clear sign of the economy’s struggles — namely, that it keeps performing worse than the experts have predicted.

Again and again, Federal Reserve officials have overestimated how quickly the economy would grow. They keep having to revise their forecasts downward, only to discover that they didn’t go far enough down. Economists on Wall Street and other parts of the private sector have made the same mistake.

Over time, the differences between the experts’ predictions and the economy’s performance have added up. The U.S. economy would be about 6 percent larger today — producing $1.3 trillion more in goods and services this year — if the forecasts had come true. And for most families, real-life experience has been more disappointing than the GDP numbers, because much of the bounty of the economy’s growth has flowed to the affluent.

So what is ailing the U.S. economy?

Several years ago, Lawrence Summers — the economist and former Treasury secretary — began using the phrase “secular stagnation” to describe the problem. The term was originally coined during the Great Depression, and it describes an economy that can’t quite get healthy.

When Summers first made his case in 2013, some other economists criticized it as too pessimistic. But the repeated growth shortfalls of recent years suggest he was onto something. At last week’s conference, hosted by the Brookings Institution, Olivier Blanchard — the former chief economist of the International Monetary Fund — said he was now more persuaded by the secular-stagnation story than he first had been. It is, Blanchard said, “more likely than not.”

There are two main culprits. The first is a savings glut. Americans are saving more and spending less partly because the rich now take home so much of the economy’s income — and the rich don’t spend as large a share of their income as the poor and middle class. The aging of society plays a role too, because people are saving for retirement.

The second big cause is an investment slump. Despite all the savings that’s available to be invested, companies are holding back. Some have grown so large and monopoly-like that they don’t need to invest in new projects to make profits. Think about your internet provider: It may have terrible customer service, but you don’t have a lot of alternatives. The company doesn’t need to invest in new technology or employees to keep you as a customer.

Beside a lack of competition, the investment slump stems from what Summers calls the de-massification of the economy. Developers aren’t building as many malls and stores, because goods now go straight from warehouses to homes. Offices don’t need as much storage space. Cellphones have replaced not just desktop computers but also cameras, stereos, books and more. Many young people have decided they’re happy living in small apartments, without cars.

For all these economic problems, there are promising solutions. But the United States is not giving those solutions a try.

The 2017 Trump tax law is a useful case study. It is a dreadful piece of economic policy — essentially a giant effort to aggravate income inequality. Tax cuts that benefit the wealthy most are huge and permanent. Tax cuts focused on everyone else are smaller and temporary.

But the law still pumped money into the economy last year, thanks largely to those temporary tax cuts for the middle class and poor. And guess what? GDP growth finally met some forecasters’ expectations. The economy expanded 2.9 percent in 2018. Unfortunately, the boost seems to have been temporary. In the first quarter of this year, growth has slowed markedly, probably to about 0.5 percent. It will most likely grow faster over the rest of 2019, but not 3 percent. Once again, economists have started downgrading their expectations.

A better policy response would start with a tax cut focused on the majority of Americans, not the wealthy. And there are many other ways to take on secular stagnation. When I spoke to Summers last week, he rattled off a list:

Infrastructure projects, to jump-start investment. The retirement of coal-fired power plants, which would also lead to new investment. Stronger safety-net programs, including Social Security, to reduce the savings glut. More aggressive antitrust policies, to combat monopolies. And a Federal Reserve that, at long last, stopped making the same mistake — of overestimating both growth and inflation.

After a decade of negative economic surprises, maybe we shouldn’t be surprised anymore. Maybe we should try some new solutions.

This article originally appeared in <a id="7c9f88ab-0aff-4dd3-9022-c7f2747571ba" href="https://www.nytimes.com/2019/03/10/opinion/us-economy-stagnation-growth.html">The New York Times</a>.

The experts keep getting the economy wrong

Last week, while attending an economics conference in Washington, I discovered one particularly clear sign of the economy’s struggles — namely, that it keeps performing worse than the experts have predicted.

<h1>The energy in the 2020 Democratic campaign has been coming from the left. Candidates are pushing Medicare for All, a Green New Deal, a wealth tax and other ideas that are more progressive than anything a recent Democratic nominee has favored.</h1>

Much of this shift — which has been focused on economic policy — is smart. Republicans may cry socialism, and affluent centrists may not love it. But the American public leans decidedly left on economics. A clear majority favors higher taxes on the rich, a higher minimum wage and expanded government health insurance. After four decades of slow-growing living standards, people want change.

And yet there are also risks in the Democrats’ move to the left — risks that the sillier criticisms of the party’s new progressivism sometimes obscure.

So far, the 2020 candidates have mostly been competing with one another to see who can come off as the most boldly and purely liberal. Bernie Sanders talks about completing his revolution. Kamala Harris has spoken about the joy that marijuana brings. Sanders, Harris and Kirsten Gillibrand have all talked about eliminating private health insurance. And so on.

Ideological purity doesn’t tend to play well in general elections, however. Every modern president has found ways to appeal to Americans’ fondness for consensus — even if that fondness is based partly on a naive view of politics and even if the candidates’ appeals have sometimes been more stylistic than substantive.

Donald Trump campaigned as a defender of Medicare and Social Security. Barack Obama became a national figure by reaching out to both red and blue America. George W. Bush was a “compassionate conservative.” Bill Clinton followed a “third way.” Ronald Reagan put a sunny face on his conservatism.

As frustrated as many Americans have become, most still don’t see themselves as radicals. About 35 percent call themselves moderate, compared with only 26 percent who say liberal, according to Gallup. Another 35 percent say conservative. Even among Democrats, only about half use the liberal label, with the other half choosing moderate or conservative.

Perhaps most fascinating, Gallup found late last year that most Democratic voters — by a margin of 54 percent to 41 percent — would rather their party move to the center than to the left. (Most Republicans, by contrast, want their party to continue moving right.) In another recent poll, by Monmouth, most Democratic voters said they would prefer a nominee likely to win the general election to one who shared their views on most issues.

All of which suggests that the 2020 Democratic field would benefit from more candidates who made an effort to appeal to both the left and the center.

Such a candidate might end up winning the nomination and crushing Trump. Or he or she could sharpen the eventual nominee, by getting that nominee to reach beyond the party’s liberal base.

I expect that the campaign’s next phase will feature several candidates who try to do so. Obama, for example, has advised potential candidates that he “sees a relatively open space for a more moderate Democrat,” as The Times reported. Two Obama favorites who could have filled the role — Mitch Landrieu, the former New Orleans mayor, and Deval Patrick, the former Massachusetts governor — aren’t running.

Joe Biden remains the most obvious possibility. Even without having entered the race, he continues to lead just about every poll of Democratic voters. Beto O’Rourke will probably run too, and he’s shown an intriguing appeal across the left and center. Democrats typically lose Texas by between 10 and 30 percentage points. O’Rourke lost his Senate race by fewer than 3 points, and his coattails helped elect some House Democrats.

Amy Klobuchar is making a similar play. Her kickoff speech name-checked John F. Kennedy, Reagan, Martin Luther King Jr. and Walt Whitman. Similarly, John Hickenlooper, the former Colorado governor, described himself last week in Iowa as “a doer,” in contrast to the “dreamers and debaters” from Congress. Sherrod Brown, the Ohio senator, also has the potential to win self-identified moderates.

Brown is a good case study, because he shows that appealing to the middle doesn’t mean abandoning progressive principles — as, say, Howard Schultz, the Starbucks billionaire and potential independent candidate, would. (Remember: The political center isn’t where most billionaires think it is.) Brown is a proud populist, a defender of unions and a critic of “corporate freeloaders.” But he also avoids casting himself as an out-of-the-mainstream lefty. He isn’t in favor of banning private health insurance. Since Obama’s 2012 re-election, Brown is the only Democrat to have won a statewide race in Ohio.

As Geoff Garin, the Democratic pollster, said to me, voters don’t conduct fine-grained analyses of a candidate’s ideology: “They live in a world of character and personality and values.” Candidates can have an ambitious progressive agenda while also reaching out to swing voters.

It’s still very early in the 2020 campaign, and all of the Democratic candidates have the ability to follow this path. Sanders can do so by emphasizing working-class issues that matter to voters across the ideological spectrum. Elizabeth Warren can talk passionately about family values — the real thing, not the fake version. Harris can present herself as an advocate for crime victims, whether the crimes were white-collar or violent.

I understand why the Democrats have been focusing their attention on the left. It has a newfound — and welcome — energy. But the best strategy for beating Trump in 2020 doesn’t involve only the left. And beating Trump is terribly important.

This article originally appeared in <a id="e23d800a-2f5c-4da4-bd75-07ec7a607a92" href="https://www.nytimes.com/2019/03/03/opinion/2020-moderate-democrats.html">The New York Times</a>.

A dose of moderation would help Democrats

And yet there are also risks in the Democrats’ move to the left — risks that the sillier criticisms of the party’s new progressivism sometimes obscure.

<h1>Have upper-middle-class Americans been winners in the modern economy — or victims? That question has been the subject of a debate recently among economists, writers and others.</h1>

On one side are people who argue that the bourgeois professional class — essentially, households with incomes in the low-to-mid six figures but without major wealth — is not so different from the middle class and poor. All of these groups are grappling with slow-growing incomes, high medical costs, student debt and so on.

The only real winners in today’s economy are at the very top, according to this side of the debate. When Bernie Sanders talks about “the greed of billionaires” or Thomas Piketty writes about capital accumulation, they are making a version of this case.

On the opposing side are people who believe that the country’s defining class line is further down the economic ladder. To them, the upper middle class is on the happy side, enjoying rising incomes, longer life spans, stable marriages and good schools. Richard Reeves’ recent book, “Dream Hoarders” made this case, as did Matthew Stewart’s well-titled Atlantic article: “The 9.9 Percent Is the New American Aristocracy.”

To make grand pronouncements about the American economy, you need to talk about three groups.

The first is indeed the top 1 percent of earners, and especially the very richest. Their post-tax incomes (and wealth) have surged since 1980, rising at a much faster rate than economic growth. They are now capturing an even greater share of the economy’s bounty.

Then there are the bottom 90 percent of households, who are in the opposite position. The numbers here take into account taxes and government transfers, like Social Security, financial aid and anti-poverty benefits. Even so, the incomes of the bottom 90 percent have trailed GDP. Over time, their share of the economy’s bounty has shrunk.

Finally, there is the upper middle class, defined here as the 90th to 99th percentiles of the income distribution (making roughly $120,000 to $425,000 a year after tax). Their income path doesn’t look like that of either the first or second group. Since 1980, the incomes of the upper middle class have been growing at almost the identical rate as the economy.

If you, dear reader, happen to be in this group, I’m not trying to dismiss your economic anxieties. I know that you may not feel rich. You probably have big mortgage payments, rising medical costs and perhaps eye-popping tuition bills.

But I’d ask you to spend a minute thinking about how much more challenging life is for the bottom 90 percent. These households aren’t making six-figure incomes, and they have received only meager raises over the past few decades. They aren’t receiving their fair share of the country’s economic growth. No wonder so many feel frustrated.

And for too long, the country’s economic policy, even under Democrats, has blurred the distinction between the upper middle class and the actual middle class.

In the 2008 campaign, Barack Obama and Hillary Clinton both used $250,000 as the upper limit of the middle class. (Even in the New York area, $250,000 in pretax income puts a household in the top 10 percent.) Obama then delivered a tax cut for everyone below that cutoff. In the 2016 campaign, Clinton and Sanders used the same definition.

A better approach exists. Politicians should recognize that there are three broad income groups, not just two. The bottom 90 percent of Americans does deserve a tax cut, to lift its stagnant incomes. The top 1 percent deserves a substantial tax increase. The upper middle class deserves neither. Its taxes should remain roughly constant, just as its share of economic output has.

So here’s some good news: The 2020 Democratic candidates are moving in this direction.

Kamala Harris’ big tax cut applies only to families making less than $100,000. Elizabeth Warren’s child-care proposal delivers 99 percent of its benefits to the bottom 90 percent of earners, according to Moody’s Analytics. The housing plans from Harris and Cory Booker give all their benefits to the bottom 90 percent, according to the Center on Poverty and Social Policy. The tax cut from Sherrod Brown, who’s a potential candidate, is likewise focused on the middle class and poor.

Ro Khanna, a Silicon Valley congressman who co-wrote Brown’s tax plan, has a useful way of thinking about this. “Our priority has to be the working poor and those struggling to make it into the middle class,” Khanna told me. “What do the upper middle class care most about in my district? They want a pluralistic America that is engaged with the world and embraces technology and future industries. What they don’t want is a backlash to diversity, a backlash to globalization, a backlash to technology.”

The upper middle class doesn’t deserve the blame for our economic problems. But it doesn’t deserve much government help, either.

This article originally appeared in <a id="6cf1726c-256c-4653-9210-397f854a79ce" href="https://www.nytimes.com/2019/02/24/opinion/income-inequality-upper-middle-class.html">The New York Times</a>.

How the upper middle class is really doing

On one side are people who argue that the bourgeois professional class — essentially, households with incomes in the low-to-mid six figures but without major wealth — is not so different from the middle class and poor.

<h1>Imagine that a bunch of children are sitting around a table when a seemingly beneficent adult walks into the room carrying a plate of cupcakes. The kids burst out in excitement — until they notice a problem: There are fewer cupcakes than children.</h1>

At this point, the adult announces some ground rules. To receive a cupcake, the children will have to compete with one another. The adult will accept cash or other objects of value. Praise for the adult’s kindness would also be welcome.

The kids immediately start saying nice things and digging into their pockets. But then one child has second thoughts. She quiets the room and tells the adult he’s being a bully. He is bigger, stronger and richer than the kids, she says. He shouldn’t make them grovel for cupcakes. The adult replies: “Fine. No cupcake for you.”

If she were your child, how would you feel: proud that she took a stand, or disappointed that she didn’t act in her own best interests? Cupcakes, after all, are pretty tasty.

Last week, New York became that disobedient child. The city damaged its own interests, or at least its short-term interests, for the sake of principle. Enough New Yorkers raised enough of a ruckus about the nearly $3 billion in tax breaks that the city and state were bestowing on Amazon that Amazon finally had enough. On Thursday, it announced that it would no longer be bringing 25,000 jobs to Queens. No cupcake for New York.

Yes, I know: Jobs are not cupcakes. Jobs help people build middle-class lives, which are in too short supply these days. So pretend that the adult in my story offered a Kindle instead of a cupcake. Or a college scholarship. It shouldn’t change your view of the girl’s rebellion.

Regardless, it’s a version of what social scientists call “the tragedy of the commons” — in which people hurt their long-term interests by acting in their short-term interests. The only solution to the tragedy of the commons is to change the rules.

For years, companies have been getting the better of local governments — and taxpayers — by pitting them against one another. If a city or state won’t pony up cash or tax breaks, companies threaten to go elsewhere. Boeing, Nike, Intel, Ford, General Motors, Foxconn, Royal Dutch Shell and many others have all done it. Since 1990, the combined size of these handouts has surged.

In the moment, the deals are often popular. Polls showed that most New Yorkers favored Amazon’s plans for Queens. Last week, the editorial boards of both The New York Times and The Wall Street Journal criticized the politicians whose complaints scuttled the deal. The front page of The Daily News thundered, “AMAZON KILLERS: Shame on these so-called progressives for rejecting 25,000 high-paying jobs &amp; billions in taxes tech biz would’ve brought to city.”

The deal’s supporters do make some good points. Amazon’s critics have used silly anti-capitalist rhetoric at times. And the deal would have modestly helped the Queens economy (and only modestly: New York is home to more than 4 million jobs, and Queens to more than 1 million). But there is a larger picture here: Corporate-relocation subsidies are terrible policy.

They do nothing to lift the country’s economic growth — to create more cupcakes, as it were. The subsidies mostly redistribute income upward, from taxpayers to corporate shareholders. If every city and state justifies big giveaways based on its own immediate interests, the tragedy of the commons will never end.

Somebody needs to make a principled stand. In New York, a coalition of activists and politicians did so. They called attention to the grubbiness and secrecy of these subsidies, which are, in their own way, anti-capitalist. The deal’s collapse, Greg LeRoy, a longtime advocate on the issue, told Emily Badger of The Times, is “absolutely a godsend to those of us who have been trying to reform economic development.”

For decades, local politicians have felt pressure on only one side of this issue: To do whatever it takes to attract companies. As a result, those politicians have contributed, often unwittingly, to the radical rise in economic inequality.

Amazon’s messy departure from New York is a victory for the other side. It should remind politicians elsewhere that their private blandishments may later turn into public controversy. It should also remind politicians that they can say no. Northern Virginia gave Amazon much less money than New York but still won tens of thousands of new jobs.

And the whole episode should energize legal efforts to fight corporate handouts. Missouri and Kansas, for example, are talking about a “cease-fire” to keep local companies from playing the two states off each other. Officials in Arizona, Illinois, New York and several other states have talked about a multistate compact known as the End Corporate Welfare Act. The federal government, for its part, could offer financial incentives to states that refuse to play the handout game.

Yes, New York’s economy will be slightly worse off because of Amazon’s departure. But the city deserves our gratitude. Refusing to play an unfair game is sometimes better than winning it.

This article originally appeared in <a id="4e466153-00d0-47d6-af1a-a70cfa1b8870" href="https://www.nytimes.com/2019/02/17/opinion/amazon-new-york.html">The New York Times</a>.

New York did us all a favor by standing up to Amazon

At this point, the adult announces some ground rules. To receive a cupcake, the children will have to compete with one another. The adult will accept cash or other objects of value. Praise for the adult’s kindness would also be welcome.

<h1>A few weeks ago, the pollsters at Monmouth University asked Democrats across the country to choose between two different kinds of nominees. One was a candidate whom the voter agreed with on most issues but who might struggle to beat President Donald Trump. The other was the reverse — a strong candidate with different views from those of the person being polled.</h1>

It was a rout. About 56 percent preferred the more electable candidate, compared with 33 percent who picked the more ideologically in-sync candidate. The gap was even larger among women and liberal Democrats. Patrick Murray, who runs the Monmouth poll, points out that this pattern isn’t normal. In previous campaigns, voters cared more about ideology than electability.

I think there are two main reasons for the switch. The first, of course, is the awfulness of the Trump presidency. But the less obvious reason is important too: The differences among most of the leading Democratic presidential candidates just aren’t very big right now.

They all favor policies to lift incomes and reduce living costs for the middle class and poor. They all favor tax increases on the rich. They all favor climate action, voting rights and expanded Medicare. Most voters understand that choosing a candidate with modestly different ideas about how to achieve these goals isn’t much of a sacrifice.

So if Democrats wanted to identify their best hope for beating Trump, what would that candidate look like?

Above all, it would be a candidate good at persuading Americans that he or she was on their side — on their side against the forces causing the stagnation of American living standards. More specifically, this candidate would be someone who could convince swing voters of this allegiance.

Swing voters still exist. Enough Americans switched from backing Barack Obama in 2012 to Donald Trump in 2016 to House Democrats in 2018 to help decide those elections. I understand why some Democratic activists are instead drawn to the idea of victory through turnout: It offers the promise of avoiding any political compromise. The problem is, there are virtually no examples of Democrats winning close races without emphasizing persuasion. The 2018 attempts, in Florida, Georgia and Texas, all fell short.

Yet progressives shouldn’t despair — because swing voters are quite progressive, especially on economic issues. For years, we’ve been hearing about a kind of fantasy swing voter, conjured by political pundits and corporate chieftains, who is socially liberal and economically conservative (as many pundits and chieftains are). The actual swing voter leans decidedly left on economics, in favor of tax increases on the rich, opposed to Medicare cuts and skeptical of big business.

Still, these swing voters don’t think of themselves as radical. They are typically patriotic and religious. Many think of themselves as moderate and, strange as it may sound, many thought of Trump as moderate in 2016. When Republicans can paint a Democrat as an out-of-touch elitist — like they did Hillary Clinton, John Kerry, Al Gore or Michael Dukakis — the Republican candidate often wins these voters. When Democrats can instead come off as middle-class fighters, they tend to win.

In the 2020 field, two Democrats have the strongest track record of running as middle-class fighters: Amy Klobuchar and Sherrod Brown.

They are both Midwestern senators, Klobuchar (who launched her campaign Sunday) from Minnesota, Brown (who hasn’t yet decided whether to run) from Ohio. They both have a populist folksiness to them. And, no, those aren’t racial code words. Obama also won swing voters thanks in part to populist folksiness.

About the power of large corporations, Klobuchar has said, “The public is at a breaking point.” She talks constantly about lowering health care costs. Brown talks constantly about restoring “the dignity of work.” Both have also smartly avoided some ideas that play better with liberal Twitter than swing voters, like the fever dream of eliminating private health insurance.

And both of them win elections. Last year, while most Ohio Democrats were getting trounced, Brown won, by 7 percentage points. Klobuchar won her own re-election in a landslide. She even won in two of the only three House districts nationwide — that flipped from Democrat to Republican last year. “She’s a progressive who’s found a way to connect with a wide range of people Democrats often struggle to reach,” Lawrence Jacobs of the University of Minnesota told me. “The Klobuchar message is: You can be both progressive and electable.”

Klobuchar and Brown do have weaknesses. She is battling accusations of having been a harsh boss, which seem to be a mix of sexist stereotype and some truth. Brown, as a middle-age white guy not known for rhetorical greatness, will have to show he isn’t too boring to stand out in a crowded field.

But if I were Trump, I would fear Klobuchar and Brown. Either would be well positioned to take back blue-collar states Trump needs, like Wisconsin, Michigan, Pennsylvania and maybe even Ohio and Iowa. They could also play well in the Sunbelt suburbs of Arizona, Florida and North Carolina.

And if I were the other 2020 Democrats, I’d be studying how Klobuchar and Brown have succeeded where so many other Democrats have been failing.

This article originally appeared in <a id="2a136cec-fd4f-44d5-b6a8-d3befeaf4c2f" href="https://www.nytimes.com/2019/02/10/opinion/amy-klobuchar-sherrod-brown-2020.html">The New York Times</a>.

It was a rout. About 56 percent preferred the more electable candidate, compared with 33 percent who picked the more ideologically in-sync candidate.

Trump's nightmare opponents

<h1>﻿Imagine for a moment that a presidential candidate made this speech:</h1>

My fellow Americans, I’m here today to tell you about my economic plan. Each year, I will require every middle-class family across this great country to write a check. We will then pool the money and distribute it to the richest Americans among us — the top 1 percent of earners, who, because of their talent, virtue and success, deserve even more money.

The exact size of the checks will depend on a family’s income, but a typical middle-class household will hand over $15,000 each year. This plan, I promise all of you, will create the greatest version of America that has ever existed.

You would consider that proposal pretty radical, wouldn’t you? Politically crazy. Destructive, even. Well, I’ve just described the actual changes in the American economy since the 1970s.

Economic output — known as GDP — per person has almost doubled over this period. But the bulk of the bounty has flowed to the very rich. The middle class has received relative crumbs.

If middle-class pay had increased as fast as the economic growth, the average middle-class family would today earn about $15,000 a year more than it does, after taxes and benefits. Instead, that middle-class family effectively forfeits the money to the rich, year after year after year. (Larry Summers, the former Treasury secretary, first got me thinking about calculations like these.)

The extreme redistribution of income — upward — has multiple causes. Some of them, like technological change, stem mostly from private-sector forces. But government policy plays a crucial role. Tax rates on the wealthy have fallen sharply. Labor unions have been undermined. Big companies have been allowed to grow even bigger and more powerful. The United States has lost its lead as the most educated country in the world.

More often than not over the past 40 years, our government has helped the rich at the expense of everyone else. As a result, economic inequality has reached Gilded Age levels.

In the face of these trends, the radical response is to do nothing — or to make inequality even worse, as President Donald Trump’s policies have. It’s radical because soaring inequality is starting to threaten the basic fabric of American life. Many people have grown frustrated and cynical. Average life expectancy, amazingly, has fallen over the past few years.

Over the sweep of history, the main reason that societies have declined, as scholars Daron Acemoglu and James Robinson have written, is domination “by a narrow elite that have organized society for their own benefit at the expense of the vast mass of people.” The name of Acemoglu’s and Robinson’s book on this phenomenon is, “Why Nations Fail.”

It’s worth keeping all of this in mind when you hear critics (or journalists) describe the economic proposals of the Democratic presidential candidates as “radical.” They’re not radical, for the most part. The proposals are instead efforts to undo some of the extreme economic changes of recent decades and to ensure that most Americans workers — not just a narrow elite — fully benefit from economic growth.

The proposals also happen to be popular, broadly speaking. On social issues, like abortion and immigration, the country is deeply divided. But clear majorities support higher taxes on the wealthy, higher taxes on corporations, more education funding and expanded government health insurance. No wonder: Americans don’t resent success, but they do resent not receiving their fair share of economic growth.

The coming primary campaign will be a good time for the candidates to hash out which specific ideas make sense and which don’t. So far, the agenda looks pretty good. Elizabeth Warren has a plan to increase workers’ power within companies — and help them get larger pretax raises. Cory Booker and Kamala Harris want to lift the after-tax pay of the middle class and poor. Kirsten Gillibrand and others support reducing major living costs, like child care and education.

Perhaps most important, some Democrats have begun pushing for a wealth tax — to reverse the upward redistribution of the past 40 years. Warren has proposed an annual 2 or 3 percent tax on large fortunes. Bernie Sanders has proposed a big increase in the inheritance tax.

These wealth taxes are a classic example of policies that are less radical than their opponents claim. Do you know who already pays a wealth tax? Middle-class Americans. It’s called the property tax, as Noah Smith of Bloomberg Opinion has noted. Every year, homeowners pay a percentage of their house value in tax. A house, of course, is the biggest asset that most families own. If middle-class families can pay an annual tax on their main source of wealth, wealthy families can, too.

The United States as we have known it — optimistic, future-oriented and more powerful than any other nation — cannot survive the stagnation of mass living standards over many decades. I’m glad to see that some political leaders understand this and are trying to recapture a core feature of American life.

Maybe we should start describing those leaders as conservatives.

This article originally appeared in <a id="2b43c255-ac2b-4733-ac1b-4997911d29f6" href="https://www.nytimes.com/2019/02/03/opinion/democrats-wealth-tax.html">The New York Times</a>.

What's really radical? Not taxing the rich

The exact size of the checks will depend on a family’s income, but a typical middle-class household will hand over $15,000 each year. This plan, I promise all of you, will create the greatest version of America that has ever existed.

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