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Friday, February 28, 2014

The Economist: Editorial Board: Inequality in America: How to be a True Progressive


The Economist: Editorial Board: Inequality in America: How to be a True Progressive

This post was originally posted at The New Democrat on Blogger  

I've mentioned before that I do not qualify as a Progressive, at least from today's popular definition of it, someone who believes in using government to make society better and fairer with new government social programs that are generally run by the Federal Government, but I'm not sure that a lot of today's Progressives qualify as Progressive either with their constant assaults on corporate America and private enterprise and private power along with being so anti-military and law enforcement and not only in favor of the welfare state but also the nanny state, believing that Americans have too much freedom in how they manage their personal lives, with new prohibitionist ideas as they relate to what people eat, drink, smoke, as well as who and how we communicate with each other.

And these are just some of reasons why I call myself a Liberal.  I am a Liberal, at least as far as it is classically defined, but I don't like being associated with big government statists right and left, and today's so-called Progressives are really left-wing statists but not very liberal or progressive and not so much interested in progress.  True Progressives believe in moving forward and using government to make that happen as much as they are interested in growing the size and scope of the central state.

But I do view myself as a Progressive in the sense that I believe in progress and moving forward and even using government to help bring that about. But where I would differ with real Progressives, FDR or LBJ Progressive Democrats, is that I don't believe the Federal Government has all of the answers and therefore shouldn't have all the power.  As a true Liberal, I want to see that power go to the people who need it.  The income gap, as I prefer to call income inequality, is the perfect place to start.

I agree we need a new approach in how we deal with the income gap and having hundreds of programs that are really about subsidizing people in poverty, whether they are working or not, to meet their needs. This is not so much empowering them to meet their needs, which is not the right approach (this is where I agree with The Economist) but scrapping the minimum wage and replacing it with an expanded Earned Income Tax Credit is not the way to go, and this is where I agree with Progressive economist Jared Bernstein on who is an actual Progressive Democrat.

What would happen if this new conservative idea about the EITC were to ever happen is that you would end up transferring money from hard-working middle class Americans and, in a lot of cases, Americans who are just barely middle class, to the wealthy and to employers, because now they wouldn't have to pay the minimum wage and would be able to pay their low-skilled workers wages that are much lower, because these low-skilled workers would get that money back and perhaps more money from middle class tax payers instead of their employers in the form of an expanded EITC.

And this is where both the Earned Income Tax Credit and increasing the minimum wage are both critical and both needed because they would both increase wages for people at the bottom and increase their purchasing power. This is for people who spend all of their money, which drives economic and job growth, because they have no other choice because of how little money they make, but it also encourages people to work and not go on welfare or stay on welfare because they would know they could get more money working than not working.

But this alone doesn't solve the income gap because we need to not only be targeting Americans at the bottom when it comes to the income gap but also people in the struggling middle, who can see the bottom of the economic scale from where they sit, which is why unemployment insurance should be expanded to include back-to-work centers or programs that will help them pay their bills as they receive assistance to help find a good job through education and job training and assistance. Welfare insurance puts people to work and provides educational and job training assistance for workers who collect any form of public assistance.

A mid-term election, especially the one that will affect the last 2 years of the Obama Administration, is not the right time for President Obama to take on his far-left flank with all these new work and education-over-dependency ideas, because he needs these voters behind him and congressional Democrats as they run for reelection and for the House and Senate in 2014, but these are things he could propose in his budget this year, and put on the agenda for the next Congress, whoever is in power, or even if it is divided again.