Re: Debunking the myth of Europe's "sluggish" economy

[Paul <paul_@xxxxxxx>]

Eugene C. writes:
> I hope my post seems connected to the subject
> line, I'm bouncing off Paul here.  In a WSJ opinion piece a couple
> of days ago, The Mother of All Electoral
> IssuesBy STEVEN RATTNER July 19, 2006
>
> Steven Rattner praised the Democrats for  moving albeit slowly to
> focus on income distribution --defined  as "...
> the failure of robust top-line growth in the
> U.S. economy to filter into the wallets of Americans below the top of the
> pyramid." as the mother of all electoral issues this year. 
> Rattner rehearsed the income distribution data and  called for
> change.  From a centrist Democrat it was interesting -- until the
> policy prescriptions appeared, which were warmed over pleas for better
> education, etc., and more of the Reich/Clinton wisdom.  That the
> economy doesn't work is clear but ... .   Rubin and Summers
> will figure this out for us.


Thanks to Gene for posting this.  I found the full text a bit
chilling, yet very much what I have seen in various conferences, policy
papers and informal conversations. 
http://online.wsj.com/article_email/SB115326340061610384-lMyQjAxMDE2NTIzMDIyNjAzWj.html

People often soften after they leave power.  They also tend to act
far more embracing and open minded in order to get back into power. 
'Lessons were learned', 'mistakes will not be repeated', we are
told.  This (dominant) wing of the Democrats is having no such
second thoughts on economic policy.

This article purportedly announces the new awareness of this powerful
group to treat the New Inequality as "the mother of all electoral
issues" with an impact of "the next global warning". 

Yet much space was used to attack the liberal wing of his own Party
("those who will trumpet unionization and
protectionism").  Bush and his policies are given far gentler
treatment.  

Rattner's proposals for reducing inequality focus on reducing Federal
spending, reducing entitlements and not embracing redistribution
(?!).  Urgent causes of inequality include immigration and gas
prices.  Education is the key solution -- but doing something
requires changing "quaint progressive orthodoxy" in handling
teachers.  The only specific proposals are to raise the minimum wage
and give a transition payment to displaced workers if they accept a
permanently lower salary.

This is not the op ed of a lone person (albeit a key player in the Dem
Party).  As Rattner points out, he is drawing on the Hamilton
Project (nestled in Brookings) which seeks (and is likely) to be the seed
bed for anything akin to a return to DP power.  Staffed by Rubin,
Altman, etc they have gathered together a compact group of economists and
financiers.  Worth glancing at their papers and Advisory Council
& Experts, many of whom will likely have key sub-cabinet posts should
the Democrats win.  

But one gets the feeling that they care far more about defending their
contributions to the neo-liberal  policy regime than defeating the
Republicans.   
http://www.brookings.edu/es/hamilton/hamilton_hp.htm

 Paul