Econobamanomic Theory

Illustration by Ward Sutton

The six-week campaign waged by Barack Obama in Pennsylvania will no doubt be remembered for many incidents that the candidate would just as soon forget. The gutter balls in Altoona. The gormless queries about whether Yuengling is “some designer beer.” The tortured backpedaling from, explanations of, and apologies for his bitter/cling faux pas. But what will stick in my own wonky mind about the contest in the Keystone State is something else entirely: It was here that Obama finally turned in earnest to the topic of the economy.

Not that he had much choice in the matter, even before Bittergate. Having been clobbered by Hillary Clinton in Ohio, particularly among blue-collar voters, Obama and his people clearly saw the importance of proving that he could talk the economy talk. So he went to Pittsburgh and trashed NAFTA, CAFTA, and the Colombian free-trade deal. He went to Wilkes-Barre and attacked Big Oil for price gouging. He went to Washington and told a group of building tradesmen, “It’s time we had a president who didn’t choke saying the word union.” He went to last week’s debate in Philadelphia and declared that he felt the pain of “a gentleman in Latrobe who had lost his job and was trying to figure out how he could find the gas money to travel to find a job.”

Now, the knock on Obama for months has been that he’s guilty of a maddening policy vagueness. That whereas Clinton has trafficked in specificity and substance, he’s stuck to vaporous theme and inspiration. But Obama’s recent economic shtick has been anything but nebulous. In fact, it has been nearly as laundry-listy as Hillary’s patented spiel. The proposals pile up, the numbers tumble out—$60 billion for infrastructure, $80 billion for middle-class tax cuts, $150 billion for green technologies—and the mind begins to reel.

Something is better than nothing, to be sure, and many of Obama’s plans strike me as perfectly sensible. What’s missing, however, is an overriding theory of the case—a powerful narrative that both frames and makes sense of the changes whipping through the economy like a Bengali typhoon. Obama may not need such a narrative to win the Democratic nomination. But without one, he’ll find himself fighting in the fall without the gnarliest club at his disposal for the bludgeoning of John McCain—and for beating back Republican charges that, just below the surface, he’s a reflexive, old-school liberal. Obama, it seems, has the right idea: Steal a page from the Clinton playbook. The problem, so far, is that he’s been pilfering from the wrong Clinton.

What everyone remembers about Bill Clinton’s race in 1992, of course, is that he focused on the economy “like a laser beam,” as he put it. They remember “It’s the economy, stupid.” What they often forget is how cohesive, compelling, and even daring was the story he told about the source of the insecurity so many voters were feeling: the story of an economy in the throes of a profound, irreversible structural transformation, driven by technology and globalization. Clinton made no bones about the pain all this would cause. He didn’t hesitate to inform workers in old-line industries that many of the jobs that had disappeared were never coming back. But Clinton also laid out an ambitious agenda to upgrade the nation’s store of human capital, enabling anyone willing to make the effort to “make change their friend.” He called that agenda Putting People First, and it played a big part in persuading voters to put him in the White House.

“Having the right narrative is just as important as having the right policies,” says Robert Reich, Clinton’s first Labor secretary and author of the 1991 book The Work of Nations, which provided the underpinnings of Putting People First. “People are confused. Half of them think the cards are stacked against them by some devious mastermind inside the Carlyle Group. The other half don’t understand enough to be that cynical. They’re looking for an explanation for what’s happening to them. If you just give them a ten-point plan, they tune out.”

It’s not quite fair to say that neither Obama nor Hillary has offered any narrative whatsoever. “But what they have isn’t an economic narrative—it’s a political narrative,” says another adviser who played a role in shaping WJC’s message. “ ‘It’s all George W. Bush’s fault. Things are bad. I’m gonna make them better. Oh, and John McCain is Bush II.’ That’s what they’ve got.”

Obama, for his part, does more than blame Dubya—his circle of censure is wider, if no less predictable and no more insightful. He puts much of the rap on trade deals lacking “enforceable labor standards” that fail to “put American workers first.” He rails at China for “dumping goods” on the United States and undervaluing its currency. He bangs on about “corporate lobbyists in Washington … writing our laws and putting their clients’ interests ahead of what’s fair for the American people.”

The optimistic reading of this account is that Obama is simply following in the time-honored tradition of Democratic-primary pandering. Because if he believes this story, hoo boy, he may be beyond salvation. For all the caterwauling over NAFTA et al., the negative effects of such trade deals on the American economy are vanishingly small. As for amending them: “It won’t make a flying fuck of a difference to U.S. workers if there are labor standards in these trade agreements or not,” says one of the preeminent Democratic economists in the country. And though it’s easy (and fun!) to bash Beijing and Gucci Gulch, they pale in importance beside other forces—information technology primary among them—in affecting the prosperity of working- and middle-class voters.

For Obama, the challenge, which Clinton met so effectively in 1992, is to fashion a narrative that acknowledges and even embraces those forces and then describes how they can be channeled. His failure so far to offer anything like that is a source of frustration among Democrats (including many who support him) who believe that doing so is of paramount strategic importance. That his political advisers, including chief strategist David Axelrod, are avowedly policyphobic is typically cited as an explanation, as is the fact that his economic team—led by Austan Goolsbee, the University of Chicago academic who got himself and his candidate in hot water with his off-message chat with a Canadian official about NAFTA—is politically green. “Austan is a nice guy and a smart economist,” says one Democratic economic-policy geek. “But about this kind of stuff, he’s totally clueless, which is kinda frightening.”

But Obama’s difficulties in this realm are deeper than that. In 1992, Clinton was able to set himself apart from a prevailing Democratic orthodoxy that was retrograde in the extreme. “Clinton’s story was the right story then, and though certain things have changed, it’s still the right story,” says former Treasury secretary and ex–Harvard president Larry Summers. “So you can say things that are new or you can say things that are true, but it’s hard to say both—which makes it difficult to frame an exciting economic narrative.”

Reich maintains, however, that the Clinton story would be a decent starting point for an Obama narrative. “Democrats have to be willing to say, ‘We had a great shot in the nineties, we did a little, but mostly we did dipshit,’ ” Reich tells me. “You can blame it on Gingrich or Greenspan or the Reagan deficits. But there’s a huge unfinished agenda to be completed.” In Reich’s view, the next part of the story is what’s happened in the past ten years: that all the growth has gone to the top 5 percent of earners, and the thing that kept the middle class afloat—debt—has reached its outer limit. “In the Clinton era, we had the middle-class squeeze,” he says. “Now the middle class is collapsing, and the only way for the economy to utilize its productive capacity is to make big investments in education, health care, and green-tech.”

Robert Shapiro, another veteran of the 1992 Clinton economic team and author of a new book on globalization, agrees. “The narrative is: The U.S. is way ahead in the global economy, but we need to make basic changes so that everyone can prosper,” Shapiro says. “We need to get control of health-care and energy costs, because without it, American workers will never see rising wages—since the burden on businesses is otherwise too great.” As for training, Shapiro has proposed giving grants to all the community colleges in the country to keep their computer labs open on nights and weekends so that anyone can show up and learn (for free) the skills they need to compete in a tech-centric economy. “We can do it for $125 million a year, and even if it costs twice that much, it would be worth it.”

The Obama campaign has already adopted this last idea of Shapiro’s. And as the hopemonger moves closer to securing the Democratic nomination, the party’s savviest economic-idea merchants are beginning to congregate around him. (Late last week, Reich formally endorsed Obama; his first memo to Axelrod advancing his concept of “bottom-up economics” will no doubt have been dispatched by the time you read these words.)

For Democrats, all this should be a cause for hope—if Obama will listen, that is. Assuming he is the nominee, he’ll face in McCain and the GOP an opposition hell-bent on caricaturing him as the ideological offspring of George McGovern and Mike Dukakis (with a Weatherman for a godfather), as a hackneyed, knee-jerk, retrograde lefty gussied up as an avatar of the future. For Obama, therefore, telling the right kind of story about the economy will not only allow him to trump McCain on a subject where the latter has barely the faintest clue. It will offer him perhaps his very best chance to prove he is what he claims to be.

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Econobamanomic Theory