Rejecting The YOYOs

Jared Bernstein

May 30, 2006

Jared Bernstein is a senior economist at the Economic Policy Institute  and author of the new book, All Together Now: Common Sense for a New Economy (Berrett-Koehler Publishers, Inc.).The way the polls tell the story, American politics may be closing in on a tipping point.  Even among traditional supporters, the Bush agenda is wearing thin. Sure, presidential approval ratings bounce around, but the depth and the persistence of Bush’s negative trend suggest that this isn’t just about the cost of a gallon of gas. A majority of the electorate may well be ready for a change.

If so, the result would be a shift in power from conservatives to Democrats in the midterm elections. Simply changing the guard, however, won’t ensure that we start to address the broadly-shared sense that somewhere along the way, we’ve gotten fundamentally off-track.

It’s time for the WITTs to take over from the YOYOs.

Come again?

American politics have always been a balancing act between protecting the rights and privileges of individuals, and working together to meet profound challenges. Yet in recent years the emphasis on individualism has been pushed to the point where it is hurting our nation’s standing in the world, endangering our future, and, paradoxically, making it harder for individuals to get a fair shot at the American dream. The message, sometimes implicit but often explicit, is, You’re on your own , or YOYO.

Under YOYOism, whatever economic challenges we face as a nation—globalization, health care, inequality—the best solution is for people to fend for themselves. Its central goal is to shift economic risks from the government and corporations onto individuals and their families. You can see this beneath the surface of almost every recent conservative initiative: Social Security privatization, personal accounts for health care, attacks on labor market regulations, and the perpetual crusade to slash the government’s revenue through regressive tax cuts—“starving the beast”—and block the government from playing a useful role in our economic lives.

While this fast-moving reassignment of economic risk would be bad news in any period, it’s particularly harmful today. The challenges we face are generating both greater inequalities and a higher degree of economic insecurity in our lives.

Even with unemployment low in historical terms, the earnings of most workers have failed to keep pace with inflation, much less with our impressive productivity growth. Productivity growth is up 15 percent over the current recovery and the profit share of national income is at a 39-year high, but the inflation-adjusted weekly earnings of the median, or typical, full-time worker are actually down by two percent.

Conservatives are in denial about these facts, continuing to cite GDP growth, etc., as if such top-line statistics will make workers feel better about their squeezed paychecks. And it’s no surprise that they’re stuck with an economic message that amounts to “it’s all good.” Under YOYO economics, there is no explanation for an economy that’s doing fine except for the people in it.

Meanwhile, Democrats are generally following the adage, “when your opponent is beating himself up, sit down and watch.”

“We’re not them” could be a winning platform right now. But to stop there sacrifices a unique opportunity to introduce a new, optimistic agenda with the potential to reach an electorate that understandably seems stuck between apathy and cynicism.

Such sentiments grow right out of the YOYO narrative: in our competitive, global economy, the best your government can do is give you a tax cut, a private account, and get out of your way. After that, if you’re not skilled enough to compete, well, “we feel your pain.”

We need an alternative vision, one that supports individual freedom but also emphasizes that such freedom is best realized with a more collaborative approach to meeting the challenges we face. The message is simple: We’re in this together , or WITT.

Where YOYO economics explains why we cannot shape our participation in the global economy to meet our own needs, or provide health coverage for the millions who lack that basic right, or raise the living standards of working families when the economy is growing, WITT policies target these challenges head on. These outcomes occur not through redistributionist Robin Hood schemes, but through creating an economic architecture that reconnects our strong, flexible economy to the living standards of all, not just to the residents of the penthouse. As the pie grows, all the bakers get bigger slices.

Step one is to restore some fiscal sanity and basic competence at all levels in national government, a step we’ll hopefully begin taking in November. Beyond that, there are actually a number of good, big ideas floating around to create precisely the architecture America needs.

There are doable plans for universal health coverage, boosting retirement savings, and for creating an ambitious partnership between business and government to seriously pursue energy independence. There are roadmaps for tapping the growth-enhancing benefits of globalization to replace the domestic labor demand it saps from our job market

Put it all together, and we create the potential to reconnect the well-being of working families to the growing economy.

The YOYOs chickens are coming home to roost, and many of us await with great hope the arrival of the much more optimistic, can-do, WITT agenda. The only question: who has the vision to lead the way?