Kerry's economic balancing act
Now that John Kerry has his team in place, he will have to face a question that confronts all Democratic candidates for president: How do you craft a populist economic message that appeals to average voters without scaring the pants off the business community?
Since at least the days of Andrew Jackson, Democrats have defined themselves as defenders of the common man in his battle with the monied interests. In his acceptance speech at the 2000 Democratic convention, Al Gore said the difference between Republicans and Democrats could be expressed simply. ''They're for the powerful. We're for the people," Gore said.
During the primaries Kerry borrowed the language of the populists to denounce ''Benedict Arnold" companies that send jobs overseas. John Edwards's stump speech, ''Two Americas," could have been penned by William Jennings Bryan.
Like a Michael Moore movie, populism stirs the passions of the Democratic base. But like a Michael Moore movie, populism has its drawbacks. It tends to turn off some voters, especially the critical independents Kerry desperately needs to attract. It also rests on certain dubious assumptions. The fact that some Americans are rich does not explain why others are struggling. The economy is not a zero-sum game. And while denouncing outsourcing and Wal-Mart's low wages may draw cheers, most voters are smart enough to know that the president can't do a whole lot about either.
The trick for Kerry is to show he cares about the economic fortunes of the middle class with a message that doesn't depend on harsh attacks or unrealistic promises. What should Kerry say? I would recommend three things.
1. Strengthen the safety net. A dynamic modern economy will create winners and losers. The losers can be victims of trade, technological change, or shifting consumer taste. ''Republicans reward winners but they don't pay enough attention to those who don't win," said Robert Litan, a senior economist with the Brookings Institution in Washington. Litan's solution: a beefed up government effort to help the displaced. That effort would include more money for retraining, health insurance for the unemployed, and wage insurance, temporary payments to workers forced to take new jobs at lower wages. Government can't guarantee job security. It can minimize insecurity without spending a fortune.
2. Raise taxes on the well-to-do. Kerry already has said he will raise taxes on those earning more than $200,000. The truth is he may have to raise the taxes of those earning less. The Bush administration's tax cuts provided some badly needed stimulus in the short run, but in the long run they are unaffordable. They will create unsustainable budget deficits, higher interest rates, and cuts in vital government programs. The affluent were the chief beneficiaries of the tax cuts. They got lower rates on income, capital gains, dividends, and estates. If taxes must go up, the wealthy have to pay more. That isn't class warfare. It's common sense.
3. Preserve Social Security and Medicare in spirit, if not detail. Social Security was the crowning achievement of the New Deal. Medicare was arguably the most important program to come out of the Great Society. Together they have improved the lives of America's senior citizens. But there is a problem. As anyone with a calculator can figure out, the rising cost of the two programs will strain government finances to the breaking point. Both will have to be scaled back. Democrats can't prevent that. What they can do is promise to use the knife carefully, making sure the most vulnerable seniors don't get badly hurt. They can also promise that the government won't completely privatize the two programs and leave seniors to fend for themselves in the marketplace.
I'll admit that my three-point platform isn't going to get people excited. Denouncing the rich and big corporations would be more fun. But Kerry needs to do more than make his supporters feel good. He needs to get elected president and govern the nation. Populist slogans won't help him achieve that goal.
Charles Stein is a Globe columnist. He can be reached at stein@globe.com.
