Must-Read: Mike Konczal: The "new liberal economics" is the key to understanding Hillary Clinton's policies:
We’re witnessing the emergence of an important new vision...
...Before the crash, complacent Democrats, whatever their disagreements with their Republican peers, tended to agree... [that] the Federal Reserve possessed the tools to nudge the economy to full employment, they thought. What’s more, government programs, while sometimes a necessary evil, were likely to be an inefficient drag compared with the private market. Inequality was something to worry about, sure, but hardly a crisis, and policies were correspondingly timid and market-focused. But there’s been a quiet revolution in thinking about economic issues — at least on the left. Call the developing consensus the "new liberal economics."...
Inequality is not a regrettable but inevitable byproduct of an efficient economy, nor a temporary, self-correcting trend. It’s driven by policy choices, and new choices can make a difference.
The economy will not simply bounce back from any weaknesses, as was assumed under Alan Greenspan’s Great Moderation. Rather, there are deep structural problems that include a global savings glut and unwillingness by US companies to make investments.
"Nudging" the private market is not always the best way to deliver core goods and economic security. Deploying government services directly can be more effective....
"Full employment" is back in the Democratic platform: To make this concrete, consider the Democratic platform. A demand for full employment was in every Democratic platform from 1944 to 1988; then it was taken out in 1992, when the party nominated Bill Clinton. Activists, such as the "Fed Up" campaign, successfully fought to put it put back in this year’s platform.... Liberals see a bigger role for "public options" — government programs that compete with private ones. This is on display in the campaign activists have waged to expand Social Security.... The trend extends to other public policies. In January 2015, President Obama announced a plan to make public community colleges tuition-free....
President Obama was caught in the middle of these changes. Though his presidency evolved to embrace much of them, the foundations of his approach were rooted in the old regime. Hillary Clinton is the first Democratic nominee to have to put forward a new agenda in light of the Great Recession and the policy revolution, and her agenda energetically incorporates these ideas.... For now, ideas have consequences, and the people with the exciting ideas trying to address our current situation are on the left.
