Wednesday, March 26. 2008
Gene Sperling wrote a book a couple of years back, called The Pro-Growth Progressive: An Economic Strategy for Shared Prosperity (2005, Simon & Schuster). He was touted as one of the top gurus of Clintonomics. The book looked to be short on insight and long on bullshit, but I had some minor interest in how he might try to play it, especially given the traps that Bushonomics dropped along the way. So I thought I might wait for the book to come out in paperback, but that still hasn't happened. Now he seems to be Hillary Clinton's economics spokeswonk. The Wichita Eagle has been running a series of columns -- McCain and Clinton down, Obama to go -- on how each of the presidential candidates proposes to address the economy. Sperling wrote Clinton's piece. It is as lamebrained as McCain's (written by Douglas Holtz-Eakin) was incoherent. (Both are here, on the Washington Post's website. Sperling leads off:
He then repeatedly refers back to this "Main Street Test" (always capitalized, sometimes in quotes), as in "Sometimes the best way to meet the Main Street Test is to directly assist those who live there." He even gets witty at one point, asking "can't we afford $30 billion to prevent Main Streets from turning into mean streets?" -- the $30 billion referring back to her proposed Emergency Housing Fund and/or the Bear Stearns bailout.
As someone who literally grew up on Main Street, I can relate to this notion as well as anyone, even though I'm skeptical that the 1,000 sq. ft., $30,000 houses on my block -- my parents bought one for less than $8,000 in 1949, and lived in it until they died in 2000 -- are Clinton's idea of Main Street. The mortgages going belly up these days are more likely to be on suburban cul de sacs, because that's where the overreach is: the gap between how well we think we're living and how poorly we're actually doing. Clinton seems to think Main Street is just another word for her chosen demographic, the sanctified Middle Class -- of "American Dream" fame, now every bit as illusory as Main Street.
But where the Middle Class is a time-tested cliché, and Main Street is a hoped-for cliché, the really lame thing is the Test. She's done this before with her Commander-in-Chief Test. Indeed, this seems to be her specialty: making up bogus standards, then declaring oneself to have passed while the competition fails. Maybe she likes the pass-fail aspect, or maybe she just likes playing games. But even if you take this at better than face value and assume that by Main Street she means people with more/less median incomes, wealth, and security, and that she would really like to do something to help those people, it still makes no sense to say that the Main Street Test holds the answer to every economic problem. Preventing the entire financial house of cards from collapsing is a much bigger matter than just how it affects Main Street.
Similarly, there are many other economic problems that are not all that well viewed from the middle. In particular, the poor have a much clearer view of economic risk and lack of opportunity than median earners have -- part of this is that the poor show what can happen to the currently better off if/when misfortune strikes, but the reasons for addressing these problems shouldn't be limited to the Middle Class fear of falling. There are other cases where the rich offer a clearer view -- often times as bad examples, but not always.
One quasi-interesting thing about the Fed's actions to date is that thus far they've enjoyed pretty much across-the-board support. That's basically because no one wants to see the whole system fall to its knees, and that's about all these stopgaps can try to prevent. But there are much bigger political problems, which hardly anyone is up to raising -- least of all presidential candidates. But the problems aren't likely to be avoidable for long.