Economists come in many different stripes. We have microeconomists who study the intricacies of supply and demand and macroeconomists who search for overarching trends. We have financial economists who fixate on interest rates and econometricians who fashion intricate mathematical models. We have public finance economists, industrial economists, and international economists.
We even have labor economists, specialists who study what’s going on with people who do the actual work that keeps societies running.
President-elect Joe Biden’s new line-up of economic officials and advisers turns out to be packed with labor economists, a bit of encouraging news for those of us who consider America’s egregious economic inequality a clear and present danger. Labor economists tend to worry about inequality, too.
Biden had three slots to fill on his Council of Economic Advisers, the White House panel responsible for informing big-picture economic policy. He filled all three with labor economists.
One of the three, Jared Bernstein, has been a respected face in progressive economic circles for decades. A long-time fixture at the Economic Policy Institute, Bernstein co-authored nine annual editions of EPI’s annual sourcebook on the status of America’s ongoing class war, The State of Working America, and understands the squeeze on America’s workers as well as any economist.
A coauthor with Bernstein on one of those State of Working America editions, Heather Boushey, will also be serving on Biden’s Council of Economic Advisers. Boushey has of late been directing the Washington Center for Equitable Growth, an outfit funding and publishing research on inequality that aims to be “relevant, accessible, and informative to the policymaking process.”
“Decades of failed economic policies, based on ideology instead of evidence, and a blind adherence to the idea that markets can solve every problem,” Boushey writes in one of her own recently published papers, “have made our economy and our society more vulnerable” to Covid’s ravages.
The chair of Biden’s Council of Economic Advisers will be Cecilia Rouse, the dean of Princeton’s School of Public and International Affairs and a specialist on education whose work explores how we can “make it easier for people to find long-lasting economic security.”
America faces “a moment of urgency and opportunity unlike anything we’ve faced in modern times,” Rouse related earlier this week, the urgency of a “devastating crisis” and the opportunity “to build a better economy in its wake — an economy that works for everyone.”
Biden’s top economic pick, Janet Yellen as treasury secretary, brings both progressive leanings and some long experience in inside-the-Beltway battles over who gets what in the American economy.
“The past few decades of widening inequality,” Yellen, then Federal Reserve chair, observed in 2014, “can be summed up as significant income and wealth gains for those at the very top and stagnant living standards for the majority,” two trends, she added, that “greatly concern me.”
Biden’s economic policy personnel choices, overall, stack up as much more open to challenging concentrated wealth and power than the Obama administration’s key economic appointees.
“For almost every role so far,” notes an Intercept analysis, “Biden has chosen someone more progressive and less entrenched in Wall Street than the same official under Obama.”
The new Biden economic team, enthuses the New Yorker, brings an “emphasis on raising wages, reducing inequality, and fostering greener, more inclusive growth.”
Indeed, this initial batch of Biden picks may already be the most visible change-oriented circle of economic advisers since the “Brains Trust” made headlines in the early days of FDR’s New Deal.
That “Brains Trust” — the first group of White House staffers ever to gain public policy celebrity status — has somewhat faded away into history. But the hoopla and hope that gang generated still holds an important lesson for us today: Brains, even wonderfully progressive brains, can only do so much.
The players who would make up what came to be known as FDR’s Brains Trust, or “Brain Trust” as the label sometimes went, first came together in Roosevelt’s 1932 campaign for the White House. The group included, as the left economic journalist Robert Fitch once noted, “nary a Wall Streeter.”
The core Brains Trust trio all taught in and around New York’s Columbia University. Rexford Tugwell had studied years earlier with Scott Nearing, the socialist economist who had warned against the threat plutocracy posed to America’s democracy. A. A. Berle had been researching the internal dynamics of corporate ownership and power. Raymond Moley had grown up on the radical economic theories of Henry George, the original Gilded Age’s most revered champion of a more equal America.
In the spring of 1932, these Brain Trusters would help candidate Franklin Roosevelt deliver a stirring call for “bold, persistent experimentation” to aid the “millions who are in want.”
“Do what we may have to do to inject life into our ailing economic order,” FDR declaredin one widely publicized address, “we cannot make it endure for long unless we can bring about a wiser, more equitable distribution of the national income.”
Roosevelt’s dozen years in the White House would indeed end with that “wiser, more equitable distribution.” But the Brains Trust behind FDR’s call for “bold, persistent experimentation” had little — in the end — to do with that success.
These progressive staffers didn’t deliver unto us the great achievements we now associate with the New Deal. All the New Deal’s great achievements — everything from Social Security and the National Labor Relations Act to stiff taxes on the rich and the forty-hour week — only materialized after intense struggles that mobilized Americans by the millions.
These many millions mobilized because the initial reforms enacted in FDR’s now near-mythic “First Hundred Days” in the spring of 1933 came nowhere close to fixing what ailed Great Depression America. New movements would arise to push for much more. The pushing would come from seemingly everywhere. From newly energized unions. From cities and states where the old Socialist Party had made some of its deepest inroads. From the rural South. From urban neighborhoods. From old people, a demographic that had never before mattered politically.
In 1934, America’s labor movement would re-emerge after a dozen sleepy, sinking years. In 1934 alone, a million and half workers staged an estimated 1,800 walkouts. In cities the nation over, newly organized “Unemployed Councils” demanded an adequate income for every jobless American and took direct action to put evicted families back in their homes.
Out of California came a call to guarantee a decent income to every elderly American. This new “Townsend Plan” movement, led by a physician shocked by the sight of three old women scavenging in his garbage, demanded $200 a month for every senior over 60 who agreed to spend all that $200 within 30 days. By the end of 1934, Townsend Clubs had nearly a half-million dues-paying members.
Out of Louisiana came an even grander effort, the Share-Our-Wealth campaign led by Huey Long, the state’s former governor and sitting U.S. senator.
“To cure all of our woes,” Long told a national radio audience early in 1934, “it is necessary to scale down the big fortunes, that we may scatter the wealth to be shared by all the people.”
In short order, Long’s Share Our Wealth Society would claim a network of 27,000 local Share Our Wealth clubs, with over eight million names on file. Long’s staff opened 60,000 letters a week.
The campaign’s national newspaper advocated a 100 percent tax on wealth over $8 million and income and inheritances over $1 million. Revenue from these taxes, Share Our Wealth told America, would fund a guaranteed annual family income of at least $2,000 a year, old-age pensions, and a vast series of job-creating public works.
In the White House, Roosevelt could hear what these new movements were demanding — and feel the heat.
“We find our population suffering from old inequalities, little changed by past sporadic remedies,” FDR candidly admitted in his 1935 State of the Union address. “In spite of our efforts and in spite of our talk we have not weeded out the overprivileged and we have not effectively lifted up the underprivileged.”
Privately, Roosevelt would confide in his Brain Truster Raymond Moley that something had to be done “to steal Long’s thunder.” Out of the White House would soon come a series of measures to attack “old inequalities.” Collectively, they would make for a brilliant pre-emptive strike — against the growing sense that Roosevelt’s New Deal had tread too timidly.
These new initiatives would speak more directly to average Americans. The new Social Security Act FDR proposed would address the economic insecurity that had driven millions of elderly Americans to the Townsend Plan. For the millions of unemployed and their families, the new New Deal would offer a Public Works Administration with a $5 billion budget, a far more ambitious jobs effort than FDR had previously embraced. For workers demanding union representation, FDR would sign into law the National Labor Relations Act, a measure that created an apparatus for protecting the worker right to organize and bargain collectively over the wealth that American industry was creating.
Then in June 1935, on the same day FDR’s Social Security bill passed the Senate, Roosevelt delivered his first “Message to Congress on Tax Revision.” No sitting President had ever so plainly made the case for taxing the wealthy and their works.
“Our revenue laws have operated in many ways to the unfair advantage of the few,” FDR acknowledged, “and they have done little to prevent an unjust concentration of wealth and economic power.”
Congress would go on to hike the top-bracket income tax rate from 63 to 79 percent, and FDR would go on to campaign in 1936 against “the forces of privilege and greed.” This time around, he would throw no bones to keep corporate leaders content. Roosevelt now no longer needed the institutional base of the old Democratic Party. A new institutional partner had arrived on the scene, the newly organized mass industrial unions, the CIO of John Lewis and Sidney Hillman.
With labor help, Roosevelt was ushering onto the American scene a new political line-up, notes historian Jean Edward Smith, “a unique alliance of big-city bosses, the white South, farmers and workers, Jews and Irish Catholics, ethnic minorities, and African Americans that would dominate American politics for the next generation.”
The energy for all this came “from below,” from the bold demands that the new movements of the 1930s shoved onto America’s political stage.
The obvious lesson for today: Nothing fundamental will change without new mass movements. And our sharpest progressive activists have internalized that truth. We “need to create political space for bolder action,” says Waleed Shahid, a spokesman for Justice Democrats, the group that’s helped elect progressive political talents like Alexandria Ocasio-Cortez.
“If you don’t create pressure,” adds Shahid, “nothing gets done.”