masaccio — Democrats Try to Cope With Piketty

We now have two leading Democrats talking publicly about the implications of Thomas Piketty’s Capital in the Twenty-First Century: Jason Furman, the head of the Council of Economic Advisors, and Hillary Clinton. Piketty met with the Council of Economic Advisors on his recent trip to the US. There is no substance in the reporting of the event, but Furman took up the book in a speech to The Institute of International and European Affairs in Dublin, Ireland on May 7. Then Hillary Clinton spoke on the subject to the New America Foundation. I could pay $175 for a transcript, but I’ll settle for media coverage. It’s pretty much what you’d expect from the timorous leadership of Not-Republicans Party: simple common sense steps that are already part of the supposed policy structure of the party and just happen to be sufficient to solve the problem, just like banning plastic shopping bags as a solution to climate change....

[Hillary] Clinton continues the Democratic Party’s conservative turn. Get an education that you pay for with debt serfdom. Save for retirement if you have a job, meaning don’t buy anything except what you need to stay alive. It’s all on you, and if you fail, it’s your fault. Where once the Democratic Party at least paid lip service to the importance of solidarity among citizens, today’s party frankly embraces the pernicious doctrines of neoliberalism, with a dollop of Earned Income Tax Credit on the side.

Firedoglake
Democrats Try to Cope With Piketty
masaccio

However, masaccio lets Furmann off rather light. But Katherine Geier hits him full bore in her criticism of his review of Piketty, posted here at MNE previously. If you didn't read it, here is her take on Furman, a Democratic up and comer in the mold of Robert Rubin and Larry Summers.

Among the most important members of the neoliberal mafia are former Treasury Secretary Larry Summers, and Jason Furman, who is currently the chairman of President Obama’s Council of Economic Advisers. In the past week, both Furman and Summershave delivered substantive critiques of the book.

Like it or not, what people like Furman and Summers think matters. This pair and their cohort steer American economic policy today, they controlled it the last Democratic administration, and unfortunately, Hillary Clinton or whomever the next Democratic president ends up being will likely put the same people in the driver’s seat once again. To the extent that anything substantial gets done to address economic inequality in this country in the near future, it will be because people like Larry Summers and Jason Furman—or, to be more precise, the economic interests they so faithfully serve—allow it to happen.

... Furman is less well known than Summers, but because he’s younger, he’s going to be around for a while—so, regrettably, attention must be paid. Before joining Obama’s economic team, Furman was best known for his paper claiming that Wal-Mart is a “progressive success story” that has brought “huge” benefits to middle-class Americans and “even . . . larger” gains for the working class.

Furman has previously been a cheerleader for the kind of “free trade” deals that turn out to be not much more than corporate giveaways. He’s also a fan of cutting Social Security benefits.

It’s hardly a shock to discover that the guy is one of Robert Rubin’s protégés. What is a bit more of a surprise—albeit deliciously ironic, in light of his Piketty critique—is that Furman comes from fabulous wealth. His father is gazillionaire New York City real estate mogul Jay Furman; he’s the kind of rich that has enough spare cash to throw around to get his name slapped on college buildings and hospital wings.

Furman’s comments about Piketty came in a speech he made last week in Ireland about the global economy. His discussion of Piketty and economic inequality made it clear that his basic neoliberal orientation remains intact. He dismissed Piketty’s argument about the relationship between growth and the return on capital—although he admitted that it’s a “plausible reading of the aggregate data.” In fact, Piketty provides several centuries worth of data to support his argument....

Finally, there is the biggest failure of all in Furman’s speech, which is his set of policy recommendations for addressing inequality. Among them are honorable causes that any decent Democrat would lustily endorse, such as raising the minimum wage, and expanding access to preschool.

But along with those, Furman attempts to sneak in some remarkably crude 1990s-era neoliberal bamboozlement. More free trade agreements are on Furman’s inequality-busting agenda, even though there is no evidence that such agreements reduce inequality, and there is plenty evidence that they increase it, since such agreements tend to lead to massive job loss. Cutting corporate tax rates and enacting more corporate tax breaks are on his wish list, as well.

Then there are the anti-inequality policies that are absent. Furman doesn’t breathe a word about the proposals Piketty advocates for in his book: a global tax on wealth, and the return of confiscatory tax rates on the highest incomes. Nor do we hear anything about reining in rent-seeking elites by reforming the financial sector or intellectual property law, which are two major engines driving inequality.

Perhaps most striking of all—remember, this is a Democratic political official we’re talking about—we hear not a word about how to empower working people. Rather than proposals for making it easier to join a union, or creating a full-employment economy, we hear . . . silence. None of the economic policies Furman supports would cause your average one-percenter to lose a wink of sleep.

It’s a testament to the power of Piketty’s book, and to the growing salience of inequality as a political issue, that people like Jason Furman are giving Piketty’s book respectful attention. The issue has gained enough traction that political elites now feel that they have to pay it lip service.

Still, their message is clear: minor reforms might be grudgingly allowed, but policies that threaten the wealth and power of the elite class are strictly out of bounds.

So don't expect much different from establishment Democrats. They are essentially moderate Republicans, some more like Eisenhower Republicans and some like Rockefeller Republicans.