Waking Up: America’s Once-in-a-Generation Opportunity for Structural Economic Reform and Political Renewal

Rebalancing the country’s growth model while shifting and enlarging its political center of gravity

Richard Samans is a Member of the Managing Board of the World Economic Forum and Chairman of the Climate Disclosure Standards Board. He previously served as Special Assistant to the President and National Security Council Senior Director for International Economic Affairs in the Clinton Administration, senior economic policy aide to Senate Democratic Leader Thomas A. Daschle and Director-General of the Global Green Growth Institute. The views expressed here are written in a personal capacity and are the author’s alone.

The 2016 presidential campaign has shaken the political and policy establishments of both major parties. Voters in the primaries delivered a wake-up call,[see endnote 1] with nearly a majority effectively expressing a vote of no confidence in the country’s economic stewardship over the past generation by virtue of their support for the programs of Senator Sanders or Mr. Trump.

The polarization of the electorate and marked radicalization of much of the Millennial generation have unsettled the country’s professional and academic elites as well. Leaders of all walks of society are beginning to re-examine longstanding assumptions and contemplate new and more ambitious ideas regarding the economy even if this implies moving beyond their traditional comfort zone. This includes business leaders, who are coming to realize that a positive new agenda of some sort will be needed to hold off protectionist pressures, let alone pass new trade liberalization agreements.

This year’s political earthquake has the leadership strata of American society searching for, well, leadership — vision and action that can restore public confidence in America’s economic future, political institutions and engagement in the world.

The stakes for a new Administration could hardly be higher. A once-in-a-generation realignment of the political landscape appears to be underway[2] driven by mounting frustration that the American Dream of shared, rising prosperity is fading without a credible response from either Party establishment. The next president needs to find a way to cut through this stasis and rally the country behind a long overdue series of domestic reforms whose combined effect would be to rebalance our economy’s growth model to generate wider and faster progress in living standards and greater economic security for middle and working class Americans.

The right reforms would also strengthen the rate and resilience of economic growth by broadening its base and deepening its foundations. But in this season of voter discontent, they will need first and foremost to impress as a structural, as opposed to merely symbolic or ad hoc, response to the growing economic anxiety of Americans about the rapid and often disruptive pace of technological change and global economic integration.

This is the major unfinished business of the clean-up from the financial crisis. Since 2008–09, the economy has been stabilized, a modest but solid recovery nurtured, and the banking system recapitalized and appreciably de-risked. But there has been no deeper reform addressing the structural weaknesses that contributed to the wage stagnation and job insecurity for which unsustainable debt accumulation and real estate speculation were coping mechanisms for many households.[3]

Promise and Peril

Much has been made of the upheaval within the Republican Party after its so-called hostile takeover by Donald Trump.[4] But this is a moment of great promise and peril for the Democratic Party, which is the natural vehicle for a reform movement to address concentration of wealth and economic opportunity. Over the years its elected officials and supporting policy establishment have not been able to muster an adequate response, as Senator Sanders’ strong showing in the primary illustrates. And while the policy program of the Party’s nominee, Secretary Clinton, contains many important proposals directly related to this challenge, it does not yet amount either in policy content or narrative framing to a clear and convincing response to the growing inequality and related misalignment of incentives in the economy that the public perceives.

The Sanders and Trump primary campaigns demonstrated that there is now a much larger than expected constituency for action in this respect which defies traditional left-right classification. In theory, it should be possible to construct a coalition consisting of true-blue Progressives and young people, on the one hand, and a considerable number of Independents, businesspeople and other Americans who are more interested in the economy’s prospects than any particular political ideology, on the other.

If a newly elected President Clinton were to articulate an agenda perceived as truly commensurate with this challenge, she might be able to bring this coalition of purpose together and break through Washington’s gridlock at least on this central issue. As the Republican Party worked through its existential crisis over the next few years, she might be able to combine Progressives and “radical-pragmatists” wanting to see decisive action on the country’s key economic challenges into a functional governing majority whose common stake in a rebalancing of the economy and repair of its social contract might even lead over time lead to a shift in Party preferences — an expanded Democratic Party enjoying the closer affinity of a larger share of the 42%[5] of the electorate self-identifying as Independents.

By contrast, if she were to spend her first year in office without a sufficient mandate and set of accomplishments on the electorate’s central preoccupation, then she and her Party would risk presiding over four more years of insufficient action and owning the public’s frustration with Washington’s inertia next time around — with potentially disastrous electoral results up and down the ballot, particularly in the event of a recession.

In fact, the challenge to both political parties and their policy establishments is as much an intellectual as political one. To capture the ultimate prize at stake in this election — a broad and enduring improvement in American living standards and a governing (as opposed to simply Electoral College) majority — the next Administration will need to mount a more effective policy response than any Party or candidate has offered to date to the question of whether the market-friendly, internationally-open policy model of the past several decades can be adapted to generate greatly expanded social participation in the process and benefits of economic growth.

If it fails this test, then the attitudes and prescriptions represented by Mr. Trump will remain ascendant as they are throughout much of Europe. Indeed, The Economist magazine, which tends more to British understatement than Chicken-Little hyperbole, has fretted openly that the populist brushfire sweeping the West threatens to consume the liberal international order[6] constructed out of the ashes of World War II and heartbreak of the Great Depression, placing into jeopardy the considerable gains in human security and advancement since those troubled times.

How American Economic Policy Lost the Plot

But is a more sufficient response to today’s growing economic insecurity and inequality substantively possible as well as politically feasible? If so, why was it not pursued as the problem accumulated over the past few decades? Has this been mainly due to political capture of the system by moneyed interests, the remedy for which is brute political force — a political revolution[7]? Or has there been a deeper failure of imagination and will by otherwise well-intentioned politicians and other leaders of society, the remedy for which must actually be a policy revolution?

The general contours of the problem are well recognized, notably:

-Stagnation of median wages and household income[8]
· Divergence of wage and productivity growth[9]
· Decline in labor’s share of national income[10]
· Growth in the financial sector’s weight in economy[11]
· Slowdown in productivity growth[12]

The question these trends beg is what can be done to improve not only the quantity of economic growth, as traditionally measured by average GDP per person, but also its quality or bottom-line payoff to society in the form of sustained progress in median living standards, a concept that encompasses cash and non-cash household income as well as economic security and quality of life. The American Dream is not economic growth per se; it is broad-based progress in living standards sustained across generations.

The first step in regaining the confidence of economically anxious Americans is to acknowledge that this objective — — structurally reforming and upgrading the economy to broaden the gains to living standards from growth — — has not been the top priority of US economic policy for a very long time. This statement may be hard for many veteran American policymakers and economists to accept. However, it is not only factually correct but also probably the initial price of admission for a politician wishing to be taken more seriously by frustrated and disaffected voters tempted to vote populist to shake things up; idealistic young voters impatient with incrementalism; and moderates insecure about their family’s economic future and worried that the American Dream is fading in the face of technological disruption and global integration without anyone able to do anything meaningful about it.

For most countries, including our top industrial competitors in East Asia and Northern Europe, national economic development has been not just the top economic policy priority but also the top national priority. For decades, they have expended great effort devising and implementing strategies to strengthen the positioning of their economies in the shifting currents of the world economy and translating expanded trade and investment into stronger socioeconomic progress.[13] Some of these enabling environment improvements, policy incentives and industrial strategies are more effective than others. Some are more enlightened and additive to the world economy’s momentum than others. But one has to admire the sheer determination and pragmatism of these efforts, which on the whole reflect a much more sophisticated conception of the role and responsibility of government than conservative American caricatures of “industrial policy” and the “nanny state.” Most policy interventions are “horizontal” (non-sector specific), involving investments in human capital, infrastructure, the investment climate and research. Vertical approaches are increasingly at the sectoral rather than firm-specific level. And in recent years, countries at various levels of development have begun to apply a similar degree of focus to structural and institutional strategies to redress social inequity and exclusion, i.e., to achieve a more inclusive model of economic growth.

The contrast with US economic policy priorities over the past generation is striking. There has been very little structural and institutional upgrading during this period. Yes, US macroeconomic policy has been anything but inert and complacent since the 2008–09 financial crisis, and great credit is due the Federal Reserve, Obama Administration and Congress in stabilizing the economy and fostering a recovery while reducing the fiscal deficit to a more sustainable level. But the most important domestic reforms of the past twenty years — e.g., Affordable Care Act, Dodd-Frank, Leave No Child Behind, Medicare prescription drug benefit and recent energy and climate rules, etc. — were neither aimed at nor had the effect of structurally adapting the economy to the challenges posed by technological change and globalization to American employment, production and living standards.

While other countries have been focussed like a laser beam on their national economic development during the past few decades, US economic policy has been distracted by three national crises and, to an even greater extent, the ideological overreactions each triggered. These serial distractions have had the effect of making us take our eye off the ball of the government’s crucial role in facilitating strong, shared economic progress in a world in which production and capital are increasingly mobile and the global economy’s labor force essentially doubled in less than two decades.[14]

Most recently, the financial crisis required enormous attention and resources during the first few years of the Obama Administration. The hostile reaction of Congressional Republicans to the Administration’s and Fed’s stabilization policies extended this unavoidable distraction into virtual paralysis, turning back the clock thirty years on American discourse regarding the role of government in the economy and foreclosing any hope for legislation of major reforms even as fiscal space began to reopen.

In the prior decade, the 9/11 attacks and to an even greater extent the ill-prepared intervention in Iraq inspired by neoconservative thinking consumed the attention and resources of the country. The Iraq War has cost over $2 trillion, a major opportunity cost representing an average of nearly $200 billion or about 40% of non-defense discretionary spending per year, on top of a similar amount spent on the Afghanistan conflict.[15]

Finally, the stagflation trauma of the late 1970s continues to dominate the mind-set of most American policymakers and economists. Almost subliminally, we continue to fight this last war, which spawned not only the useful efficiency-enhancing deregulation of product and capital markets in the 1970s and early 1980s but also the ideological excesses of the Reagan years, e.g., explosion of fiscal deficits, benign neglect of a grossly overvalued and deindustrializing dollar, skewing of incentives in favour of capital vs. labor income, etc.

The philosophical reverberations of that crisis persist in the form of an extremely narrow conception of structural reform. Most policymakers today view structural economic policy purely in terms of measures to boost allocative efficiency and growth through flexible and competitive markets supported by macroeconomic discipline. There is little appreciation, as a previous generation of American economists and many of their foreign students had, of the equally important structural role that other kinds of institutional frameworks and policy incentives in the areas of labor markets, education, corporate and investor governance, social protection, infrastructure, business and political ethics, competition, environmental sustainability and tax systems can play in promoting an equitable and resilient pattern of growth.

This overshooting of the pendulum in reaction to the 1970s has been baked into the professional culture of a generation of policymakers. It has been accentuated by the dominance of macroeconomists and financial market specialists in the ranks of chief economic advisers and finance ministries around the world, who carry with them biases about the primacy of these elements of policy, and by the dominance of lawyers in the ranks of trade ministries, whose own cultural tendency is to overemphasize the negotiation of market opening deals and underemphasize the role of the domestic institutional context in shaping the extent to which agreements particularly with developing countries boost domestic consumption and global aggregate demand.

If our economy is in need of rebalancing today, it is in no small part due to these distractions and reflexes of the past generation. Twice we came close to escaping their grip. The first time was at the end of the Clinton-Gore Administration, when projected budget surpluses spurred consideration of new retirement saving, skilling, infrastructure, research and other initiatives, and Congressional rejection of the President’s fast-track trade negotiating authority request triggered a reset of foreign economic policy aimed at “putting a human face on the global economy” by promoting mutually reinforcing improvements in living standards and domestic demand among countries through greater emphasis on development assistance, institutional capacity building, developing country debt relief, trade policy transparency and better adherence to core labor and environmental standards. But the 2000 election and 9/11 attacks aborted these nascent initiatives.

The second brush with escape velocity came during 2009, when in the heat of the crisis President Obama and all other G20 leaders committed to undertake fundamental reforms to improve the sustainability and inclusivity of economic growth.[16] This raised hopes of a TR or FDR moment for the world economy — a paradigm shift from the prevailing Washington Consensus policy mix exclusively emphasizing efficiency enhancing measures to what I have called elsewhere a Roosevelt Consensus placing equal emphasis on institutional deepening and modernization in other policy areas, such as those mentioned above, that help to diffuse the benefits of growth more widely and make it more resilient.[17] But these hopes also vanished as quickly as they appeared as the focus shifted around the world to budget deficits, Greece, ISIS, etc.

Thus, popular frustration with the political establishment’s stewardship of the economy over the past generation is neither irrational nor naive. There is an essential validity to it. Although the private sector has been highly adaptive and dynamic during this period, US economic policy has been uneven and buffeted by crisis in macroeconomic terms and thoroughly flat-footed in structural terms. It is not an overstatement to say that there has been no real structural strategy to address the five trends listed above, which have been evident and gathering force for some time. Distraction and philosophical path dependency have produced a legacy of complacency, an appearance of feet of clay in a world in which many of our trading partners have caught up to us in terms of living standards and industrial competitiveness, in part by being anything but complacent or captured by 1970s-inspired conservative doctrine.

From Incremental to Structural Reform

The seeds of the revolution in American economic policy needed to combat inequality and insecurity while strengthening growth can be found in the legacy of Theodore Roosevelt. A progressive Republican, independent and self-willed man of action,[18] TR recast the American political landscape and set in motion a transformational process of reform across decades that, at root, made the economy work better for working people and reduced the excesses of the go-go financial capitalism and inequality of the early 20th century.

The themes in TR’s 1905 Square Deal speech and other aspects of his legacy are relevant to circumstances today (including his foreign policy adage “walk softly but carry a big stick,” which remains good advice for the conduct of both economic and security diplomacy). He was avowedly pro-worker and pro-industry, an advocate of balanced regulation in respect of both. He abhorred extreme inequality and unfair competition, which he viewed as stifling economic opportunity and basic human dignity. “When I say that I am for the square deal,” he reflected in 1910, “I mean not merely that I stand for fair play under the present rules of the game, but that I stand for having those rules changed so as to work for a more substantial equality of opportunity and of reward for equally good service.”[19]

These are American civic values that transcend Party affiliation and time. From trust-busting to environmental conservation to worker protection to the regulation public health and safety, his domestic policy program and those of multiple subsequent Democratic and Republican Administrations simultaneously advanced economic growth and social inclusion. They set the stage for a sustained expansion of the American middle class, whose accumulation of purchasing power was the locomotive that drove the country to economic superpower status. What has long been missing from both parties’ priorities, and this is at least as much a failing of their policy establishments as their elected officials, is a serious strategy capable of rallying all those interested in “changing the rules” (rebalancing incentives in key areas of structural economic policy) as necessary to overcome the obstacles to “equality of opportunity and of reward for equally good service” in today’s economy.

American conservatives seem constitutionally unable to rise to this challenge because of the polarizing lens through which their doctrine views the role of government in the economy. Progressives, by contrast, see competitive markets and their institutional underpinnings as natural, even symbiotic, complements, not antagonists. If an economy can be thought of as a garden or farm whose ultimate yield is strong, broad-based and sustained progress in living standards, then sound macroeconomic conditions and vibrant competition represent the basic climatic conditions of sunlight and moisture. The institutional enabling environment (rules, policy incentives, administrative capacity) set largely by government in various areas of structural economic policy (e.g., education and training, labor markets, corporate governance, banking and capital markets, social protection, infrastructure, competition, business and political ethics, environment, consumer and investor protections, basic services, etc.) represent the nutrient mix in the soil.[20] Just as soil quality influences the volume and consistency of crop yield, so the strength and mix of the institutional frameworks underlying a modern market economy influence the quality of its economic growth, i.e., the extent to which its benefits are widely diffused and sustained in the form of increased opportunity, income and quality of life.

This pragmatic understanding of government’s role in the economy was learned the hard way after the financial crises and gross inequities of the early 20th century. It is the forgotten bipartisan Progressive legacy of the TR, Taft, Wilson, FDR, Truman, Eisenhower, Kennedy, Johnson and even Nixon Administrations, which cumulatively built a national institutional infrastructure[21] across these areas of structural economic policy that contributed importantly to the high-growth, high-equity, low-risk performance of the US economy in the post-war period. This process of institutional deepening rebalanced the growth model of our economy, making it simultaneously more inclusive, resilient and robust — a critically important lesson of American economic history that needs to be recalled from our national memory and reapplied to modern economic circumstances.[22]

In the early to mid-20th century, the economy was shifting rapidly from a rural agrarian to metropolitan industrial footing. Economies of scale were achieved through mass, standardized production by and for the domestic economy and fuelled by cheap fossil fuel energy. Work tended to be organized by large and stable employers paying an expanding array of employee benefits. Information was analogue and had to be channelled through dedicated media, educational and other institutions. Households tended to have a single, male breadwinner, as women were less educated, liberated and integrated into the workforce.

The Square Deal and subsequent progressive institutional reforms of the 20th century, including particularly but by no means only the New Deal, were fashioned out of this context to support the creation of a large middle class through the establishment and diffusion of basic opportunity and security in such areas as basic education, infrastructure, pensions, housing, unemployment insurance, occupational safety and health.

Today’s global information economy presents a different set of challenges to shared prosperity. Production is increasingly distributed and spatially dispersed across the world, a trend enabled by instantaneous, low-cost data transmission and communications as well as a more open international trade and investment regime. Digital and other technology is disrupting employment and business models in a steady succession of industries and service sectors, with the pace of disintermediation likely to accelerate through retail, travel, financial, legal, governmental and health services. Work is increasingly parcelled and distributed along the value chain, and entrepreneurs are facing lower barriers to entry particularly for the provision of many kinds of services.

This more dynamic competitive environment is fragmenting the organization of work, forcing cost efficiencies of all sorts, including with respect to the payment of employee benefits and utilization of resources and materials. As robots automate more of industrial production and algorithms displace mid-level white collar services, the job market is placing a premium on advanced knowledge, creativity, flexibility and leisure- and aging-related local services — i.e., dimensions of work less conducive to automation. In this tougher labor market, households tend to have already maxed out their supply of labor, with two-breadwinner households now not just the norm but the imperative, and underemployment as much a function of skills and geographical mismatches as a lack of available jobs.

Accordingly, a new Square Deal for the 21st century would need to be aimed at bolstering the standard of living of the middle and working class by upgrading the institutional framework underpinning economic opportunity and security that was built in the last century so it corresponds better to today’s economic context in which:

· Workforce skills are the paramount determinant of individual and national economic success and therefore need to be diffused widely and upgraded periodically, particularly those related to advanced knowledge, STEM (Science, Technology, Engineering and Mathematics), creativity, and local trades and services.

· Entrepreneurship, particularly the Main Street small business variety, is an increasingly important alternative to working for a big company, and therefore needs to be prioritized for the removal of policy impediments and distortions relative to full-time, large-firm salaried arrangements.

· Worker security needs to be reinforced and made more portable to better enable worker flexibility and mobility in a world of more distributed, fragmented and self-employed work, particularly those aspects of non-wage compensation important for two-breadwinner or single-parent households (child care and family leave) and part-time, contract and other flexible work arrangements (qualification for basic unemployment and pension benefits on a modular, ratable basis).

· Domestic production needs to be made as attractive as possible to investors, through an improved enabling environment for innovation (R&D financing and partnerships, agile regulation), skills matching, and removal of major tax disadvantages relative to international production and investment.

· Resource efficiency needs to be encouraged as much for international competitiveness as quality of life purposes, reflecting the fact that with the Paris COP21 climate agreement and rising popular concern around the world about environmental threats such as water stress and air pollution, the industrial race is on in this area as well, with early movers likely to enjoy higher efficiency and lower costs over time.

A Progressive Structural Reform Agenda for the 21st Century

Secretary Clinton’s existing proposals go about half to two-thirds of the way toward the rebalancing of economic incentives and rules necessary to strengthen the rate and breadth of progress in American living standards — toward a structural rather than incremental response to the challenge people perceive in 21st century globalization and technological disruption. Following is an integrated, budget-neutral set of major policy initiatives that could help her program travel the remaining distance. Articulated properly, the increased ambition of these proposals is no longer outside the realm of political feasibility after the game-changing 2016 primary season. Indeed, it could be politically additive in an electorate increasingly frustrated with Washington’s inaction and petty partisan jockeying.

Invoking Theodore Roosevelt, perhaps by referring to such a program as a Square Deal for the 21st Century — a Real Deal to prioritize the Real Economy — could help to attract frustrated Independents and moderate or business Republicans who have recently become unmoored from or at least less firmly tethered to the Republican Party in addition to inspiring and energizing progressive Democrats. This branding would not only evoke the watershed nature of the leadership she is seeking to offer but also send a signal to many independents and Republicans that it’s OK to jump in, the water is just fine in the Democratic Party.

1) Strengthening the skills, productivity, compensation and basic security of our economy’s most important resource, our people.

The Secretary’s early education, college education, minimum wage, child care and family leave proposals[23] would go a long way toward strengthening worker productivity, compensation and security. However, there are two other big missing pieces of this puzzle in which the US is an outlier among advanced nations and out of step with the dynamic nature of today’s more internationally integrated and technologically disruptive economic environment. Correction of these structural weaknesses in the US labor market could be financed through the financial and corporate tax reform proposals outlined below. There is considerable pent-up political demand within the business community for the latter, which creates an opportunity (indeed responsibility) to do important new things on skilling and worker security, on the one hand, and climate change, on the other. The two skilling and worker security proposals are:

· Triple federal funding for the acquisition and refreshment of workforce skills (dislocated worker training assistance, lifelong learning and vocational education, including apprenticeships). The US has the next to lowest level in the OECD (after much poorer Mexico) of financial support for training and other active labor market policies, i.e., 0.1% of GDP compared with a 0.6% OECD average (e.g., 0.3% to 0.4% in Japan, Canada, UK, Italy and Australia; 0.8% in Germany; and between 1 to 2% in the Nordics and the Netherlands).[24] The Workforce Innovation and Opportunity Act passed in 2014 modernized our framework for the governance and delivery of much of this assistance[25] but, as an authorization bill, did nothing to boost the inadequate level of funding for training of about $2 billion. Similarly, although the Trade Adjustment Assistance (TAA) program was reauthorized and improved with the passage of trade negotiating authority last year, its training budget remains capped at $450 million. And the weakness of the US approach to vocational education and apprenticeships in particular is well known despite projections that by 2018 a third of all job vacancies will call for some post-secondary qualification but not necessarily that of a four-year college degree. According to a recent Brookings Institution study,[26] apprentices make up only 0.2 percent of the U.S. labor force, far less than in Canada (2.2 percent), Britain (2.7 percent), and Australia and Germany (3.7 percent). In addition, government spending on apprenticeship programs is tiny compared with spending by other countries. While total annual government funding for apprenticeship in the United States is only about $100 to $400 per apprentice, federal, state, and local annual government spending per participant for two-year public colleges is approximately $11,400 and this would go up under the Secretary’s program.[27] The US is desperately in need of a sufficiently funded general (as opposed to solely import competition related) approach to supporting the ongoing skills development and adjustment of its workforce, something that the business and trade policy communities have understood for years but never taken seriously enough to support adequate financing. The anti-trade mood of the electorate in 2016 has likely changed that. (Estimated incremental cost: $15 billion to $20 billion/year)

· Require employers with over 50 employees or independent contractors (and create an opt-in for smaller firms) to contribute at least $2 to $3 per hour of the value of part-time employee or contractor wages into a portable, multi-employer-style benefits fund for contributions to retirement, workers compensation, health or unemployment insurance benefit coverage.[28] It is estimated that a third of the American workforce now relies on contract or contingent work for a substantial portion or all of their livelihood,[29] and that this proportion is growing as more industries and service sectors are disrupted and disintermediated by the digital economy. Most advanced OECD countries seek to maintain the flexibility of their workforce while avoiding a race to the bottom on worker security by requiring the proration of such benefits. This is a large and growing hole in the quality of life and level of human dignity within the American economy. We have an opportunity to address it as part of a comprehensive reform of corporate taxation that would provide an offsetting benefit to companies in the form of a substantial reduction in the marginal corporate rate to levels more in line with the rest of the OECD (full proposal explained in last section below). Support for a more equitable and portable worker benefits framework for contract and part-time employees is growing.[30] As advocated generally by Sen. Mark Warner (D-VA)[31] and explored more specifically in New America Foundation and Brookings Institution papers,[32] such a vehicle could be modelled on the multi-employer funds that exist in the construction industry, including those run by unions. Indeed, union organizations could bid to administer these funds in different sectors by themselves or in partnership with other entities, giving them a constructive additional pathway to engage with workers. This approach could help to address the main practical matter at issue for a large and growing share of our workforce[33] without prejudicing the outstanding legal questions and enforcement actions regarding the proper classification of certain gig economy and other workers.

2) Boosting employment, labor productivity and wages by placing the financial system (Wall Street) more fully at the service of investment in the real economy (Main Street) through changes in investor and corporate governance, executive pay and tax policy.

The Secretary has very good banking system, high-frequency trading, long-term capital gains taxation and infrastructure financing proposals.[34] But they do not yet measure up to her stated aspiration to “fix quarterly capitalism”[35] and encourage a shift to long-term investment. Here are three additional proposals that would take aim more squarely at this longstanding, complex problem, which is one of the principal structural impediments to a more inclusive growth model in the United States.

The first would address the contradiction at the heart of our capital markets in which the long-term retirement and college savings of middle class American families are systematically transformed into short-term trading behaviour that distorts corporate decision making in ways that undercut their very own job security and productivity by undermining the long-term value creation and competitiveness of the companies in which they work. The second would close the tax deduction limitation loophole for large executive pay packages. The third would impose a modest financial transaction tax modelled on what exists in other countries, the primary purpose of which would be to broaden the country’s tax revenue base but a secondary benefit would be to create a marginal disincentive to share turnover particularly by institutional investors managing tax-exempt or tax-deferred funds. Accounting for over a third of US equity ownership and typically representing the largest shareholders in major companies, these are not affected by the Secretary’s long-term capital gains tax preference proposal. Even at the modest level suggested here (one-fifth of the rate and narrower coverage than the legislative proposal endorsed by Sen. Sanders) the money raised would cover the skills and apprenticeship funding increase proposed above — a useful political optic — as well as basic health and energy research proposal outlined later. Specifically:

· Lengthen the duration and strengthen the governance due diligence of the investment mandates given by pension funds and other institutional investors to the asset managers they hire, while pursuing complementary efforts to improve disclosure, asset manager compensation practices and other aspects of the conduct of fiduciary responsibility. Since 1975, institutional ownership of US equities has grown from 35% to 70%, while average stock holding period has declined from 5 years in 1980 to 5 months today.[36] Academic studies have documented the distortive effect this has on corporate decision making,[37] with managers reporting that they have foregone or delayed major investments so as not to disrupt the trajectory of quarterly earnings expected by investment analysts. The good news is that awareness of the problem has grown and principles and best practice frameworks for how governments and funds can address it have been developed. In particular, in 2013 G20 Leaders endorsed a set of High-Level Principles on Long-term Investment Financing by Institutional Investors,[38] which was followed by a 2014 OECD report on effective approaches to implementation of the Principles.[39] And in 2012, the International Corporate Governance Network of 550 leaders of institutional investors with $18 trillion under management issued a Model Mandate[40] for improving the alignment of contracts between asset owners and their fund managers with the long-term interests of beneficiaries. Pension funds, foundations and insurance companies are the key point of leverage within the system. If particularly the big public, union and corporate pension funds began to hire and evaluate asset management firms over at least a 3 to 5 year period (as their underlying liability structure would logically suggest they should do), then we would see a cascading behavioral effect through the entire investment value chain.

But these principles and best practices remain just that; they have hardly begun to change actual behaviour and are a very long way from becoming customary practice.[41] This awaits the judicious but deliberate action of governments. Triggering this transformation would not require legislation or even much if any new regulation. Instead, a concerted process of official guidance, clarification, convening and signalling — i.e., use of the Bully Pulpit — could be catalytic since there is now much wider awareness and acceptance among institutional investors of what they ought to be doing (i.e., using long term mandates, requiring better analysis of the soft, non-financial risks and aspects of corporate performance that are particularly germane to returns over the medium to long term, and making corresponding changes in trustee training, investment research and asset manager compensation practices).[42] In an industry obsessed with benchmarking against common practice, the actors along the value chain have a hard time moving unless a large group of them, and particularly those at the top of the chain (asset owners) do so at once, thereby resetting standard perceptions of what constitutes good governance. The next President should direct the Secretaries of the Treasury and Labor and invite the Security and Exchange Commission (SEC) Chairman to work together to catalyze this process of change through a series of discussions with industry leaders, issuance of directional guidance and regulatory interpretation, positive reinforcement, coordination and analysis in these five areas. This is likely all it would take.to trigger a systemic shift in behaviour. (Cost: $0)

· Close the open-ended performance-based compensation exception to the $1 million limit on executive pay tax deductibility. Section 162(m) of the tax code generally limits a publicly held corporation’s federal income tax deduction for compensation paid to any “covered employee” to $1 million in any taxable year.[43] The “covered employees” are a company’s chief executive officer and its three other most highly compensated executive officers (other than the chief financial officer). Section 162(m) provides an exception to the $1 million tax deductibility limitation for “qualified performance-based compensation,” namely certain stock options and stock appreciation rights granted at fair market value and disclosed to and approved by the company’s shareholders. This exception has been dramatically exploited over the years to the point that taxpayers are routinely subsidizing enormous compensation packages on the order of tens of millions of dollars. It’s ultimately up to shareholders and boards to determine the appropriate level of pay for their executive teams, but that does not mean the public should subsidize any amount. Performance-based pay can play a useful role, so rather than eliminating the exception entirely, the exception could be limited to $1 million per year for a maximum of $2 million in executive pay deductibility. (Estimated revenue: $3 to $4 billion/year).

· Impose a securities transfer tax of 0.1% on secondary market transactions of US corporation equities and equity option premiums and of 0.01% on the notional value of US equity futures and swaps. Multiple G20 countries impose financial transactions taxes, usually on secondary market equity sales in the range of 0.1% to 0.5%, specifically China, India, Indonesia, Italy, France South Africa, South Korea and the UK.[44] And ten European Union countries are working on a proposal that has been supported by Chancellor Merkel among other leaders for implementation in 2017 or more likely 2018. The UK and French taxes are levied on transfers of their firms’ shares wherever the trade takes place around the world. Many of these countries raise 0.2% to 0.3% of GDP per year or more from such taxes, the equivalent of $35 billion to $50 billion per year in US terms. The US itself had a very low stock transfer tax from 1914 to 1966 and still maintains one in the form of a nominal fee of 0.00184% to fund SEC oversight operations.

At a time when wages have stagnated, the share of labor in national income has declined and that of capital has risen markedly, it makes sense to shift the federal fiscal burden at the margin from labor to capital. We also should be looking for ways to expand the tax base in more lightly taxed areas such as wealth and consumption as the population ages and our wage-related tax base declines as a share of the economy. And, yes, it would be modestly helpful to the goal of incentivizing longer term shareholding by otherwise tax-exempt institutional investors if the frictional cost of frequent share turnover were to rise, not to the point of draining market liquidity (which a tax at this level would not) but to making fiduciaries think twice. This proposal would raise about $25 billion per year[45] and have a salutary, reinforcing effect on the proposal above to shift the time horizon of investment behaviour through longer term asset management mandates and related changes in the culture of institutional investment. These funds would make possible a major upgrade in the skills of our workforce through a tripling or more of funding for lifelong, dislocated worker, vocational and apprenticeship training — a fiscal trade-off most Americans would find quite sensible. (Estimated revenue: $25 billion per year)

3) Strengthening the foundations of our quality of life and kids’ prosperity and well-being by upgrading our transport, water and sanitation infrastructure, insuring against the worst risks of climate change and doubling down on basic health and energy research. The Secretary’s infrastructure proposals and President Obama’s recent targeted regulatory approach to climate action are very significant and encouraging. But there are two additional initiatives that would elevate and lend a certain moral imperative to her presidency, tapping into the universal desire to leave the world a better and safer place for one’s children and grandchildren.

The first would take the Obama-Biden Administration’s health and clean energy research initiatives to a new level by doubling federal funding for corresponding basic research. The second recognizes that the fight against climate change requires a two-track strategy: not only intensive development of new technology capable of replacing fossil fuels over the long term but also widespread deployment of existing clean technologies in order to achieve a peak and then accelerating decline in global emissions in the next 5 to 10 years, as advised by the scientific community. We need a systemic lever to complement the emerging sector-specific and subnational ones in the US, and a political window is opening to do so via a carbon tax within the context of a revenue-neutral and politically balanced reform of the corporate income tax, carefully configured to be border adjustable under GATT/WTO rules. More specifically:

· Launch a new national “moon-shot” research effort on public health and alternative energy by dedicating to this purpose most of the $10 billion to $15 billion per year in revenues generated by the executive pay and equity securities transfer tax proposals beyond what is required to fund the labor force skills proposal described above. This would double funding for basic health research[46] on particularly cancer and Alzheimer’s, which is a looming public health crisis and has a huge latent political constituency, and for alternative energy research,[47] whose pace is likely to be the ultimate determinant of whether the atmosphere experiences a catastrophic breach of the Holocene interglacial cycle later this century as many scientists fear. [48]

· Work with Capitol Hill to achieve a balanced, revenue-neutral reform of the corporate income tax that would include a major reduction in the marginal corporate rate from 35% to potentially as low as 25% (the OECD average) in combination with a border-adjustable industrial externality (or “sustainability”) excise tax, full expensing of certain highly energy-efficient capital investments and requirement for contributions of $2 to $3 per hour of the value of part-time and contract (1099) wages to the new multi-employer plan benefit plans described above for firms with 50 or more employees or contract workers. The Treasury Department would establish a schedule of excise tax rates for a finite number of the most fossil-fuel intensive industrial products based on the industrywide average level of carbon embedded in each product on the list at a level corresponding to $25 per ton. These rates would be applied in uniform fashion to the business-to-business (B2B) sale of all such corresponding products whether domestic or imported and rebated on exports.

Border adjustability has been a major stumbling block for environmental and trade experts seeking stronger and more coordinated climate action. While GATT/WTO rules do not clearly permit the border adjustment of carbon taxes that are applied at different rates to the same class of products as a function of their carbon content, they do for an excise tax that is applied at the same rate on a non-discriminatory basis to all “like” products.[49] It does not matter what the policy motive was for imposing the tax; what is determinative is whether it is a tax on a product (as opposed to a process input) and applied domestically and internationally on a non-discriminatory basis. This proposal represents a new way to meet these criteria unambiguously. The Treasury Department would also be directed to designate a list of highly energy-efficient capital equipment that would qualify for full expensing (immediate depreciation) based on the “Top Runner”[50] approach developed by the Government of Japan with domestic consultations aimed at extending the list to additional industrial equipment.

This restructuring of corporate taxation would likely generate a sizable net tax reduction for the great majority of firms (including particularly small businesses) and leave most others no worse off. This is partly because the tax base is being broadened to include a substantial share of industrial imports that are not now covered by any federal taxation. Net losers will likely be concentrated either on the coal, oil, gas and cement industries and downstream industries that are disproportionate users of their products (although the international competitive effects will be offset by the border adjustability) or firms that have particularly large contract workforces and are not paying benefits. Even in these cases, the effect is likely to be diffused somewhat by the ability of these firms to pass on some of the additional costs to their customers. Between 10% and 15% of the carbon tax revenues would be dedicated to assistance of lower-income households and communities most dependent on fossil fuel production, including coal-dependent regions,[51] including approximately 3% for a special adjustment assistance package for coal- and oil-dependent communities and their workforces going well beyond existing federal programs.[52]

This corporate tax reform would have five significant benefits:

o First, by dropping the marginal rate to the OECD norm, it would remove a key incentive for companies to shift their headquarters and production overseas, including through the tax-inversion international mergers of recent notoriety, but without providing a net reduction in corporate taxes.

o Second, it would put a price on carbon — the holy grail of climate policy — in what appears to be the least costly available way in political terms, i.e., via a B2B tax not visible to consumers on a limited number of the most relevant products in the context of a revenue-neutral reform as well as via a positive incentive in the form of a reduction in the installed cost of the most efficient industrial equipment. This politically surgical but economically scalable carrot-and-stick approach would substantially accelerate the decarbonization of the US economy. And by ratcheting up the carbon price-equivalent of the excise tax over time to encourage ongoing improvement in efficiency while keeping revenue from the tax roughly constant, it might even render the power plant regulations unnecessary over time, which would be another political selling point to the business community. Further, the approximately $100 billion per year[53] generated by this fee would finance not only the other elements of this corporate tax reform but also the measures to offset the impact on lower income households and affected communities cited above.

o Third, it would provide a significant boost to entrepreneurship and small business, which would experience a sizable tax cut, since firms with fewer than 50 employees and contract workers would be exempt from the industrial excise tax and pro-rata worker benefit requirement but qualify for the major marginal rate reduction.

o Fourth, the multi-employer benefit plan requirement for contract employees would plug one of the worst and most rapidly growing holes in the US safety net without requiring a new federal spending program.

o Fifth, this reform would for the first time make a significant US tax border adjustable (imposed on imports and rebated on exports), partially making up for the competitive disadvantage of the US not having a value-added tax (VAT), which is border adjustable and employed by virtually all of our major trading partners and thus perceived by industry and labor to place our products at a disadvantage in international trade. Yes, economists argue that exchange rates will adjust and wash out this effect, but exchange rate movements are dominated even over extended periods by a host of other factors, so the help to our tradable goods industries (think cars, airplanes, construction and farm equipment, for example) could be significant.

If the US enacted this kind of carbon-related industrial excise tax regime, it would likely catalyze a new wave of constructive international climate diplomacy. Countries with cap-and-trade schemes, which are neither border adjustable under GATT/WTO rules nor currently meaningful in behavioral terms (i.e., with the exception of Sweden their carbon prices are nominal),[54] would react to the legally smarter and environmentally more effective nature of this tax approach by moving to emulate and perhaps even align with it. That would create the basis for what the world really needs, a coordinated and progressively meaningful approach to carbon pricing across major industrial economies.

From Policy to Political Revolution

Thus, a win-win-win realignment of incentives within the economy to yield stronger growth with greater equity and lower risk is technically, fiscally and politically feasible, including a:

· Comprehensive and adequately financed framework for boosting workforce skills, compensation and security, truly placing investment in people at the center of the country’s economic strategy.

· Fundamental shift of incentives within financial markets and corporate executive teams to refocus them on longer-term job-generating and wage-raising capital formation in the real economy — investments in industry and infrastructure.

· Reduction of the strain on middle and working class family finances and corresponding boost to aggregate demand through a strengthening of the federal and corporate support structure (social contract) for education, retraining, family leave, retirement saving and unemployment insurance coverage.

· Big boost to innovation and small-scale entrepreneurship through a substantial cut in small business taxes and increase in basic research and development in fields with enormous commercial potential and future benefits for the well-being and quality of life of the next generation.

· “Price” on carbon targeted to make the most difference in the fight against climate change with the lowest possible burden on industry and consumers.

· Major cut in the tax and tariff incentives that exist for the offshoring of industrial production and related high value-added services jobs.

These are the elements of a more sufficient response to the erosion of public confidence in the country’s economic future and engagement in the world — of the policy revolution that is required to respond credibly and constructively to the accumulating economic frustration of many Americans.

There has been much aspirational discussion in Progressive circles in recent years about pre-distribution,[55] that is, addressing inequality through changes in the way the economy functions rather than solely or primarily through redistribution via fiscal transfers (increased tax code progressivity and social safety net expenditures). Indeed, US inequality before taxes and transfers (market inequality) has deteriorated markedly since the late 1970s, accounting for all of the deterioration in our country’s Gini coefficient, the standard international measure of inequality.[56] Just as the progressive wave of structural economic reforms beginning with the TR’s Square Deal significantly reduced both pre- and post-transfer inequality in the US during the middle of the 20th century, so the more comprehensive set of progressive reforms outlined here is a strategy to build upon Secretary Clinton’s campaign program to mobilize a full-court-press on inclusive growth in the 21st Century through pre-distribution in particular.

There is no such policy revolution on the horizon of the Republican Party and conservative movement at the moment. The most thoughtful, emerging work identifies the increasingly fragmented nature of society and work as posing important challenges for governance.[57] But these analyses and prescriptions are mainly socio-political and, as such, largely tangential to the question of how public policy can fundamentally improve the economy’s growth/equity/risk performance.

Because of the distractions and doctrinal cul-de-sac of the past generation, much of our economy’s institutional support structure for shared, sustainable progress has deteriorated or been overtaken by changes in the economy. The recent improvement in the country’s finances and disruption in its politics have created a once-in-a-generation opportunity to make the necessary repairs and upgrades and, in so doing, assemble a dominant coalition of Democratic progressives and economically results-oriented Independents and erstwhile Republicans not unlike the one that FDR mobilized following the bust of the country’s last Gilded Age, shifting and enlarging the country’s political center of gravity in the process.

The Trump and Sanders phenomena, Brexit and other upheaval of this year are opening a second post-crisis window of opportunity for a Rooseveltian moment of structural economic reform that could be the key to winning the political realignment that some analysts believe has already begun.[58] Just as TR’s and FDR’s progressive economic reforms transformed American politics for a generation, so a more serious effort to adapt our economy to 21st century imperatives could help to assemble the larger coalition that could also reform America’s campaign finance and voter registration practices, the political “revolution” most needed to fully enfranchise ordinary Americans and restore their trust in our democratic institutions.

From Wake-up to Clarion Call

One might imagine a new president translating the wake-up call of the 2016 election into the following clarion call for structural reform and national renewal upon taking office next winter (or perhaps as a closing argument and bid for a more specific mandate this fall):

Fellow citizens, for too long we have been distracted from making the structural improvements to our economy that are necessary to make it work better for working families and the real economy — Main Street rather than Wall Street — in an era of globalization and rapid technological change.

I have heard and share the American people’s frustration. There are things we could have been doing about this over the years but didn’t for a variety of reasons, including the financial crisis, budget deficits, wars, cultural debates and other things.

While we have been distracted, other countries have not been standing still. Many of them have caught up to us in terms of living standards and industrial competitiveness.

I believe it’s time for us finally to get serious about this challenge. Having made the long, tough climb back from the worst of the financial crisis, I am convinced we now have our best opportunity to do so in a generation.

There IS a way to face up to it that would be in virtually everybody’s interest — American workers and businesses, younger and older people — but this is serious work for serious times. We can’t allow ourselves to be distracted again, including by allowing our political discourse to descend to the kind of scapegoating and vilification that insults the intelligence of the American people and is unworthy of the world’s greatest democracy.

Let me be specific:

1) Modernizing and structurally upgrading the economy to boost Middle America’s living standards and strengthen the competitiveness of our workers and businesses will be the top priority of my Administration. I am going to focus like a laser beam on improving the quality of economic growth, — — how much it helps family budgets and economic security and not just how much it is reflected in the numbers appearing in the financial pages of newspapers. If we do this well, I am convinced and in fact our own history has shown that it will also strengthen the pace and resilience of growth, creating more jobs and business opportunities for everyone.

2) This means we’ve got to rebalance our priorities in several respects. For example, I don’t think we can or should try to turn back the clock on globalization. And we certainly shouldn’t let the world economy descend again into the law of the jungle by engaging in the kind of hot-tempered, tit-for-tat trade wars that some have advocated. But I do believe that modernizing our domestic economic policy is the highest priority now. So, I will not seek approval of any major trade liberalization deals unless and until big structural improvements to the domestic economy are passed. For too long, we’ve done one without the other, exposing our people to much greater competition without properly preparing the ground for it.

3) At home, particularly after the rising inequality and obvious financial excesses of recent years, there are three big things that need rebalancing:

First, we haven’t been properly investing in and rewarding the most important element of our country’s economic success — — our people. We’ve got to come together to take the practical steps necessary to strengthen the skills and productivity, compensation and basic security of our people. This is good for both labor and business, for people with and without kids. I will present Congress with a comprehensive program to do this, by making college, vocational and lifelong education in public and community colleges, and on-the-job apprenticeships for skilled trades, affordable for everyone. And by raising the minimum wage to a reasonable level, reducing child care costs and creating a new, fairer system that gives basic, portable benefits to the growing number of contract and other workers whose employers are skimping on such benefits or just not providing them at all.

Second, we have to put the financial system (Wall Street) more fully at the service of the real economy (Main Street and industry) through changes in investor and corporate governance, executive pay and tax policy. The investment capital in our economy could be put to more productive use. Too much of it is sitting idly in corporate balance sheets, being used for buybacks of shares or being traded in and out of the market by investment funds behaving more like speculators in a casino than the stewards of the long-term savings of American families and actual owners of American companies that they are. We’ve made a lot of progress fixing the banking system, but this is the other, equally important, part of our financial system that needs rebalancing if we are serious about boosting America’s industrial strength and living standards. Many CEOs of corporations and investment funds will tell you the same thing in private — they know our system is misallocating capital and underinvesting in expanded productive capacity and capabilities because it prioritizes short-term financial returns over long-term economic value creation. Well, it’s time to fix this problem by recalibrating some of the incentives in our financial markets, and I have a specific plan that will be a top priority of my Secretary of the Treasury.

Third, there are some fundamental things we must do better today for the well-being of our children and grandchildren tomorrow. Each generation has a responsibility to leave a solid foundation for the next. But I regret to say that we baby boomers and GenXers haven’t yet fully assumed ours, and I am determined to lead us to do so in four key areas:

· We’ve let much of the country’s transport, water and sanitation infrastructure deteriorate in a way that is imposing economic and public health costs today, while storing up even bigger trouble for our kids tomorrow. I have proposed a major infrastructure modernization program that is financed in a smart, efficient way and will pay dividends for business productivity and family quality of life for decades to come while creating tens of thousands of construction and engineering jobs in communities around the country now.

· We know we are rolling the dice with the climate, and that it will be our children and grandchildren who will be left to contend with the results of the planetary experiment we are conducting with fossil fuels. Parents are used to taking out a life insurance policy to safeguard the well-being of their children. We slightly reduce the funds available for spending today in order to protect our children from future risks to their livelihood. The worst of those risks may never come to pass, but we rest easier knowing that we’ve insured our kids against them. It’s the prudent, responsible and entirely normal thing to do. Well, that’s how we’ve got to think as a society about climate change. Our generation has a responsibility to our kids and grandkids to insure them against the worst of the risks scientists have identified. The good news is that, like a typical life insurance policy, only a small change in spending today is necessary to shield our kids from a severe disaster tomorrow. And if structured properly as part of a comprehensive reform of the corporate tax code, the program could even turn out to be a net plus for the economy by significantly dropping the marginal tax rate for businesses and boosting industry by imposing part of these taxes on imports and rebating them on exports in a manner that would be consistent with international law.

· The government has a special responsibility in funding basic research, investing in big breakthroughs that companies usually can’t because the payoff is a decade or more in the future. Nowhere is this more vital for the quality of life of our children and grandchildren than in health sciences and energy. We may not have solved cancer or Alzheimer’s in our generation, but with a sustained push this might be possible by the time our children get old. And wouldn’t it be great for our national security as well as air, water and soil quality if American scientists and engineers enabled us once and for all to replace Middle East oil imports with cheaper and locally generated renewable energy? I will create a moon-shot effort in both of these areas, literally doubling down on this funding.

· Finally, the country’s finances are on the mend — the budget deficit has been cut in the last six years from 10% to 2.5% of GDP. But in the coming two or three decades, as the baby boom generation retires and ages, Medicare and Medicaid net costs are projected to rise by about 3% of GDP or half a trillion dollars.[59] That’s a big number — equivalent to all of what we spend on defense or all of what we spend on non-defense discretionary programs. It’s so big that it cannot be offset by business-as-usual adjustments in spending or taxes. Now, I am committed to ensuring that everything in my program fits within the rest of the budget, but this future demographic shock to our finances is clearly going to need its own, special solution. It wouldn’t be right to pass the buck, as this would place the country — that is to say, our children — into deep debt in 20 years’ time. That wouldn’t be responsible or fair. So after my structural reform of the economy is passed, I will work with people of good will in both Parties to organize a national conversation and bipartisan commission about the best options available to address the problem after the next presidential election.

If we do these things — — invest properly in the skills and basic security of our workforce; free up space in family budgets by reducing college, child care and retraining costs; create better paying jobs by incentivizing capital to be invested in Main Street and American industry rather than financial speculation and foreign production; and insure our kids’ well-being by securing the country’s infrastructure, environment and finances — — we will both share the nation’s economic pie more equitably AND enlarge its size.

Each plank of the structural reform program I have outlined is a win-win; each would help to reduce inequality AND boost economic growth by broadening the base and strengthening the foundations of that growth. Each is good for labor AND business, younger AND older people.

I did not run for president just to be president. I ran to rebalance the incentives in our economy in order to strengthen the living standards of ALL Americans and reignite American industry and entrepreneurship.

True economic strength comes from investing in things that make the bulk of our population more productive and give it better jobs and more purchasing power. It doesn’t come from quick-buck strategies of cutting costs to the bone, financial engineering or foreign profit-shifting.

Investing in our people and the real economy — that’s how we build a fairer, stronger and more sustainable model of economic growth. That’s how we restore confidence in the American Dream, the expectation that our kids will be able to live better than we have. That’s how we upgrade and adapt our economy to the super-charged competitive conditions of the 21st century.

Such an overarching narrative would:

1) Offer a core, compelling purpose for a new Administration — a comprehensive, structural upgrade of the US economy aimed at increasing the payoff to broad living standards from growth and prioritizing the real economy — thereby conveying a larger, clearer sense of mission and call to action.

2) Convey a fundamental change in course for the country, giving people of all stripes and generations (workers, entrepreneurs, mothers, seniors, Millennials) a better reason than identity politics or their own pet concern to support a new president’s sincere bid to lead Washington out of its gridlock on these critical national challenges.

3) Declare a profound and unabashed commitment to progressive change that, in its specificity and comprehensiveness, surpasses even Senator Sanders’ program in key respects and as such would inspire Progressives and appeal more generally to the better angels of the American spirit as Robert F. Kennedy did during the last years of his life.

4) Outline a growth strategy with both short- and long-term elements that would also appeal to businesspeople and entrepreneurs — a new and more resilient approach to increasing growth that focuses on the strengthening the economy’s fundamental attributes, which everybody agreed at the time was a key learning from the financial crisis: boosting labor productivity by enhancing worker skills, security and flexibility; strengthening disposable income and aggregate demand by relieving some of the strain on family budgets; rebalancing incentives to prioritize investment in productivity-enhancing tangible and intangible capital formation in the real economy; improving international competitiveness by redressing tax disadvantages, lengthening investment horizons and modernizing the country’s infrastructure; spurring innovation and entrepreneurship by lowering small business taxes and boosting basic R&D; securing its long-term finances, etc.

Clarity of vision, seriousness of purpose, a sea change in economic philosophy as well as an appeal to intergenerational responsibility would combine to position our new president as a stronger, larger-purpose, bigger-tent kind of leader. A conviction politician capable of the leadership necessary to transform the country’s growth model and politics.

From Great Recession to Great Awakening

The 2016 election cycle has shown that the country is ready for a serious run at a new kind of structural economic reform. It can be a new ballgame in Washington: higher progressive ambition need not be polarizing if the agenda is calibrated carefully and the case is articulated well — indeed, just the opposite is possible.

The US economy has so much going for it: world-beating higher education; a robust demographic profile; abundant resources; an entrepreneurial culture and strong work ethic; cutting-edge technological innovation that is beginning to drive a re-shoring of industrial production;[60] strong rule of law; individual freedoms, etc.

President Obama was unable for a variety of reasons to turn in the immediate aftermath of the crisis from the passage of the stimulus package and Dodd-Frank banking legislation to a broader post-crisis agenda to address our structural weaknesses.[61] But the next Administration is likely to have a second opportunity that may not be repeated. What is required is an extension of Secretary Clinton’s campaign policy program in a few key areas framed as elements of a structural shift aimed at prioritizing the quality of economic growth and strength of the real economy, as measured by broad-based progress in living standards, over the mere quantity of growth, as measured by quarterly GDP, corporate profit and stock price statistics.

By inspiring Americans to face up to our complacency during the past generation and articulating an agenda that, in resonating with the values of many Independents, moderates and businesspeople as well as those of progressive Democrats is calibrated to transform the political landscape rather than play within its current limits, our new president would be in a better position to capture the strategic prize at stake following this year’s extraordinary election season: a rebalanced and revitalized economy and realigned political landscape.

This is the national awakening that is required to extend confidence in the American Dream, to make our economy and society continue to shine as a beacon for generations to come.


[1] Senator Bernie Sanders, “Bernie Sanders: Democrats Need to Wake Up,” New York Times, June 28, 2016.

[2] See in particular Michael Lind, “This Is What the Future of American Politics Looks Like,” Politico, May 22, 2016 and David Brooks, “The Coming Political Realignment,” New York Times, July 1, 2016

[3] See William A. Galston, “How Obama’s Economy Spawned Trump: The president had no second act, as millions of Americans are all too painfully aware,” Wall Street Journal, May 3, 2016. and Rajan, Raghuram G., Fault Lines: How Hidden Fractures Still Threaten the World Economy, Princeton University Press, 2010.

[4] See for example, Ryan Lizza, Donald Trump’s Hostile Takeover of the G.O.P., The New Yorker, January 28, 2016, and Patrick Healy and Jonathan Martin, Republican Party Unravels Over Donald Trump’s Hostile Takeover, New York Times, May 7, 2016

[5] http://www.gallup.com/poll/15370/party-affiliation.aspx

[6]The Politics of Anger: The triumph of the Brexit campaign is a warning to the liberal international order,” The Economist, June 30, 2016.

[7]See for example Kate Aronoff, What’s the Future of Bernie Sanders’ Political Revolution?” Rolling Stone, April 25, 2016. http://www.rollingstone.com/politics/news/whats-the-future-of-bernie-sanders-political-revolution-20160425, Molly Ball, “The Democrats Face a Revolution,” The Atlantic, January 31, 2016 http://www.theatlantic.com/politics/archive/2016/01/bernie-sanders-democrats-revolution/436674/ and https://berniesanders.com/?nosplash=true%2F

[8] See for example Lawrence Mishel, “Pay Is Stagnant for Vast Majority, Even When You Include Benefits,” Economic Snapshot, Economic Policy Institute, July 15, 2015. http://www.epi.org/publication/pay-is-stagnant-for-vast-majority-even-when-you-include-benefits/, Josh Bivens, Elise Gould, Lawrence Mishel and Heidi Shierholz, “Raising America’s Pay: Why It’s Our Central Economic Challenge, Economic Policy Institute, June 4, 2014. http://www.epi.org/publication/raising-americas-pay/ and Robert J. Shapiro, “Income growth and decline under recent U.S. presidents and the new challenge to restore broad economic prosperity,” Center for Effective Public Management, The Brookings Institution, March 2015 http://www.brookings.edu/~/media/research/files/papers/2015/03/05-income-growth-decline-economic-prosperity-shapiro/shapirov3.pdf

[9] See for example Josh Bivens and Lawrence Mishel, “Understanding the Historic Divergence between Productivity and a Typical Worker’s Pay,” Economic Policy Institute, September 2, 2015. http://www.epi.org/publication/understanding-the-historic-divergence-between-productivity-and-a-typical-workers-pay-why-it-matters-and-why-its-real/ , Robert Z. Lawrence, “The Growing Gap between Real Wages and Labor Productivity,“ Realtime Economic Issues Watch, Peterson Institute for International Economics, July 21, 2015 https://piie.com/blogs/realtime-economic-issues-watch/growing-gap-between-real-wages-and-labor-productivity

[10] “The Labor Share in G20 Economies,” International Labour Organization and Organisation for Economic Cooperation and Development, Report prepared for the G20 Employment Working Group, Antalya, Turkey, 26–27 February 2015 https://www.oecd.org/g20/topics/employment-and-social-policy/The-Labour-Share-in-G20-Economies.pdf

[11] See for example Robin Greenwood and David Scharfstein, “The Growth of Finance,” Journal of Economic Perspectives, Volume 27, Number 2 — Spring 2013 — Pages 3–28. http://www.people.hbs.edu/dscharfstein/Growth_of_Finance_JEP.pdf and Stephen Cecchetti, Enisse Kharroubi, “Why growth in finance is a drag on the real economy,” VoxEU, July 7, 2015 http://www.voxeu.org/article/why-growth-finance-drag-real-economy

[12] “Working Hard for the Money: There are more explanations than solutions for the productivity slowdown,” Buttonwood, The Economist, June 2, 2016 http://www.economist.com/news/finance-and-economics/21699939-there-are-more-explanations-solutions-productivity-slowdown-working ,and “New OECD Indicators Trace Productivity Growth Slowdown Pre- and Post-Crisis, Organisation for Economic Cooperation and Development,” May 26, 2016 “http://www.oecd.org/economy/newoecdindicatorstraceproductivitygrowthslowdownpre-andpost-crisis.htm

[13] See for example, World Bank, The East Asian Miracle: Economic Growth and Public Policy, Oxford University Press, 1993. http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/1993/09/01/000009265_3970716142516/Rendered/PDF/multi_page.pdf , Jose M. Salazar-Xirinachs, Irmgard Nubler and Richard Kozul-Wright, Transforming Economies: Making Industrial Policy Work for Growth, Jobs and Development, International Labour Organization, 2014 http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_242878.pdf , United Nations Industrial Development Organisation, “Industrial Policy for Prosperity: Reasoning and Approach,” 2011. http://www.unido.org//fileadmin/user_media/Publications/Research_and_statistics/Branch_publications/Research_and_Policy/Files/Working_Papers/2011/WP022011%20Industrial%20Policy%20for%20Prosperity%20-%20Reasoning%20and%20Approach.pdf and Justin Yifu Lin, New Structural Economics : A Framework for Rethinking Development and Policy, Washington, DC: World Bank, 2012. https://openknowledge.worldbank.org/handle/10986/2232

[14] Richard B. Freeman, The Great Doubling: The Challenge of the New Global Labor Market in Ending Poverty in America: How to Restore the American Dream, The New Press; 2007. http://eml.berkeley.edu/~webfac/eichengreen/e183_sp07/great_doub.pdf

[15] http://watson.brown.edu/costsofwar/costs/economic

[16] Richard Samans, “Beyond Business as Usual: G20 Leaders and Post-Crisis Reconstitution of the International Economic Order,” Center for American Progress, 2009, pp. 3–6. https://cdn.americanprogress.org/wp-content/uploads/issues/2009/09/pdf/g20.pdf

[17]See Richard Samans, “Transitioning to a New U.S. International Economic Policy: Toward a Global Deal to Revive and Broaden the Benefits of Growth,” Center for American Progress, 2008. https://cdn.americanprogress.org/wp-content/uploads/issues/2008/12/pdf/global_deal.pdf and Richard Samans and Jonathan Jacoby, “Virtuous Circle: Strengthening Broad-based Global Progress in Living Standards,” Center for American Progress, 2007. https://cdn.americanprogress.org/wp-content/uploads/issues/2007/12/pdf/virtuous_circle.pdf

[18] http://www.theodorerooseveltcenter.org/Learn-About-TR/TR-Brief-Biography.aspx

[19] Richard D. Heffner; Alexander Heffner (2013). A Documentary History of the United States (Updated & Expanded). Penguin. p. 146.

[20] Richard Samans, Jennifer Blanke, Gemma Corrigan and Margareta Drzeniek, “Toward an Actionable Framework for Strengthening Broad-based Progress in Living Standards,” Inclusive Growth and Development Report 2015, World Economic Forum, 2015, p. 8. http://www3.weforum.org/docs/Media/WEF_Inclusive_Growth.pdf ,

[21] Samans and Jacoby, op. cit., p. 5. https://cdn.americanprogress.org/wp-content/uploads/issues/2007/12/pdf/virtuous_circle.pdf

[22] For other important contributions to thinking about what this might mean in a contemporary context, see Joseph Stiglitz, Nell Abernathy, Adam Hersch, Mike Konczal, Susan Holmber, “Rewriting the Rules of the American Economy,”Roosevelt Institute, 2015 http://rooseveltinstitute.org/rewriting-rules-report/ , “Report of the Commission on Inclusive Prosperity,” Center for American Progress, 2015 https://cdn.americanprogress.org/wp-content/uploads/2015/01/IPC-PDF-full.pdf and Amy Traub, David Callahan, Tamara Draut, “Millions to Middle: 14 Big Ideas to be Build a Strong & Diverse Middle Class,” Demos, 2012 http://www.demos.org/millions-middle

[23] https://www.hillaryclinton.com/issues/

[24] Organisation for Economic Cooperation and Development, “Public Expenditure on Active Labour Market Policies,” 2013 http://www.oecd-ilibrary.org/employment/public-expenditure-on-active-labour-market-policies_20752342-table9

[25] United States Department of Labor, Workforce Innovation and Opportunity Act Overview https://www.doleta.gov/wioa/Overview.cfm

[26] Robert I. Lerman, “Expanding Apprenticeship Opportunities in the United States,” in Policies to Address Poverty in America, ed. Melissa S. Kearny and Benjamin H. Harris, The Hamilton Project, Brookings Institution, 2014, chapter 7 http://www.brookings.edu/~/media/research/files/papers/2014/06/19_hamilton_policies_addressing_poverty/expand_apprenticeships_united_states_lerman.pdf

[27] Stephanie Cellini, “For-Profit Higher Education: An Assessment of Costs and Benefits.” National Tax Journal 65 (1) 2012: 153–80.

[28] Steven Hill, “A New Safety Net for the New Economy,” Spotlight on Poverty and Opportunity, 2016 http://spotlightonpoverty.org/app/uploads/2016/02/Spotlight_Hill_20160209.pdf

[29] U.S. Government Accountability Office, “Contingent Workforce: Size, Characteristics, Earnings, and Benefits,” April 20, 2015, p. 4 http://www.gao.gov/assets/670/669899.pdf

[30] See for example “Common Ground for Independent Workers: Principles for Delivering a Stable and Flexible Safety Net for All Types of Work,” statement signed by multiple stakeholders, Medium.com, November 10, 2015 https://medium.com/the-wtf-economy/common-ground-for-independent-workers-83f3fbcf548f#.fiydpcwum

[31] Senator Mark R. Warner, “Asking Tough Questions about the Gig Economy,” Washington Post, June 18, 2015 https://www.washingtonpost.com/opinions/asking-tough-questions-about-the-gig-economy/2015/06/18/b43f2d0a-1461-11e5-9ddc-e3353542100c_story.html

[32] Steven Hill, “New Economy, New Social Contract: A Plan for a Safety Net in a Multi-employer World,” New America Foundation, August 2015 https://static.newamerica.org/attachments/4395-new-economy-new-social-contract/New%20Economy,%20Social%20Contract_UpdatedFinal.34c973248e6946d0af17116fbd6bb79e.pdf and Seth D. Harrris and Alan B. Krueger, “A Proposal for Modernizing Labor Laws for Twenty-First Century Work: The ‘Independent Worker’,” Hamilton Project, Brookings Institution, December 2015 http://www.hamiltonproject.org/assets/files/modernizing_labor_laws_for_twenty_first_century_work_krueger_harris.pdf

[33] Richard B. Freeman, “The Subcontracted Labor Market: David Weil’s book, The Fissured Workplace, describes a disturbing trend for workers,” in Perspectives on Work, Labor and Employment Relations Association, 2014, pp. 40–41 http://www.fissuredworkplace.net/assets/LaborMarket_mf.pdf

[34] Hillary R. Clinton, “Wall Street Should Work for Main Street,” Fact Sheet, briefing.hillaryclinton.com https://www.hillaryclinton.com/briefing/factsheets/2015/10/08/wall-street-work-for-main-street/

[35] Hillary R. Clinton, “Moving Beyond Quarterly Capitalism,” Speech at New York University, July 24, 2015 https://medium.com/hillary-for-america/moving-beyond-quarterly-capitalism-7abec53733f6#.52mta85ai

[36] John C. Bogle, “Restoring Faith in Financial Markets,” Wall Street Journal, January 18, 2010 http://www.wsj.com/articles/SB10001424052748703436504574640523013840290

[37] See for example, Rock Center for Corporate Governance, “2014 Survey on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making,” Stanford University Graduate School of Business https://www.gsb.stanford.edu/sites/gsb/files/publication-pdf/cgri-survey-2014-investment-horizon.pdf and John R. Grahama , Campbell R. Harveya, b, and Shiva Rajgopal, “The Economic Implications of Corporate Financial Reporting,” National Bureau of Economic Research Working Paper 10550, January 2005 version, https://faculty.fuqua.duke.edu/~charvey/Research/Working_Papers/W73_The_economic_implications.pdf

[38] Organisation for Economic Cooperation and Development, “G20/OECD HIGH-LEVEL PRINCIPLES OF LONG-TERM INVESTMENT FINANCING BY INSTITUTIONAL INVESTORS,” September 2013 http://www.oecd.org/finance/private-pensions/G20-OECD-Principles-LTI-Financing.pdf

[39] Organisation for Economic Cooperation and Development, “REPORT ON EFFECTIVE APPROACHES TO SUPPORT IMPLEMENTATION OF THE G20/OECDHIGH-LEVEL PRINCIPLES ON LONG-TERM INVESTMENT FINANCING BY INSTITUTIONALINVESTORS,” September 2014 http://www.oecd.org/daf/fin/private-pensions/G20-OECD-Report-Effective-Approaches-LTI-Financing-Sept-2014.pdf

[40] “Model contract terms between asset owners and their fund managers,” ICGN Model Mandate Initiative, International Corporate Governance Network, 2012 https://d3n8a8pro7vhmx.cloudfront.net/intentionalendowments/pages/27/attachments/original/1420777456/ICGN_Model_Mandate_Initiative.pdf?1420777456

[41] “Long-term Mandates,” Principles for Responsible Investing, UNEP Finance Initiative and UN Global Compact, June 11, 2015 file:///C:/Users/SRI/Downloads/d41d8cd98f00b204e9800998ecf8427e-Long-Term%20Mandates%20-%20Final.pdf

[42] “Long-term Mandates: A Discussion Paper,” Principles for Responsible Investing, 2014 file:///C:/Users/SRI/Downloads/Long-term-mandates1%20(1).pdf “Fiduciary Duty in the 21st Century: Global Statement on Investor Obligations and Duties,” Generations Foundation, UNEP Finance Initiative and Principles for Responsible Investing, September 2015 file:///C:/Users/SRI/Downloads/Fiduciary%20Duty%2021st%20Century%20-%20Global%20statement%20on%20investor%20obligations%20and%20duties.pdf and Simon Zadek, Mira Merme and Richard Samans, “Mainstreaming Responsible Investment,” World Economic Forum Global Corporate Citizenship Initiative in cooperation with Accountabillty, World Economic Forum, 2005 http://www.zadek.net/wp-content/uploads/2011/04/WEF_Mainstreaming_Responsible_Investment_2005.pdf

[43] Kobi Kastiel, “IRS Releases Final Regulations Under Section 162(m),” HLS Forum on Corporate Governance and Financial Regulation, Harvard Law School Forum on Corporate Governance and Financial Regulation, April 9, 2015 https://corpgov.law.harvard.edu/2015/04/09/irs-releases-final-regulations-under-section-162m/

[44] Leonard E. Burman, William G. Gale, Sarah Gault, Bryan Kim, Jim Nunns, and Steve Rosenthal, “Financial Transaction Taxes in Theory and Practice,” National Tax Journal, March 2016, 69(1) http://www.brookings.edu/~/media/research/files/papers/2016/02/29-financial-transaction-taxes-in-theory-practice-gale/burman-et-al_-ntj-mar-2016-(2).pdf and Thornton Matheson, “Taxing Financial Transactions: Issues and Evidence,” IMF Working Paper, International Monetary Fund, March 2011 https://www.imf.org/external/pubs/ft/wp/2011/wp1154.pdf

[45] Burman, Gale, Gault etal., op. cit., pp. 200–204 http://www.brookings.edu/~/media/research/files/papers/2016/02/29-financial-transaction-taxes-in-theory-practice-gale/burman-et-al_-ntj-mar-2016-(2).pdf

[46] “Estimates of Funding for Various Research, Condition and Disease Categories,” National Institutes of Health, Table published February 10, 2016 https://report.nih.gov/categorical_spending.aspx

[47] American Energy Innovation Council, “Restoring American Energy Innovation Leadership: Report Card, Challenges and Opportunities,” February 2015, p. 7 http://www.americanenergyinnovation.org/wp-content/uploads/2015/02/AEIC-Restoring-American-Energy-Innovation-Leadership-2015.pdf

[48] See for example Johan Rockstrom etal., “Planetary Boundaries: Exploring the Safe Operating Space for Humanity,” in Ecology and Society, Volume 14, №2, Art. 32, 2009 http://www.ecologyandsociety.org/vol14/iss2/art32/

[49] See Joost Pauwelyn, “Carbon Leakage Measures and Border Tax Adjustments under WTO Law,” in D. Prevost and G. Van Calster (eds.), Research Handbook on Environment, Health and the WTO (Edward Elgar, 2012) SSRN 2026879 http://poseidon01.ssrn.com/delivery.php?ID=537100100007025092086025103017071000103051006034026016025071106086085005000006067074121007006025119120053086114001094065096078112050061043086007092118084125071073054037032065087026003020023064019067118065115072125072116091016121026107100100003117002&EXT=pdf , Steve Charnovitz, “Border Tax Equalization,” Paper prepared for the Conference on Challenges Facing the World Trading System, Columbia University and Johns Hopkins University, September 29, 2014 http://indianeconomy.columbia.edu/sites/default/files/paper2-bordertax.pdf and General Agreement on Tariffs and Trade, “United States — Taxes on Petroleum and Certain Imported Substances,” Report of the Panel Adopted on 17 June 1987, (L/6175–34S/136) https://www.wto.org/english/tratop_e/dispu_e/87superf.pdf

[50] See Atsushi Kodaka, “Japan’s Top Runner Program: The Race for the Top,” Ministry of Economy, Trade and Industry, Government of Japan, http://www.eceee.org/events/eceee_events/product_efficiency_08/programme_presentations/Kodaka_TopRunnerProgram.pdf and “Top Runner Program,” Agency for Natural Resources and Energy, Ministry of Economy, Trade and Industry, March 2015 http://www.enecho.meti.go.jp/category/saving_and_new/saving/data/toprunner2015e.pdf

[51] As proposed in Donald B. Marron and Adele C. Morris, “How to Use Carbon Tax Revenues,” Tax Policy Center, Urban Institute and Brookings Institution, February 2016 http://www.urban.org/sites/default/files/alfresco/publication-pdfs/2000624-how-to-use-carbon-tax-revenues.pdf

[52] See Chad Stone, “Designing Rebates to Protect Low-Income Households under a Carbon Tax,” Resources for the Future, 2015 http://www.rff.org/files/document/file/RFF-Resources-190_CarbonTaxRebates_0.pdf , p. 24.

[53] Adele Morris and Aparna Mathur, “A Carbon Tax in Broader U.S. Fiscal Reform: Design and Distributional Issues,” Center for Climate and Energy Solutions, May 2014 http://www.c2es.org/publications/carbon-tax-broader-us-fiscal-reform-design-distributional-issues and Marron and Morris, op. cit., http://www.urban.org/sites/default/files/alfresco/publication-pdfs/2000624-how-to-use-carbon-tax-revenues.pdf

[54] See for example Matthew Carr and Joe Ryan, “Tough to Keep the World from Warming When Carbon Is This Cheap,” Bloomberg, July 18, 2016 http://www.bloomberg.com/news/articles/2016-07-07/tough-to-keep-the-world-from-warming-when-carbon-is-this-cheap and “Carbon Prices around the World Are Consistently Too Low,” On Climate Change Policy, June 2, 2015 https://onclimatechangepolicydotorg.wordpress.com/2015/06/02/carbon-prices-around-the-world-are-consistently-too-low/

[55] Jacob S. Hacker, “The Institutional Foundations of Middle-Class Democracy,” Policy Network, May 6, 2011 file:///C:/Users/SRI/Downloads/Jacob%20S.Hacker.pdf http://equitablegrowth.org/equitablog/predistribution/

[56] Frederick Solt, “The Standardized World Income Inequality Database,” Social Science Quarterly 97, 2016 http://fsolt.org/swiid/

[57] See in particular Yuval Levin, “The Next Conservative Movement,” Wall Street Journal, April 15, 2016 http://www.wsj.com/articles/the-next-conservative-movement-1460741085, Yuval Levin, “How Boomer Nostalgia Harms America,” Book excerpt from Yuval Levin, The Fractured Republic: Renewing America’s Social Contract in the Age of Individualism, in Washington Free Beacon, May 28, 2016 http://freebeacon.com/culture/baby-boomer-nostalgia-harming-america/ and Walter Russell Mead, “The Once and Future Liberalism: The Blue Model Is On Its Way Out; What Should Come Next?” The American Interest, January 24, 2012 http://www.the-american-interest.com/2012/01/24/the-once-and-future-liberalism/

[58] See Lind and Brooks op. cit.

[59] Congressional Budget Office, The 2016 Long-Term Budget Outlook, July 2016, p. 6, 17. https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/51580-LTBO.pdf

[60] See for example The Boston Consulting Group, “Made in America Again: Fourth Annual Survey of U.S.-based Manufacturing Executives,” December 2015 http://www.slideshare.net/TheBostonConsultingGroup/made-in-america-again-55937000 and T.X. Hammes, “The End of Globalization? The International Security Implications,” War on the Rocks, August 2, 2016 http://warontherocks.com/2016/08/the-end-of-globalization-the-international-security-implications/

[61] See for example, Jonathan Alter, The Promise: President Obama, Year One, Simon and Schuster, 2010, pp. 268–270. https://books.google.ch/books?id=g_1wN2RzTlcC&pg=PA270&lpg=PA270&dq=obama+no+economic+narrative&source=bl&ots=jPd4orntm3&sig=PWUCukJ-pL77dAU2lp1NoBx6hcY&hl=en&sa=X&ved=0ahUKEwjh0uTqjfrNAhWD2ywKHYfiDZEQ6AEIUDAJ#v=onepage&q=obama%20no%20economic%20narrative&f=false http://www.wsj.com/articles/how-obamas-economy-spawned-trump-1462313951