Monday, November 27, 2006

The centre-left project

The downside of concern about trade is that it can spill over into xenophobia, says Robert Reich who notes that global capitalism rather than communism is the fear:
Congress’s distrust extends beyond Vietnam, to other areas where global capitalism is expanding. Trade bills now pending with several poor countries in Africa, Asia, and Latin America are also in jeopardy. Don’t expect the next Congress to look on these trade deals more favorably. Many of the newly-elected members campaigned openly and vocally against free trade. Whether it’s a renewed fear of foreigners, or fear of job losses to them, this nation seems to be turning inward. Sadly for us, as well as for millions of poor people around the world, America may be on the brink of a new Cold War -- with the enemy this time not global communism but global capitalism.

The trade debate is part of a renewed concern on the left, even the ‘centre-left’ with economic inequality. Harold Meyerson describes two research projects underway to develop strategies to tackle growing inequality and ensure sustainable growth. One by the Economic Policy institute, aligned with the liberal-left and close to the unions, and another, the Hamilton project organised through the Brookings Institute) in which former Clinton Treasury secretary and Wall Street wunderkind Robert Rubin (current director of Citigroup) is a leading figure. The Hamilton Project seen by some as presaging a more interventionist approach by former Clintonites. Rubin notes that:
My recollection is, if you take the last thirty years, roughly speaking, that for twenty-five of them, real median wages have been stagnant despite rising GDP growth.

The Hamilton project argues against economic isolationism stressing the importance of reducing the budget deficit and refocusing public investment in growth-promoting areas. This is congruent with the Democrats’ rhetoric reinvention as the party of fiscal responsibility. It seems an attempt to combine some of the themes of Clinton Mark I on human capital and infrastructure with the Clinton Mark II emphasis on balanced budgets.


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