Whose Economy Is It Anyway? - WhoWhatWhy

Whose Economy Is It Anyway?

Gene Sperling, Joe Biden
National Economic Council Director Gene Sperling, Vice President Joe Biden, and others listen as President Barack Obama delivers a statement on the short-term budget deal to prevent a government shutdown, in the Blue Room of the White House, April 8, 2011. Photo credit: Obama White House / Flickr
Reading Time: 12 minutes

Most of us remember Bill Clinton’s oft-repeated slogan when he ran for President in 1992: “It’s the economy, stupid.” It was effective because it captured, in perhaps a more innocent time, the idea of a single economy that impacted everyone. 

Almost 30 years later, it seems there are many economies: the economy of Wall Street, the economy of the one-percent, of the middle class, of those struggling to make ends meet, and of those totally left behind.

In the age of COVID-19 and rampant inequality, we have to find a new language to make sense of our economic reality.

So says our guest on today’s WhoWhatwhy podcast, Gene Sperling, who was chairman of Clinton’s Council of Economic Advisors and is now an economic advisor to President-elect Joe Biden.

According to Sperling, with millions out of work, lines at food banks stretching for miles, and the stock market hitting all-time highs, the metrics that economists have used to chart the ups and downs of economic activity no longer work with the needed precision.

Clearly, he says, too many of today’s metrics fail to capture the pain and suffering that the marketplace inflicts on too many people. He talks about the need for new metrics that can measure people’s ability to care for their families, their yearning to fulfill their potential, their desire to get a second chance, and to achieve respect in the workplace. Sperling argues that there is historical precedent to deal with all of this — which might be summed up under the rubric “quality of life” — and that full economic dignity is entirely compatible with modern capitalism. 

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Full Text Transcript:

Jeff Schechtman: Welcome to the WhoWhatWhy podcast. I’m your host, Jeff Schechtman. I’m sure you all remember that when Bill Clinton ran for president in 1992, James Carville’s pression slogan ‘It’s the economy, stupid’ was a fundamental foundation of that campaign. It was effective because it captured, in perhaps a more innocent time, the essence of the economy that personally impacted every single American. Today, almost 30 years and a political chasm later, it seems that there are many economies, the Wall Street economy, the economy of the 1 percent, the middle class, those struggling to make ends meet, and those totally left behind. The economy is no longer a catchword that’s a big tent for all. Just look at the current situation as 35 million Americans are out of work. Lines at food banks stretch for miles and yet the stock market is hitting new highs. Arguably today, the current pandemic and its resultant economic crisis is an accelerant that further accentuates our division.
Jeff Schechtman: So, as we look out amidst staggering unemployment and a great economic divide, is there a common goal that the economy should represent and strive for? My guest, Gene Sperling thinks that there is. Gene Sperling was director of the National Economic Council under both President Obama and President Clinton. He is the author of several previous books, including The Pro-Growth Progressive and Economic Dignity. He founded the Center for Universal Education at the Brookings Institution and has been a senior economic adviser to President-elect Joe Biden. He is considered one of the most progressive economic advisers in the Biden camp and he has been on the shortlist for a number of economic positions in the Biden administration. It is my pleasure to welcome Gene Sperling to the WhoWhatWhy podcast. Gene, thanks so much for joining us.
Gene Sperling: Oh, well, thanks for having me. I really appreciate it.
Jeff Schechtman: I want to talk about this idea first that when we look at the economy today, when we talk about the economy, that it means different things to different people. We hear coming out of Washington sometimes and out of the White House sometimes that it’s only about the stock market, but of course it’s very different for people out there in the rest of the country. Talk a little bit about that and this kind of confusion as to what we mean by the economy today.
Gene Sperling: No, I think you hit it on the nail. We tend to allow economics to be thought of as if the end goal was some economic metric. The end goal of everything you’re doing is a GDP goal or productivity goal or how the stock market is moving. And I think that’s both wrong for policy makers and it alienates a lot of people from feeling that they can be part of the economic discussion. I wanted to write a different kind of economic books that would talk about what is actually should be your end goal. The economic end goal of the democracy shouldn’t be anything other than how it uplifts the lives of people. And I wanted to ask and define what should that end goal be? What is it that matters? What would someone on their death bed say mattered most in their economic life?
Gene Sperling: And so, I defined as this North Star, the frame economic dignity, but I also wanted to say what exactly that meant and then talk about how you would apply that to different policy measures. And so I came up with a three-part definition. One, that it’s the economic capacity to truly care for your family, to not just put food on the table, but be at the table, be at the bedtime story, be at the bedside of a loved one in their final days. In other words, economic caring for family has to mean your capacity to enjoy those moments of life that are most essential for all of us in caring for the people we love.
Gene Sperling: Then two, that we also all desire to pursue a sense of purpose and potential. And that our ideal in our country is that everyone has not only a first chance, but that we have second chances. We idealized the notion of second chances and yet we’re particularly miserable at it as a country. There’s no country where losing a job leads to more hardship. There’s probably few countries where going to prison or being involved in criminal justice gives you less second chances. We do enormously little for people who maybe deal with a disability but would still like to find a way to contribute to their economy. So that was the second leg.
Gene Sperling: But I realized that all of that could come tumbling down if you didn’t have the third pillar of economic dignity, which is protections to ensure you can work with respect and not be subject to domination or humiliation. So if the price of putting food on the table, if the price of pursuing your potential is that you have to deal with an unsafe workplace, sexual harassment or sexual violence, abuse that becomes the antithesis of economic dignity.
Gene Sperling: So, you have to have that third pillar as well. And we see that every day right now, where we cheer and honor many of our essential workers, and yet our treatment of them fails in many of these regards. They can’t actually put food on the table, they don’t have the paid sick leave to care for their family, and some of them are being subject to abusive conditions or facing retaliation when they speak out. So this is not meant to be an abstract book, this is defining our North Star, our economic goal is economic dignity. And then asking what we need to do to a country to live up to this for everyone who does their part, who contributes to work.
Jeff Schechtman: One of the things that’s inherent it seems in talking about economics, what somebody once referred to as the dismal science, is that there are some metrics by which to judge all of this. Can we take something like dignity and the things that you’re talking about, Gene, and put that into some kind of metric by which we can judge our success or failure?
Gene Sperling: So, I think it’s true that obviously you want to have measurement, obviously you don’t want people to just be able to define anything as dignity and say, ‘I know it when I see it,’ but I do feel that it is important to start with this kind of qualitative aspiration. I think it helps you keep your eye on the ball. And what I find happens is that somebody starts thinking, ‘Boy, 3 percent of GDP, that’s measurable. So therefore, that ought to be our goal.’ And it does start to remind of the very bad joke about the inebriated person who’s looking for their car keys under the streetlight and somebody goes to help them and says, ‘Is this where you think your keys are?’ And they say, ‘No, but it’s the only place the light is shining.’ If we look only for that that can be precisely measured, we can miss an enormous amount of the economic pain that is actually quite obvious once we have a goal like economic dignity.
Gene Sperling: So, for example, do you need to show with precision the harm that tens of millions of women might feel if they’re being sexually harassed or sexually violated at work? No, we know that is a source of domination and humiliation that shouldn’t exist, and you don’t need to have an economic metric. We know that that defies working with respect or without domination or humiliation. Or if we look just at even a wage number, how’s net wages going for people, that might miss the fact that we as a country often allow job loss or community factory closing to lead to a downward cycle that eats at a person’s soul. It takes away their ability to care for their family. It takes away their capacity to find another job, to pursue potential. That might get lost in measurement, but if our standard is everybody should be able to pursue potential, then I do think it doesn’t substitute for metrics, but it makes you remember your ultimate end goal is to ensure that everybody who does their part lives with a degree of economic dignity.
Gene Sperling: And then you can start to ask which metrics help us reach that end goal. But you don’t confuse the GDP as your end goal, because you can have high GDP in a country like Saudi Arabia that gives all the money to the royal family, and you wouldn’t say ‘Well, that meets our end goal,’ because we actually don’t just care about a metric in the abstract, we care about whether it is leading to an economy that everybody can work, pursue their potential, work with respect, and be able to care for their family. With the degree of dignity that is universal for people in wanting to make sure their children are okay, make sure they have some opportunity, make sure that they don’t take devastating falls that force them to lose their house or their sense of wellbeing.
Jeff Schechtman: Can we find historical precedent for this? Starting first in the US, where that has been the focus and we’ve seen positive results from it?
Gene Sperling: Well, in my book, I talk about the two Roosevelts era. And I talk about Teddy Roosevelt because it’s very powerful. Here he’s a Republican, pro-business, pro-market, anti-regulation Republican. And what changes him? It’s not some economic philosophy. It’s as he’s a state assemblyman, he goes and tours the tenements in New York City where they’re making cigars and he sees a level of degradation that he can’t imagine. Working men humiliated in front of their children who are also working by their side. And he says, ‘This is just wrong,’ and that starts to lead to the era where we start saying, ‘We’re going to make sure that work does protect against a degree of domination and humiliation.’ And so, you see that period of anti-child labor law, minimum wage, some of the basic labor protections that we now take for granted.
Gene Sperling: But I think when you look at what drove them, it was a sense that there was a degree of domination that led people to have a kind of inhuman loss of dignity, that those people felt was inconsistent with the broader ideals and the broader protections people had against the state. And then I think the second Roosevelt, FDR, is people are looking and they are seeing people who worked their whole lives, dying in the street in their older age. And FDR’s response in the New Deal is not just a macroeconomic response.
Gene Sperling: If you go through his language, he talks about the idea of people who’ve contributed their whole life dying in the street in their elderly age and he refers to the loss of dignity that that leads to that that’s not a dignified economy. And so, you then see this kind of affirmative positive dignity, where we realize that it’s not just protecting against the abusive employer, but there’s affirmative things that we need to do to ensure that people have the wages, the health security, the retirement security, so that they can work with dignity, raise their family with dignity, and retire with dignity.
Jeff Schechtman: How does this relate to people that are on the upper end of the economy, who certainly don’t need a helping hand, don’t need to address some of these issues, but are nonetheless an important part of the economy?
Gene Sperling: Well, I think what you want to do is — an economic dignity framework, it can be very consistent and should be consistent with a view of capitalism. And what I talk about is that you can have in a capitalist society a country where, yes, some people will be celebrities or start their own successful business. And they’ll have wealth, they’ll have a certain degree of wealth and a beautiful house and beautiful vacations, but you should still structure that economy, that even for those who are doing well, it is built on a foundation where there’s a basic level for everyone. And that is not radical and it’s not impossible. I mean, obviously it starts with the living wage. Obviously, it starts with universal health care. But think about the following: at a typical firm in the United States, executives often have paid bereavement leave.
Gene Sperling: If they were to suffer the worst of tragedies, the loss of somebody in their immediate family, an executive could get paid time off, but lower-level workers or contractors wouldn’t. Now, what does that say? What kind of country are we when if you lost a spouse or something, just one of the worst events in your life that your economic station in the country would determine whether you could take time off with your family to grieve? One in eight women go back to work, are economically forced to go back to work, within one week of their childbirth. So, what I’m saying is you can have a country that celebrates capitalism, that understands that some people will do better, but you structure markets and you structure your economic compact so it is not at the expense or the exploitation of people, but that it is built on a foundation that everyone who contributes can, again, not just care for their family, but be there for life’s most special moments, pursue their sense of potential, and work with respect, not domination.
Jeff Schechtman: How much of this has to be addressed through public policy, specific policies, and how much of it is really a political equation that we need a different mindset in the body politic?
Gene Sperling: Well, I think they’re obviously related. I mean, the thing I’ve spoken about a lot during the COVID crisis is that we in some sense have had that. I think of it as the Martin Luther King moment and what I refer to is in 1968 at the Memphis Sanitation Workers’ Strike, he makes his famous speech just weeks before his assassination, where he says, ‘All labor has dignity.’ And right before that the line is, ‘We, as a nation, will someday come to realize that the sanitation worker is as essential as the physician to our wellbeing.’ And we are powerfully having that moment now. People are very aware that perhaps the assistant nurse, the home health aide, the delivery worker, the farm worker, that they are propping up our lives, they’re saving our lives, and we’re calling them essential and people are cheering for them.
Gene Sperling: And that sense of recognition of the value of each of us is more powerful today perhaps than ever. But Martin Luther King also said in that same speech, ‘What good is it to sit at an integrated lunch counter if you can’t afford to buy your family a meal.’ And I think many of the people getting applause as they go into work at a hospital are going to start to ask, ‘How meaningful is the applause and being called a hero, if I still don’t have a living wage? If I’m caring for other people, but can’t have a single day of paid sick leave myself.’
Gene Sperling: And so, I think one has to hope that this moment of realizing the value, the dignity, how essential all work is doesn’t translate into more support across the political spectrum, for just a basic compact of economic dignity, a new New Deal for workers, where you just say, ‘If you work hard, if you contribute, then you should be able to raise your family with a modicum of dignity and respect.’ And I believe that’s rich in the American values, I think we just have to call on it enough so that our policy makers feel compelled to take the acts to structure our economy so that all work has to be treated that way.
Jeff Schechtman: Gene Sperling. Gene, I thank you so much for spending time with us here on the WhoWhatWhy podcast.
Gene Sperling: Well, I thank you so much for caring and being willing to have me on. Thank you so much.
Jeff Schechtman: Thank you. And thank you for listening and for joining us here on radio WhoWhatWhy. I hope you join us next week for another radio WhoWhatWhy podcast. I’m Jeff Schechtman. If you liked this podcast, please feel free to share and help others find it by rating and reviewing it on iTunes. You can also support this podcast and all the work we do by going to whowhatwhy.org/donate.

Related front page panorama photo credit: Adapted by WhoWhatWhy from Nick Thompson / Flickr (CC BY-NC 2.0).

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