The Good Growth Reform Agenda

A quintessentially American reform movement

In 19 days, either Kamala Harris or Donald Trump will be President (not including prolonged ballot counting chaos, of course). If Vice President Harris loses, Democrats will inevitably do some painful soul searching and finger pointing. If she wins, the various Democratic factions will vie for credit and influence over the priorities of the administration. In either case, the center-left needs a clear and tight enunciation of its vision and values if it is going to win the coming intra-party battle and build a durable majority. 

A New Vision Born Out of Current Economic Confusion

As I have written about before, Democrats must eschew their preoccupation with identity politics and, instead, focus on a powerful economic vision that inspires and unifies voters. It must address voters’ justified anger and dissatisfaction with the status quo without devolving into pandering populism. 

It is a valuable opportunity given how muddled the current economic positioning of the two political parties currently is. A reductionist caricature of their economic platforms would describe Democrats as promoting a hand-out economy while Republicans advance a hands-off economy. Voters are dissatisfied with both of these options and the various factions within each party are scrambling to redefine their economic visions.

Traditional, neo-liberal Republicans are in tension with the MAGA movement’s economic populism. Former President  Trump’s policy proposals reflect this awkward marriage as he simultaneously embraces pandering give-aways, tariffs, corporate tax cuts, and deregulation.

Meanwhile, Ms Harris has wisely tacked to the center on everything from immigration to energy production to housing. Yet voters remain skeptical and justifiably confused about the Democrats economic agenda. It was only four years ago that the Democratic Presidential Primary featured a race-to-the-left on nearly every policy topic. Ask a voter to summarize the Democratic economic platform and you will likely get blank stares, followed by some hodgepodge of equity, anti-corporate greed, taxing the wealthy, and social program spending. Ms. Harris’s “opportunity economy” is a strong improvement, but there is much work to do to further define and solidify it as the core Democratic identity.

Whatever the outcome of the election, Democrats need to commit themselves to building a bolder, simpler, and more coherent economic vision that addresses America’s most pressing problems, while playing to its greatest strengths. 

Good Growth Reform Agenda

America’s greatness lies in the fulfilled promise of the American Dream - to be a nation in which all citizens of all backgrounds have the opportunity to build better, richer, and fuller lives according to their talents and work ethic. That truly American ideal demands an unwavering commitment to both economic dynamism and shared prosperity. 

The following agenda aims to paint a vision of an abundant future of shared prosperity built on three, classic American values - freedom, opportunity, and fairness - that unlock robust and inclusive economic growth.

• Freedom: a free and open economy is essential to dynamic growth

  • Champion regulatory reform to make it easier to build homes and infrastructure, and launch new businesses

  • Keep tariffs low to maximize business opportunities and lower costs

  • Encourage legal and well-managed immigration to address labor shortages and continue America’s legacy as a nation of hard-working strivers

• Opportunity: proactively empowering Americans is key to shared prosperity

  • Invest in shared public goods, such as transportation, energy infrastructure, and high speed internet, to ensure a strong economic foundation

  • Empower a skilled workforce with a high performing education system and workforce training resources

  • Unlock productivity and workforce participation by investing in childcare, healthcare and eldercare

• Fairness: government must protect Americans from market excesses and failures

  • Ensure healthy business competition and low prices with strong antitrust regulation

  • Address pollution and climate change with simple, consistent incentives and regulations to steer private sector solutions

  • Help Americans make informed economic decisions by ensuring transparency and equal access to information

At first glance, this agenda may seem like standard, commonsensical economic proposals - and that is partially true; it represents a reasonable approach to well-regulated capitalism. But there is also an element of radical reform.

To build a truly open and dynamic economy, we must challenge the spoiled complacency of entrenched interests. That will not be well-received by the owners of capital who use strategies of regulatory capture and rent-seeking to drive profits without creating any additional value. 

The Sin of Status Quo Power Protection

One of the risks of a capitalist system is that those who have accrued capital or powerful positions try to press their advantage by unfair and anti competitive behaviors. They deliberately prevent change in order to stay on top. This self-interested behavior is not surprising, but is harmful to a dynamic economy. And it is widespread.

Too many large corporations deliberately pursue market consolidation in order to increase their power and raise prices. These organizations are not trying to add more value for their customers; they are simply trying to reduce competition to make growing profits easier. In healthcare, consolidation of hospitals and small practices has led to predictable price increases without any increase in healthcare outcomes. This monopolistic behavior is far too common and must be countered with robust antitrust efforts. 

NIMBYism is another example. The not-in-my-backyard movement seeks to limit additional building of housing or energy projects in order to protect the interests of existing property owners. If you are a homeowner who does not want a six story apartment building in your neighborhood, perhaps it is because you don’t like tall buildings or the people who might live there. Or, more likely, it is because you fear it will hurt the resale price of your home. That is a fair economic self-interest, but it also means prices will continue to soar as demand outstrips the strategically limited supply of housing stock. In practice, it is not uncommon to hear parents of adult children complain that their kids cannot afford homes today; yet those same homeowner parents are too often the ones using local zoning laws to block new construction in their own neighborhoods. This regulatory and permitting manipulation for personal gain at the expense of the next generation is at the heart of NIMBYism.

Finally, tariffs are yet another example of rent-seeking. Charging foreign companies a fee to access American customers does nothing to create innovation at home. It gives American companies less competition, allowing them to increase their prices without adding any value to their products. This not only hurts American consumers, but it also hurts American manufacturers who have to pay higher input costs themselves. It is a particularly self-defeating form of rent-seeking.

Embrace Dynamic Reform

All of these are examples in which the beneficiaries of the status quo want to prevent dynamic change from happening in order to serve their self interests. This is the opposite of progressive politics and it breaks with the American tradition. This country is fundamentally about dynamic change: revolution, settling the West, being a nation of immigrants, technological innovation, upward mobility, and consistently reforming our political systems to make our nation more just. This dynamic change has made America the largest economy in the world and one of the most attractive destinations for immigrants across the globe. 

We must embrace this proud legacy of dynamism. The key question is not whether change is necessary, but how to go about it. Populists propose an illiberal, burn-it-all-down strategy. That is a backward, harmful form of change, but the center-left must not respond by being the status quo faction. It is ethically and politically untenable. Instead, the center-left should champion a robust reform movement that celebrates - rather than transgresses - American values.

The Good Growth Reform Agenda is designed to stoke this pro-American change by empowering the little guy and disrupting the ossified status quo. It celebrates and encourages the private sector as the primary driver of economic value. But rather than backing away with a “do-nothing” attitude towards the economy, this agenda recognizes the invaluable, proactive role of government to ensure our capitalistic system fulfills its full potential as an engine of egalitarian economic mobility.

The Good Growth Reform Agenda promotes economic freedom by lowering barriers, creates upward mobility by proactively empowering its citizenry to compete effectively, and enforces fairness by upending entrenched interests that exploit market failures and rent-seeking for personal gain. This is a pro-people form of economic liberalism, and it is an American economic playbook we can be proud of. 

Americans are seeking a new economic vision that addresses their justified feelings of economic futility but also champions what they love about America. We should give them a pro-growth reform movement that does just that.