The Washington Center for Equitable Growth – Neoliberalism Reloaded?

By Dan Kervick

There is a new Washington think tank on the scene. Well, actually it is just a spinoff and re-branding of an older Washington think tank: the Center for American Progress. The new think tank is called the Washington Center for Equitable Growth. Here is the organization’s self-description:

The Washington Center for Equitable Growth is a new research and grantmaking organization founded to accelerate cutting-edge analysis into whether and how structural changes in the U.S. economy, particularly related to economic inequality, affect growth.  Core to our mission is helping to build a stronger bridge between academics and policymakers so that new research is relevant, accessible, and informative to the policymaking process.

And here are the people involved with the project on its steering committee, advisory board and staff. There are a handful of interesting folks in the lineup, including Heather Boushey, Nancy Folbre and Emmanuel Saez, economists who have an authentic, well-established research interest in issues of economic inequality. But the crew also contains a lot of Clinton and Obama administration veterans who, quite frankly, have been a giant part of the problem, and helped lay the foundations for the repulsive and dehumanizing economic order under which we currently live. And the organization is headed by John Podesta, the ultimate beltway insider.

Two of the more notable absences from the list are Joseph Stiglitz and James K. Galbraith, very prominent economists who have authored two of the most important recent books on economic inequality. It would be interesting to know whether they were invited to join, and declined, or if they just weren’t invited at all.

I wouldn’t get too excited at this point about any bold ideas for a New Age of Equality coming from WCEG. From all appearances, this new think tank is just the Podesta-Clinton machine re-branding itself yet again to keep up with intellectual and political fashions.  Ken Silverstein at The Nation has written about Podesta and his Business Alliance of top corporate honchos.  And WCEG is funded by the Sandler Foundation, run by subprime mortgage tycoons Herb and Marion Sadler.

Podesta claims that WCEG will be free to break with Democratic Party orthodoxy, and also with the policies developed by its parent, the Center for American Progress:

Mr. Podesta, who will be the center’s chairman, said he wanted to set it up as a separate group so that its findings could remain separate from the policies advocated by the Center for American Progress. To have credibility, the new group will need to follow the data wherever it leads, even when it conflicted with Democratic Party positions, he acknowledged.

Frankly, that’s a bit hard to believe, given Podesta’s pedigree and connections. My guess is that WCEG is designed to serve as a policy incubator for the upcoming Clinton campaign, so that the positions it develops become the Democratic Party positions, as the Democrats’ center of political gravity moves away from the moribund Obama administration and back toward the Clinton machine. In any case, one knows in advance that whatever policy WCEG ends up advocating will have to get the Good Plutocracy seal of approval from the likes of General Electric, Goldman Sachs, Comcast, Walmart Boeing and the other financial backers of Podesta and his political network. Hopefully, economists like Saez will help the organization produce some useful work. But the final political upshot of that work, once it is churned through the WCEG policy grinder and packaged for the establishment political market, is likely to look more like Neoliberalism Reloaded, rather than a roadmap toward an egalitarian society.

For a glimpse at a vigorously egalitarian political and economic agenda that goes far beyond anything that the centrist Democratic Party and its Wall Street and corporate board room backers are likely to find agreeable, please take a look at my proposals for Rugged Egalitarianism.

Cross-posted from Rugged Egalitarianism

Follow @DanMKervick

37 responses to “The Washington Center for Equitable Growth – Neoliberalism Reloaded?

  1. The neoliberal hydra is like John Carpenter’s “The Thing” spontaneously mutating to overcome an obstacle.

    • Yeah, except it is not spontaneous. It’s planned. The plutocrats say, “How do we hold onto our stuff while making the minimum change necessary to fob off the grumbling rabble. Let’s call John Podesta and see what he can do for us.”

  2. I agree with Dan that the launch of a new high profile “think tank” is related to the upcoming Clinton campaign.

    Almost certainly the WCEG will be providing an intellectual / chattering class patina of authenticity for Hillary Clinton’s upcoming campaign.

    The campaign will need unquestioning friends that it can count on and this is an example of how to do it.

  3. I’d suggest they read ‘Grand Pursuit’ by Sylvia Nasar to discover how great ideas were developed by Irving Fisher and John Maynard Keynes. It isn’t a miracle. Paraphrasing Paul Krugman, ‘we know what works, we just aren’t doing it’.

    The other problem is the media. Chuck Todd said their job is just to report, not tell us what’s true or false. Problem is they don’t know what’s true or false. They are economic idiots. Paraphrasing Tom Freidman, ‘if a congressman said the earth is flat, the press would report the shape of the earth is in dispute’. And with the knowledge level of the American public, I can hear a husband saying to his wife, look honey science has been wrong about the shape of the earth all these years. Probably about 40% of them would buy it.

  4. Pingback: The Washington Center for Equitable Growth &nda...

  5. Excellent article. It’ll be interesting to see how the forthcoming campaign rhetoric, camouflages the hard core realities.
    Your keen observation about Joseph Stiglitz and James K. Galbraith should be amplified, pressed and not left to casual curiosity.

  6. Aloha! Equitable growth? Academics and policymakers are at it again! The mission statement is this: “Core to our mission is helping to build a stronger bridge between academics and policymakers …”

    How many “academics” have real world business experience, whereby they face the actual every day consequences of government regulations? How many policymakers have faced the real world in the role of a start-up company or a small business owner? Next … and this should be the first requirement of every academic and policymaker prior to employment have ever read the Federal Registry’s CODE OF FEDERAL REGULATIONS (Titles1-50; 85,000 pages) in its entirety? Perhaps if that were a “federally mandated requirement for all think tanks” then these political “think tanks” might have to stop thinking, which would be a blessing to all of us “real world” employers slash business owners.

    • Reading the Federal Code might keep them out of everyone’s hair for a while, but it would probably inspire them to make many revisions, much to everyone’s detriment.

  7. Random thought… Since the capital account and the current account balance, it may be the case that the United Kingdom would only be likely achieve a current account surplus by shutting down the City of London.

    • Mark Robertson

      I apologize for my obtuseness, but what are you talking about?

      What do you mean by “capital account,” “current account balance,” and “current account surplus”?

      Do you mean the UK’s federal budget? Do you want a surplus for that budget? A surplus would be catastrophic.

      The UK’s real economy is in a depression, caused by gratuitous austerity. Just yesterday BAE Systems announced that it will forever close down its shipyards at Portsmouth, which had operated for 500 years. This will cause a massive loss of jobs.

      A federal budget surplus (i.e. austerity on steroids) would make the UK’s depression many times worse.

      As for the City of London, it is only relevant to the financial economy, not the real economy. That is, it is relevant to financial affairs, not fiscal affairs. The real economy is in a depression. The financial economy is roaring.

      This blog revolves mainly around MMT. Please read up on MMT.

        “In macroeconomics and international finance, the capital account (also known as financial account) is one of two primary components of the balance of payments, the other being the current account. Whereas the current account reflects a nation’s net income, the capital account reflects net change in ownership of national assets.
        A surplus in the capital account means money is flowing into the country, but unlike a surplus in the current account, the inbound flows will effectively represent borrowings or sales of assets rather than payment for work. A deficit in the capital account means money is flowing out the country, and it suggests the nation is increasing its ownership of foreign assets.”

        Central to MMT is the accounting identity relating public deficit to private surplus and foreign balance. Surely understanding that foreign balance is relevant to MMT. The City of London attracts significant foreign portfolio investment. That creates a capital account surplus. Including changes in reserves to the capital account nets the balance of payments to zero. So, portfolio investment is partially balanced by a current account deficit. That implies that inflows of foreign investment can translate into higher imports. Hence, sales in the financial economy affect sales in the real economy.

  8. Money can be issued as Liabilities or shares in Equity. The problem with the former is that money creation in excess of Equity requires that not all Liabilities can be redeemed at once. This is clearly fraudulent in the case of demand liabilities but is tolerated by the legal system since it is generally considered that TINA.

    Otoh, shares in Equity can be issued without limit, assuming a majority of the existing share holders agree.

    I don’t make the case in this comment that government-backing of Liability creation is inherently crooked, though it is, but I do wonder how people can use the word EQUITABLE and not realize that the solution is money issued as shares in Equity?

  9. Thanks for pointing out the latest shill tank not working in the best interests of the citizenry. The name of the other outfit escapes me, but I recall that Albright Stonebridge was partnered with the neocon institute which was made up of the mob which interrupted and disrupted the recount of the vote in Florida in the 2000 presidential election (referred to in the news as the “Brooks Brothers mob” given their expensive suited attire.

    And of course, Princeton’s Alan Blinder was a cheerleader for offshoring as many jobs as possible, and is now supposedly sounding the alarm because of all those jobs which have been offshored!

    Definitely not far removed from your typical neocon bunch…..

  10. @Bill Cash: “The other problem is the media. Chuck Todd said their job is just to report, not tell us what’s true or false. Problem is they don’t know what’s true or false.”
    I respectfully submit that the job of reporters and all media personnel is to serve their corporate masters, which has nothing to do with discovering or reporting what’s true or false. And BTW, their masters may be the bosses of for-profit or non-profit corporations.

  11. Dan,

    Looks like they are going to make some study funds available along the lines of “equity”:

    More details to follow mid-November.


  12. I certainly can’t blame you for being skeptical. It’s hard to be optimistic when dealing with anything that resembles (or goes by the name) “think tank”. But I’m going to give this group a chance. I mean, you have Alan Blinder and Robert Solow on the steering committee. These two have been concerned about inequality since the early 90s, at a time when few people in the mainstream were concerned. Dan, I really enjoy your posts, and I think you would appreciate Solow’s take on the subject.

    Also, though I can’t say for sure, my feeling is that Stiglitz would no doubt applaud their involvement.

    • I agree that some of the economists in the lineup have done good work (although I can’t say I have ever run across anything from Blinder that appealed to me.) But the staff and steering committee are also filled with a bunch of lame political insiders. I have to say that I am immediately biased against anything Podesta is involved with, much less heads. He is a key Third Way Democrat machine guy, and is totally plugged into the Wall Street crowd and the giant corporations and banks. He is an old Clinton hand and was also the main guy behind staffing the Obama administration – which earns him a giant “fail” in my book. I just can’t believe anything good will come from more Podesta-branded political product. The two main political parties and their leading lights don’t just strike me as wrong-headed, but as grotesque and ridiculous.

    • I mean, you have Alan Blinder and Robert Solow on the steering committee.

      Alan Blinder? You mean the guy who is a member of the Bretton Woods Committee, lobbyist group for the international super-rich?

      Alan Blinder? On the board of the Hamilton Project, established by Robert Rubin at Brookings, to privatize everything?

      You and I have completely differing views of both Blinder, and inequality and people who are truly and deeply concerned with such, my friend!

      • OoooK!
        I’m a huge fan of the Levy Institute, home away from home for many MMTers. Yet the Levy has had many, many big shot bankers sitting on the Board throughout the years (including Goldman Sachs if I remember…). Does that tarnish its worth and work? Of course not.

        Is it possible for the reverse to happen too? I say yes: you can have perfectly honest and smart people sitting on Boards of organizations that miss more often than they hit.

        • @sgt_doom

          I just looked at the Bretton Woods Committee list of members.

          Dr. Jörg Bibow, who’s a long time partner of the Levy Institute, makes the list…

          Also, George Soros makes the list. Does that mean that all economists involved in Soros’s INET are puppets to the greedy few?

  13. Michael Hoexter

    David Sirota had an excellent piece about “liberal-washing”…the use of progressive sounding ideas and individuals with some progressive pedigree to push through non-progressive policies and, in this case..maybe, sell a non-progressive candidate as “liberal” or “progressive” if political fashion requires it.

    • This appears to be a widespread truth Michael. There seem to be cooperative efforts between more progressive/Liberal sounding political parties, and conservative parties, in the support of neoliberal economic policy across mandates outside the US too. It’s very difficult to envision any other way this sort of consistency should happen if it isn’t planned at some level and the number of possible influences seems quite limited. The ideology itself isn’t strong enough to survive any other way. The cross party support is reinforcement of the old “there is no alternative” mantra.

      • Michael Hoexter

        Sirota’s formulation was new to me though he describes a general trend in neoliberalism that others have noticed for a while (since Clinton and Blair at least). I called them in a post a few months ago the Neoliberal “Left”, with an emphasis on the quotation marks.

  14. Dan,

    Over at WCEG blog, DeLong states our long-run fiscal situation remains discouraging. I’m going to lose my sh*t, man. THIS HAS GOT TO STOP!!!! Thanks for continuing to fight. We’ve got your back.

    • Thanks Tyler. It’s kind of funny that this new “think tank”, which is supposed to be sponsoring independent research and new directions, has a blog where Brad DeLong tells everybody what to think ahead of time and “what conversation they should be having.” This is just the Clinton government-in-exile repackaging itself and building out its support network by sinking tentacles further into the economics profession.

      • I, for one, would love to see the US elect a woman president, but not Hillary. Her economic policies would be a renewal of Bill’s, essentially a continuation of Obama’s. Four to eight more years of stagnant growth, deficit hawking, and safety net cutting. Ouch!
        Could Elizabeth Warren be tutored on MMT and brought up to speed?

      • Speaking of Clinton and to anyone who once bothered to read his legislation regarding the Telecommunications Act of 1996 as well as the Affordable Care Act legisltion.

        Said cohort would understand what I am referring to when I like the ACA (referred to in the media as “Obamacare”) to the T.A. 1996; one was structured for the consolidation of the corporate media and telecoms, while the ACA is similarly structured for the concentration of the major private health insurance companies, while destroying the smaller players.

    • That is discouraging. But what you would expect.

  15. Yes the Obama administration is moribund. But what new could these people bring to bear that we could get behind. I suspect not much. So it may just be eyewash to put distance between Hilary and Obama. Obama has not made too many friends among the left. And if he cuts SSMM Hilary will need a barrel of peroxide to scrub off the stink and even then Christie will capture the anger .

  16. It’s three years away, but at the moment another President Clinton seems like a good bet. I don’t know that there is anyone on the horizon that wants to give working people a better deal. Pretty unlikely we will see one on the Republican side. I still find it amazing after all that happened the GOP would nominate an actual Wall-Street asshole as its candidate.

  17. Can you bring up some actual substantial critics of the Washington Center for Equitable Growth and CAP?

    Because all I see here is some stylistic critique and you trying to burnish your credentials by attacking people doing policy work that actually has a chance of helping real people.

  18. “If anything, Clinton’s world appears very aware that income inequality is an issue that matches the prevailing mood of the Democratic base… A Clinton ally, John Podesta, is launching a new think tank aimed at evaluating income inequality; it will be a subsidiary of the larger Center for American Progress, run by longtime Hillary Clinton adviser Neera Tanden.” ~ Ben White and Maggie Haberman

    • Right, this is the Clinton operation trying desperately to catch up to the changing zeitgeist. The defeat of the Summers bid might have helped convince them the winds are blowing away from 90’s-style market fundamentalism, deregulation and bubbly neoliberalism. I think Hillary’s minions sent out the message, “Quick, someone find us a think tank with some economists who know something about inequality!” The problem is that the Clintons are old. Their political networks and power bases are ancient and well-established, and it’s too late for them to be radically overhauled with a quickie policy makeover. They built their lives and careers back in the 20th century when they helped found the DLC and painstakingly built up a a political machine guided by plutocrats and Wall Street bigwigs. Bill has continued along that path in his post-presidency by cultivating the global billionaire glitterati, and Hillary followed up with her stint as Secretary of State, traveling the world tirelessly to network for the future with the established rich and powerful.

      But it’s not going to work. They had their time and its over. It crashed. They’re done.