The Case for a New Deal 3.0

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Photo credit: Ellie Graan

David Riemer

David Riemer graduated from Milwaukee’s Riverside High School. After attending Harvard College and Law School, he returned to Wisconsin in 1975 to serve as legal advisor to Gov. Patrick Lucey. He later held positions with U.S. Sen. Edward Kennedy, Mayor John Norquist and Gov. Jim Doyle. In 2004, Riemer ran against Scott Walker for Milwaukee county executive. He served as founding director and senior fellow for the Community Advocates Public Policy Institute. His book, Putting Government in its Place: The Case for a New Deal 3.0, appeared this fall. Off the Cuff sat down with Riemer to ask about his provocative proposals for sweeping change in U.S. domestic policy

Much of your book deals with economic insecurity. How bad is the problem?

Economic insecurity is bad and getting worse. The official unemployment rate masks a lot of joblessness. Millions who want jobs don’t get counted as unemployed. Likewise, if you work just a few hours, you’re not counted as unemployed. In neighborhoods like Milwaukee’s Zip Code 53206, unemployment—and its cousin, underemployment—remain pervasive.

What is causing economic insecurity to worsen?

The heart of the problem is the labor market’s shortcomings. Compared to the true number of unemployed adults, the supply of vacant jobs is usually inadequate. An equally serious problem: A huge swath of employees—sometimes with two or three jobs—get paid wages so low they cannot escape poverty, much less earn a comfortable living. Unstable positions and volatile hours compound the problem.

When did America stop making progress?

The mid-1970s. Since then, we’ve made no progress in reducing the poverty rate. It’s no surprise. Men’s earnings since the 1970s have been flat. Women’s earnings have not advanced since 2000. For more than four decades, median income has flatlined.

So, what can we do about it?

We need a sharply different approach. I call it a New Deal 3.0. America needs to greatly strengthen two of the “policy clusters” that emerged from the New Deal: broad-based economic security guarantees and market regulation. We should at the same time eliminate the two other “policy clusters” that the New Deal created: means-tested welfare programs and market manipulation.

Can you spell out in more detail what you’re proposing?

To achieve true economic security, we need to focus on making work available—and making work pay. This means:

n Guaranteeing unemployed and underemployed Americans access to Transitional Jobs, so they can have 40 hours of paid work, if that much isn’t available in the regular labor market.

n Raising the minimum wage to $10 per hour, then quickly to $12 per hour, with inflation adjustments.

n Strengthening our policies for supplementing earnings—the Earned Income Tax Credit and Child Tax Credit—so full-time work always yields an income way above the poverty line.

n Making it easier to form unions and bargain collectively.

Other economic security guarantees are also needed. They include paid leave, excellent childcare and ensuring that adults with disabilities—as well as retired seniors—get benefits well above the poverty line.

And there’s more: Whether health care is a right or not, it’s a necessity. Every American should have affordable and excellent health insurance, as well as long-term care insurance. With this system of broad-based economic security guarantees in place, we should end means-tested welfare programs. We’ll no longer need TANF, SNAP (food stamps), Medicaid and more.

You also talk about creating an effective market? What do you mean?

Two fundamental reforms are needed. First, stop corporations from “dumping.” Second, end the costly subsidies that distort the market. To begin with, the U.S. government needs to stop denying climate change. Instead, we should become a leader in stopping and reversing it. Americans likewise deserve water that is always safe to drink. In addition, government needs to do better in safeguarding workers, consumers and investors from damage. Ensuring that corporations stop “dumping,” and instead profit due to their creativity and productivity, will make the market far more effective.

A second requirement is to get rid of the hundreds of billions of dollars in subsidies that government doles out. Manipulating the market in order to favor politically preferred types of consumption and investment weakens its effectiveness.

All this sounds wonderful. But in a world of gerrymandering and “dark money,” can we actually make the kind of progress you propose?

It won’t be easy. Change will be incremental. But the Bible tells us that we perish without a vision. As we proceed into the 21st century, it is essential to know where we want to head. My book is meant to be a roadmap that shows the path towards the kind of America we should aim to become.