>"The key to substantially rising living standards for the working class ... is precisely more economic growth,"
I would argue that economic growth does not simply do the job on its own. Since 2000 economic growth has increased ~65-70% while wages over the same period of time increased ~10-15%.
The key unaffordable sectors (housing, healthcare and education) are not unaffordable because a lack of economic growth. They have become unaffordable due to subsidized demand and regulatory supply constraints applied simultaneously. This creates the economically unsurprising result of those demand subsidies being almost entirely captured in price increases. This is not a policy mistake; this is the system doing what it is designed to do.
The biggest problem I have with this article is the way it links "Productivity Growth" to increased wealth for ordinary workers. That has not been evident from the increases in productivity over the past few decades: productivity has increased greatly while wages have not kept pace and we have exported entire industries and the payrolls that went with them. If MegaCorp swallows a smaller corporation, the first thing that happens is a wave of layoffs as duplicate positions are eliminated. The same products/services are still being produced as before but fewer folks are employed. "Productivity" has increased as has profitability but those economic benefits are not being shared and a number of formerly employed are now much less "productive". As more and more wealth and income concentrates in the upper brackets, businesses focus more on providing goods and services to those who have the money. There is no shortage of luxury items and expensive housing but starter housing for the lower income renters and home buyers in very limited. I think that is a valid "affordability" issue, one that the free market seems incapable of addressing. And as far as the "Green Economy" is concerned, how many folks are now engaged (or were engaged) in installing heat pumps and solar systems as compared to coal miners ?? Don't those "green" jobs count ??
"Nearly as popular as affordability—and frequently twinned with the affordability pitch—is a populist denunciation of the rich and big companies who are alleged to be responsible for high prices and nearly everything else that’s wrong with the economy."
Stoking class envy and racial grievance is part and parcel of the Democrats' toolkit.
Improving US productivity growth also requires substantially improving the poor effectiveness, efficiency, and adaptability of our K-12 education system. And the Democratic Party is never going to take that on, beyond bleating that "schools need more money" - always with no link to results.
This has been the Democratic ideology for decades. There is a clear ideological distinction between liberals and conservatives. Liberals, who now call themselves progressives, center their ideology around government action - government social welfare programs, subsidies, and regulations. Just think back to Elizabeth Warren's claim "I have a plan for that." Or Mamdani's inaugural victory speech "there is no problem too large for government to solve." Take, for example, liberals' solution to rising ACA insurance premiums - just increase the ACA subsidies. Liberals' energy, environmental, and zoning regulations have not only created huge barriers to the construction of new housing stock, they've consigned many existing multi-family housing complexes to abandonment. Democrats give lip service to "affordability" beRucause it poll tests well. It's a con. If put back into power, they will simply fall back on more government subsidies and programs. Ruy is not going to convince them otherwise. So the only option for free market, pro-growth Democrats is to support the Republican party until Democrats truly reform.
I think you’re getting at something real here, but I’d frame it one step deeper.
The issue isn’t just that Democrats have talked less about growth or shifted their policy mix. It’s that growth no longer seems to function as the organizing principle that disciplines tradeoffs across the system.
When growth really is central, it forces clarity. It shapes energy policy, education, technology, and regulation. It pushes you toward building things, expanding capacity, and making sure the basics that support rising living standards are in place.
What we’ve seen instead is that, when tradeoffs show up, growth has often been the thing that can move, while other priorities hold firm. To me, that shows up most clearly in energy. With AI coming on strong, the country needs a serious commitment to abundant, reliable power. What we’ve had feels more fragmented and conflicted than mobilized.
Once growth stops playing that organizing role, something else fills the space. In practice, it starts to look more like a moral framing of politics, where the focus is on alignment, signaling, and addressing harms, rather than on building the material systems that actually drive long term progress.
That’s why this feels bigger than a messaging problem. It’s not just that Democrats don’t talk enough about growth. It’s that their priorities, when tested under real constraints, don’t consistently line up behind it.
And when that happens, the country doesn’t just argue differently. It moves forward more slowly than it should, given what it’s capable of.
"The key to substantially rising living standards for the working class—once the Democrats’ prized goal—is precisely more economic growth, especially higher productivity growth."
That, in the view of the current crop of Democratic Party leaders and strategists (TLP excepted), is a sucker's game and way too much work. What, bust you butt to help working class people get richer? How do you guarantee they won't just turn around and vote Republican in line with their new economic class?
It's much easier to cultivate dependence: make low-income people dependent on direct handouts from the government (and thereby ensure they'll vote for the people delivering the handouts) and make white-collar people dependent on working for the government, whether directly in government offices or indirectly in academia and industries dependent on government programs and procurement. In that light, it's very easy to understand the appeal of Klein & Thompson's Abundance: it focuses on governing in such a way that the government has more goodies to hand out.
However, it completely misses the point that the only way to provide the government with the resources for handouts is to grow the private sector so that the tax base grows in a sustainable way. It also misses the point that a growing private sector can let the populace earn enough through employment and wealth creation to make handouts unnecessary. Maybe, though, they're missing that last point deliberately, since what people earn through their own work doesn't make them grateful to government the way handouts do.
1: The more the government is involved the worse off everyone is.
2: Taxiing successful individuals will never work, especially if it is said they will distribute the funds to poor people. Why work?
3: The warm embrace of collectivism is the Democrat plan, period. Why else did Congress literally vote on this subject.
4: This country is tired, of many things. Very tired. No matter what Trump does, dems simply lose thier minds and kneecap him with crazy activist judges to impede progress. Think government shutdowns. All you have to do is look at who is voting to open government. It's Republicans. All the rest is just noise.
5: The war in Iran is basically over. Fix the Strait, couple boat go through, markets boom, oil drops, all good. Be ready to change your investments 1 step higher risk!
6: Get rid of the freeloaders on our welfare system. Welfare is not an occupation, it is a safety net.
7: If you have 750 to 1 mill stashed away for retirement, these clowns have you in Tax the Rich bullseye. Be careful
8: Dems are already threating yet again to punish anyone that is a Trump backer, just like in any banana Republic. Let's just imprison the opposition. Also, there is an actual track record on this point.
9: illegal aliens are NOT immigrants, my grandparents were immigrants. Came here legal had to learn our language, fought in our wars, worked for a living and did not collect welfare for thier livelihood
10: Fraud is a bipartisan issue. But not here. Dems love it and want it to continue
11: FGS yall in the senate better pass the SAVE act. Who ever doesn't vote a yes should be primaries and voted out. Strong yes on this one. Bunch of whiny weak arguments against this bill
12: DEPORT all the illegals. Watch housing prices drop to pre 2018 levels. Watch the unemployment stats drop.
13: All these useful idiots that cheer for terrorists, killers people that commit crime, you are sick and should leave with the illegals
If Democrats focused their agenda on promoting economic growth, increasing the size of the pie, instead of picking who gets how much of a shrinking pie, I would be more inclined to vote for them.
The rise of the Democratic Socialists within the Democrat Party is a nonstarter for me to ever consider voting Democrat.
Agreed. As a side note: If a person is simultaneously advocating for "degrowth" AND for a secular-humanist society with a redistributive welfare state (e.g., Scandinavia), you can immediately dismiss almost EVERY other political or economic insight they might offer, because they clearly do not understand even the most basic thing about economics or even reality itself. They're like children who think that electricity is made in the socket.
I must be missing something. If in 5 years, AI takes all the jobs and the fat corporations take the profits (money), then what happens 5 years after that? The vast majority of people now have no money, so no goods/services are bought, so economic collapse for everyone, right? When do all these supposed smart, rich people start acting in self-interest? When revenues/profits precipitously drop? When the money runs out? When the pitchforks are at the door? I don’t get it.
Does seem kinda odd that if people don’t have jobs because of AI then who’s buying all the stuff that keeps the company in business. AI doesn’t need clothes, a car, food, a house etc. all the things that create demand for a company’s product or service. Businesses exist to serve the needs and desires of customers. If customers have no money because they have no jobs then companies can’t make money. Hmmm…..🤔
I so wish the Dems would embrace your views Ruy...for the last DECADE.
For what it's worth, I think the Dem's "billionaire bashing" is the wrong marketing tactic as it resonates with a "punish success" to a lot of voters....
A different tactic could be "tax code FAIRNESS" and focus on the inequities in the tax code, be it :
a) the long discussed "carried interest" loophole (that even the Dems didn't fix before);
b) the inequities in tax rates depending on HOW you make your money: W2 and interest income more typical of the working class vs capital gains and dividend income among the "upper class"
c) the unique tax benefits the ultra rich have who don't need to trigger taxable events (i.e. sell capital assets) for their living expenses but rather they can borrow against their capital assets and continually roll over that debt, with the end result being paying out lesser amounts in interest expense than income taxes.
d) I'm sure there are others as well that aren't top of mind
I think the public could more readily get behind a "fairness" message than an "anti success" message.
Additionally, putting aside the impracticalities of determining the value of one's assets (particularly for illiquid assets like real estate, businesses, etc), the reliability of values could be debated endlessly and countless amounts of taxpayer dollars spent debating those values and/or auditing them. Or how to deal with "rebates" that would be due when values go down. I understand the sentiment, but the practicalities make this one of the more dumb things I've heard proposed from the Dems.
Whereas the above already have processes in place to capture and compute the taxes.
Before even one Democrat talks about fairness, they must end insider trading for themselves. To continue to become millionaires flouting the law that requires everyone to get the same information at the same time is a SCANDAL!! I’d love to march in Washington, behind Martha Stewart and anyone else who went to jail for insider trading.
AMEN...as a retired audit partner of public companies who had VERY strict rules around investing in clients, I have little sympathy for Congress...If there's a will, there's a way! They lack the will.
>"The key to substantially rising living standards for the working class ... is precisely more economic growth,"
I would argue that economic growth does not simply do the job on its own. Since 2000 economic growth has increased ~65-70% while wages over the same period of time increased ~10-15%.
The key unaffordable sectors (housing, healthcare and education) are not unaffordable because a lack of economic growth. They have become unaffordable due to subsidized demand and regulatory supply constraints applied simultaneously. This creates the economically unsurprising result of those demand subsidies being almost entirely captured in price increases. This is not a policy mistake; this is the system doing what it is designed to do.
Excellent!
Tax and spend
The biggest problem I have with this article is the way it links "Productivity Growth" to increased wealth for ordinary workers. That has not been evident from the increases in productivity over the past few decades: productivity has increased greatly while wages have not kept pace and we have exported entire industries and the payrolls that went with them. If MegaCorp swallows a smaller corporation, the first thing that happens is a wave of layoffs as duplicate positions are eliminated. The same products/services are still being produced as before but fewer folks are employed. "Productivity" has increased as has profitability but those economic benefits are not being shared and a number of formerly employed are now much less "productive". As more and more wealth and income concentrates in the upper brackets, businesses focus more on providing goods and services to those who have the money. There is no shortage of luxury items and expensive housing but starter housing for the lower income renters and home buyers in very limited. I think that is a valid "affordability" issue, one that the free market seems incapable of addressing. And as far as the "Green Economy" is concerned, how many folks are now engaged (or were engaged) in installing heat pumps and solar systems as compared to coal miners ?? Don't those "green" jobs count ??
Or any other program.
When the Democratic Party is a party of builders again, I’ll consider voting for them. That is what is missing in this article is spot on.
"Nearly as popular as affordability—and frequently twinned with the affordability pitch—is a populist denunciation of the rich and big companies who are alleged to be responsible for high prices and nearly everything else that’s wrong with the economy."
Stoking class envy and racial grievance is part and parcel of the Democrats' toolkit.
Improving US productivity growth also requires substantially improving the poor effectiveness, efficiency, and adaptability of our K-12 education system. And the Democratic Party is never going to take that on, beyond bleating that "schools need more money" - always with no link to results.
This has been the Democratic ideology for decades. There is a clear ideological distinction between liberals and conservatives. Liberals, who now call themselves progressives, center their ideology around government action - government social welfare programs, subsidies, and regulations. Just think back to Elizabeth Warren's claim "I have a plan for that." Or Mamdani's inaugural victory speech "there is no problem too large for government to solve." Take, for example, liberals' solution to rising ACA insurance premiums - just increase the ACA subsidies. Liberals' energy, environmental, and zoning regulations have not only created huge barriers to the construction of new housing stock, they've consigned many existing multi-family housing complexes to abandonment. Democrats give lip service to "affordability" beRucause it poll tests well. It's a con. If put back into power, they will simply fall back on more government subsidies and programs. Ruy is not going to convince them otherwise. So the only option for free market, pro-growth Democrats is to support the Republican party until Democrats truly reform.
They don’t have A program. Except for TDS. And TDS is no basis for a party.
I think you’re getting at something real here, but I’d frame it one step deeper.
The issue isn’t just that Democrats have talked less about growth or shifted their policy mix. It’s that growth no longer seems to function as the organizing principle that disciplines tradeoffs across the system.
When growth really is central, it forces clarity. It shapes energy policy, education, technology, and regulation. It pushes you toward building things, expanding capacity, and making sure the basics that support rising living standards are in place.
What we’ve seen instead is that, when tradeoffs show up, growth has often been the thing that can move, while other priorities hold firm. To me, that shows up most clearly in energy. With AI coming on strong, the country needs a serious commitment to abundant, reliable power. What we’ve had feels more fragmented and conflicted than mobilized.
Once growth stops playing that organizing role, something else fills the space. In practice, it starts to look more like a moral framing of politics, where the focus is on alignment, signaling, and addressing harms, rather than on building the material systems that actually drive long term progress.
That’s why this feels bigger than a messaging problem. It’s not just that Democrats don’t talk enough about growth. It’s that their priorities, when tested under real constraints, don’t consistently line up behind it.
And when that happens, the country doesn’t just argue differently. It moves forward more slowly than it should, given what it’s capable of.
"The key to substantially rising living standards for the working class—once the Democrats’ prized goal—is precisely more economic growth, especially higher productivity growth."
That, in the view of the current crop of Democratic Party leaders and strategists (TLP excepted), is a sucker's game and way too much work. What, bust you butt to help working class people get richer? How do you guarantee they won't just turn around and vote Republican in line with their new economic class?
It's much easier to cultivate dependence: make low-income people dependent on direct handouts from the government (and thereby ensure they'll vote for the people delivering the handouts) and make white-collar people dependent on working for the government, whether directly in government offices or indirectly in academia and industries dependent on government programs and procurement. In that light, it's very easy to understand the appeal of Klein & Thompson's Abundance: it focuses on governing in such a way that the government has more goodies to hand out.
However, it completely misses the point that the only way to provide the government with the resources for handouts is to grow the private sector so that the tax base grows in a sustainable way. It also misses the point that a growing private sector can let the populace earn enough through employment and wealth creation to make handouts unnecessary. Maybe, though, they're missing that last point deliberately, since what people earn through their own work doesn't make them grateful to government the way handouts do.
1: The more the government is involved the worse off everyone is.
2: Taxiing successful individuals will never work, especially if it is said they will distribute the funds to poor people. Why work?
3: The warm embrace of collectivism is the Democrat plan, period. Why else did Congress literally vote on this subject.
4: This country is tired, of many things. Very tired. No matter what Trump does, dems simply lose thier minds and kneecap him with crazy activist judges to impede progress. Think government shutdowns. All you have to do is look at who is voting to open government. It's Republicans. All the rest is just noise.
5: The war in Iran is basically over. Fix the Strait, couple boat go through, markets boom, oil drops, all good. Be ready to change your investments 1 step higher risk!
6: Get rid of the freeloaders on our welfare system. Welfare is not an occupation, it is a safety net.
7: If you have 750 to 1 mill stashed away for retirement, these clowns have you in Tax the Rich bullseye. Be careful
8: Dems are already threating yet again to punish anyone that is a Trump backer, just like in any banana Republic. Let's just imprison the opposition. Also, there is an actual track record on this point.
9: illegal aliens are NOT immigrants, my grandparents were immigrants. Came here legal had to learn our language, fought in our wars, worked for a living and did not collect welfare for thier livelihood
10: Fraud is a bipartisan issue. But not here. Dems love it and want it to continue
11: FGS yall in the senate better pass the SAVE act. Who ever doesn't vote a yes should be primaries and voted out. Strong yes on this one. Bunch of whiny weak arguments against this bill
12: DEPORT all the illegals. Watch housing prices drop to pre 2018 levels. Watch the unemployment stats drop.
13: All these useful idiots that cheer for terrorists, killers people that commit crime, you are sick and should leave with the illegals
Thanks for listening
If Democrats focused their agenda on promoting economic growth, increasing the size of the pie, instead of picking who gets how much of a shrinking pie, I would be more inclined to vote for them.
The rise of the Democratic Socialists within the Democrat Party is a nonstarter for me to ever consider voting Democrat.
Agreed. As a side note: If a person is simultaneously advocating for "degrowth" AND for a secular-humanist society with a redistributive welfare state (e.g., Scandinavia), you can immediately dismiss almost EVERY other political or economic insight they might offer, because they clearly do not understand even the most basic thing about economics or even reality itself. They're like children who think that electricity is made in the socket.
I must be missing something. If in 5 years, AI takes all the jobs and the fat corporations take the profits (money), then what happens 5 years after that? The vast majority of people now have no money, so no goods/services are bought, so economic collapse for everyone, right? When do all these supposed smart, rich people start acting in self-interest? When revenues/profits precipitously drop? When the money runs out? When the pitchforks are at the door? I don’t get it.
Exactly.
Does seem kinda odd that if people don’t have jobs because of AI then who’s buying all the stuff that keeps the company in business. AI doesn’t need clothes, a car, food, a house etc. all the things that create demand for a company’s product or service. Businesses exist to serve the needs and desires of customers. If customers have no money because they have no jobs then companies can’t make money. Hmmm…..🤔
I so wish the Dems would embrace your views Ruy...for the last DECADE.
For what it's worth, I think the Dem's "billionaire bashing" is the wrong marketing tactic as it resonates with a "punish success" to a lot of voters....
A different tactic could be "tax code FAIRNESS" and focus on the inequities in the tax code, be it :
a) the long discussed "carried interest" loophole (that even the Dems didn't fix before);
b) the inequities in tax rates depending on HOW you make your money: W2 and interest income more typical of the working class vs capital gains and dividend income among the "upper class"
c) the unique tax benefits the ultra rich have who don't need to trigger taxable events (i.e. sell capital assets) for their living expenses but rather they can borrow against their capital assets and continually roll over that debt, with the end result being paying out lesser amounts in interest expense than income taxes.
d) I'm sure there are others as well that aren't top of mind
I think the public could more readily get behind a "fairness" message than an "anti success" message.
Additionally, putting aside the impracticalities of determining the value of one's assets (particularly for illiquid assets like real estate, businesses, etc), the reliability of values could be debated endlessly and countless amounts of taxpayer dollars spent debating those values and/or auditing them. Or how to deal with "rebates" that would be due when values go down. I understand the sentiment, but the practicalities make this one of the more dumb things I've heard proposed from the Dems.
Whereas the above already have processes in place to capture and compute the taxes.
Before even one Democrat talks about fairness, they must end insider trading for themselves. To continue to become millionaires flouting the law that requires everyone to get the same information at the same time is a SCANDAL!! I’d love to march in Washington, behind Martha Stewart and anyone else who went to jail for insider trading.
Ilhan Omar gained likeb30 mill in 2 years. Hmmm, you telling me her so called winery is that profitable? No purp walks ever. They ALL just walk away
AMEN...as a retired audit partner of public companies who had VERY strict rules around investing in clients, I have little sympathy for Congress...If there's a will, there's a way! They lack the will.