Back in my White House daze, while helping out with an economics speech to be given by a top senior official, I suggested a sentence that had the word "distribution" in it in the context of income or tax policy or something. Not even "redistribution." Needless to say, editors went ballistic--they didn't just cross it out, but that warned me to go through and make sure no such socialistic language was anywhere to seen.
I totally saw and see their point, by the way. The word's a dog whistle that releases the hounds, if not the Foxes. And yet, one of my rules of thumb in this work is that when policy does a lot of something and that something cannot be spoken of, we're courting dysfunction and distortion.
E.J. Dionne nicely captures all this in an oped this AM, wherein he points out that there's of course there's ton of redistribution afoot in government policy, and it is by no means in one direction, i.e., there's a lot of policy which redistributes upwards. (I cited this same point yesterday in a tax debate.)
In fact, other than naming post offices and such, you'd be hard pressed to name a policy that doesn't redistribute resources, tax dollars, or power either up or down the income scale. Of course, when it's down the scale, it's often derided as class warfare; when it's up the scale, it's giving the job creators their due.
However, as far as I can tell, there's a huge gap in our knowledge here. We don't know nearly enough, or at least I don't, about the distribution of government spending. Propose a tax plan, and quant shops all over this town will have distribution tables up (showing tax changes by income class) before can say "marginal rate." But what's the distribution of infrastructure or defense spending? We can easily imagine who gets helped by say a training program or an early Head Start program, but such information would be useful to see.
I recall back in 2013 seeing anecdotes of this sort when sequestration was cutting Head Start slots, and I found it very powerful. So go forth, public-policy-school types, and crunch these numbers!
E.J. makes another point I'd like to highlight:
In fact, we need to pay far more attention to "pre-distribution," the wages and benefits people get before government taxes or transfers money. It's why we should increase the minimum wage, strengthen unions and find other ways of enhancing workers' bargaining power. Funnily enough, progressives are more insistent than conservatives on increasing the market rewards for work so government doesn't have to redistribute so much. In the meantime, the tax code and the various credits ought to be tilted toward those who have been lagging behind.
The inequality problem is largely a pretax phenomenon, and while we should enact the types of ideas in the President's budget to help ameliorate the problem, this deep bargaining power deficit cannot be solved through the tax code alone. To be very clear, that's not to be taken as downplaying at all the importance of the redistribution (I said it!) that Dionne highlights.
But it's critical to get to the source, which, btw, is a key motivator for the full employment agenda I'm forever going on about. In an economy where union membership sits at a meager 11 percent, truly tight labor markets are one big way the average (and the median, and the 10th percentile, and so on) worker can glean some bargaining power. That's also the punchline of this Baker/Bernstein book.
I leave it as an exercise to the reader as to whether we'd be better off if politicians could speak more forthrightly about the redistributive goals of their policies. As a straightforward guy strongly in favor of plain and crisp speech (and no, I don't always meet that goal -- we are, all of us, works in progress!), I'm certain the answer is "yes."
What do you think?
This post originally appeared at Jared Bernstein's On The Economy blog.