Today CAP released a big, bold report, 300 Million Engines of Growth, edited by Jennifer Erickson and Michael Ettlinger. Jim Tankersley writes about it in today’s Washington Post:
The core of the plan is the notion that economies grow and thrive best when prosperity is broadly shared — a rebuke of the income and wealth inequality that the United States has seen widen over the past few decades and of the tax-cutting, deregulating policies that CAP economists blame for much of that widening.
CAP’s view is that growing the economy from the middle out will not only create more sustainable growth, it will also grow our middle class. For too long, we’ve listened to economists and others tells us a story of how they think the economy works best: If the rich people have the money to invest, they’ll become job creator, so the most important thing for policymakers to do is to get out of the way–don’t regulate and keep taxes low. This approach has not strengthened our middle class; rather, it has left us with wide–and widening–income inequality, growth that has too-often been bubble-driven and highly unstable, and a growing gap between the riches produced by our economy and the incomes of America’s families.
300 Million Engines of Growth lays out what it actually takes to make an economy grow and thrive, “strong people working and living in an adaptive economic environment conducive to their success”:
The starting point for our strategy … is multifaceted and begins with the understanding that people—their work, their ingenuity, their willingness to take risks, and their desire and capacity to build a better life for themselves and their families—are what cause an economy to grow. In the United States, we have 300 million of these engines of growth. To be successful, a country’s economic agenda has to strengthen its people. It has to educate them, train them, and reward them with financial security. This is the core of a middle-out plan for economic growth. In other words, as explained in the box below, to have a strong and growing economy, we need a strong and growing middle class.
But while strong, talented people are the most important ingredient in our economic success, they cannot contribute fully if the economic environment in which they perform fails to offer opportunities. For people to build a vibrant economy, they must work in a country committed to technological advancement, readily available capital, quality public infrastructure, a fair playing field for competition, and a strategy for success in the global economy. They must live in a country with thriving businesses, big and small, that are at the vanguard of what’s new and are the most efficient in the world.
The report outlines a multitude of practical policy ideas that we could put in place right now to grow the economy and strengthen our middle class. We begin by focusing on policies that focus on people and families–literally the lifeblood of our economy–and move on to ones that will create the kind of environment that will support economic growth.
I want to congratulate my colleagues for taking the time to put this report together. I hope that policymakers will make these ideas come to life.