Rising-Tide Economics

In the twenty-first-century economy, growth and equality must go hand in hand.

Gene Sperling has just been appointed the new director of the National Economic Council by President Obama. To get a sense of his ideas and philosophy, one might look at this essay he published in 2007 in Democracy:

106737 In my White House days, I was known for tormenting the speechwriters by insisting that we should rip off Ben Franklin’s caution that we “must indeed all hang together, or … hang separately” with the economic refrain “we will grow together or grow apart.” My line never made it into a speech, but with the spread of globalization it has never been more apt. Indeed, the question of whether spreading globalization and information technology (IT) is strengthening or hollowing out our middle class may be the most paramount economic issue of our time.

Perhaps a better phrase to capture the notion of shared prosperity was John F. Kennedy’s observation that “a rising tide lifts all boats.” For progressives, the rising-tide metaphor is not a causal assumption that growth will automatically raise everyone. Rather, it is the aspiration and test for economic policy: Does it both raise the tide and lift all boats? This vision of shared prosperity is not only demanded by the global, interdependent economy, but rooted in the historic values of the progressive vision of the United States. Moving forward, we must recognize that the economy is undergoing a profound transformation, making it distinct from both the industrial era and even the beginnings of the Internet Age just a decade ago. In such a world, economic growth can be explosive, but growth alone is not enough. For Americans, shared prosperity, an opportunity for upward mobility, and economic outcomes determined more by merit than the accident of birth are fundamental to who we are as a nation.

More here.