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The political opposition that pushed Amazon to abandon the building of a New York headquarters was one of the pillars of the progressives' economic agenda: ending tax policies that unjustly reward and strengthen the wealthiest.
But this also revealed a political vulnerability, leaving unclear the alternative strategy proposed to encourage growth and create the thousands of jobs promised by Amazon to the city.
The confrontation has consequences far beyond New York and is at the heart of a national debate likely to dominate the race for the presidency of 2020: what is the best way to spread prosperity?
While Governor Andrew M. Cuomo said that some of his fellow Democrats were jeopardizing "the economic future of the state," others within and outside the party saw the scuttled project as evidence that the left did not understand how to generate growth. In a tweet, Lloyd Blankfein, chairman of the Goldman Sachs board of directors, criticized the progressive democrats, calling them both "anti-progress" and "anti-democratic."
These opinions fuel a powerful and long-standing story, popularized by Ronald Reagan, that Democratic decision makers had – like Senator Barack Obama at the time. To put it in 2006, become "more obsessed with cutting the economic pie than growing the pie".
For Republicans, Amazon's retreat is an opportunity to revive beloved beards and democrats known as "work killers" too eager to "tax and spend." Reducing taxes for investors and business owners is what encourages entrepreneurs to create jobs and spread wealth.
For progressives, the defeat of a plan providing for the granting of tax incentives to a $ 1 trillion tech technician is part of a broader effort to discredit this. that they consider as a failed economic policy. They argue that workers and the government – two players who have been relegated to the background – should be treated as important drivers of growth.
Many objections raised in New York by critics like Alexandria Ocasio-Cortez, the new congressman whose neighborhood of Queens is located on the edge of the neighborhood where Amazon was headed, align with the economic criticisms formulated by the Democratic candidates to the presidency. Senator Bernie Sanders of Vermont and Senator Elizabeth Warren of Mbadachusetts, for example, have often protested against the excessive power of corporations, unbalanced tax cuts and favorable incentives for the rich.
Ms. Warren described state subsidies in the Amazon Accord as "bribes to taxpayers," while Mr. Sanders said, "That's what the rigged economy consists of. . " New York provided nearly $ 3 billion in grants to Amazon, a year-long company that actually paid half the federal corporate tax rate of 21%.
At the same time, presidential candidates have backed policies that strengthen workers and the middle clbad, such as an increased minimum wage and rules guaranteeing overtime pay, as well as a public investment substantial. Left-wing democrats are also launching ambitious proposals such as free universities for all, a federal employment guarantee, an industrial plan to redefine the country's energy consumption, and higher taxes for the wealthiest.
The fundamentals of these ideas have been prepared in recent years by a network of liberal economists, thinkers and activists from research organizations and universities interested in the development of 39, a set of policies to replace the supply economy and the theory of abandonment.
"The interaction between the marketplace and collective action contributes to our prosperity," said Joseph Stiglitz, a Nobel economist, who publishes a book on the growth of the 21st century economy. Advances in science and technology, for example, rely on basic research funded by the government and marketed by the private sector.
Mr Stiglitz says that it is the kind of alternative explanation of growth that the Democratic Party has to offer more vocally. Increased competition, reduced taxation of the rich, and flawless financial regulation, he said, have not kept their promises of boosting the economy and boosting incomes. substantially.
Nick Hanauer, a Seattle-based venture capitalist who was one of Amazon's early investors and now a progressive activist and writer, argues that the runoff theory should be replaced by what he and Eric Liu, a former adviser to the administration of Bill Clinton, call "Environmental Economics".
"I believe that capitalism is the greatest social technology ever created to generate wealth and prosperity," he said, "but we have confused what is good for the narrow interest and to short run of some capitalists for what is good for capitalism. "
The idea that tax cuts for the rich are the cause of economic growth and the creation of a thriving middle clbad is "both false and backward," Hanauer said. . "The burgeoning middle clbad is the cause of economic growth."
The ideas that hold the spotlight, especially in the run-up to the 2020 elections, are more focused on the fate of the workers and give the government a much more central role in stimulating economic growth and distribution. of wealth.
The approach dates back to the time of Franklin D. Roosevelt for inspiration. The major effort to change the course of climate change has been purposely called the "Green New Deal" – named after Roosevelt's signature policy – precisely for this reason. The program exists in several versions, but the one presented by the Ocasio-Cortez representative and Senator Ed Markey of Mbadachusetts includes "an employment guarantee program guaranteeing a paid job to all those who wish it".
During the darkest months of the recession, President Obama insisted on accelerating the establishment of a multi-billion dollar stimulus package – the US Recovery and Reinvestment Act of 2009 – to create jobs and spend money on transportation, technology and energy projects. Although the plan was lower than many leftist democrats wanted, it was based on a common badumption: increasing public investment would move the economy and put people back to work.
How such policies materialize at a time when the unemployment rate is 4% will be a source of tension between the different factions of the party. In the past, Democrats pushed these stimulants during periods of economic weakness. And specific proposals proposed by progressives, whether it's a free college or a wealth tax, are making some Democrats pale.
Nevertheless, many Democrats recognize that political leaders and business leaders have tended to focus too much on winners of growth-friendly policies, such as free trade, without paying enough attention losers, such as factory workers fired. This is a theme that President Trump managed to feature on the campaign in 2016.
"You are organizing the economy so that workers have more power to earn fair wages and secure living conditions," said Jacob Leibenluft, who led the team in charge of the economy. Hillary Clinton's economic policy during her presidential campaign. executive vice president of policy at the Center for American Progress, a liberal research institute.
Democrat centrists and self-proclaimed pragmatists are now largely badociated with criticisms of the dominant economic policies of the last twenty years, especially since fiscal policy has not produced vigorous growth. There is also a consensus that the government needs to play a bigger role in the economy by raising taxes, investing in public institutions and, to a certain extent, redistributing income.
The two pillars of the democratic establishment – Lawrence Summers, Treasury Secretary under the Clinton Administration and Director of the National Economic Council of President Obama, and Jason Furman, Chairman of the Council of Economic Advisers under the administration Obama – have called for significant public spending on infrastructure, education, health care and more to address weak economic growth and marginalized workers.
"The government must play an important role," said Furman, who wrote an article with Mr. Summers last month on the need for such policies to reduce the deficit. "If you spend more, you have to tax more."
For many Democrats, the transition to a more activist role is expected. Yet this also comes at a time when public confidence in the government has fallen to historic lows, according to a December 2017 report from the Pew Research Center.
Only 18% of Americans believed that the federal government was doing the job "almost always" or "most of the time".
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