The New Populism

A Movement and Agenda To Transform Americas Economy and Politics

By ROBERT L. BOROSAGE
F
O
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This paper was written for The New Populism Conference in Washington, D.C., May 22, 2014.
The Campaign for Americas Future is a center for ideas and action that works to build an enduring
majority for progressive change. The Campaign advances a progressive economic agenda and a
vision of the future that works for all, not simply the few. We are leading the fight for Americas
kitchen-table priorities good jobs, a sustainable economy and lifelong financial security.
The Populist Majority is a project of the Campaign for Americas Future that compiles the most
recent public opinion research on economic and political issues, exposing the gulf between
American opinion and conventional wisdom.

PopulistMajority.org
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R
OurFuture.org
1825 K Street NW Suite 400 Washington D.C. 20006 202.955.5665

The New Populism | 1

Moral Mondays demonstration in Raleigh, N.C. (Photo by Will Thomas via Flickr/Creative Commons)

e live in a populist moment. We are witnessing the first stirrings of an
upheaval that will challenge business as usual from Washington to Wall
Street. This moment is grounded in the reality that the economy no longer
works for working people. The American middle class continues to lose ground, even as
the wealthiest few capture more and more of the economic gains. Extreme and growing
inequality mocks the American promise of equal opportunity for all.
The Great Recession shattered the myths and the legitimacy of the conservative era. As
President Obama declared, the growth of Gilded Age inequality while the majority of
Americans struggle to keep their heads above water is the defining challenge of our
time.
1
Denial is no longer possible.
The current reality is no longer seen as inevitable, an act of God or nature. People
understand that it is the result of deliberate policy choices. The game is rigged, Senator
Elizabeth Warren concluded, and the American people know that. They get it right
down to their toes.
2

Bailed-out bankers can no longer pose as masters of the universe. Multinationals that
stash trillions abroad can no longer pretend to be national assets. Congress, with
millionaires constituting more than half of its members
3
, is increasingly seen as serving
donors rather than constituents. As detailed at PopulistMajority.org, broad majorities of
Americans support populist positions on taxes, Social Security and Medicare,
investments, Wall Street, multinationals, trade, money in politics that are a far remove
from elite opinion.
The first stirrings of a populist movement are apparent. Occupy Wall Street exposed the 1
percent and put inequality on the national agenda. Strikes and walkouts by low-wage

1
"Remarks by the President on Economic Mobility." The White House. December 4, 2013. Accessed May 16,
2
Borosage, Robert. "Corporate Tax Breaks: How Congress Rigs the Rules." Campaign for America's Future.
April 28, 2014. Retrieved May 15, 2014, http://ourfuture.org/20140428/corporate-tax-breaks-how-congress-
rigs-the-rules
3
Cody, Carly. "Majority In Congress Are Millionaires." NPR. January 10, 2014. Accessed May 15, 2014.
http://www.npr.org/blogs/itsallpolitics/2014/01/10/261398205/majority-in-congress-are-millionaires.
W

2 | The New Populism
workers, from fast food restaurants to Wal-Mart, in over 150 cities
4
dramatize the
growing anger at lousy wages and benefits in the fastest growing sectors of the economy.
With Washington gridlocked, cities and states from Seattle to Newark, Hawaii to
Vermont have moved to hike the minimum wage,
5
mandate paid family leave
6
and crack
down on wage theft.
7
Voters from California
8
to New Jersey
9
support hiking taxes on the
wealthy to invest in schools and infrastructure.
Progressive populist attitudes are now finding champions in Washington. Attractive
emerging leaders in the Senate such as Warren, Sherrod Brown, Jeff Merkley, Tammy
Baldwin, Sheldon Whitehouse, Al Franken and Bernie Sanders support bold challenges
to the old order. In the House, members of the Congressional Progressive Caucus have
put forth a comprehensive plan for rebuilding the nation, financed by progressive tax
reforms. At the local level, progressive mayors New Yorks Bill de Blasio, Pittsburghs
Bill Peduto, Minnesotas Betsy Hodges, and more are pushing populist reforms.
10

The rising American electorate the millennials, single women, and people of color who
form the heart of the Obama majority have been hit the hardest in this economy and are
most supportive of change. The activist base of the Democratic Party labor unions,
community organizations, online activists also supports a more populist agenda than
that now under debate in Washington.
The new populist politics have only begun to find expression. As of yet, citizens see few
vehicles for their anger. The president has been reluctant to use his bully pulpit to
mobilize opinion. The two parties seem to be part of the problem. Unions are under siege
and increasingly absent from the workplace. Not surprisingly, the publics outrage takes
different forms. On the right, well-funded Tea Party groups target big government and
crony capitalism, while mining the old politics of racial division and distraction.
Conservative governors focus anger at public unions and pensions. Big money invests in
the establishment of both parties that still controls and constricts the debate. The off-year
elections in 2014 are likely to feature low turnouts, as many put little hope in elections.

4
Greenhouse, Steven. "Fast Food Protests Spread Overseas." The New York Times. May 14, 2014. Accessed
May 16, 2014. http://www.nytimes.com/2014/05/15/business/fast-food-protests-spread-overseas.html?hp.
5
USA Today. "Minimum Wage Hikes Possible in Many States." USA Today. September 17, 2013. Accessed
May 16, 2014. http://www.usatoday.com/story/news/nation/2013/09/17/stateline-minimum-wage/2826727/.
6
Ludden, Jennifer. "Paid Leave Laws Catch On Across the Nation." NPR. January 28, 2014. Accessed May
16, 2014. http://www.npr.org/2014/01/28/267488576/more-states-offer-paid-leave.
7
"Can My Boss Do That?" Wage Theft. Accessed May 16, 2014. http://wagetheft.org/wordpress/.
8
Luhby, Tami. "Californians Approve Massive Tax Hike on the Wealthy." CNN Money. November 7, 2012.
Accessed May 16, 2014. http://money.cnn.com/2012/11/07/news/economy/california-tax-wealthy/
9
George, Andrew. "Poll: N.J. Voters against Further Taxes on Middle Class but Support 'Millionaires Tax'".
NJBIZ. March 17, 2014. Accessed May 16, 2014.
http://www.njbiz.com/article/20140317/NJBIZ01/140319816/Poll:-NJ-voters-against-further-taxes-on-
middle-class-but-support-%27millionaires-tax
10
Meyerson, Harold. "The Revolt of the Cities." The American Prospect. May 2014. Accessed May 16, 2014.
http://prospect.org/article/revolt-cities

The New Populism | 3
But these stirrings will continue to build. In 2016, presidential contenders in both parties
will have to address this reality and make the case that they represent real change.
Meanwhile, the most direct expression of public frustration is likely to be found in
growing upheaval strikes, protests, and disruptions. And as the economic and political
systems fail to deliver, more and more Americans will start to demand answers about why
the deck has been stacked against them.
An Economy For the Few, Not the Many
In the fifth year after the Great Recession, Americans are struggling in an economy that
does not work for working people. Families are losing ground as incomes stagnate and
the prices of necessities health, housing, education and retirement security keep
rising. The top 1 percent has captured a staggering 95 percent of the income gains in the
faltering recovery. The top 1 percent now possesses as much wealth as the bottom 90
percent. Twenty million people remain in need of full-time work. The jobs being created
are worse than the jobs that were lost. Students are graduating with record debt burdens
as they enter the worst jobs market since the Great Depression. One in four children are
born into poverty. The American dream is becoming a fantasy, if not a nightmare.
This is not a cyclical or transitory reality. Inequality accompanied by income stagnation
for the majority has been building since the 1980s.
Thomas Piketty, in his magisterial work Capital in the Twenty-first Century, argues that
extreme inequality is the natural order of capitalism, suggesting that the broad middle
class that emerged in the middle of the 20
th
century was an anomaly, a product of the
Great Depression and the World War that devastated wealth, opening space for more
equitable growth.
But the middle class that was built after World War II was constructed by public policy.
The New Deal put curbs on banks that allowed 40 years without a financial crisis.
Mobilization for war, much more than the New Deal, created full employment. President
Franklin D. Roosevelt required defense contractors to recognize unions, dramatically
increasing union membership and power. Progressive income taxes with top rates over
90 percent and limits on executive compensation reduced inequality dramatically.
After the war, shared sacrifice made shared prosperity a social norm. The GI Bill educated
a generation, and helped spur the home ownership boom that built the suburbs.
Government financed the conversion of wartime factories, aiding U.S. dominance in the
emerging industries, from airplanes to autos. Continued high income tax rates and broad
union membership insured that the rewards of growth were widely shared, while
providing funds for building the new infrastructure interstate highways, airports and
water systems vital to growth. For 30 years, America grew together, with wages rising
with productivity. With that growth came the confidence to respond to the civil rights
movement and end legal segregation, and to mobilize to lift Americans from poverty,
seeking to extend opportunity to all.

4 | The New Populism
The Stacked Deck
What went wrong? The growing inequality was not an act of God. It wasnt like the
weather, something we simply have to live with. It wasnt an inevitable product of
technological advance or globalization, as the president suggests. One of the greatest
periods of technological advance came after World War II when the broad middle class
was built. Other industrial nations have navigated global markets without running up
unprecedented trade deficits or shipping the best manufacturing jobs abroad.
The growing inequality was as much the result of policy as the post-war shared prosperity
had been. Corporations launched a fierce attack on unions and regulation. Wall Street
lobbied to dismantle the New Deal restraints. Inflation significantly the product of
failed wars and energy politics was the excuse to abandon full employment policies.
Multinational banks and corporations defined our globalization and trade strategy,
leading to unprecedented deficits, as companies shipped good jobs abroad and used the
threat of offshoring to squelch wage demands at home. Conservatives railed against big
government, and lowered taxes on the wealthy, even while hiking payroll taxes on
workers. Government was painted as the problem; markets as the solution.
As private wealth exploded, vital public services were starved or corrupted.
Private insurance and drug companies dominate a health care system that costs twice as
much per capita as other industrial nations, with worse results. Our decrepit and
outmoded infrastructure poses an increasing threat to the lives and safety of Americans,
and an increasing obstacle on our ability to compete. Catastrophic climate change wreaks
more and more damage, with no coherent national drive to forestall much worse. Our
schools fail to provide children with the basics from quality pre-school, to smaller
classes in the early years, to robust after-school programs, respected and skilled teachers
and affordable college. Investment in research and development, which has helped the
U.S. invent and capture new markets, is being cut back even as global competition grows.
This wasnt a failure of policy. It was a power grab. We werent broke; we were robbed.
They rigged the rules to benefit the few and they succeeded. As Sen. Elizabeth Warren
argues, People feel like the system is rigged against them. And here's the painful part:
they're right. The system is rigged. Look around. Oil companies guzzle down billions in
subsidies. Billionaires pay lower tax rates than their secretaries. Wall Street CEOs the
same ones who wrecked our economy and destroyed millions of jobs still strut around
Congress, no shame, demanding favors, and acting like we should thank them.
The Emerging Populist Agenda
Conservatives claim that there are no alternatives to todays failing economic system.
Companies treat their subsides and their tax breaks as an inherent right. But there are
clear policies that could rebuild a broad middle class and provide the basis for shared
prosperity. The emerging populist agenda is focused on the rules that define markets. It
challenges directly entrenched and powerful interests. It assumes that growth is

The New Populism | 5
necessary, but not sufficient to generate opportunity and shared prosperity. It aims to
make government an instrument of the many and not a captive of the few.
An Economy for Workers, Not Bankers
As we witnessed at the end of the 1990s, full employment is vital to more widely shared
prosperity. When jobs are plentiful and workers are in demand, they can demand higher
wages and better benefits. The Federal Reserve has a mandate to manage money to reduce
unemployment as low as possible without generating destabilizing inflation. But as a
creature of the banks, the Fed has largely served the interests of bankers rather than
workers. For years, exaggerated fears of inflation led it to limit growth when wages began
to rise. And in the run-up to the collapse, when Wall Streets wilding inflated the housing
bubble, it failed abjectly as a regulator of the banking system.
When the Fed did act boldly in the wake of the Great Recession, Washington failed. With
an economy desperately needing public demand, the White House and the Congress
embraced a premature turn to austerity. The result was the weakest recovery since the
Great Depression, with mass unemployment continuing for what may well become a lost
decade. Populists demand that the measure of the economy is a job for everyone able and
willing to work. If the private sector fails to provide that, the government should take
action to get Americans working and spending. Unemployment is a human calamity.
Mass unemployment is a national disgrace.
Make Work Pay
The reforms that currently have the greatest momentum are those that directly address
lifting the floor under workers. Raise the minimum wage so that a full-time worker can
lift his or her family from poverty, and then index that to inflation so that it rises with
prices. Mandate pay equity, paid family leave, and paid vacation bringing America
closer to other industrial nations providing sensible minimum standards for workers.
Crack down on wage theft. Democrats have moved to champion this agenda at the
national level, even as it gains traction in cities and states across the country.
It is not a coincidence that the middle class grew when unions were at their peak, and
declined as they came under withering attack. All Americans will benefit when we
empower workers once more to bargain collectively to gain a fair share of the profits and
productivity that they help to produce. Putting teeth into enforcing current labor laws
would help. Reviving the wartime requirement that government contractors recognize
their unions would provide an impetus. Populists should be as aggressive in defense of
collective bargaining as employers and their allies are in assaulting it.
Empowering workers would also help crack down on perverse executive compensation
policies. CEOs and the four other top executives in large corporations now pocket more
than 10 percent of corporate earnings.
11
Current packages give executives multimillion-

11
Bebchuk, Lucian, and Yaniv Grinstein. "The growth of executive pay." Oxford review of economic policy 21,
no. 2 (2005): 283-303.

6 | The New Populism
dollar personal incentives to loot their own companies, using profits for stock buybacks
to hike stock prices, shipping jobs abroad, taking on debt, merging or breaking up
companies for short-term rewards. A sensible first start would be to require consumer
and worker representatives on the board of directors and the compensation committees.
A second would be to require companies with high disparities in pay between the CEO
and the average worker to pay a higher rate of taxes, giving shareholder and corporate
boards an incentive to curb current excesses. A bill to this effect has recently been
introduced in the California Senate.
12

Rebuild America
The accumulation of extreme private wealth has been accompanied by the spread of
public squalor. The U.S. is starving public investments vital to our future. To be a
competitive high-wage country in a global economy requires a modern, sustainable, and
competitive infrastructure. The most recent estimate of the American Society of Civil
Engineers is that it will cost $3.6 trillion simply to repair current infrastructure.
13
That
does not include the cost of modernization, such as fast trains, a smart grid, a competitive
high-speed Internet. Nor does it include the costs of responding to the damage caused by
catastrophic climate change, which is inescapable unless we act now replace our
carbon-based energy and power systems with renewable technologies. Rebuilding
America would not only make our economy more efficient and more resilient in the face
of change, it can create the green industries and jobs that will provide sustainable
prosperity in the 21
st
century.
Second, all agree education is essential both to our democracy and our economy. Every
child should be guaranteed the opportunity to learn with access to a high-quality public
education. Yet we are not providing even the basics in public education. Instead, a new
breed of corporate conservative reformers have imposed so much privatization,
compulsory testing and budget austerity on our school systems that a parent-teacher-
student rebellion is building, demanding real reforms. That would include new
investments in universal pre-kindergarten programs, smaller classes in early grades,
better rewards and preparation for teachers, modernizing schools and equipment, and
comprehensive afterschool programs. A similar rebellion is brewing among millennial-
generation. post-high school youth, who are buried in massive education debt. Their
demand: debt relief, plus affordable college and advanced training in every state in the
U.S.
Third, to compete on the high end of a global economy, the U.S. should lead the world in
research, development and innovation. We should be expanding rather than cutting basic
research budgets, and driving innovation in areas of promise.

12
Young, Allen. "Bill proposes higher taxes on CEOs with high wage disparity." Sacramento Business Journal.
April 24, 2014. Accessed May 16, 2014. http://www.bizjournals.com/sacramento/news/2014/04/24/calif-
wage-disparity-ceo-workers-bill-taxes.html?page=all
13
American Society of Civil Engineers. "2013 Report Card for America's Infrastructure." 2013 Report Card
for Americas Infrastructure. Accessed May 16, 2014. http://www.infrastructurereportcard.org/.

The New Populism | 7
Shared Security
Among the industrial countries, the U.S. is a laggard in providing shared security to its
citizens. Health care reform will provide health insurance to millions of Americans, but
our system, dominated by private insurance and drug companies, remains twice as
expensive as that of other industrial nations while providing worse results. A higher
percentage of American mothers die in childbirth. Europeans live longer than Americans.
Reform can begin by eliminating outrages, like the ban on government from negotiating
bulk discounts on drugs. As the limits of the current wave of health care reform become
clear, populists will demand extending Medicare to all, insuring access to affordable, high
quality care.
Americans also face a looming retirement crisis, as companies abandon pensions and
retirement savings plans fall short. Increasingly, Social Security, designed as a modest
floor for retirees, is becoming the primary source of retirement income. Americans have
rejected elite calls to raise the retirement age or cut back Social Security benefits. Now
populists are joining to champion lifting the lid on Social Security taxes to expand
benefits and provide a greater measure of guaranteed security for workers in the dusk of
life.
Fair Taxes
We arent broke. Progressive tax reform can provide resources for investments we need,
while helping to reduce inequality. Today, tax rates on the rich are among the lowest in
the developed world.
Rep. Jan Schakowsky has called for progressive tax rates for wealthy Americans, rising to
a top rate of 49% similar to the rate under Ronald Reagan in the early 1980s, that is still
far lower than it was during the post war era when the economy enjoyed its fastest growth
and the broad middle class was built.
We should tax income from wealth at the same rates at income from work, and raise
rates on top-end incomes. An expanded estate tax, with higher rates on multimillion-
dollar estates, would reduce the threat of an entrenched and growing plutocratic class.
Ending deferral of taxes on corporate profits stashed overseas would insure that
multinationals pay the same tax rates as domestic companies. Cracking down on tax
evasion as well as tax havens would collect hundreds of billions in revenues now lost.
Other taxes are needed for the public good. A financial transaction tax, similar to that
now moving forward in the European Union, would help curb speculative trading
practices and raise billions of dollars. A tax on carbon would create incentives for the
transition to clean energy, with proceeds rebated to working and poor families to avoid
adding to their expenses.

8 | The New Populism
Fair and Balanced Trade
Current corporate trade policies have racked up over $7 trillion in trade deficits from
2000 to 2012. Our trade deficits with China, unprecedented in the annals of time, cost an
estimated 2.9 million jobs.
14
A growing populist outrage has helped build opposition to
fast-track trade authority, and raised alarms about the current closed-door negotiations of
the Trans-Pacific and Trans-Atlantic trade accords.
We want more but balanced trade. The next president should announce that the U.S. will
balance our trade over the next decade, putting companies on notice that if they want to
sell in America, they had better build in America. We should then crack down on the
countries like China that manipulate their currencies, and abandon the bloated dollar
policy so our exports are not priced out of the market. Lets reward companies that
manufacture here at home, and end the subsidies and tax dodges that rewards companies
that ship jobs abroad.
Lead the Green Industrial Revolution
Catastrophic climate change is a clear and present danger. But the green energy solution
to that threat will drive the next industrial revolution with inventions in renewable
energy, energy efficiency, sustainable agriculture that inevitably will sweep the world.
We should adopt a comprehensive strategy to capture the lead in these growing markets
expanding R&D, requiring growing percentage of energy to come from renewable
sources, raising efficiency standards, making our infrastructure more resilient, providing
tax incentives for clean energy and more. This will generate jobs, global markets, and a
safer world. And we surely should end the subsidies to big oil companies, the most
profitable companies in world history.
Curb Wall Street
The big banks that blew up the economy emerged from the bailout bigger and more
concentrated than before. Working people are the first casualties of Wall Streets boom-
and-bust speculation.
We should require big banks to raise far higher capital reserves. House Ways and Means
Chair Dave Camp (R-Mich.) has proposed taxing the 10 biggest banks and financial
institutions, recouping at least part of the subsidy they pocket from being too big to fail.
Senators Elizabeth Warren and John McCain have called for restoring Glass-Steagall
restrictions, insuring that banks do not speculate with government-guaranteed deposits.

14
Mathews, Rick. "U.S. Trade Deficit: How Our Negative Balance of Trade Is Harming the Recovery."
PolicyMic. September 25, 2012. Accessed May 16, 2014. http://www.policymic.com/articles/15337/us-trade-
deficit-how-our-negative-balance-of-trade-is-harming-the-recovery.


The New Populism | 9
And Sen. Sherrod Brown has proposed legislation that would end too big to fail
financial institutions.
15

It is simply an outrage that no leading banker has faced either criminal or civil liability for
the pandemic of fraud and other crimes that their banks have been charged with. Bank
fraud cannot simply be a cost of doing business.
Get Big Money Out of Politics
Wall Street is the largest financial contributor to both parties. Freshmen legislators flock
to the House Finance Committee because, as one said, the banks pay big. Corporate
lobbies deploy literally millions of dollars and thousands of lobbyists to make their case.
At the height of financial reform after the crash, Wall Street arrayed some 3,000 lobbyists
and spent an estimated $1 billion to influence the legislation.
16
And unlimited funds now
flow to support ersatz think tanks that churn out industry arguments, shadowy non-
profits that fund issue campaigns and attack ads, mega-PACS that savage any politician
who dares challenge the status quo.
Any reform movement must overcome big money and must curb the role of big money
in politics. We need elections financed by public matches to small donations, with strict
limits on what can be contributed. Secret money in elections should be outlawed. We
have to overturn Supreme Court decisions that corporations are people, that money is
speech, and that no limits can be put on billionaires looking to buy elections.
The revolving door between Washington and Wall Street should be closed, with
legislators and high executive and regulatory officials prohibited from becoming lobbyists
or lawyers of the regulated on leaving office. Public service should not be a prelude to
cashing in.
It Takes A Movement
These reforms would put people to work, raise wages, expand opportunity, strengthen
family security, curb financial crises, drive innovation and expand democracy. They are a
beginning towards rebuilding an economy that works for working people.
Virtually all of these reforms have broad majority support. Most have strong champions
in the House and Senate. None has been able to move forward in a Washington corrupted
by money and corroded by partisan division.

15
Doughtery, Carter and Cheyenne Hopkins. "Warren Joins McCain to Push New Glass-Steagall Law for
Banks." Bloomberg. June 12, 2013. Accessed May 16, 2014. http://www.bloomberg.com/news/2013-07-
11/warren-joins-mccain-to-push-new-glass-steagall-bill-for-banks.html
16
Rivlin, Gary. "How Wall Street Defanged Dodd-Frank." The Nation. April 30, 2013. Accessed May 16,
2014. http://www.thenation.com/article/174113/how-wall-street-defanged-dodd-frank.


10 | The New Populism
For progress to be made, the demand must come from outside the Beltway, from the
people up, not Washington down. This will take a movement. And that new populist
movement is already being built.
Modern-day muckrakers are revealing just how the game is fixed and who is on take.
Popular mobilizations online and in communities are rising up to challenge the
powers that be, in the streets and in the boardrooms. Workers all over America are
standing up for decent pay and benefits on the job. Citizens of conscience are raising a
moral voice at injustices that need not be. The impoverished, the young, and the locked
out are starting to demand jobs and justice. We need new leaders to join the sturdy band
willing to take on special interests and big money.
This wont get built in a day, or in one election, or in one administration. But this is
Americas hope. Americas founders were deeply suspicious of the dangers of entrenched
privilege. The question always was whether the people could use the instruments of
democracy to counter the influence of the plutocrats. In an 1825 letter, Thomas Jefferson
warned against those who would create a single and splendid government of an
Aristocracy, founded on banking institutions and moneyed incorporations under the
guise and cloak of their favored branches of manufactures commerce and navigation,
riding and ruling over the plundered ploughman and beggared yeomanry."
Nearly a century later, Supreme Court Justice Louis Brandeis, a leading progressive in the
Gilded Age, warned that we may have democracy or we may have wealth concentrated
in the hands of a few, but we cannot have both.
Over the next years, Americans will choose. The debate will be a donnybrook. The
wealthy will fight fiercely to defend their privileges. The big corporations will resist efforts
to limit their subsidies or curb their predatory deals. The defenders of the stacked deck
will mobilize big money, and armies of paid advocates, networks of false fronts and ersatz
peoples movements. Only a broad popular movement can help Americans sort out who
is on their side and who is not. Only popular upheaval and protests will be able to shake
the forces against change. The outcome is not defined, but the debate has already begun.