Unlike most candidates, Digby, John and I have known David Segal for over a decade. We met him when he was a Rhode Island state legislator. What impresses us about David is that in him there is a pairing of deep progressive values with a record of moving substantive legislation-- between 2 and 3 dozen bills and ordinances passed under his name. He has helped protect online rights, while fighting against abuses by big tech and big banks.
We couldn't be more enthusiastic in endorsing him for the open Rhode island congressional seat, where he's up against multiple deep-pocketed establishment Dems with strong ties to the Clintons and Gina Raimondo.
Both on the Providence City Council and in the state legislature, Segal pushed to move policy to the left, advocating on issues such as union organizing, alternative energy mandates, LGBT rights, higher taxes on upper-income residents, and protections for undocumented immigrants. He is the co-founder of the national advocacy group Demand Progress. Over the years the organization has expanded its focus from internet-related policies such as copyright enforcement and net neutrality to banking regulation, federal appointments and the war in Yemen.
We invited him to tell us about his congressional campaign and to introduce himself to new Blue America members. Please consider contributing to the all grassroots campaign here or by clicking on the Blue America 2022 congressional thermometer above.
Building Coalitions To Press A Vision For An Economy That Works For Everybody
-by David Segal
The Blue America community well knows that since the 2008 housing and financial crisis, the ideas that characterized the Washington Consensus-- extreme deficit hawkery, the adoption of low marginal tax rates, the promotion of trade liberalization in the form of deals like NAFTA and TPP, the privatization of state enterprises, deregulation broadly construed, and so forth-- have proved disastrous. (Largely in line with warnings many of us offered over the years or even decades prior.) As we’ve confronted the subsequent COVID crisis we have finally seen the beginnings of a breach in this way of thinking, by policymakers at the highest levels-- but troubling signs are now emerging that the old guard is leveraging legitimate concern about inflation to reclaim lost terrain.
My focus in office would be to build coalitions that are capable of continuing to press a vision for an economy that works for everybody: Macroeconomic policy that does right by everyday people-- including Medicare for All, mass investments in green infrastructure, and full employment measures-- combined with anti-monopoly policies and appropriate corporate regulation to make future crises less likely and to otherwise make our economy more democratic. And in the immediate term, we need a response to inflation that rejects the old playbook of shoving the economy into a recession and putting millions of people out of work.
Back in 2008-9 I was in the legislature in Rhode Island, organizing through our Progressive Caucus (and even building alliances with more “old school” Democrats) to push back against cuts to our budget as our revenue streams collapsed. I watched in dismay as the federal government failed to use its vast fiscal powers to step in and help. Those cuts were targeted at the most vulnerable people in Rhode Island-- and we succeeded to a degree at blunting them, forcing an increase in capital gains taxes and retaining some funding that would go to our poorest cities and towns. We held out hope for a “second stimulus” that was supposedly in the works (to largely be focused on propping up state and local governments). But Washington would never bless us with one. The sense of helplessness in the face of such inaction is part of what inspired me to run for Congress in 2010: With near ubiquity, even Democrats of that era believed the federal government to be fiscally constrained even in times of great need. The banks got bailed out, while aid to renters and homeowners never manifested-- even though many lawmakers offered their votes for the bailout on the promise of such support. The fiscal stimulus package was perhaps half of what was needed. And all of this followed years of inaction to mitigate a housing bubble whose bursting was both predictable and predicted.
To quote Hyman Minsky, “A capitalist economy cannot be maintained… if it oscillates between threats of an imminent collapse of asset values and employment and threats of accelerating inflation and rampant speculation, especially if the threats are sometimes realized.”
The failings of the Washington Consensus have been reinforced by the ongoing economic crisis precipitated by the COVID-19 pandemic. But in contrast to what took place during the prior crisis, for a period we seemed to transcend this way of thinking, building on a foundation of post-Keynesian scholarship and activism that itself grew in prominence in the wake of the 2008 crash. There was a burgeoning recognition among policymakers of the potential to use public power and spending to improve people’s lives-- or at least allay some of the worst potential effects of the pandemic and attendant economic meltdown. Nobody worried much about pay-fors during debates about the first few tranches of pandemic relief. For a moment it seemed, to invoke Milton Freedman, that they were all MMT-ers-- and that included leading Budget Committee Democrats, and in some moments even Donald Trump. My former colleagues and new friends in the RI State Legislature are deciding how best to spend billions of dollars in stimulus funding, and local revenues that are far higher than expected-- and this is a most welcome development.
But with inflation rising and wages thus stagnant in real dollars, the powers that be see an opening to demand a return to the old ways. They argue that we did too much to support the economy and people whom it comprises-- and inflation is to be addressed by raising interest rates and throwing people out of work, on average those who’ve longest suffered from under- and unemployment. (This is something even Fed Chair Jerome Powell once underscored-- yet we now expect the Fed to issue seven rate hikes this year.) We risk allowing political debates to again take place on a terrain that assumes the wisdom of dictates that dominated during the neoliberal era.
The Blue America community knows that the old story about putative fiscal constraints is illusory. So too is the notion that we have only the bluntest of tools for addressing harmful inflation. In order to strengthen our economy, we must continue to invest in our people, especially those most in need, and in our infrastructure-- and we can do this, even in an inflationary environment. Certain constructions of Medicare for All are even conceptually deflationary-- and our response to inflation can’t be to compound the suffering for the poorer people and working families who are bearing the brunt of its harms-- especially as corporate profits soar to their highest levels in 70 years. Rather, the response must be targeted at those corporations and structures that have laid the foundation for the present inflation-- and in some cases are quite explicitly benefiting from it: We must attack price gouging, break up concentrated industries that afford monopoly players pricing power, tax excess corporate profits, reshore critical production capacities, and create appropriate levels of redundancy in supply chains. We should also consider ways to implement targeted credit constraints-- rather than relying on the blunt tools the Fed wants to wield to slow down the whole economy.
Even prior to the present crisis, people were struggling: Wages are not tied to productivity; healthcare costs are out of control; ballooning housing costs force families out of the cities where they work; and so forth. These issues should not be considered separate from our understanding of the crisis-- they have exacerbated it. And our solutions to them must consider that the “maintenance” of our economy, to borrow Minsky’s language, requires that we push back against the powers that be and force the emerging breach from the past half-century of economic dogma. People understand that the government should be able to do more for them: We must continue to build and entrench a new consensus based on an understanding that we ought wield public power to better the lives of everyday people-- and doing this would be a highest priority for me in Congress.