Democrats needn't be defensive toward those who are urging them further toward the left. As the Economic Policy Institute (EPI) notes, a great deal of the credit for 2015's strong report goes to government programs like Social Security, housing subsidies, and unemployment insurance, which together kept millions of people out of poverty. Minimum wage hikes helped boost incomes nationwide.
Krugman correctly points out that "progressive policies have worked, and the critics of those policies have been proved wrong." Democrats need to make that case more forcefully, while calling for new, bold social programs that build on these achievements.
In the end it comes down to this: What kind of people do we hope to become? Will we be satisfied with an elegiac future of ever-diminishing aspirations for our children and grandchildren, or will we reach for new goals that rival past achievements like Social Security and Medicare?
Democrats need a vision that is compelling enough to rout congressional Republicans, if not this year than in elections to come. They must meet Teddy Roosevelt's test of leadership by "daring greatly." Otherwise they're likely to face a Sisyphean fate, eternally seeking the same compromises over and over again from implacable Republican extremists.
They must also resist the temptation to dismiss expressions of concern about the economy as doing Donald Trump's work for him. That's ceding the "change" mantle to the Republicans. Democrats can win on a platform of change, because Republicans have nothing to offer but empty rhetoric. It would be a tragic mistake if Democrats presented themselves instead as the stewards and engineers of the status quo, when the status quo has failed so many for so long.
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