Anxiety Attack

Despite the wishes of people like Ng and Parker for an economy and a job market that provide more middle-class stability, there's no turning the clock back.

Right now, as Republican Gingrich sees it, the only choices being given people like Burns by policymakers is "happy talk from the right and more unions and bureaucracy from the left." And, guess what, some of his Democratic counterparts see it the same way. "There is a policy void out there," says Gene Sperling, director of President Clinton's National Economic Council from 1996 to 2001. "Either we'll just repeal enough trade agreements to prevent economic dislocation or cut capital-gains taxes enough to lift ourselves up. But I think there is a middle space of accepting the inevitability of some of these tough realities of globalization but also asking how public policy can shape it so it lifts all boats." Sperling admits that's a message that many in his own party are skeptical about. Liberal politicians tell him voters want to hear only how government will save their jobs.

Sperling, who outlined many of his ideas last year in his book The Pro-Growth Progressive, advocates a pre-emptive approach to the community devastation that occurs when a major employer closes a factory or service center and ships production to Mexico or Asia. The government should offer tax incentives, he says, for businesses and for retraining workers before a community gets whacked. He's also in favor of $15,000 "flexible education accounts" for all Americans, which would allow workers to receive a 50 percent tax credit up to $15,000 per decade. Still feeling anxious? How about a "universal" 401(k) plan in which the government would, using a refundable tax credit, match on as much as a 2-to-1 basis retirement account contributions by low- and middle-income earners on the first $2,000 they accrue in savings?

Insuring the future. Looking for something bolder yet, perhaps something that might interest that 50-year-old factory worker who fears losing his job? How about wage insurance? Under a plan originally put forward by Brookings Institution economist Robert Litan and University of California-Santa Cruz economics Prof. Lori Kletzer, a laid-off worker who once earned $40,000 and found a new job paying just $30,000 would receive $5,000 a year--broken down into quarterly payments--until two years after the initial layoff. Such a plan might cost $4 billion a year. Hacker would up the ante considerably with a $34 billion-a-year "universal insurance" program. If a family experienced catastrophic medical costs or a large drop in income--say, more than 20 percent--due to a variety of common risks (unemployment, loss of wages because of sickness or childbirth, temporary disability, and the death of a spouse), Hacker's universal insurance plan would make up a portion of the loss ranging from 20 percent to 50 percent of all losses or costs in excess of a fifth of that family's income.

The point of many of these ideas is to shift financial risk away from individuals and spread it out among America's taxpayers much as the New Deal did back during the Great Depression. While many of these policies might be criticized on the right as the "return of big government," they might also, Sperling argues, increase support for the dynamic, entrepreneurial economy that conservatives favor.