Back when I worked for the Obama administration, I remember a depressing meeting our econ team had, circa late 2010, after the Tea Party came to town and pretty much shut down the Congress as far as policies to boost the still-weak recovery. The point of the meeting was to come up with policy ideas that would a) help folks struggling with jobs, wages, and debts, and b) didn’t require Congress. This would later become the President’s “pen and phone” initiative (he’d jawbone biz to do the right thing, and sign exec orders and rule changes).
Like many economists, I thought in terms of temporary stimulus to help close remaining output gaps and labor market slack, but that requires Congress to open the purse strings. That was off the table (and, to be fair, we ourselves in the admin had begun to pivot too soon to deficit reduction). I don’t remember much of note coming out of that first meeting.
But the admin kept hammering away at it and eventually came up with a lot of really good ideas, far more than I think most seasoned government wonks thought was possible. Congress may be mired in dysfunction, but team Obama’s been doing some pretty remarkable stuff.
I was reminded of this when, in my perusal of this AM’s papers, I saw pieces on the soon-to-kick-in overtime rule, which will boost the pay of millions of middle-wage earners, the fiduciary rule against “conflicted advice” from investment advisers, which has the potential to save billions in the aggregate for retirement savers, and a new disclosure rule wherein firms that hire outside advisers to block union organizing drives have to reveal what they’re up to.
Just to remind you of some of the other pro-worker changes the administration has managed to cobble together (including stuff just mentioned for completeness and links):
- Updating the overtime threshold
- The new fiduciary rule to block conflicted investment advice
- The new transparency rule on employer negotiations with outside anti-union consultants
- New IRS rules for Treasury to go after tax inversions
- A fair-hiring practice–“Ban the Box”–for government hiring to help those with criminal records (though the rule needs to be extended to federal contractors)
- An executive order that makes it harder for large firms with labor law violators to get federal contracts
- A $10.10 minimum wage for federal contractors (the federal min wg is still $7.25)
- Paid sick leave for federal contractors
- The creation of a new, tax-favored savings vehicle: myRA
And a bunch of other stuff too, including the immigration actions to extend some legal status to certain undocumented persons (the court challenges to these policies are now uncertain), barring employers from retaliating against those who discuss their compensation, enhancing work/life balance at federal agencies, and barring federal contractors from discrimination on the basis of sexual orientation or gender identity.
I’m also impressed by the extent to which Obama’s been able to normalize relations with Cuba, which is also opening up some trade possibilities (and with no big, divisive “free trade agreement” to boot!).
Two related points about all this.
First, one big problem with this approach–one that underscores its difference with legislation–is how quickly all these policies can be reversed by the next president. It is standard practice that when a president of the other party takes office, they first hang up their coat in the residency and next reverse all the previous administration’s executive orders.
That’s not just bad from the obvious perspective of progressive policy. It’s the kind of policy lurching that creates economic uncertainties and inefficiencies. To be clear, this is not at all an anti-regulation rap. All of that “regs are choking us!” stuff is overblown and American business has continuously shown itself to be highly adaptable. But it’s hard to adapt to a quickly shifting regulatory landscape.
Second, all of the above further raises the stakes in the election. Though you don’t hear this so much given the ascendency of the Donald, people on the far left (and right too, I think) sometimes claim it doesn’t matter who’s president, as both parties are deeply co-opted and compromised by monied interests.
Yeah, well…there’s something to that, but I really wouldn’t push it too far, especially when you consider the list above.