Campaign economics

On Monday, Sen. Hillary Clinton laid out a plan in Philadelphia to slow mounting foreclosures. She called for greater lender transparency and for $30 billion in federal assistance for individual homeowners. She clearly hopes to woo enough Pennsylvanians to keep her bid for the Democratic nomination alive. \nIn many ways, this represents the complete evolution of her strategy. She has gone from clumsily swiping Sen. Barack Obama’s calls for change and hope to establishing herself as the more economically progressive candidate. She won big with working-class Ohioans and Texans. And Pennsylvania is the sixth most populous state in the country, full of working-class voters. \nLike Ohio, Indiana, Michigan and West Virginia, Pennsylvania lies within the Rust Belt. Rust Belt cities such as Flint, Mich., and Buffalo, N.Y., have long been synonymous with urban blight and industrial gloom. Other cities such as Cleveland have survived but have clearly been hurt. \nPennsylvania’s two major metropolises, Pittsburgh and Philadelphia, have done better than others in part because Pennsylvania has long had a strong urban agenda. The current governor of Pennsylvania is Ed Rendell, a former mayor of Philadelphia.\nCooperation between cities and their surroundings can break the competition between cities and suburbs for jobs. Embracing service industry jobs and information technologies might also offer a way out for the Rust Belt. \nClinton has hardly been emphasizing such transformative policies, and in truth, neither has Obama. Both have hinted that “fair trade” could rejuvenate the region, while the real culprits of decay are ignored. \nUnions thought they could transfer bigger and bigger chunks of prosperity to their members. State and local governments thought they could treat the auto and steel industries under their jurisdiction as cash cows. Many industrial jobs have moved south not only to Mexico but also to America’s Sun Belt, where workers haven’t always been as enthusiastic about unions.\nThe Democratic candidates have supported some imaginative schemes. They are backing Connecticut Sen. Chris Dodd and Nebraska Sen. Chuck Hagel in their efforts to create a National Infrastructure Bank. This could address some of the structural economic issues for the Rust Belt. Such a bank could solve problems with funding the Pennsylvania Turnpike.\nUnfortunately, it doesn’t seem to play as well with the voters as populist rhetoric does. That might be why public expenditure on infrastructure is so low in the first place. \nPennsylvania’s choice is whether its primary will endorse the policies of old-style Democrats – policies that have previously led to stagnation instead of growth. It’s too bad that Clinton is looking almost exclusively to working-class Democrats when we need a Democratic nominee like her husband. He could bring working-class and idealistic Democrats together while supporting a good policy like NAFTA. Pennsylvania Gov. Rendell has thrown his support behind Clinton. If this is because of some of her recent economic rhetoric, I must respectfully disagree with him.